Nescafe

The hot beverages market in India has predominantly been dominated by tea, but lately the coffee market has come up as a buoyant force. The rapid growth of the coffee market in the past decade provides an insight into the consumers' mind who does not want to remain confined to the traditional tea drinking habits, and wants to explore new drinks. The upcoming chain of coffee houses such as Barista, Café Coffee Days, Georgia, Nescafe Bars, etc. account for the fact of the growing popularity of coffee amongst the Indian consumers.

Nescafe is the most visible player in the coffee market. It holds more than a 55% market share of the coffee market across India. The two primary brands of Nescafe available in India are Nescafe Sunrise and Nescafe Classic. Nescafe Classic is the major player in the northern and the western parts of India covering the states of Punjab, UP, Delhi, Gujarat and Mumbai. In the south Indian market the most visible player is Nescafe Sunrise. It covers the states of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka.

One of the closest competitors of Nescafe in the Indian coffee market is Bru. The upcoming cafes such as Barista and Café Coffee Day also stiffen the competition. The presence of various players in the coffee market has made it more dynamic. To survive in the market today requires more than just what the product has to offer. Marketing of the product has gained unprecedented importance for the players. Various marketing strategies are employed taking into consideration the customer preferences, competitor strategies, market volatility and the prevalent market dynamics.

The distribution network of Nescafe is very strong. It is present in 3 lac outlets out of a universe of 15 lacs. Thus, it penetrates to the base consumer anywhere and everywhere.

It has established such high levels of brand recognition that when one thinks of coffee, Nescafe strikes one's thought process almost as if it were the definition of coffee.

The general perception in the minds of people is that coffee is not meant for the general masses and coffee is generally consumed by the affluent section of society. This perception has to change by making coffee available to general masses at strategic locations. This is being done by the company by positioning mobile vending machines at various strategic locations that are frequented by the general masses.

The pricing of Nescafe Classic is significantly higher than its competitors Bru. The reason being Bru contains 70% coffee and 30% chickory whereas Nescafe contains 100% pure coffee. Notwithstanding this fact, Nescafe has come up with Nescafe Sunrise which has competitive pricing with respect to its rival Bru.

The major players vis-à-vis Nescafe are:

Bru: Of late, Bru has also started its sampling activities in office canteens etc. where it samples free coffee and also free sampling of Bru coffee powder sachet with it.

Georgia: It is another major competitor of Nescafe in the vending business.