4Ps Challenger

2018

Marketing Case Study

Study
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Ground Rules – Nestlé 4Ps Challenger Case Study

Eligibility
 All second year students (other than PPO holders from any company who have
signed out of the process) are eligible to participate in the contest.

 Teams must have 3 members each. At maximum one student who is currently
on exchange can be a part of a team. Also, no team can have more than 1
PPO holder.

Submissions
 The case study would be rolled out on 21st August 2018 (23:59 hrs).
 All teams must provide the following details with their submission (mandatory):
o Name of the team
o Names of the members of the team
o Email id of One point of contact
o Contact numbers of all members of the team
 Solution should be provided in PDF format.
 Please submit to your place-com SPOC for Nestlé.
 Last date for Submission – 4th September 2018 (23:59 hrs)
What is in store for you?
Selected teams will get to present their solutions to Nestlé Panel at their campus on
dates that will be communicated subsequently.
Top 3 teams across campuses get a chance to present their solutions to the
Management Committee of Nestlé India at Nestlé House, Gurgaon.
Team Prizes:
 Campus Winners : Cash Prize of 50K
 Nationals Runners Up : Cash Prize of 1L and PPIs
 Nationals Winners : Bragging Rights, a Bounty of 2L and PPIs
Individual Prizes:
PPI offers to the individual participants may be given.

Best of Luck!
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Building the 3-in-1 coffee category in India

Coffee in India:
Coffee in India is a developing category and currently has low penetration. With tea
being the hot beverage of choice for decades now, spanning all age groups, need
states and occasions, coffee is much smaller as a category with high seasonality
(especially in the North, East and West of India where nearly 50% of the category
sales happen in 4 months between November – February)
In India, coffee has huge potential to grow for the following reasons:

1. 50% of India is younger than 25 and is aspiring and independent, keen to make
their own choices and establish an identity for themselves; driving up the potential
for building a coffee culture in the country.

2. There is increasing affluence and global exposure, leading to a desire to try new
experiences and develop new habits.

3. Coffee has cool imagery and a significant section of the consumers find drinking
coffee more aspirational than tea.

4. With coffee chains and cafés increasing across India, exposure to a coffee culture
is slowly but steadily on the rise among the 15-25 year old cohort.

Challenges for coffee in India:

1. Predominantly a tea market. Tea: Coffee – 10:1

2. There exists a lot of uncertainty around the MOP (method of preparation) of

coffee. Making a perfect cup of coffee, consistently, is considered difficult and
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complicated. A typical consumer speak would be “I like the coffee that is served in
café’s. I never seem to be able to make a similar cup in home!”

3. Coffee is a special occasion beverage at home in the North, East and West and
that limits the usage of coffee in regular daily life; Monthly penetration of coffee is in
single digits.

4. Coffee is perceived to be a winter drink particularly in the North, East and West of
India. Penetration of coffee drops drastically during non-winter months.

The opportunity for 3-in-1 coffee in India:

• Coffee as a beverage has cool imagery. The emerging youth is exposed to the
coffee taste in out of home experiences and they like the taste of a good cup of
coffee.

• Given the uncertainty around MOP, consumers find it difficult to attain the same
tasting cup of coffee time after time. A 3-in-1 coffee premix (a mixture of coffee, milk
and sugar) which eliminates the preparation tackles this barrier of MOP and would
deliver a great tasting cup of coffee, consistently with minimum effort (Just add hot
water).

• Convenience and speed being highly valued among today’s youth, a 3-in-1 coffee
is a perfect fit and solution to their busy lives.

Nescafé Latte:

With this idea of building the mixes business in India, Nescafé Latte was launched in
Q4 of 2016. The core proposition of the brand is to offer a consistently great cup of
coffee in one simple step of adding hot water, every single time.

The brand is aimed at the young cohort of 15-25 year old college students and early
jobbers; Independent, ambitious and trendy youngsters who are making choices for
themselves across categories, and especially food and beverages as they form their
identity. Hence the metros are important focus geographies, particularly in the North,
West and East of India.

The product recipe was developed through an intensive iterative process with the
target consumer group leading to high acceptance and a taste likeability score that
exceeded the benchmarks.

The brand is available in two SKUs: a single serve (INR 25) and a multipack containing
five single serve sachets (INR 120). [Images at the end]
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The single serve SKU is an innovative cup format consisting of a disposable cup with a
lid, inside which are the single serve sachet and a stirrer – a first of its kind in India. This
innovative expensive format was targeted to make the beverage even more
appealing and convenient. The cup also has an indicator to show the consumers the
exact quantity of water to be added to make a perfect cup.

The cup is an expensive packaging format and has an aggressive pricing to ensure
quick trials and it is meant to develop a loyal user base who would then consume the
multipack. The business model would be sustainable if there is a healthy mix of cup
and multipack sales.

Generating Demand:

The first year of the launch was supported through media, sampling and visibility
support.

Awareness building: TV advertisements in February and September 2017, followed by

regional media campaigns: digital campaigns in Bangalore, Mumbai, and print
campaign in Delhi NCR

Trials: Heavy investments were ploughed into sampling. The product was sampled in
supermarkets across major cities like Delhi, Mumbai, Bangalore, Pune, Jaipur, and
Hyderabad throughout the year.

Visibility: Visibility activations were carried out in supermarkets during important

months for the category in key cities.

Communication Strategy:

The communication strategy following the launch focused on establishing Nescafé

Latte as the perfect cup of coffee in a cool take-away format to beat the rush of the
morning. The core message of the TVC was “The cup that gets you going”

TVC link: https://www.youtube.com/watch?v=E8P5fDnpLX8

While the overarching theme was “The cup that gets you going”, the TVC as well as
future media interventions online and offline drove format familiarity through the line
“Just add hot water” with the future media assets purely concentrating on the
message of “Just add hot water”

All communication assets put the cup at the forefront driving at on-the-go
consumption.

[Communication assets sent as separate attachments]

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Brand Performance:

The product has been widely accepted by the TG, with positive feedback from both
consumers and trade. However, as a new brand in a new mixes category of coffee, it
is yet to establish relevance at a large scale.

• While the brand is growing at a steady pace, it has not matched the high
expectations from the brand. The base volume is currently very low and after 1.5
years of launch, Nescafé Latte holds less than 1% of the market share in instant
coffee.

• When the brand funnel was analyzed over the period of a year, it was found that
spontaneous awareness was very low while aided awareness for the brand stands at
around 50%

• Trials for the brand are at 1/3rd among those aware of the brand but repurchase
drops sharply.

• The brand’s sales are also currently heavily skewed towards the single serve cup
SKU (80:20)

Thus, the brand needs interventions to develop a wide, loyal user base with regular
consumption, especially through the multipack to achieve scale rapidly and improve
the portfolio mix.

The key challenges for the brand currently are:

• It is imperative for Nescafé Latte to create format familiarity and relevance around
3-in-1 coffee; so as to drive regular consumption and achieve scale

• Additionally, the brand needs to build awareness and trials among the TG [See
exhibit 2 for the Latte brand funnel]

o Given the mammoth presence and awareness of Nescafé Classic which is the
market leader in coffee in the North, East and West of India, it is a challenging
task to establish awareness for Nescafé Latte as a brand

o Nescafé Classic has almost 100% total awareness and a very strong funnel in
terms of trials and repeats among coffee consumers
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Your Objectives:

1. Define how you would position the brand Nescafé Latte with a clear rationale*

*Keeping in mind the key brand challenges

*Should stem from an in-depth understanding of the TG, their consumption habits,
and use-cases for the brand (Preferably from a consumer survey)

2. Create a detailed digital marketing plan for your idea clearly defining your
platform/touchpoint strategy

3. In addition to the campaign, what other approach would you take to drive trials
and adoption for Nescafé Latte? Please look at building preference for both the
single serve cup and the multipack in your plans and suggest 1 big idea along with a
detailed operational plan# for any ONE of the options below:

a. Sampling

b. Consumer/Trade promotions

c. In store visibility/activations

d. Any other BTL activity

#Points to keep in mind: Scalability (financial and operational) and measurability