Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

I. Background Analysis
1.1 Product and Product Analysis
NESCAFÉ 3in1 Original Instant Coffee 18g Sachet (Display Box of 10)
NESCAFÉ Original 3in1 Coffee Mix is a delicious blend of coffee,
creamer, and sugar in a single-serve sachet. It's carefully designed to make
astonishing sweet white coffee with ease every time. Savor the delicious
balance of coffee sweetness with a smooth crema, wherever and whenever
you want.
Nescafe Original had carefully selected high-quality beans. Medium-
dark roasted coffee beans give every mug a rich, full flavor. High-quality
and sustainably sourced from countries like Colombia, Brazil, Honduras,
Vietnam, and Indonesia.
NESCAFÉ 3in1 Original tastes like a quality coffee roast, with its
comforting aroma and distinctive full-flavor taste, Nescafe 3in1 Original
conveniently turns their medium-dark roast signature blend into a sweet
white coffee in an instant.
The main ingredients of Nescafe Original 3 in 1 were Sugar (46%),
Whitener (35%) [Glucose Syrup, Palm Kernel Oil, Skimmed Milk Powder,
Milk Proteins, Lactose, Stabilisers (E331, E452), Acidity Regulator (E340),
Emulsifiers (E471, E472e), Milk Fat, Color (E101)], Instant Coffee (14%),
Chicory Root Fiber, Salt, Natural Flavoring.

Nescafe 3 in 1 Nutrition Facts:

Typical values Per 19g
Energy 81 kcal
Fat 2.1g
Protein 0.4g
Carbohydrate 15.2g

INGREDIENTS:
Coffee creamer [Glucose syrup, Hydrogenated vegetable oil (may contain
one or more of the following oils: Coconut, Palm, Palm kernel),
Sequestrants (Dipotassium phosphate, Trisodium citrate, Sodium
polyphosphate), Caseinate, Emulsifiers (Mono- and di-glycerides of fatty
acids, Diacetyl tartaric and fatty acid esters of glycerol), Anticaking agent
(Calcium carbonate), Salt], Sugar, Maltodextrin, NESCAFÉ instant coffee,
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

Iodized salt, Stabilizer (Sodium carboxymethyl cellulose), Flavors,

Sweetener (Acesulfame potassium).
Allergen information: Contains MILK.
COFFEE FACTS
• Made with Robusta beans
• The new Nescafé original has 40% more content to give you that strong
taste and aroma.
• How to serve -- pour contents into a mug. Add 200ml of hot water. Stir
and enjoy! A standard serving of Nescafé instant coffee in a mug plus
200ml of water.

1.2 Market Analysis

Nescafe, being a product of a famous brand nestle have been
successful in capturing a high market share of instant coffee. The word
Nescafe is actually the portmanteau of two words that are “Nestle” and
“café”. Max Mergenthaler along with his team members had worked hard
for almost seven years to make coffee powder. On April 1, 1930 for the first
time in Switzerland, they succeeded. It was launched in the United States
with a brand name known as Taster’s Choice Nescafe. However, the brand
name was once again changed and was then known as Nescafe Taster
Choice.

Marketing strategy
Nestle is one of those products that is considered to be people and
brand oriented rather than being system oriented. Their marketing
strategy is designed in a way that gives importance to the needs and
lifestyles of their consumers. The product is of high quality and they also
try to improve their pricing strategy and distribution networks. Along with
all these priorities they are able to generate annual profits (Wentzand
Newbery, 2010).
Nestle Nescafe has been able to satisfy its customers by providing them
with products of good quality. This is given intense value. Nescafe seeks to
have loyal customers for which they renovate and innovate their products.
Nestle prefers to have increased flexibility in its business for which it has
become decentralized. To gain the satisfaction of its customers it involves
itself in improving its activities along with segmenting its market, targeting
different groups of customers and positioning. The market of coffee is
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

intense around the world. Out of 73% of the instant coffee market Nestle
has been able to occupy around 72%. This shows the brand loyalty and
their marketing strategy that Nescafe adopts around the world (Greff,
2010).
The three vital elements on which the marketing strategy of Nestle is
dependent on is shown by the following formulation:
-Consumer
-Competition
- Quality
The discussion of how, when and where to compete is considered less
important for Nescafe than quality that they produce to satisfy their
consumer’s wants. This is a part of their effective marketing strategy.

Target market
The company is mainly targeting the class of consumers that are socio-
economic. Those people who accept that nestle provides products that are
of good quality are its potential consumers (Student Murat’s Blog, 2003).
However, the prices of its products are not very low, and therefore, not
everyone can afford it. Following is a strategy that they use to choose the
market that they plan to target:
-Quality realization
-Education
- Income level

Nescafé’s target market consists of basically coffee drinkers, especially

people whom are in the need of instant and qualified coffee that stimulates
body within a day. Due to its convenience, it is a quick solution for people
who want to enjoy it at home, work or school; accordinlgy, it targets each of
them in different ways. Especially for target segments of working
individuals or students, it aims to awake them in the mornings, sober up in
the afternoons, or again keeping awake in the late evening. Besides,
another target can be assumed which contains the middle-aged and elderly
people who get into the habit of drinking Nescafé. On the other hand, if we
think demographic variables deeply, it can be seen that targets are more
youth oriented.

Market Segmentation
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

Consumer Profile:
In brief, the consumer profile is as follows:
1)Occupation: StudentsAge: 15-23
Lifestyle: Busy
Denstiy: Urban
Personality: Ambitious, outgoing
Occasion: Seasonal (at exam times)
Benefits: Convenience
User Status: Potential user, regular user, first-time user
User rate: Light user
Loyalty Status: Medium

2)Occupation: ProfessionalsAge: 23-31

Lifestyle: Western
Denstiy: Urban
Personality: Inspired, outgoing
Occasion: In the mornings
Benefits: Quality
User Status: Regular user
User rate: Medium user
Loyalty Status: None, medium, strong
3)Occupation: ManagersAge: 46-60
Family Life Cycle: Married w/children
Lifestyle: Hard-worker
Denstiy: Urban
Personality: Ambitious
Occasion: Regular
Benefits: Speed
User Status: Regular user
User Rate: Heavy user
Attitude toward product: Indifferent

Best Target Segment:

When those segments that can be potential target markets of Nescafé
are examined, it is seen that the second one is the best fit for company’s
actual segmentation. In this one, the focus is urban young professional
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

cosmopolitans with contemporary lifestyles. Taste and aroma of the coffee,

accordingly quality is the important element for them. Nescafé emphasizes
keeping them active througout the day.

1.3 Competitive Analysis

Nestle is known most for its instant coffee which was one of the first
global instant coffee brands to be released in the market. Nescafe is known
as the most popular and widely sold coffee brand in the world and also has
one of the most favorite advertising jingles. Nescafé faces competition from
various local and global coffee brands, including but not limited to: Jacobs
Douwe Egberts (JDE), Starbucks VIA Instant, Folgers, Maxwell
House,Tchibo. Despite the competition, Nescafé has retained a leading
position in the instant coffee market thanks to its strong brand recognition,
quality products, and effective marketing campaigns.

STRENGTHS WEAKNESSES
• Dependence on the instant
•Strong brand recognition coffee
• Global presence segment
• Quality and taste • Competition from global and
• Product variety and local
innovation brands
• Effective marketing strategies • Potential negative
• Sustainability initiatives perception of
• Parent company support instant coffee
• Commodity price
fluctuations
• Limited product offerings
outside
the coffee segments
• Environmental and
social concerns
OPPORTUNITIES THREATS
• Expanding specialty coffee • Intense competition
offerings • Changing consumer
• Growing ready-to-drink preferences
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

(RTD) • Fluctuating coffee bean

coffee market prices
• Sustainable and eco-friendly • Regulatory changes and
packaging compliance
• Expansion in emerging • Environmental and social
markets concerns
• Collaboration with local • Health concerns related to
coffee coffee
shops and restaurants consumption
• Leveraging digital channels • Economic downturns and
and ecommerce market
• Developing healthier coffee instability
options

Figure 1. SWOT Analysis of Nescafe

Construct to the Nescafe strength, Nescafé is one of the most
recognizable coffee brands in the world. Its iconic red mug logo and
consistent branding efforts have made it a household name, synonymous
with instant coffee. Nescafé’s products are available in over 180 countries,
giving it a wide customer base and diverse revenue streams. This extensive
distribution network enables the brand to reach consumers in various
markets, helping it maintain its global market share. On Nescafe product
variety and innovation, Nescafé offers a broad range of instant coffee
products catering to different consumer preferences, from classic blends to
premium selections. Tackling quality and taste Nescafe is known for its
consistent taste and quality across its product range. The brand’s focus on
sourcing high-quality coffee beans and using advanced production
methods has helped it maintain a loyal customer base that appreciates its
distinctive flavor. Based on the market, Nescafe has an effective marketing
strategy. Nescafé has a history of engaging and innovative marketing
campaigns that resonate with consumers. The brand leverages various
marketing channels, including television, print, digital, and social media, to
create memorable and impactful advertisements that strengthen its brand
image. As a part of Nestlé, Nescafé benefits from the resources, expertise,
and established supply chain of one of the world’s largest food and
beverage companies. This support enables Nescafé to operate more
efficiently and effectively, enhancing its overall business performance.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

Conducting to Nescafe weaknesses in dependence on the instant coffee

segment: Nescafé’s primary focus on instant coffee makes it vulnerable to
changes in consumer preferences and market trends. As consumer tastes
evolve and preferences shift towards specialty coffee, cold brews, or ready-
to-drink coffee beverages, Nescafé’s dominance in the instant coffee
segment could face challenges. And also, the potentially negative
perception of instant coffee, some coffee enthusiasts and consumers might
perceive instant coffee as inferior in quality or taste compared to freshly
brewed coffee. This perception can make it difficult for Nescafé to attract
new customers, particularly those who prioritize taste and quality over
convenience. On the other hand, competition on the weakness of Nescafe is
the competition from global and local brands, Nescafé faces intense
competition from both global and regional coffee brands, including
Starbucks, Jacobs Douwe Egberts, Folgers, and Tchibo, among others. This
competition can affect Nescafé’s market share, pricing power, and profit
margins. While on commodity price fluctuations, the coffee industry is
vulnerable to fluctuations in commodity prices, particularly coffee beans.
As a significant player in the market, Nescafé is exposed to these
fluctuations, which can affect its production costs and profitability.
Changes in the global economic climate, weather patterns, or political
factors can also impact coffee bean prices and availability. Another big
weakness of Nescafe was the environmental and social concerns, as a major
player in the coffee industry, Nescafé may face scrutiny and criticism for its
environmental impact, particularly regarding waste generated by single-
use packaging and coffee pods. Additionally, the brand must continuously
address issues related to ethical sourcing and fair labor practices in its
supply chain to maintain a positive brand image.
Notwithstanding Nescafe weaknesses opportunities on Nescafe are
expanding through such as expanding specialty coffee offerings, as
consumer preferences evolve, there is a growing demand for specialty
coffee and unique flavors. Nescafé can capitalize on this trend by
introducing more premium and specialty coffee products, targeting a
broader audience, and capturing market share from competitors. On the
coffee market, The RTD coffee market is experiencing significant growth,
driven by consumers seeking convenience and new flavors. Nescafé can
expand its RTD coffee offerings to cater to this demand and capture a
larger share of this growing market segment. Based on packaging, as
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

environmental concerns become increasingly important to consumers,

Nescafé can invest in more sustainable packaging solutions for its
products, such as biodegradable or compostable materials. This would
enhance the brand’s image and appeal to environmentally-conscious
consumers. Adding to the opportunities of Nescafe was a collaboration
with local coffee shops and restaurants, Nescafé can explore partnerships
with local coffee shops, restaurants, and hotels to offer its products as a
part of its menu or as a preferred coffee option. This strategy would help
the brand increase its market penetration and brand visibility. And also
leveraging digital channels and e-commerce, the growth of ecommerce and
digital marketing presents an opportunity for Nescafé to strengthen its
online presence and reach a wider audience. The brand can invest in
improving its online shopping experience, optimizing its website, and
expanding its digital marketing efforts to engage with consumers more
effectively. While with the increasing focus on health and wellness, Nescafé
can innovate and develop healthier coffee options, such as reduced-sugar,
low-calorie, or fortified products, catering to health-conscious consumers
and expanding its product portfolio. The threats to Nescafe are the intense
competition, The coffee industry is highly competitive, with numerous
global and local brands vying for market share. Nescafé faces competition
from major players like Starbucks, Jacobs Douwe Egberts, Folgers, and
local and niche brands. This competition can affect the brand’s pricing
power, profitability, and market share. And also changing consumer
preferences is one of the threats to Nescafe, Consumer tastes and
preferences in the coffee market are constantly evolving, with trends such
as specialty coffee, cold brews, and plant-based alternatives gaining
popularity. Nescafé must continuously adapt and innovate its product
offerings to stay relevant and cater to these changing preferences.
Conducting to fluctuating coffee bean prices, the coffee industry is
susceptible to fluctuations in coffee bean prices due to factors such as
weather conditions, global economic climate, and political factors. These
fluctuations can impact Nescafé’s production costs and profitability,
making it vulnerable to changes in the coffee market. On Regulatory
changes and compliance, Nescafé, part of the global food and beverage
industry, is subject to various regulatory requirements and compliance
standards related to food safety, labeling, and environmental impact.
Changes in regulations or non-compliance could result in financial
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

penalties, reputational damage, or even restrictions on selling its products.

Added to threats on Nescafe the health concerns related to coffee
consumption, there are ongoing debates and studies about the health
effects of coffee consumption. If negative perceptions about coffee’s impact
on health gain traction, it could reduce demand for Nescafé’s products and
affect its overall performance. And also concern environmental and social
concerns, as a major player in the coffee industry, Nescafé may face
increased scrutiny and criticism regarding its environmental impact and
labor practices in its supply chain. Addressing these concerns is crucial for
maintaining a positive brand image and fostering long-term growth.

1.4 Consumer Analysis

The existing genuine customers/consumers of the Nescafe brand are
those in the pecking order of social class (lower class-middle class). The
target audience of the offered product will be both men and women, and
the age of consumers will be considered the age of 15-60. It will be
preferred by teenagers, teens, workers, and adults. Scrutinizing their
behavior and approach towards the product will be justifiable for the
brand.
Additionally, most coffee drinkers want to enjoy their coffee by
aiding their needs, for instance, they want to feel revitalized and have the
energy today. Consumers want to enjoy their coffee without any
hassle/ready in a jiffy, all in the comfort of their own home. Their
preference towards the variations of the coffee that the brand proposes was
to ratify the versatility of Nescafe in the market. Consumers often approach
it with a focus on convenience and affordability. Instant coffee is a quick
and easy alternative to brewing coffee using traditional methods, making it
a popular choice for busy customers who may not have time to create a
fresh pot of coffee. In terms of flavor, instant coffee is not as rich or
aromatic as freshly brewed coffee, but it still has a devoted following of
consumers who acknowledge its taste and aroma. Numerous individuals
adhere to the milder taste of instant coffee, while others may boost the
flavor with milk and sugar. Here are some of the insights into the target
users of Nescafe:
Teenagers and Students: Some students may rely significantly on
instant coffee to keep them alert and focused during long study sessions or
to help them wake up in the morning.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

Busy professionals: Nescafe's instant coffee products are touted as a

convenient and quick option for persons who do not have time to brew
coffee from scratch. This implies that Nescafe's target users are likely to be
busy professionals who prioritize efficiency and convenience in their daily
routines.
Coffee lovers: Despite being an instant coffee company, Nescafe has a
wide range of goods to suit a variety of tastes and preferences. This shows
that Nescafe's target users are likely to be coffee lovers who appreciate the
various flavors and blends that Nescafe offers.
Budget-conscious consumers: Nescafe's instant coffee products are
often less expensive than specialty coffee drinks from coffee cafes. This
shows that Nescafe's target consumers may include cost-conscious
consumers who wish to enjoy coffee without breaking the bank.
Health-Conscious Consumers: Nescafe has lately developed products
aimed at health-conscious consumers, such as Nescafe Gold Plant-Based
Lattes prepared with almond milk. This implies that Nescafe's target
consumers may potentially include people who place a premium on health
and wellness in their food and beverage choices.
To sum up, everything that is been stated, consumer attitudes
toward Nescafe coffee are influenced by convenience, cost, and flavor
preferences. Nescafe's target consumers are likely to be a broad set of
people who place a premium on convenience, flavor, cost, and health in
their coffee purchases. While it may not be the first pick of coffee experts,
the Nescafe product remains a popular choice for many consumers who
value its convenience and accessibility.

II. Synthesis
2.1 Problems and Opportunities
Due to the consumer’s analysis, the group would like to introduce an
innovation to a well-known coffee brand, “Nescafe Coffee”, through the
development and production of the coffee capsule or the “Nes-Capsule
(Nescafe Capsule)”. The goal of Nes-Capsule is to have a convenient way to
take our favorite coffee with us in our pockets or handbags anywhere and
anytime of the day without the hassle of opening sachets or looking for
coffee machines.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

With this innovation, problems and opportunities were identified as

follows:

Product Problems
 Production of a coffee capsule- one of the identified challenges is ensuring
the production of a coffee capsule that is compact yet easily dissolved in
water and preserving its flavor. In the production of the capsule, it is to be
considered that the extenders/ binders that will be used/ added to make
the product intact and in shape must have less or no added taste to the
coffee. The procurement and availability of machines/ equipment for its
production and storage should also be taken into consideration.
Furthermore, training requirements to complement the usage of the
machines/equipment should be expected.

 Equipment, training requirements, and ingredients/ materials for the

production of the capsule may not be locally available. These shall also
include the materials that will be used for packaging and distribution of the
product to targeted areas/markets. Alternatives and locally available
resources should be exhausted to cost-cut possible expenses for
production.

 Costing (suggested retail price of the product)- in the beginning of the

production, cost for the procurement of the ingredients, packaging
materials, production machines/ equipment, manpower requirement, and
distribution must be considered and may affect the pricing or
determination of the SRP of the Nes-Capsule.
 Pricing- Since Nescapsule have a new feature like energy drink effect and
contains collagen, glutathione and vitamins. The price might increase
unlike its normal price.

Product Opportunities
The concept itself brings economic, environmental and societal added
value to both consumers and manufacturers. The following are
opportunities set with the development of the Nes-Capsule:
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

 Support to local coffee farmers and producers of materials/ ingredients-

producing the product entails the need for the identification of suppliers of
its ingredients. Patronizing local suppliers and farmers, ensuring the
quality and taste/ flavor of the coffee, for the product, will be cost
beneficial to the manufacturer. Import expenses will be lessen, at the same
time, small and local industries were being empowered.
 Convenience to the new target market- the new product will be small and
handy that will be easy for the consumers to bring in any occasion or place.

 Develop job opportunities- production of the coffee capsules will require

manpower, from the operations of the machines, manufacturing, and
distribution. With this, jobs will be created. Lastly,

 Lessen waste and pollution- logistically speaking, savings can be made

for consumers in terms of waste (vs pods, pads, jars of instant coffee
etc.) and for manufacturers and retailers in terms of packaging and
volume of goods transported and stored, offering advantages for
loading, transport, environmental safety and shelf stocking etc.

2.2 Theoretical Framework

This study is supported by theories to help the marketers to make an
innovative product that is unique, meaningful and new in market
segment, also it can help the marketers to elaborate more all the
information and to discuss all the theories that is related with the
proposed innovative product which is the coffee capsule.

Digging Deeper into Consumers’ Minds and Lives

Some market researchers use variety of techniques and strategies to
learn about consumer. Surveys, experiment and data studies have a long
help to the marketers to fully develop more effective strategies and to
have a basis in understanding consumer minds and lives. There's a
study where the recent trend in market is to dig deeper into consumers’
minds and lives using a variety of anthropological techniques to better
understand the deeper meaning of products and brands.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

This theory is associate to the study of the marketers for the reason
that it can elaborate more the importance of creating such techniques in
order to be more mindful and knowledgeable about the consumers.
Analyzing consumer behavior may serve as a guide for every marketer
to assess what aspect they need to consider to proposed an innovative
product that is new in minds and lives of every consumer. In addition,
with these theories it will be beneficial in a way of discussing the reason
and significance of our innovative product which is a coffee capsule.
After assessing consumer behavior, we come up with this kind of
product since coffee is very trend nowadays. We can use that
opportunity to improve the product, improve its packaging and to
improve its features.

Competitive Advantages
With our generation today, being a more organized and strategized
company can be a big factor to compete more effectively than its
industry peers. Competitive Advantages may serve as a key for every
marketer to produce better goods and to innovate a new product in the
market segment. In addition, this theory of competitive advantages
indicates what makes an entity product more desirable to customers
than that of any form of other rival. The aim of this theory is to gain
benefits by offering products with distinctive advantages over
competitors.
This theory is related to the study since the product brand that
marketers use to innovate a new product has a lot of bigger competitors
in its industry peers. Also, with the use of this theory it will enlighten
the marketers on what strategies are needed to offer a unique and
desirable product to the target customer. With our innovative product
which is coffee capsule this product will gain more profit because it has
a lot of advantages in terms of its features, design and it's new
packaging. Furthermore, this theory will help not only the marketers
but also the customer to be more observant about the uniqueness of
every product that they purchase in any market segment.

PRODUCT INNOVATION
According to Sheth (1981) and Rogers (1995) acceptance of
innovations depends on the personal habits and the risks associated
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

with innovations. The strength of the individual attachment to habitual

practices can cause resistance to the installation of the new behavior. In
other words, consumer innovativeness or innovative values may either
encourage or constrain consumers’ perception and acceptance of
innovative products/services. In addition, personal and consumer
values affect the ability and desire of the individual to change his/her
behavior.
This theory is somewhat related to the study because using this
theory, the marketers are able to know how consumers perceive the
innovation of a specific product. With regards to the product, the
researchers will know if the coffee in a capsule is favorable and a greater
choice for consumers than regular coffee.

CONSUMER'S APPROACH ON GREEN PRODUCTS

Recently, the principle of sustainability and
environmental/ecological issues in the process of production and
consumption have been discussed in most countries. The topics of
resource use efficiency, waste management and emissions reduction
were discussed, as well as improved environmental performance and,
therefore, reduced environmental impact (Pujari, 2004). Sustainable
consumption is both a lever for sustainable production and the result of
it. The use of more environmentally friendly technologies is already
creating a healthier environment for consumption and consumer
decisions, and then sustainable consumption and post-consumption
(conservation, reuse, recycling, etc.) activities take over, creating a
sustainable consumption cycle (Jansson et al., 2010).
This principle of sustainability and environmental/ecological issues
in the process of production and consumption is associated with the
study, since the innovative idea on using a dissolvable material on
coffee is considered as green product and it is much safer for our
environment. With this principle the researchers will know how
important it is for consumers to acquire sustainable and eco-friendly
products and how those factors affect their buying behavior.

PACKAGING
Ian Pavlov's classical conditioning theory suggests that product
packaging directly influences a consumer’s perception of the product.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

And the influenced value perception of product is bound to affect

consumers buying decision
The classical conditioning theory of Ian Pavlov is essential for this
study. Since the packaging of our product involves other functional
features, the researchers will know how packaging affects consumer's
buying behavior and how important it is to the success of the product.

Analyze Consumer-Product Relationships.

Pricing strategy for a new product generally starts with at least one
given: The firm has a product concept or several variations of a product
concept in mind. When a price change for an existing product is being
considered, much more information is typically available, including
sales and cost data. Developing a pricing strategy is one of the
important aspects in every company but before this useful first stage in
the process is to analyze the consumer-product relationships.
This study is very relevant on the study of marketers because this
theory is the combination of ideas about pricing strategy, relationship of
products to consumer and distribution channel. Also, these theories
also tacked how the product benefit the target market, our innovative
product which is nescapsule will benefit our target market in a way of
they can drink coffee anywhere because it is capsule were they can take
in wherever they are going. They can use this product in a situation such
as when they need to travel and when they are in a night shift regarding
on their work. In terms of the pricing strategy this theory also discuss
how it develop pricing strategy for a new and existing product. Which is
related to this study because the marketers also develop a pricing
strategy for the new proposed product a price that is affordable for all
target customer. Lastly, this theory also elaborated about the
distribution channel of the product. Just like in this theory the firm
supposed to distribute the product on traditional store, convenience
store and in online store and with that scenario it can be a testament
that this theory was very connected with our study since the marketers
also decided to distribute the product which is nescapsule in
convenience store nationwide and also the proposed product can be
purchase in online store.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

STRENGTHS WEAKNESSES

-Innovative products - Since it is new in the

have new features and market segment it can
new uses. lead to lack of
- New packaging that brand/product
will make the product awareness.
more desirable to - Environmental and
customers. social concerns.
- This innovative -Potential negative perception
product uses eco- of instant coffee.
friendly or
environmentally friendly
materials that make it
simple but unique.
- Product Variety and
Innovation.
OPPORTUNITIES THREATS
- The innovative idea of - Consumers are able to
the product is unique purchase coffee with its
and new to the traditional packaging
customers and possibly because they are used to
a trend in the market. it, and it's they're
- Since the innovative preference or choosing a
product is environment coffee product.
friendly, it can lure - Traditional coffee companies
customers that are can easily duplicate or copy
concerned with our packaging; thus, larger
protecting and capital companies can be a
preserving our natural treat to us.
environment.
- the government is
encouraging businesses to
apply green technology or
using eco-friendly materials to
their products, with this we
can easily promote the product
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

and lead us to increase in sales.

Figure 2. SWOT Analysis of Nescafsule

III. Proposition
3.1 Summary
Summary of Chapter 1
To inaugurate the product, Nescafe 3in1 Original Instant
Coffee is a brand of coffee made by Nestle that originated in
Switzerland. The coffee mix is a delicious blend of coffee, creamer,
and sugar in a single-serve sachet. It has high-quality beans that are
sourced from different countries and made it tastes like quality rose
quality of coffee. The main ingredients and Nutrition Facts,
additionally the Coffee facts are fully stated for the consumer to
contemplate and if they were inquisitive towards the benefits and
facts, they could get from considering the Nescafe coffee product.
On top of market analysis, it was insinuated and produced by
the popular brand Nestle. It was formulated by Max Mergenthaler
alongside his team members for seven years, bearing compassed the
high market share of instant coffee. The three dynamic elements that
Nescafe exhibits in its formulation of marketing strategies are
Consumers, Competition, and Quality. Their Marketing Strategy lies
within an arrangement to give significance to the needs and lifestyle
of their consumers which they are not enclosed to innovate and
renovate their products to retain and secure loyal customers. Nescafe
plump for ascending their flexibility outturn to decentralized. To
acquire the satisfaction of the customers, they engage them in
activities, segmenting to market, targeting different groups of
customers, and positioning. In the world market of coffee, Nescafe
proves its brand loyalty and tier marketing strategy by dominating
the market percentage of 72% out of 73%. The discussion of how,
when, and where to compete is considered less important for
Nescafe than the quality that they produce to satisfy their
consumer’s wants justify the utilization of the efficient marketing
strategy.
The target market of Nescafe was the class of consumers that are
socio-economic. The market they plan to target by the strategy it
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

employs is the quality realization, education, and income level of the

potential buyer, the demographics and consumer profile are
correspondingly examined. The potential customers consist of coffee
drinkers, working individuals, and students that aim to revitalize
their energy.

Nescafé’s competitive analysis as it faces competition from various

local and global coffee brands, including but not limited to: Jacobs
Douwe Egberts (JDE), Starbucks VIA Instant, Folgers, Maxwell
House, and Tchibo. Despite the competition, Nescafé has retained a
leading position in the instant coffee market thanks to its strong
brand recognition, quality products, and effective marketing
campaigns. Nescafe scrutinizes its SWOT to fully grasp its place in all
variables. Nescafe strengths are instilled in the strong brand being
the most recognizable brand in the world, breaking down to the
weakness which is its vulnerability to constant changes and
evolution of preferences and market trends of consumers in the
market in spite of the reigning dominance the Nescafe have in the
instant coffee market. Withstanding that weakness will create
opportunities for the brand to expand its offerings in the market
however it could still face a threat in the midst of challenges from
strong competition and due to the fact that some perceptions in
instant coffee deteriorates against the brewed coffee. Addressing
these concerns is crucial for maintaining a positive brand image and
fostering long-term growth.
The consumer analysis will fall into the categorization of the
social class of potential and existing consumers. The target audience
of the offered product will be both men and women, and the age of
consumers will be considered the age of 15-60. It will be preferred by
teenagers, teens, workers, and adults. Scrutinizing their behavior
and approach towards the product will be justifiable for the brand.
Consumers desire to relish the convenience and affordability in all
comfort at their homes. Their preference towards the variations of
the coffee that the brand proposes was to ratify the versatility of
Nescafe in the market. The brand accumulated insights into the
target market of Nescafe users including teenagers, students, busy
professionals, coffee lovers, budget-conscious consumers, and
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

health-conscious consumers. In all-inclusive, consumer attitudes

toward Nescafe coffee are influenced by convenience, cost, and flavor
preferences. Nescafe's target consumers are likely to be a broad set of
people who place a premium on convenience, flavor, cost, and health
in their coffee purchases. While it may not be the first pick of coffee
experts, the Nescafe product remains a popular choice for many
consumers who value its convenience and accessibility.

Summary of Synthesis
The group would like to introduce an innovation to a well-
known coffee brand, “Nescafe Coffee”, through the development and
production of the coffee capsule or the “Nes-Capsule (Nescafe
Capsule)”. With this innovation, problems and opportunities were
identified as follows:
Production of a coffee capsule – one of the identified
challenges is ensuring the production of a coffee capsule that is
compact yet easily dissolved in water and preserving its flavor. In the
production of the capsule, it is to be considered that the extenders/
binders that will be used/ added to make the product intact and in
shape must less or no added taste to the coffee. Furthermore,
training requirements to complement the usage of the
machines/equipment should be expected. These shall also include
the materials that will be used for packaging and distribution of the
product to targeted areas/markets. Costing will be affected
considering from the beginning of the production to its distribution
on what will be the pricing and determination of the SRP of Nes-
Capsule and it will have a new feature like energy drink effect and
contains collagen, glutathione, and vitamins.
The concept itself brings economic, environmental, and
societal added value to both consumers and manufacturers. The
following are opportunities set with the development of the Nes-
Capsule:
Support to local coffee farmers and producers of
materials/ingredients, producing the product entails the need for the
identification of suppliers of its ingredients. Import expenses will be
lessened, and at the same time, small and local industries were being
empowered. The new product will be small and handy that will be
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

easy for the consumer to bring to any occasion or place. The

production of coffee capsules will require manpower, from the
operations of the machines, manufacturing, and distribution. With
this, jobs will be created lastly. Logistically speaking, savings can be
made for consumers in terms of waste and for manufacturers and
retailers in terms of packaging and volume of goods transported and
stored, offering advantages for loading, transport, environmental
safety, shelf stocking, etc.
This study’s theoretical framework is supported by theories to
help marketers to make an innovative product that is unique,
meaningful, and new in the market segment, also it can help the
marketers to elaborate more on all the information and to discuss all
the theories that are related to the proposed innovative product
which is the coffee capsule. Some market researchers use a variety of
techniques and strategies to learn about consumers. Surveys,
experiments, and data studies have long help to marketers to fully
develop more effective strategies and to have a basis for
understanding consumer minds and lives using a variety of
anthropological techniques to better understand the deeper meaning
of products and brands. Over and above, these theories will be
beneficial in a way of discussing the reason and significance of our
innovative product which is a coffee capsule. Competitive
Advantages may serve as a key for every marketer to produce better
goods and to innovate a new product in the market segment. In
addition, this theory of competitive advantages indicates what makes
an entity’s product more desirable to customers than that of any
form of other rival.
The aim of this theory is to gain benefits by offering products
with distinctive advantages over competitors. This theory is related
to the study since the product brand that marketers use to innovate a
new product has a lot of bigger competitors in its industry peers.
With our innovative product which is a coffee capsule, this product
will gain more profit because it has a lot of advantages in terms of its
features, design and its new packaging. Furthermore, this theory will
help not only the marketers but also the customer to be more
observant about the uniqueness of every product that they purchase
in any market segment.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

The strength of the individual attachment to habitual practices

can cause resistance to the installation of the new behavior. In other
words, consumer innovativeness or innovative values may either
encourage or constrain consumers’ perception and acceptance of
innovative products/services. In addition, personal and consumer
values affect the ability and desire of the individual to change his/her
behavior. With regards to the product, the researchers will know if
the coffee in a capsule is favorable and a greater choice for
consumers than regular coffee. The classical conditioning theory of
Ian Pavlov is essential for this study. Since the packaging of our
product involves other functional features, the researchers will know
how packaging affects consumers’ buying behavior and how
important it is to the success of the product.
The firm has a product concept or several variations of a
product concept in mind. When a price change for an existing
product is being considered, much more information is typically
available, including sales and cost data. This study is very relevant to
the study of marketers because this theory is the combination of
ideas about pricing strategy, the relationship of products to
consumers, and distribution channels. Moreover, these theories also
tackled how the product benefits the target market, our innovative
product which is the nescafsule will benefit our target market in a
way of they can drink coffee anywhere because it is a nescafsule
where they can take in wherever they are going.

3.2 Target Market

Nescafsule has the energy drink effect and contains collagen,
glutathione, vitamins (D, E, B2, B3, B6, iron, and protein). This
product's target market comprises more than just coffee drinkers
and lovers; it's also popular among teens because it contains collagen
and glutathione. Students usually drink coffee during the school
year, especially during hell week or test week. They drink it more
regularly throughout this season. In this product Their bodies will
not only receive caffeine, which will keep them alert, but they will
also receive other vitamins, which will assist their health. Drinking
this product will help them acquire the glow they desire while also
allowing them to do all of their tasks.
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

Coffee is the best friend of workers, especially night workers. Call

center agents at age 20-50. They needed caffeine to stay productive,
which this coffee capsule provides. It makes it easier for them to use
the product because it is simple to use. It will be more convenient for
them because they will not have to go to coffee machines or buy
coffee outdoors; with this 18g 3 in 1 original instant coffee, they will
be able to obtain the caffeine and other vitamins that they require.
We also intend to appeal to customers who cannot afford the larger
sachets of coffee; our product will be more accessible to them.

3.3 Distribution
The following will be the distribution of Nescafsule 3in1
Original:
Nescafsule 3in1 Original Coffee Capsules will be distributed in
convenience stores nationwide. Through convenience stores,
customers can buy coffee capsules near their homes. Nescafsule 3in1
original were chosen to be distributed in convenience stores due to
their convenience, brand recognition, target market, and product
variety. Convenient stores often cater to busy, on-the-go customers
who are looking for products that are easy to use and require
minimal preparation. Convenience stores are placed in locations that
are convenient for local customers. They are a natural destination
point for the neighborhood in which they are located. If someone
requires a couple of items that don’t justify a trip to the local grocery
store, then a trip to the convenience store down the street makes
more sense. Convenience stores offer the traveler a one-stop shop for
items they might want or need while traveling. So, it is good to have
exposure of the product through convenient stores and for our
product to be more accessible when needed or want. Simply having
an exposure to consumers of Nescafsule 3in1 through convenient
stores can also gain new customers/consumers. Through convenient
stores some consumers can visit the store inside to drink coffee to
remove tiredness or sleeplessness. Nescafe should test different
distribution methods to determine the most effective approach.
Nescafe coffee capsules are designed for people who enjoy a good
cup of coffee and want a convenient and hassle-free way to make it at
home or work. They could appeal to coffee lovers, busy professionals,
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

students, home users, and office users. Convenience stores are often
located in convenient locations, such as along major roads and
highways or in densely populated urban areas. This makes them an
ideal location for people who are looking for a quick and convenient
way to grab a coffee on the go. Convenience stores are known for
their ability to generate impulse purchases, as customers are often in
a hurry and looking for quick and easy solutions. Nescafsule 3in1
original coffee capsules are a great fit for convenience stores as they
are a small, easy to-store product that can be quickly grabbed by
customers who are looking for a quick caffeine fix. Nescafsule 3in1
will be distributed also on different grocery stores nationwide.
Distributing Nescafsule 3in1 original to grocery stores can have
many benefits, including increased accessibility, convenience, brand
recognition, sales, and repeat customers. Distributing Nescafe coffee
capsules to grocery stores can have several benefits, such as
increased accessibility, convenience, brand recognition, sales
increase, and repeat customers. Grocery stores offer a large customer
base, and by tapping into this market, Nescapsule can increase their
revenue and market share. It can also be distributed online on the
Nescafe official online stores. The COVID-19 pandemic has
expedited the growth of e-commerce in the world, as in global
markets, strengthening online shopping exchange relationships.
Nescafe seeks advanced models of online shopping dimensions that
are appropriate for tailoring services to customers. When customers
crave some coffee and don't want to go outside, Nescapsule 3in1
Original are available online, Customers can purchase items from
the comfort of their own homes or workplace. Shopping Online is
made easier and more convenient for the customer through the
Internet.

3.4 Marketing Strategies

Marketing strategies are a tool marketers use to establish their

numerous campaigns and marketing models. It is the method of how
the customers get interested in the products or services.
However, the first strategy that Nescafsule will have is the social
media marketing. Social media marketing entails expanding the
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

business via the use of social networking sites such as Facebook,

Instagram, Twitter and TikTok. These sites may help to create
relationships with potential customers, solve consumer questions,
and deliver fresh leads to your website.
Second marketing strategy is the video marketing. Video
has a greatly higher engagement, comment and share rate than text.
Videos are great method to communicate with possible clients online
since they are extremely entertaining, memorable, and user-friendly.
There are different variety ways to utilize videos such as video
advertisements, content marketing films that is entertaining,
corporate culture videos, videos of product demonstration and
customer feedback.
Lastly, we will use Influencer marketing. It is a developing
sort of marketing approach that allows a business to promote our
product by collaborating with people who have influence with our
target audience. These influencers may or may not be typical
celebrities. More often than not, they are someone who has built a
significant online presence and reputation in a certain field, such as
a blogger, YouTuber, or social media celebrity.

3.5 Pricing
We will set our prices based on what our customers are willing
to pay. Since our target market mostly are the Filipino coffee lover,
we will set our price in a very affordable price. A box of Nescapsule
will contain 4 capsule pack that has 8 capsule per capsule pack which
means a box will contain 32 pieces. A Nescapsule will cost Php550
per box. But to make it more affordable to our valued customers, we
will also sell it in retail. Our Nescapsule will cost Php19.50 per piece.
In that way, more coffee lovers will be able to purchase our product.

3.6 Prototype of the Nescafsule

 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management
 Pablo Borbon Campus

College of Accountancy, Business, Economics and International Hospitality

Management

Reference:

https://assignmentpresentationedu.blogspot.com/2013/06/term-paper-
on-segmenting-targeting-and.html

https://mervegulnazerdem.wordpress.com/market-segmentation/

https://www.grin.com/document/271463?
fbclid=IwAR1EfDjhT4qrC4cEgsoxrmJNKB9f24DHhoN9QdVVUxpCG64e
OzmweXsZ-g

https://www.nescafe.com
https://www.nescafe.com/cb/our-coffees/nescafe-3in1-original-instant-
coffee

https://thestrategystory.com/blog/nescafe-swot-analysis/
https://adbrand.tv/psychology-behind-packaging-design/#:~:text=The
%20classical%20conditioning%20theory%20suggests,to%20affect
%20consumers%20buying%20decision. https://www.mdpi.com/2071-
1050/14/2/689
https://www.researchgate.net/publication/332350186_Product_Innovati
on_-_A_Theoretical_Framework_of_the_Concept