Nestlé: Quest for dominance in the global coffee market
The global consumer packaged coffee market has grown noticeably in recent years. It is forecast to grow further as demand for single serve solutions and premium products grows. This makes it attractive to fast moving consumer goods companies eager to be active across the product spectrum. In no case has this been more apparent than with Nestlé.
Features and benefits
- This case study analyzes how Nestlé has become a major player in the consumer packaged coffee market.
- This case study examines the market segmentation strategies Nestlé is adopting to secure a position as undisputed market leader.
- This case study looks at Nestlé's competition and how it is seeking to gain a competitive advantage in the consumer packaged coffee market
There is a wide range of coffee products available, designed to cater for all budgets and tastes. Each area of the market has its target demographic and all are lucrative. Nestlé has employed market segmentation strategies and product differentiation to launch a range of products which allow it to capture a share of every coffee sub-market.
Nestlé’s offering at the lower, instant end of the market revolves around the Nescafé brand. In order to grow the brand, Nestlé has employed market segmentation and product differentiation strategies which have proved successful. The company is a leading player in this sector but faces competition from the likes of Mondelez and Douwe Egberts.
Nestlé services the high end of the coffee market through its Nespresso brand. Nestlé harnesses the power of pod convenience but marries it with coffee quality, design and marketing that grant the Nespresso brand an air of exclusivity as it seeks to capture top-end consumers.
Your key questions answered
- Who are the market leaders in the global consumer packaged coffee market?
- How does Nestlé use market segmentation techniques to cement its position in the coffee market?
- How does Nestlé compete with major rivals such as Mondelez and Douwe Egberts?
- How is single serve coffee revolutionizing the market?
Table of contents
THE GLOBAL COFFEE MARKET
The global coffee market grew between 2008 and 2012
Both the roast and instant coffee segments remain lucrative
Nestle is the number two by volume market share
Nestle is not satisfied with being the number two player
NESTLE’S LOW-END OFFERING
The Nescafe brand: Success varies from country to country
The company employs market segmentation strategies to maximize its market
The company’s low-end offering is not limited to Nescafe
NESTLE’S MID-RANGE OFFERING
Douwe Egberts and Philips blazed a trail with the Senseo
Kraft was next on the scene with its Tassimo line of machines
Nestle was late to market with its Dolce Gusto machines
Rivalry in the mid-range coffee market is intense
There is evidence of market segmentation with the machines
NESTLE’S HIGH-END OFFERING
Nespresso is not a new phenomenon
Nespresso uses only very select coffee in its pods
Nespresso positions itself as an exclusive, high-end brand
This positioning allows Nespresso to charge a premium
Nespresso machines are also sold at a premium
Market segmentation has made Nestle a major player in the global coffee market
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By company: Nestle
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