Travails of a Coffee Cup !

The Instant Coffee Market is ruled by two Multinationals who together control more than 98 % of the market. Bru from HLL (now HUL) and Nescafe from Nestle need no introduction. Though present in the same market and address the same needs of the consumer, these brands represent two very different and distinct personality.

Bru has always worked on the platform of being a slightly cheaper product, ‘closer to filter coffee’- taste and ‘reinforcing happiness’ image. Nescafe is a more evolved brand, which just focuses on “Being Yourself” and “Deserving the best cup”. Nescafe if not heavily, but outsells Bru by a margin of 7 % in market share. With a slightly better quality product and a ‘very rich coffee’ image, Nescafe has always been a pull product unlike bru which does quite a bit of pushing (remember ads where the protagonist cries out load .... “Itz Bru Maaaaa”).

While branding a product of Nescafe’s caliber, Nestle has to manage 2 things – Its Current Brand Image and Future Positioning Plan. Being a premium product which advertises emotional gratification, it can only try moving higher up the value chain. But what Nescafe is doing in south has made me feel, if they too are trying to push their product. Nescafe team seems to have become ridiculously desperate with their Activation efforts.

[Outside Jeeva Park - T.Nagar, Chennai - Dated March 2007]

What you see above in the New Nescafe Activation, where they are trying to own the small platform hot teashops (HTS in FMCG lingo) and advertise their brand through these shops. Premium Product through these shops is indeed a funny idea with the Nescafe Banner in the shop reading “ Rich Taste; Richer Moments”. This has been quite a terrific irony I have come across in the recent past. With no analysis on who in Nestle gave this idea and what are they trying to do, here is a look at why this is gonna leave their brand identity in shambles.

• Chennai or any South Indian city is the biggest consumer of Nescafe as its taste is closer to filter coffee than Bru. With the acceptance of the “a richer taste” among these consumers, Nescafe should be doing things to get a better premium on their products than taking their product to the platform. This will definitely alienate these consumers for whom ‘filter coffee’ is available at an arm’s reach.

• 90 % of the Teashops in chennai are owned by keralites and is frequented mostly by bachelors and workmen. 70 % of the teashop’s sales come from selling Tea. Even companies like Brooke Bond and Tatas have ignored these shops not willing to reduce the brand image. Nescafe, which costs around twice as much as Red Label or Tata Tea, ideally should have not gone for this.

• If this is just an attempt to hike up the visibility, Nescafe could have tried it on any other place, which could range anywhere from upcoming malls to parking spaces. The place should not add any 'negative' value back to the brand like what might happen with the current effort.

• Coffee always has a premium positioning in people's mind and is considered a "Rich Man’s Drink" unlike Tea. People associate Barista’s and Starbucks with Coffee and not a Roadside Nair’s shop.

Nescafe trying to reach out to the public is understandable, as they have been in a silent mode in the past. But what needs to be noted is the fact that they have been the market leader despite not being over pushy. Its time Nestle starts acting like a market leader and work more on innovating and growing the market rather than doing some cheap activation which might burry the brand beyond resurrection.