Strategic Brand Evaluation of Nescafe - Case Study Example

Strategic brand evaluation of Nescafe 0 The Brand 1 Defining a Brand Nowadays, consumers are exposed to a significant number of different brands, thus, there is an increase of those brands who managed to gain a strong position and reach the customers mind (Carlson and Johansson, 2014). So, what is a brand? The American Marketing Association (AMA) describes brand as a "symbol, design, name, sign, term, or a combination of any of them, with an intention of identifying goods and services from one seller or a group and to make them differ from those of competition" (Keller, 2013). According to that, being able to choose a name, logo, packing design, or other characteristics are the keys to creating a brand. The former CEO of Johnson & Johnson, James Burke has a unique definition of a brand as "the primary trust value of a given company and its corresponding clients" (Carlson and Johansson, 2014). Moreover, meeting the needs of a certain buyer/user by perceiving the unique benefit can lead to identifiable product/services by the brand successfully (Bhimrao and Ghodeswar, 2008). Furthermore, Brands offer a number of benefits to firms and customers due to their powerful entities by blending performance-based values with emotional values (Chernatory, 2010). 1.1.1 The differences between a Brand, Product and Commodity Keller (2013) argues that a product can be offered to the market for use, consumption, attention or acquisition to satisfy the needs and wants of customers. Therefore, a product can be tangible. In contrast, a brand can be represented by symbolic, emotions that are intangible elements (Keller, 2013). For example, Nescafe is a brand, whereby coffee beans are the commodity and instant coffee is considered to be the product. 1.2 Background of the brand Nescafe stands out as a worlds most popular coffee brands; they created the instant coffee category 75 years ago. Having developed a way to make a quality cup of coffee simply by adding boiling water, today Nescafe is present in over 180 countries; with more than 5,500 cups of Nescafe instant coffee undergo consumption in every second around the globe. In 2014, for the first time in the brands history, Nescafe products started to share the same visual identity by using the same new slogan "It all starts with a Nescafe." Through innovation, Nescafe has developed different blends and flavors, which are adapted to different local tastes; it comes in various sizes and price points from affordable prices to premium prices such as Nescafe Gold and Nescafe Dolce Gusto. Moreover, the brand features a number of essential design elements developed with the new, younger consumers through the unified approach to packaging design, digital strategy and communications. From the modernized Nescafe brand mark, they have introduced the Nescafe red accent and the iconic red Nescafe mug. 1.2.1 Brand Strategy Aeker and Joachimsthaler (2000) define brand architecture as a cohesive brand building process in which brand relationships are established in a competitive environment. Brand architecture is a critical aspect of the companys overall strategy, due to the reasons in which it provides a structure in order to leverage strong brands into different markets, justify the companys branding strategy and assimilate obtained brands (Rajagopal and Sanchez, 2004). 1.3 Brand Positioning Keller (2013) defines brand positioning as the "act of designing the companys offer and image so as to occupy a valued and unique position in the target customers minds"; he also stated that brand positioning is at the heart of marketing strategy. Similarly, Kapferer (2008) stated that positioning a brand could be done through emphasizing the distinctive characteristics by making it different from its competitors. Nescafe enjoys strong leadership in instant coffee (Euromonitor, 2014); thus, they have the highest market share in the global market of instant coffee. In addition, according to Inter-brand (2014) Nescafe was ranked 38 in best brands globally. In terms of brand positioning, Nescafe uses product differentiation and image differentiation. 1.4 New Brand Positioning Statement 1.4.1 Positioning Statement of Nescafe When the consumers of coffee come together and relate, they are usually bound by a positioning statement that states that, " Nescafe is a contemporary, upbeat brand of unique quality that gives one a rewarding coffee experience every time, everywhere. 1.4.2 The brand positioning process The process entails understanding all the needs and the desires of the stakeholders being involved, modeling the opportunity and then forming the brand platform. Identifying the brand is what follows then brand architecture takes its course. The final process phase is the continuous evaluation and development of Nescafe brand (Aaker and Joachimsthaler, 2000). 1.4.3 Brand Positioning Strategy The brand positioning strategy involves the composition of the product, the distinguishing position of the product, being concerned about the health of Nescafe consumers and finally combining the products taste with its quality. 1.4.4 The positioning strategy of Nescafe Nescafe when positioning their strategy uses three major steps. These steps include identifying, choosing and selecting the correct competitive advantage. The company then communicates efficiently to the target market position. 1.4.5. The new positioning statement "People who are cool, outgoing, inspired and trendy need to start each morning with an enjoyable and original smell and taste of coffee, Nescafe provide the best quality and taste, which makes someone feel unsleepy, happy and relaxed. 1.5 Competitor Positioning The Nescafe brand employs the use of product and image differentiation in a quest to gain competitive advantages and to build a position by providing products of superior value as compared to that of its competitors. The company commands a profound market share in the instant coffee market with the characteristics of its products, the high levels of quality, and the satisfaction that the brand gives to its consumers as alleged value. Moreover, the manufacturing company conveys classics unique advantages and positioning since the customers perceive a difference based on the image of the brand when competing offers look alike (Aaker and Joachimsthaler, 2000).. Brand positioning is constitutes of the fundamental marketing strategy of a particular brand. It is very important to put into action brand positioning, as it acts to serve the purpose of designing the offers that the company gives plus the image of the brand being sold which is Nescafe in this case. It is directed towards making the brand occupy a unique and a valued place in the mind of the targeted consumer. It means that the consumers should have affirmative emotions and favorable beliefs that are attached to Nescafe as a brand as compared to that of its competitors Biazzo, 2009). Proper brand positioning happens via emphasizing characteristics where the Nescafe brand has some relative advantages and deemphasizes the feeble characteristics. The new positioning statement identifies that any brand positioning statement should be based on the objectives of the company and shows the way that the brand manager would like Nescafe to be seen by the consumers. In order to make it to the correct positioning of Nescafe as a brand, its differences and parities to its competitors must be established (Cravens and Piercy, 2006). Although Nescafe may be the leading brand in the world, the company is in the process of adopting a differentiated positioning approach as they look forward to an advantage that it offers differently from the general class advantage that tend to position the competitor in a better place than them. Nescafe has come up with a point of difference approach as they continue with their market leadership competition (Aaker and Joachimsthaler, 2000). Nescafes position is directed towards the consumers who places his or her entire values on the quality of the product served to the customers whereby the quality of the brand is highly important in the competition. Nescafe can be said to get the most effective positioning strategy to attract associations to the side of the brand by trying to focus on the emotions and the feelings of the consumers to the product. Nescafe is successfully taking its position as the main market leader in its manageable efforts and the levels of trust that are evidenced in their positioning statement (Biazzo, 2009). 1.5.1Marketing positioning Marketing refers to the Brand manipulation to impart a positive public perception. In a well-positioned product, a strong sale stands out. The brand may become a go to brand type hence peoples choice. Inappropriate positioning has consequential bad reputation and sales. There are several activities involved in market positioning; these comprise of effective product positioning and specialization. (Aaker and Joachimsthaler, 2000). When releasing a product to the market, the involved company is required to internalize on the importance of the product before positioning. The company ought to evaluate the target customers and the existing consumer perception in related brands. The company also has an obligation to evaluate how the different form of marketing and presentation of the given product influences the customer’s perception. (Cravens and Piercy, 2006). Although those who use coffee are much less than 1% of the overall population, studies have shown that 9% of the young people take coffee. Additionally, about 40% of people take both tea and coffee. The widespread promotion of Nescafe through the media will most likely make the brand be used by this large group (Cravens and Piercy, 2006). When it comes to taking coffee, about 92 percent of the respondents contacted answered that they preferred Nescafe that included both the importers and the company’s product. Nescafe is in the process of encouraging the promotion of coffee by any other possible distributors because it will widen coffee growing in the market. One cup of coffee equals to one good feeling with Nescafe, majority of the people have been aware of the brand in a number of elements such as to pass love between two people, red cup, hug, co-workers, happiness amongst others (Aaker and Joachimsthaler, 2000). 2.0 Strategic Brand Analysis 2.1 Brand Identity Aaker (1995) identifies brand identity as the strive to obtain on the market by the Associations of the owner of a brand. In relation to Keller’s (2004) five relative brand Components, Nescafes brand identity have been categorized. However, the design factor have been replaced with a slogan. Nescafes visual identity has reflected the multiple experiences that it offers, as it encourages people to share the moments, find inspirations and trig new opportunities. In 2014, Nescafe launched the Revolution, this include the Nescafe red accent that is taken from the brand mark ‘Nescafe, in addition to Nescafe red mug and ‘a stylized graphic device (Nestle, 2014). Through that, Nescafe has attracted younger tastes because the way of consuming coffee is changing with new trends used by coffee shops. Brand identity always originates from the company by coming up with differentiated products that are unique from those of their competitors with respect to their features. It is the process of seeking company’s identity in the existing market. A firm always uses its branding strategies as a method of communicating to its target consumers and stakeholders about the identity and the value of the products that they produce. The excellent method brand identity construction revolves around marketing mix strategy. The strategy employs the use of the four P’s that stands for product, promotion, price and place (Aaker and Joachimsthaler, 2000). Fig 1. Identifying Nescafe Through brand identity, a firm looks to express its personal and distinctiveness to majority of its proper publics. Through the growth of brand identity both workers and the managers of a given company make the brand to be unique to the public and the market. Brand identity is said to be of different components that include brand vision, positioning, brand culture, personality, relationships and presentations (Biazzo, 2009). 2.1.1 Brand identity pyramid The set of the brand themes and styles always result in the formation of a six-sided identity prism. The prism tends to stress on the identity of Nescafe as a structured whole of six related elements of culture, personality, self-image, reflection, relationship and physique are incorporated within the brand itself and the last three elements. The last three facets represent the social elements that always give Nescafe its external expression (Kapferer, 2008). The external elements are communicated openly and they are observable and material. The most valuable components that are represented by the identical prism are the emotional and the representational components because the element of physique only makes it to the first stage in the Nescafe brand building process (Keller, 2013). The themes of brand Nescafe may include its physiques like the color logo and the packaging; the reflection that it displays the type of the representative used the brands advertisement. The theme may also show the relationship that Nescafe expresses too. The themes also tend to be more flexible than the style and the core of the brand and changes easier with fashion, style and technology (Keller, 2013). Fig 2. Brand pyramid showing the six dimensions of brand identity In the Kapferer brand identity prism, there are six aspects of brand identity that are displayed. The aspects are physique, personality, culture, relationship, reflection and self-image. The six aspects are divided over two dimensions, but in relation to Nescafe, there are two major aspects that are clearly expressed by the prism and they are discussed below. Physique Physique refers to the set of the physical characteristics of Nescafe as a brand that are evoked in consumers minds when the brand is mentioned to them. The major questions that arise from the consumers include, what does Nescafe look like? What can a consumer do with it? How can Nescafe be recognized? It is imperative to have a clear flagship product that represents the overall qualities of the brand. In the case of Nescafe, the consistent use of the products glass bottle has managed to create a recognizable and differentiating its market position. Kapferer also indicates that there is no brand that will make it without drawing attention to its material advantages. Personality The brand personality, in this case, conforms to the character of Nescafe. By talking to the consumers in a given way, these can be given the feeling that all communications related to Nescafe makes any person with particular character traits talking about it. This is clearly met by the use of specific writing fonts on the packages of Nescafe. 2.2 Brand image The brand image holds a close relation to the perception of the consumers Nescafe. Brand image has been defined as the combination of beliefs that are held by the consumers of Nescafe. It can be termed as the summation of all the total impressions that the consumers tend to get from many sources of which they merge and form a brand personality (Elliott, 2014). Brands may have the general personality that may be more relevant to the customers than mere technical facts that are known concerning Nescafe. The image does not only discuss the personal characteristics of the product, but it is also concerned with creating the total impression in the minds of the consumers. It also refers to the means by which a given brand is placed in the market regarding how the customer perceives Nescafe in this case (Cravens and Piercy, 2006). Consumers tend to form a personal image of the brand based on the associations that they develop after using this brand. It is the understanding that the consumers derive from the total set of all the activities that the company develops relating to the production of Nescafe. Brand consumers will always tend to give some character or an image to this product based on the biased insights of a set of associations that they have developed towards it (Elliott, 2014). There are three dimensions of brand associations that are related to the brand image of Nescafe. These dimensions comprises of benefits, attitudes and attributes. The attributes can be abstract or specific. Characteristics like size, weight, color tends to be specific while the brand personality characteristics such as durable, youthful and rugged tend to be conceptual in nature (Elliott, 2014). Characteristics can be divided into product-related and non-product related. Product related characteristics tend to be unique to the type of products that are not related to the non-product-related characteristics that include packaging and user imagery, as well as the usage of imagery in the packaging of Nescafe. Benefits refer to the perception of the consumers needs that are being satisfied. The categorization made on Nescafe divides them into three classes based on the problems that it solves (Eskola, 2005). 2.3 Brand Equity Brand equity can be given several definitions as it gives value to both the branding company and the consumers of the brand. A vital characteristic of almost all the definitions of brand equity is that they tend to focus more on the additional impact of the brand in comparison with some notions of what the consumer response would look like for the same product if by any chance it were not branded (Eskola, 2005). Concerning Nescafe, Brand equity can generally be defined as a set of a products brand assets and liabilities that are related to Nescafe, its name, and the main symbol used that adds to or subtract from the value given by Nescafe towards the targeted consumers of the firm. It can be used to indicate the value attached to Nescafe due to the powerful linkage that has grown in between the consumers and the brand together with the other stakeholders over a given period of time (Euromonitor, 2014). Equity tends to create value to customers by improving proficient information processing and shopping, developing the confidence of making major decisions, enhancing buying and contributing to the self-esteem of the consumer towards Nescafe (Hosty et al., 2008). It tends to create some value for the company making Nescafe via the increment of marketing efficiency and effectiveness, the building of a brand royalty, developing and improving the profit margins, acquiring leverage over the retailers of the product, and making it to the distinctiveness over the major competition (Euromonitor, 2014). It has been found that brand equity plays a big role in differentiating Nescafe from the competitors’ products; it also serves as a proxy for quality and brings about positive images in the minds of the consumers. Equity also shows market share corrosion in times of price and promotional wars and prevents the notion of market share erosion by offering to a company to respond to competitive threats from the major competitors of Nescafe as a global brand (Hosty et al., 2008). A brand is always said to have some affirmative customer-based equity when the consumers of the targeted product and the different ways through which the product is marketed when it is identified in comparison to when it is not present. Therefore, a brand characterized by affirmative customer-based brand equity may lead to the consumers being more accepting of an emerging brand extension, being a little bit less sensitive to the increases and withdraws in the prices of the advertising support or more willing to seek the products brand in an emerging distribution channel (Johansson, n.d.). The consumer-based brand equity that emerges when the consumer is well versed with the brand and holds to some positive associations with the brand in the memory. Favorable consumer responses, in turn, always leads to increased taxes, costs being low and the firm realizing greater profits for Nescafe sell all over the world (Hosty et al., 2008). Fig 3. Brand equity pyramid By applying the equity pyramid in the case of Nescafe, the company gets knowledge of what it will need to achieve and how it will be achieved equally in the society. The importance of coming up with a detailed plan to handle all the aspects of the pyramid is very important in order to achieve the brand resonance. Once the brand resonance has been achieved, then there is always the need for constant vigilance aimed at maintaining the position that Nescafe holds in the market making its payoff be significant. 2.4 Nescafe Brand Pyramid A brand cannot necessarily conform to a product but it refers to the products source, its meaning and its direction and it tends to define the identity of the product in time and space. Most often, Nescafe as a brand tend to be examined via its elemental parts as the brand name, the products logo, the design, packaging of the product, the advertisement made to the brand and its recognition name (Johansson, n.d.). However, real brand management always begins in an earlier stage of production with a strategy and a dependable incorporated vision. The fundamental concept is always its identity that must be well defined and managed to the consumers. The identity of the brand refers to the message that is sent out by the brand (Kapferer, 2008). Thus, to explain the brand pyramid of Nescafe, a model of it is always suitable for the analysis and the understanding of the model of Nescafe’s brand identity. Three fundamental tiers constitutes the model. The most important and the upper part of the Nescafe brand pyramid is the brands core that always remains fairly fixed over time. The central tier is known as the brand style (Kapferer, 2008). The tier tends to articulate the brand hub in terms of the culture that it conveys, its individuality and its self-image. The pyramid’s bottom layer comprises of the brand themes. The themes display how Nescafe as a brand reaches its consumers like via advertising, press releases and the packaging (Van Gelder, 2005). Nescafe brand pyramid is shown in the diagram below. Fig 4. Nescafe brand pyramid 3.0 Specific area of relevance 3.1 Global Branding of Nescafe CBA has taken the responsibility of supporting the strategic repositioning of Nescafe as a brand and it has tried to give it a new global brand identity system. The new developed visual identity system that CBA has created tries to build on the heritage of the brand and at the same time, it reveals the diversity of the Nescafe experiences via the making of three brand icons. The icons are the red mug, the hub and the accent. Nescafe has recently made announcements in carrying out a massive worldwide campaign that mostly targets the younger generation of coffee users. The brand was created in 1938 with a major goal of becoming one of the widely distributed instant coffee brands (Keller, 2013). It managed to meet its goal and a lot more by being the worldwide brand that it is today. Due to the competitiveness that is evident in the coffee industry, the company came up with the need to change its packaging design and also its digital strategy and communication (Sengupta, 2005). The approach to the packaging design, communication and the digital strategy that the brand will adopt will feature several major design elements that will be developed with new and younger consumers in the mind of the designers (Sengupta, 2005). They include the Nescafe Red Accent is taken from the modernized Nescafe brand mark, the iconic red Nescafe mug and the stylized graphic device. The company will be launching a global and unified worldwide identity that will be viewed in about 180 countries where the brand is sold (Shi et al., 2010). It is the first time in a period of seventy-five year history that each product brand will share a similar visual identity. The agency that is responsible for the packaging of the new design in the branding project is known as the CBA and the process involved other agencies of the same group from all over the world (Shi et al., 2010). The look is characterized by an icon of modernization of the Nescafe brand that presently has an accent of a red color and at the same time a graphic device, the hub, which is a stylized upper view of a coffee mug. However, the cup retains its original red and already known appearance. A new slogan is also being used that states that, it all starts with a Nescafe (Trappey and Woodside, 2005). The branding company, the CBA was mainly selected for four major reasons, firstly, the ability of the company to understand the specificities of the international market, and at the same time come up with a massive and strong idea that adapts to every single Nescafe consumer from all over the world. The strategy employed by the branding company had to make them think outside the box by not trying to use any of the tested branding methods but had to come with a new and unique design for Nescafe (Thornhill, 2007). The company then went ahead to synthesize the design basics of Nescafe into three different rudiments that are the basis of all the brands communication, presented in packaging, digital, advertising, promotion and retail among others (Syed Alwi and Kitchen, 2014). All the partners from different parts of the world have been incorporated and the branding company together with the brand being promoted is quite very proud of the branding and design work as referred by one of the branding company employee (Shi et al., 2010). 4.0 Recommendations Nescafe has been a traditional and a historical brand that has successfully spread all over the world meeting the needs of its consumers in both innovative and creative ways. Despite having a number of various products, Nescafe still goes with its unity. The brand is very reliable and by far, it has the largest market share among its immediate competitors like coffee having an 80% market share. With its large market share though, the product does not in any way guarantee any eternal benefits. Therefore, for Nescafe to improve on its sales, it needs to work extra hard on its marketing strategies and be creative and innovative attributes to maintain its top position. Making extra efforts in its marketing all over the world is the only sure way to improve and make the brand stay top in the global market. References Aaker, D. and Joachimsthaler, E. (2000). The Brand Relationship Spectrum: The Key to the Brand Architecture Challenge. California Management Review, 42(4), pp.8-23. Biazzo, S. (2009). Flexibility, Structuration, and Simultaneity in New Product Development. Journal of Product Innovation Management, 26(3), pp.336-353. Cravens, D. and Piercy, N. 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