1.

0 INTRODUCTION

1.1 THE NESTLÉ COMPANY HISTORY

1.1.1 The Pioneer Years (1866-1905)

The story begins in year 1866, with the foundation of the Anglo-Swiss Condensed Milk
Company. A breakthrough infant food in 1867 is developed by Henri Nestlé. In 1866, the US
brothers Charles and George Page help establish Anglo-Swiss Condensed Milk Company. Using
abundant supplies of fresh milk in Switzerland, the knowledge gained they apply in their
homeland to establish Europe’s first production facility for condensed milk in Cham. They start
to supply Europe’s industrial towns with the product under the Milkmaid brand, marketing it as a
safe, long life alternative to fresh milk.

In 1867, Nestlé founder, Henri Nestlé is German-born pharmacist, launches his “farine
lactéé” which is flour with milk in Vevey, Switzerland. The “farine lactéé” combines cow’s milk,
wheat flour and sugar. Nestlé develops it for consumptions by infants that cannot be breastfeed in
order to tackle high mortality rates. Within this time, he starts using him now iconic “Nest” logo.
In 1875, Henri Nestlé starts to sells his company and factory in Vevey to the three local
businessmen. They employ chemists and skilled workers in order to help them to expand their
business production and sales.

In 1878, fierce competition develops between Nestlé AND Anglo-Swiss, when both
companies start selling rival version of other’s original products which are condensed milk and
infant cereal. Both firm expand their sales and production globally. In 1882, Anglo-Swiss
expands into the US but the death of George Page frustrates his plans. So in 1902, he sells its US
based operations which lead up the way for eventual merger with Nestlé.

In 1904, Nestlé starts to sell chocolate for the first time when it takes over export sales for
Peter and Kohler. Henri Nestlé himself plays an important role in development of his milk
chocolate from 1875 when he supplies his Vevey neighbor Danial Peter with condensed milk that
Peter uses to develop the first commercial product in the 1880s. In 1905 the company he found
merges with Anglo-Swiss to form what is now known as the Nestlé Group. The cities grow
during this period and the railways and also the steamships bring down commodity costs,
stimulating international trade in consumer goods.

1.1.2 The Belle Epoque (1905-1913)

In 1905, Nestlé & Anglo-Swiss have more than 20 factories, and starts using overseas
subsidiaries to establish a sales network that spans Africa, Latin America and Australia. Anglo-
Swiss and Nestlé merge to form the Nestlé & Anglo-Swiss Milk Company. This company has
two head offices where ones in Vevey and the other one in Cham. Later, the third office is opened
in London to drive dairy export sales. The company expands its range over the year to include
unsweetened condensed milk and sterilized milk. The firm benefits from the period of prosperity
known as the Belle Epoque or known as “Beautiful Age” as World War One approaches and
becomes the global dairy company.

1.1.3 Survival during Wartime (1914-1918)

In 1914, the outbreak of war leads to increased demand for condensed milk and
chocolates. Unfortunately, there is a shortage of raw materials and limits on cross border trade
hamper production for Nestlé & Anglo-Swiss. In 1915, condensed milk is long lasting and easy
to transport. This makes the condensed milk more popular among the armed forces. The British
Army starts issuing Nestlé canned milk to their soldiers for their emergency rations. High
demand for that product shows that the company’s milk refineries are working flat out.

In 1916, Nestlé & Anglo-Swiss acquires Norwegian dairy company Egron that has
patented a spray-drying process for producing milk powder. In 1917 until 1918, the war disrupts
productions for the company where milk shortages in Switzerland. Hence, to solve this problem
the company acquires facilities in the US and Australia. The Nestlé & Anglo-Swiss has 40
factories by the end of war.
1.1.4 Crisis and Opportunity (1919-1938)
In 1921, falling prices and high stock levels lead to the first, and only ever financial loss
for Nestlé & Anglo-Swiss. Banker Louis Dapples joins as Crisis Manager and urge the company
to appoint professional managers for the first time. The administration is centralized and the
research is consolidated at one laboratory in Vevey, Switzerland. In 1929, Nestlé & Anglo-Swiss
buys Switzerland’s largest company Peter Cailler Kohler, when Francois Louis Cailler creates
the first chocolate in that country brands Cailler. Now, chocolate becomes one of the Nestlé &
Anglo-Swiss products.

In 1934, malted chocolate drink Milo is launched in Australia. This success means it is
later exported for sale in other markets to expand its business. The company continues to develop
infant food in this inter-war period and launches Perlagon in 1934. Perlagon is a full milk powder
for babies enriched with lactic acid bacteria in order to improve digestibility. In 1936, a
competitive market for chocolate in Switzerland urge Nestlé Peter Cailler Kohler to innovate by
launching new product next year which are Galak white chocolate and Rayon, a chocolate with
honey and air bubbles.

In 1938, Nescafe is launched as a powdered extract of pure coffee that maintains the
coffee’s natural flavor but can be served in simplest way by only adding hot water. The product
is the brainchild of Max Morgenthaler, who begins to work on it in 1929 when the Brazilian
government asks Nestlé & Anglo-Swiss to find an outlet for its huge coffee surplus.

1.1.5 Riding out the Storm (1939-1947)

In 1939, the outbreak of World War Two affects every market virtually, but Nestlé &
Anglo-Swiss continues to operate in difficult circumstances by supplying both civilians and
armed forces. Fearing that the Axis power could conquer Switzerland, the Nestlé & Anglo-Swiss
employ some managers to a new office in Stamford in the US, which operates as the company’s
second headquarters during the war. The fighting in Europe makes it hard to exports milk from
there, hence the company supplies Africa and Asia from the US and Australia while expands its
production in Latin America.
 In 1942 until 1945, the World War Two makes the sales of Nescafe slows. After the US
enters the war, Nestlé brands promptly obtain popularity from American service personnel. In the
late 1940s, Nestea is launched and Nescafe is included in CARE aid supplies in Japan and
Europe at the end of war. In 1947, Nestlé & Anglo-Swiss merges with Swiss company
Alimentana that produces Maggi soups, bouillons and seasonings, and is renamed Nestlé
Alimentana. Alimentana is developed by Julius Maggi that a protein rich dried soup in order to
tackle malnutrition.

1.1.6 Greater Consumer Convenience (1948-1959)

In 1948, in the US Nestlé Alimentana launches a soluble tea, Nestea. The Nestea is
manufactured using the same method like Nescafe where can be prepared both by cold or hot
water. Nesquik, which dissolves easily in cold milk is also be launched in the US and becomes
famous. In 1954, Nestlé infant cereal has been existed since 1948 as a powdered product. Now
the infant cereal is rebranded as Cerelac. Originally it only sold as a bouillon cube, now the
Maggi seasoning brand Fondor is launched as a powder. The new package in a convenient shaker
now can be used as a seasoning in the dining room and also in the kitchen. In 1957, Canned
ravioli is launched under the Maggi brand. This is such a huge success for Nestlé to launch more
canned, prepared foods that can become a new growth segment.

1.1.7 Frozen Foods to Pharmaceuticals (1960-1980)

In 1960, the increasing number of households buying freezers, demand for ice cream
relatively high. So, Nestlé buys German producer Jopa and French manufacture Heudebert
Gervais to capitalize on this growth, and add Swiss brand Frisco in 1962. Nestlé also buys UK
canned food company Crosse & Blackwell. In 1962, Nestlé buys the Findus frozen food brand
from Swedish manufacturer Marabou, and expands the brand to international markets. Findus is
one of the first companies that sell frozen foods in Europe from 1945. In 1968, Chilled dairy
product becomes famous, Nestlé buys French yogurt producer Chambourcy. In the early 1970s
the latter launches the Sveltesse of yoghurts focused on health and weight of the consumers. In
1969, Nestlé enters mineral water markets by buying a stake in French water brand Vittel.
 In 1973, interested to boost up its canned foods and frozen portfolio in Anglo Saxon
markets, Nestlé takes over the US frozen foods company Stouffer Corporation. In 1974, Nestlé
starts ti diversifies beyond food and drink for the first time. It becomes a minority shareholders
in global cosmetics company L’Oreal. In 1977, renamed Nestlé S.A, the company continues its
diversification strategy by buying US pharmaceutical and ophthalmic products manufacturer
Alcon Laboratories. Decreasing in breast feeding rates leads to some activists to question for the
baby food marketing strategies of companies including Nestlé. Hence, Nestlé product is been
boycott.

1.1.8 Towards Nutrition, Health and Wellness (1981-2005)

In 1981, frozen meals of a low-fat, low-calorie platform, and the brand posts impressive
sales are launched by Stouffer’s Lean Cuisine. Nestlé and L’Oreal form Galderma as a joint
venture that actively participate in dermatology. The World Health Assembly adopts the WHO
code on breast-milk substitutes, and Nestlé is the first company that develops policies based on it
and used on its business. In 1985, with US based Carnatioon Company of USD 3 billion, Nestlé
adds new brands like Carnation and Coffee-Matte to its portfolio. Besides that, it also enters the
pet food business when it buys the Friskies brand.In 1986, new story begins of Nespresso with a
simple idea which it can enables people to create a perfect cup of coffee just like a skilled barista.

In 1988, Nestlé buys UK Confectionery Company which is Rowntree Mackintosh, also

adding brands like Kit Kat, After Eight and Smarties to its portfolio. It also acquire Italian pasta,
sauce and confectionery group Buitoni-Perugina In 1991, Nestlé joint a venture with General
Mills and Cereals Partners Worldwide in order to produce and market breakfast cereals globally.
The company also creates a joint venture with The Coca-Cola Company to form Beverage
Partners Worldwide so that it can manufacture and market brands including Nestea.In 1992,
Nestlé starts to develop it position in mineral water by acquiring France’s Perrier Group. Nestlé
Sources International is created as a separate water business in 1993 and it renamed to Nestlé
Waters in 2002.

In 1997, the new CEO Peter Brabeck Letmathe sees the growth potential in personalized
nutrition. He affirms Nestlé positions as the leader in “Nutrition, Health and Wellness” as the
millennium approaches. In 1998, Nestlé buys an Italian mineral waters business Sanpellegrin
Group. The Nestlé Pure Life is launched in the developing countries in order to guarantee clean
and healthy drinking water. In the next two year, Aquarel is launched in Europe. In 2000, the
Sustainable Agricultural Initiative Nestlé (SAIN) is launched to develop collaboration with local
farmers. It objectives is to enhance their living standards and ensure a sustainable supply of
commodities.

In 2001, Nestlé buys the US pet food business like Ralston Purina and merges it with
Nestlé Friskies Petcare to be the new market leader in pet care, Nestlé Purina Petcare. In 2002,
results from expanding its ice cream business in the late 90s, Nestlé acquires the licensing right
to premium producer Häagen-Dazs in the US and in Canada. It also buys Mövenpick and
Dreyer’s Grand Ice Cream in 2003. At the same time, it also acquires frozen foods business Chef
America for USD 2.6 billion.

1.1.9 Creating Shared Value (2006-today)

In 2006, Nestlé emphasize in Creating Shared Value approach in doing business where
any action for shareholders must also create value for the communities so that it can operates in
wider society. Nestlé acquires weight management business Jenny Craig and Australia breakfast
cereals company Uncle Toby’s. In 2007, lately the growing focus more on medical nutrition
leads Nestlé to acquire Novartis Medical Nutrition. Besides that, it also buys infants food
company Gerber and Swiss mineral waters concern Sources Minerales Henniez.

In 2009, by it first Creating Shared Value Forum in New York brings all the experts
together to discuss about global challenges in the area of nutrition, water and rural development,
and the role of business in order to help them. The forum now becomes an annual event. Nestlé
creates a foodservice business division named Nestlé Professional from 2009. In 2010, Nestlé
acquires Kraft Foods’ frozen pizza business. The objectives for the Nestlé Cocoa Plan and
Nescafe Plan be launched is to develop the company’s sustainable supply chains in cocoa and
coffee. It also will help to enhance social conditions in farming communities and assure their
profitability.
 In 2011, Nestlé Health Science and the Nestlé Institute of Health Sciences is been set up.
The establishment is to do research on science based nutritional products aimed in preventing
and treating chronic medical conditions. Nestlé is the first company to work with the Fair Labor
Association (FLA) that helps to tackle child labor in the cocoa supply chain. In 2012, Nestlé
acquires Wyeth Nutrition, formerly Pfizer Nutrition for USD 11.9 billion. This is to bolster
position in baby nutrition. In 2013, Nestlé Health Science buys US based medical foods
company, Pamlab. The Pamlab is specializes in medical nutrition for patients that have mild
cognitive impairment and depression. Meanwhile, weight management business Jenny Craig is
sold in America and also in Oceania.

In 2014, the creation of Nestlé Sin Health, Nestlé takes full control of the Galderma
dermatology joint venture that created with L’Oreal in 1981. They end their joint venture with
Innéov, a cosmetic nutritional supplements business that launched in 2002. Galderma next
acquires some of its assets. In 2015, Nestlé launches its new product named Cailler which is the
oldest surviving Swiss chocolate brand as its first super premium global chocolate. French frozen
foods business Davigel is sold.

1.2 THE NESTLÉ LOGO EVOLUTION

Henri Nestlé is one of the first Swiss manufactures that build up a brand with the help of
logo. Formerly, the Nestlé trademark is based on his family’s coat of arms that featured a bird
sitting on a nest. This is a reference to the family name which means “nest: in German. He adopt
the coat of arms by include the three young birds being fed by their mother. This new features is
to create a visual link between his name and his company’s infant cereal products. He begins to
use the logo as a trademark in 1868. Now, the familiar bird’s nest logo continues to be used on
Nestlé products globally, in a modified form.

YEAR DESCRIPTIONS LOGO EVOLUTION

 Original Nestlé family coat of arms.

1868 Uses his family’s coat of arms as

inspiration for the logo where Nestlé
means little nest in German to protect his
“Milk Food” from imitators.

1938 The Nestlé lettering and logo are combined

to form an umbrella brand. This shows the
unifying distinguish mark for different
Nestlé products.
1966 The combined trademark is modernized in
celebration of the company’s 100th
anniversary.

1988 Subsidiaries are given standardized names

in combinations with “Nestlé” and the logo
that has now been reduced to two young
birds with the writing underneath becomes
the strategic umbrella trademark.
1955 The logo is simplified once again and the
four product categories milk product, ice
cream, confectionery and baby milk, are
each given specific Nestlé lettering

2015 The new, softer logo design makes it easier

to read on modern digital devices such as
smart phones.
 2016 In 2016, Nestlé commemorate 150 years.

1.3 NESTLÉ IN MALAYSIA

Nestlé commitment to served high quality products to Malaysians dates back almost 100
years ago. Nestlé starts in Malaysia in 1012 as the Anglo-Swiss Condensed Milk Company
operates in Penang later results from growth and expansion, they move to Kuala Lumpur in
1939. Its first factory since 1962 operates in Petaling Jaya till then, now Nestlé Malaysia
manufactures its products in 7 factories and operates from its head office in Mutiara Damansara.
Now, the company hire more than 5000 labor and manufactures as well as market more than 300
Halal products in Malaysia. Its brand name like Milo, Nescafe, Maggi, Nespray and Kit Kat have
become trusted household names and enjoyed for generations.

1.4 BRANDS IN MALAYSIA

TYPES OF FOOD BRANDS
Junior Foods Cerelac
Milk Every Day, Lactokid, Mom & Me, NANKID
Breakfast Cereals Cookie Crisp, Corn Flakes, Fitnesse, Honey
Stars, Koko Krunch, Milo, Multi Grain
Cheerios
Hot Cereals Nestum
Creamers Coffee-mate
Beverages Milo. Omega Plus
Coffee Nescafe
Culinary Products Maggi
Chilled Dairy Bliss
Ice Cream Drumstick, La Cremeria, Mat Kool, Aiskrim
Tradisi
Confectionary and Chocolate Kit Kat, Milo Nuggets, Crunch Wafer
Health Science Nutren, Peptamen, Resource, Isosource,
Novasource
1.4.1 New Products
1. Maggi Letup

It is not secret that Malaysians from all walks of life share a love for hot and spicy
food. That is why Maggi proudly presents it hottest noodles ever which is Maggi Letup.
This Maggi Letup is made explosively delicious and hot with pure extracts of fiery red
and dried chilies, a secret blend of authentic curry spices that are topped with real chili
flakes to give that spicy kick have been crave for.

2. Kit Kat Green Tea

Have a bite of Kit Kat Green Tea and experience one of the sweetest moment in
life. With high quality Japanese green tea confectionary that melts in the mouth with a
nice crispy wafer.

3. Nescafe Mountain Wash

Nescafe Mountain Wash is freshly from the mountain of Tri-An in Vietnam. It has
only 100% naturally caffeine free premium coffee. The secret is the water where the long
hours of soaking the coffee beans results in caffeine free, without compromising the rich
taste.

4. Milo Nutri G

With a wholesome selection of 4 whole grains like oats, barley, brown rice and
wheat that perfectly blended with protomalt, milk and cocoa in order to make sure the
goodness that will fuel customers towards all that he can be.

5. Nescafe Blend & Brew

New taste of freshly brewed coffee is retained and added with milk to give that
unique taste.
 6. Nestlé Mat Kool Butterfly

Inspired by the concept of sharing, this butterfly shaped ice confection comes
with two sticks in one pack. It is both strawberry and grape flavored that makes every
bite absolutely refreshing. It can be split into half and share the other half of the savory
ice cream with the loved one.

7. Nestlé Cerelac Infant Cereal Wheat, Honey & Dates

This help to introduce the deliciousness and the nutritious taste of dates. In
contains more pieces and textures to make sure the child ready for benefits of solid food.
It also benefits the child with combination of DHA, BIFIDUS BL and several vitamins
and minerals for a wholesome meal.

8. The Nescafe Cans Makeover

Make a new cans make over to attract customers.

9. Nescafe Latte Caramel

It comes with no harshness, no bitterness. It just a great coffee beans that evenly
roasted.

1.5 ORGANIZATIONAL STRUCTURE

2.0 NEW PRODUCT DESCRIPTION

Nescafe Mountain Wash is Malaysia’s first and only decaf coffee that is 100 percent
natural decaffeinated with pure, natural water to remove caffeine. The existence of Nescafe
Mountain Wash in the market is freshly came from Tri-An, which is a hidden village in Vietnam
where a unique terroir and local traditions met to create an indulgent experience. This product
brings intensity of coffee compared to others because the coffee that used in this product is
grown in the breath-taking Vietnamese mountains. So those coffee beans benefit from the right
amount of sunlight to release a dense and concentrated coffee flavor.

Besides, alternating wet and dry seasons provide an ideal cultivating environment for
naturally ripened coffee cherries since this unique coffee is grown in a sub-tropical climate that
provides the optimal environment. The coffee beans are also 100 percent water washed which is
inspired from local traditions of farmers soaking the coffee beans in pure water for long hours to
gently remove the caffeine while maintaining the bean’s signature flavor. This unique process
preserves the bean’s true nature, maintaining its strength, variety and richness in aroma. So, the
consumers never have to worry about heart palpitations or insomnia since Nescafe Mountain
Wash is naturally caffeine-free coffee.
2.1 CHARACTERISTICS OF PRODUCT
Nescafe Mountain Wash comes with the perfect coffee strength, creaminess and right
amount of sweetness to give consumers coffee perfection. It is decaffeinated through a water
process that involve long hours of soaking to gently remove the caffeine while maintaining the
bean’s signature flavor. Nescafe Mountain Wash taken only fine coffee beans grown in the
Vietnamese mountains and carefully roasted and ground them. Therefore, every bean is bold to
give the consumers that premium experience:

 Distinctively premium blend

 Intense and soothing aroma

 Decaffeinated coffee but same delicious coffee taste and aroma - 100% rich taste, 0%
caffeine

 Perfect for every day consumption

2.2 CUSTOMERS
Coffee becoming more popular in Malaysia, there has also been a rise in the younger
generation’s taste for high quality coffee. This has driven coffee companies to focus even more
on innovation and the development of different product varieties that satisfy consumers’ needs.
According to a press release, Malaysia has historically been a tea-drinking nation, but the
consumption of coffee is on the rise. In 2014, the Malaysian coffee market was good for a total
of RM581.7 million. Malaysians indicate they drink about two to three cups of coffee per day.

In combination with the jump in coffee drinking in Malaysia, consumers are becoming
more discerning and demands for high quality coffee products. Youngsters especially have
acquired a taste for specialty coffee. So, Nescafe made the decisions to make Nescafe Mountain
Was as new innovative products and focus more on the younger generations.
2.3 STRENGTH AND WEAKNESSES
Nescafe Mountain Wash, a product of Nestle is a famous and well-known brand of coffee
made from fine cocoa beans. Being a well-known brand it has drawbacks and some strengths
following with its opportunities.

Strengths:

1. Good for health

Nescafe Mountain Wash is the perfect cup of coffee as its coffee beans are decaf,
which helps to reduce effects such as heart palpitation and headache.

2. Good quality control over the products

Nescafe Mountain Wash gives an aromatically strong, bold and well-rounded

coffee taste.

3. Innovative culture

Nescafe Mountain Wash is one of unique products that meet their customer needs.

Weaknesses:

1. Weak supply chain

The consumers can only buy Nescafe Mountain Wash via online because this
product are not available at any supermarket but available only online. So it is
difficult to those who are not familiar with online buyers.

3.0 CURRENT MARKETING STRATEGY

Malaysia is the first country in the world to launch the new NESCAFÉ’s Mountain Wash.
NESCAFÉ Mountain Wash is a perfect cup of caffeine-free coffee (de-caf) without
compromising the rich taste, catered to satisfy coffee lovers anytime and anywhere. As a world
leader in coffee manufacturing, NESCAFÉ continues to strengthen its belief that quality and
taste of coffee should not be compromised for the total consumer experience. In this day and age,
consumers are more educated and aware of what they want and the variety of options they are
offered for their enjoyment.

For the outline of a marketing strategy that was implemented by Nestle to market their
new product, NESCAFÉ Mountain Wash, it consists of the four Ps which is:

PRICE PRODUCT

PLACE PROMOTION

3.1 PRODUCT
In term of product, nestle offer their new product, NESCAFÉ Mountain Wash specially
for a customer of a non-hard core coffee drinker NESCAFÉ Mountain Wash is the perfect cup of
coffee as its coffee beans are decaf, which helps to reduce effects such as heart palpitation and
headache. So that everyone may enjoy their NESCAFÉ Mountain Wash at any time of the day!
Besides the wonderful secret behind NESCAFÉ Mountain Wash is a result of 100% water
decaffeinated beans. NESCAFÉ Mountain Wash is soaked in the waters from the Tri-An
Mountains of Vietnam for long hours that gently removes the caffeine from each coffee bean.

This unique coffee is grown in a sub-tropical climate that provides the optimal
environment for cultivation, with alternating wet and dry seasons. It is grown at a high altitude,
and its beans are soaked in pure mountain waters to remove the caffeine while maintaining the
bean’s signature flavour and aroma! This creates a great-tasting coffee that is 99.9%
decaffeinated while delivering a well-rounded, smooth and slightly floral coffee flavour. In
addition, here are the factors that give the coffee its taste and quality:

1. Altitude

 Located in the Vietnamese mountains, the coffee bean benefits from the right amount
of sunlight to release a dense and concentrated coffee flavour

2. Climate

 Alternating wet and dry seasons provide an ideal cultivating environment for
naturally ripened coffee cherries

3. Water

 Inspired from local traditions, farmers spend long hours soaking the coffee beans in
pure water to gently remove the caffeine while maintaining the bean’s signature
flavour.

3.2 PRICE
NESCAFE Mountain Wash Decaf Coffee Mixes Tin 20g x 12 Stick Canister

Price: RM 14.84

SHIPPING:

 West Malaysia = RM 5.50

 Sarawak & Sabah = RM 15.00

NESCAFE Mountain Wash Decaf Coffee Mixes 20g x 15 sticks

Price: RM 14.84

SHIPPING:
  West Malaysia = RM 7.50

 Sarawak & Sabah = No Shipping

3.3 PLACE
Malaysia is the first country in the world that launches the new
NESCAFÉ’s Mountain Wash. Since it is a new product to a market, this
new product only available online and customer have to pay a shipping
cost to get it. Here, nestle will know how successful their new product, NESCAFÉ’s Mountain
Wash towards customer before massively sold in selected stores.

3.4 PROMOTION
Nestle is doing the selective demand advertising that is intended to stimulate demand for
individual brands. For this new product which is NESCAFÉ’s Mountain Wash, Nestle promote
their product through advertising at www.nescafemountainwash.com.my. In the advertisement
on NESCAFÉ’s Mountain Wash the message is given that;

“Try Nescafe Mountain Wash. We promise you, a smooth, well rounded coffee, perfect for every
day, anytime. ”

Customers who are interested to know more about NESCAFÉ’s Mountain Wash may visit this
link and also can buy easily through online.

In term of segmentation, Nestle have segmented the product on the following basis:

1. Psychographic Segmentation

Psychographic segmentation divides buyers into different groups based on social

class, lifestyle, or personality traits. For example, NESCAFE 3 in 1 is for exclusively
those customers who are really busy and do not have enough time. Nestle also provides
KIT KAT for those people who really want to enjoy chocolate. For their new product
which is NESCAFÉ Mountain Wash, it is made for customer of non- hardcore coffee
 drinker so that they can continues enjoy caffeine without worried about bad effect on
their health.

2. Demographic Segmentation

Demographic segmentation divides the market into groups based on variables

such as age, gender, family size, family life cycle, income, occupation, education,
religion, race, generation, and nationality. For NESCAFÉ Mountain Wash, its special
provide for young generation because it is decaffeinated through a water process that
involves long hours of soaking to gently remove the caffeine while maintaining the
bean’s signature flavour.

3. Geographic Segmentation

Geographic segmentation divides the market into different geographical units

such as nations, regions, states, counties, or cities. For NESCAFÉ Mountain Wash, its
only provide in Malaysia.

4. Behavioral segmentation

Behavioral segmentation divides buyers into groups based on their knowledge,

attitudes, uses, or responses to a product. NESCAFÉ Mountain Wash provide for
customer of non- hard core caffeine and definitely a great option to de-stress.

In term of SWOT analysis:

1. Strength

Nestlé provides quality brands and products and line extensions that are well-
known, top-selling brands. Since Nestle is large and well-known company, easily for
them to get customer to try their new product. Besides, Nestle always do further research
and development for their products, as well as innovation and renovation. For example
NESCAFÉ Mountain Wash. In addition, Nestle has a large distribution network. It is
 because their product can be found everywhere, from hypermarkets in large cities to
small shops in the villages.

2. Weaknesses

Nestlé’s product price is relatively expensive compared to similar products. It is

because, Nestle products have a good standard and the price is relatively expensive.
Many buyers are from middle class income. Besides, Nestle only provide their new
product only available online.

3. Opportunities

Since Nestle in Malaysia already known by the public as a product that has
superior product quality and have a good image in the eyes of customers so it is not
difficult for Nestle to launch new products on the market. Definitely many customers are
looking forward for their latest new product. Nowadays, people are concern about their
health. Because the awareness of the importance of health, it have increase the health-
based product.

Nestle, which has a superior quality in each product they had launched has a
chance to become the number one health product in Malaysia. Nestle with their good
image can expand the market by opening a cafe or a special booth for their most-popular
products. Besides, not only aim for promote new product, they also can get more
customer to love and to remain faithful to their brand.

4. Threats

Besides for having a good image quality products, Nestle also has an image that
sticks in the mind of the customer that the price of Nestle products are relatively
expensive compared with similar products from other companies. This cause consumer
will consider before buying or they will look for a replacement product or switch to other
brands that have a similar product.
 In addition, since Nestle motto is for quality assurance for their consumer, so that
the raw materials used are also from a high quality and the price will be relatively
expensive. As an impact, nestle products will get more expensive compare to their
substitute product. Since some of other product also has a similar product quality and has
a lower starting price, they become threats to Nestle who make consumer do a price
consideration and will switch to that less expensive product.

For competitors’ analysis, at SUPER their growth ambitions are predicated by their
favorable Branded Consumer offerings and strategic geographic exposure. With their extensive
distribution network and dedicated managers, they are well-positioned to continue to deliver
stellar performance with a portfolio of brands. Besides, SUPER’s offer more than 150 products
to choose from instant coffee mix, instant cereal, instant soymilk, instant tea mix, instant cup
noodles, canned drinks, to non-dairy creamer. In addition, they are driven to continually deliver
quality branded consumer products to their consumers while enabling they to enhance and
extend they regional presence in Southeast Asia.

Next, delivering quality food ingredients and providing solutions to SUPER customers is
what they are all about. SUPER dedication and optimism has made them lead ingredients
manufacturer in Asia for a diverse range of tasty instant beverages and convenient food products
which are marketed and distributed globally. With key ingredient manufacturing plants in
Singapore, Malaysia and China, they provide excellent services, products of superior quality and
value to the customers in the global market.

In order to comparing the company’s strategy with competitors, we decide to compare

between SUPER and NESTLE. SUPER aspire to be a world class manufacturer of great food and
beverages, only so they can put a smile on customer’s face every day. There’s a spirit of
optimism in everything SUPER do because they make it their mission to create tasty products
and package them delightfully to bring a little joy into customer’s everyday occasions. By
listening to what customers are looking for and actively sourcing for great ingredients, SUPER
strive to deliver that great taste experience customer’s look forward to. After all, SUPER are
looking forward to putting a smile on every customer’s face.
 While for Nestle, with Nestle Nutrition, Health and Wellness strategy they support people
who want to live a healthier lifestyle. Industry-leading research and development drives
innovation and supports the constant renovation of customer’s food and beverage portfolio. In
addition, Nestle researchers are exploring the role of nutritional therapies to maintain or improve
health and investigating how customers can help people look after their skin. Besides, Nestle are
on track to deliver their commitments to reduce the amount of salt, sugar and saturated fats in
customer’s products and remove trans fats, while maintaining consumer preference. Nestle are
enhancing their portion guidance and improving customer’s labelling, printing GDAs (Guideline
Daily Amounts) on the front of packs, making it easier for people to read them. Nestle strive to
meet the fast-changing expectations of their consumers because Nestle care deeply about quality,
food safety, the environment and sustainability.

4.0 PROBLEMS AND SOLUTIONS

Problem 1: Lagging behind consumer trends (Related to Product)

According to Euromonitor International GMID, consumers are seeking to have authentic
high-quality coffee brewed at home, and since many manufacturers have introduced newly
developed high-quality products which offer similar quality as the coffee offered at specialty
coffee shops, consumer’s interest in the authentic high-quality coffee has increased. This is
evident in the explosion of coffee chains and independent coffee houses which reflects the
growing coffee culture and increased sophistication in consumer’s tastes in coffee.

The low perception of Nescafé coffee quality poses a serious threat to their brand image
and consequently brand equity especially in their new brand which is Nescafé Mountain Wash.
Nescafe images are clearly strong and relatively unique but not favorable. While lack of
favorability is an issue because many of the strong associations such as cheap and instant
possibly carry an implicit meaning of low quality which reflected in lower performance rating
quality of Nescafe products.

Solution 1:
 The solution is Nescafe could work better on conveying its quality. The maintenance and
improvement of quality are crucial to sustain consumption in the long term, add value to the
product and ensure compliance with international food safety requirements, thus contributing to
a healthier balance between global supply and demand. The bottom line is that consumers will
drink more coffee if the quality is good, leading to gains in all sectors of the market.

Nescafe should distribute awareness of marketing and preparation methods appropriate to

high quality coffee by improving cultivation, processing, storage, and transportation practices
and through protection against pests, diseases and infection during storage. In order to preserve
coffee quality, the ICO discourages the trade of coffee with less than the equivalent of 95 percent
of green coffee as the basic raw material. Because of that, the Nescafé have introduced new
brand to their customer to make it more favorable. Nescafe Mountain Wash is the perfect cup of
coffee for the customer as its coffee beans are decaf which mean caffeine free, which will help to
reduce effects such as heart palpitation and headache.

That means, the customer can drink it any time of the days. Nescafe Mountain Wash is a
caffeine-free coffee without compromising the rich taste, supplied to satisfy coffee lovers
anytime and anywhere. In order to decaffeinate the beans, Nescafe Mountain Wash is soaked in
the waters from the Tri-An Mountains of Vietnam for long hours that gently removes the caffeine
from each coffee bean (Nescafe, 2015). This unique coffee is grown in sub-tropical climate that
provides the optimal environment for cultivation with alternating wet and dry seasons. In order
to make it more favorable to their customer it is grown at a high altitude, and its beans are soaked
in pure mountain waters to remove the caffeine while maintaining the beans signature flavor and
aroma (Stephanie, 2015).

Problem 2: Brand Salience (Related to Promotion)

No matter how effective the packaging and promotion of a product, the company will
find it very challenging to market a product that doesn’t satisfy a consumer need. The emotional
marketing approach has been inconsistent and the core message scattered, leading to neutral or
even lack of emotional engagement in consumer, indifferences poses a real danger to Nescafe
because it indicates confusion in who and what Nescafe really stand for and also potentially a
lack of consumer interest in Nescafe.

Nescafe appears to be excelling at the depth of brand awareness, as evident in its top of
mind recall and recognition in the instant coffee product category. The Nescafé need a proper
promotion in order to satisfy a consumer need and to get engagement with the customer.
Furthermore, with the emergence of a new Nescafé product brand which is Nescafe Mountain
Wash that only available in online purchasing (Nescafe, 2015). It will make this brand does not
surface in consumers’ minds as easily or frequently in general coffee purchase and consumption
situations. This clearly presents itself as a substantial gap that needs to be addressed in order to
rising up consumption and sales volume.

Solution 2:

The solution is in order to bridge the salience gap and improve the breadth of brand
awareness, Nescafe could address the perceived quality of their coffee by setting up a Nescafe
pop-up store that allows the consumer to experience the Nescafe Mountain Wash brands first
hand and therefore raise their brand knowledge. The pop-up stores basically mean that Nescafe
can brings it product to where the consumer are and as such consumers are able to experiences
Nescafe Mountain Wash anytime and anywhere.

This also allows the Nescafe to be able target its younger customers by bringing it to
various youth’s hangout who are likely to find this concept appealing. In addition, the pop-up
store should have various varieties of soluble free dried coffee and customers should be allowed
to customize their coffee to meet their own taste and preferences. Popular blends customized by
consumers can be the mass produced and distributed through its current channels. It is hoped that
Nescafe Mountain Wash would be perceived as a high quality coffee which would open up
Nescafe breadth of brand awareness.

Problem 3: Higher price (Related to Price)

Nestle has adopted the strategy of non-price competition. It ensures that traders don’t take
advantage and hike prices by maintaining uniform pricing for all its products, including Nescafé.
It offers generous discounts to its distributors. Different Nescafé brands come with different
prices depending on how they are made. Nescafe has estimated other cost factors such as labor
and considered mass production in order to reduce the price and make it more affordable.
However, being one of the premium brands it enjoys a high stature and acceptability at a
relatively high cost than its nearest competitors. Furthermore, some people state that the new
brand of Nestle Mountain Wash taste just the same like the normal Nescafe, however the price
for each sachet is consider expensive as compared to other instant coffee.

Solution 3:

The solution is Nescafe is using price skimming strategy when they enter into the market
in a country, because at that time they believe that their target customer for coffee belonged to
upper class, after that with the success of this strategy they reduce their prices and target the
upper middle class.

For Nescafe, the focus is focus on the maintaining prices because in circumstances where
a price change may be desirable, but the magnitude of change is undeterminable. It is found the
competitors of Nescafe are very weak in terms of having market share, so it give company an
edge on competitors to maintain prices while introducing new product. Nescafe is at the moment
having a price leadership strategy and it is because it fulfills all the requirements of a successful
price leadership. They have flexibility in their pricing strategy but only for the Institutional
businesses, otherwise they stick on with same prices in market. And this is because their
competitors are not powerful and not in a position to dictate Nescafe to create flexibility in
pricing.

In this case, to make the price fits with their new products, quality aspects have been
given priority by the Nescafe, where this new brand also focus to a non-hardcore coffee drinker.
Nescafe Mountain Wash is a perfect cup of caffeine-free coffee (de-caf) without compromising
the rich taste, catered to satisfy coffee lovers anytime and anywhere. As a world leader in coffee
manufacturing, Nescafe continues to strengthen its belief that quality and taste of coffee should
not be compromised for the total consumer experience. In this day and age, consumers are more
educated and aware of what they want and the variety of options they are offered for their
enjoyment.
 Nescafe Mountain Wash can be purchased at an affordable price that suits the quality of
the coffee. For Nescafe Mountain Wash Decaf Coffee Mixes Tin (12 Stick) the price is RM 14.84
while for Nescafe Mountain Wash Premix Decaffeinated Coffee (15 sticks) the price is RM
17.40.

Problem 4: Only available online (Related to Place)

In 2015, Nescafe launched its first decaffeinated coffee the Nescafe Mountain Wash,
inspired by the traditional Vietnamese practices. However, decaffeinated coffee was not very
receptive locally as some find it lacking in taste. In addition, this new coffee was only available
online. So how do Nestle generate purchase intention while educating the customers the story of
Nescafe Mountain Wash?

Solution 4:

The solution are, first, Kingdom Digital provided an engaging platform for Nescafe
Malaysia to bring customers on a journey of discovery about the Mountain Wash’s origins and
the secrets behind the delicious coffee. A responsive microsite was built in which every chapter
portray the product in a visually impactful way. To maintain attention span, parallax animations
were injected into the website, resulting in a motion picture experience coupled with realistic
depth of field effects.

Second, online marketplace 11street (www.11street.my) and Nestle Malaysia, shared

insights of the latest coffee consumption trends. With coffee becoming more popular in
Malaysia, there has also been a rise in the younger generation’s taste for high quality coffee. This
has led to a boom in cafes opening up and has driven coffee companies to focus even more on
innovation and the development of different product varieties that satisfy consumers’ needs.

In combination with the jump in coffee drinking in Malaysia, an evolution in taste from
where consumers are becoming more discerning and demands for high quality coffee products.
Youngsters especially have acquired a taste for specialty coffee, and because they love the
convenience and efficiency of e-commerce. As a result, Nescafe made the decision to take their
new innovative products, Nescafe Mountain Wash to the next level and focus more closely on the
younger generations by selling it online at 11street (Sherif Hani, 2015).
 By bringing Nescafe Mountain Wash to 11street will enable Nescafe to connect directly
with younger coffee lovers in Malaysia and offer them a platform to educate the consumers on
‘the art of coffee’. Online channels allow brands like Nescafe to share fun recipes with
consumers, have them brew new creations and inform them about combo purchases that make
the whole coffee experience a lot more fun. It is this kind of self-enablement that turns
consumers into fans that would be much harder to convey in brick and mortar stores than via
ecommerce (Sherif Hani, 2015).

5.0 CONCLUSION
We can conclude that nestle is a market leader due to different reasons. Even though its
price is high against its competitors but it matches its quality with its competitors. Nestle is using
its brand name to promote its product and its very popular compare to its competitors. Beside,
Nestle also has a good and attractive packaging. We also can easily find Nestle products from
any retailer shop. In addition, Nestle always maintained the quality of its product and are highly
trusted by buyers. Not only the largest food processing company, Nestle also done well to
enhance its consumer loyalty operating as a market challenger in its industry.

In order to market NESCAFÉ Mountain Wash, our recommendations are they should
improve the marketing strategies so that they can capture market and improve their sales. They
also they also need to stress to the public the dangers of caffeine since if they drink after 4pm or
5pm in the evening, they might still be feeling the effects at night when they are trying to sleep.
Actually people might not notice it and they actually go to sleep but their brain is still awake,
meaning they don’t go into a deep sleep and wake up fully refreshed the next morning as
compared to when they don’t consume any caffeine.

NESCAFÉ Mountain Wash is decaffeinated through a water process that involves long
hours of soaking to gently remove the caffeine while maintaining the bean’s signature flavour.
Savour the strong and bold NESCAFÉ Mountain Wash any time of the day and never have to
worry about heart palpitations or insomnia. Now we can drink coffee anytime of the day and here
our love for coffee just grew stronger! Lastly, Nestle also believes that good food means Keeping
Yourself fine too!
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Hitesh Bhasin. (July 7, 2016). Marketing Mix of Nescafe. Retrieve November 11, 2016 from
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CONTENTS
1.0 INTRODUCTION.................................................................................................................................1
1.1 THE NESTLÉ COMPANY HISTORY..............................................................................................1
1.1.1 The Pioneer Years (1866-1905)...................................................................................................1
1.1.2 The Belle Epoque (1905-1913)...................................................................................................2
1.1.3 Survival during Wartime (1914-1918)........................................................................................2
1.1.4 Crisis and Opportunity (1919-1938)...........................................................................................3
1.1.5 Riding out the Storm (1939-1947)..............................................................................................3
1.1.6 Greater Consumer Convenience (1948-1959).............................................................................4
1.1.7 Frozen Foods to Pharmaceuticals (1960-1980)...........................................................................4
1.1.8 Towards Nutrition, Health and Wellness (1981-2005)................................................................5
1.1.9 Creating Shared Value (2006-today)...........................................................................................6
1.2 THE NESTLÉ LOGO EVOLUTION................................................................................................7
1.3 NESTLÉ IN MALAYSIA..................................................................................................................9
1.4 BRANDS IN MALAYSIA................................................................................................................9
1.4.1 New Products............................................................................................................................10
1.5 ORGANIZATIONAL STRUCTURE..............................................................................................12
2.0 NEW PRODUCT DESCRIPTION......................................................................................................13
2.1 CHARACTERISTICS OF PRODUCT............................................................................................14
2.2 CUSTOMERS.................................................................................................................................14
2.3 STRENGTH AND WEAKNESSES................................................................................................15
3.0 CURRENT MARKETING STRATEGY.............................................................................................15
3.1 PRODUCT......................................................................................................................................16
 3.2 PRICE..............................................................................................................................................17
3.3 PLACE............................................................................................................................................18
3.4 PROMOTION.................................................................................................................................18
4.0 PROBLEMS AND SOLUTIONS........................................................................................................22
Problem 1: Lagging behind consumer trends (Related to Product)........................................................22
Problem 2: Brand Salience (Related to Promotion)...............................................................................23
Problem 3: Higher price (Related to Price)............................................................................................24
Problem 4: Only available online (Related to Place).............................................................................25
5.0 CONCLUSION...................................................................................................................................27