Abstract

This case is about the repositioning exercise of the Nestlé’s Nescafé brand which was started in the year 2014. Sales of Nescafé were declining in the years before 2014 as the demand for instant coffee had been falling in some of the major coffee drinking countries around the world. Many young customers who were drinking coffee for the first time in their life perceived instant coffee to be outdated and instead preferred fresh coffee sold in coffee chains like Starbucks. The rise in the sales of portable coffee machines, which made it possible to brew fresh coffee easily, too had impacted the sales of Instant coffee. Smaller instant coffee brands had also started to eat into the market share of Nescafé. Nescafé was the biggest brand in the stable of Nestlé and a number of coffee related products were sold under the brand. In order to improve the performance of the brand, Nestlé launched a new repositioning exercise for the Nescafé brand called REDvolution. The objective of the repositioning exercise was to increase the potential of Nescafé as an iconic brand and consolidate its competitive advantage in the market. REDvolution was mainly targeted at the younger potential customers of Nescafé and heavily relied on social media. Under the repositioning campaign, all the products sold under the Nescafé brand would share the same visual identity, communication, and digital strategy all over the world. Standardizing all the characteristics of the Nescafé brand was expected to make it easier for customers to easily recognize all the products that were sold under the brand. The single personality that was created through the repositioning exercise would be customized to suit the requirements of some local markets. REDvolution was based upon three visual markers, viz. the final accent on the logo of Nescafé, a structurally redesigned red mug, and a blockmark called ‘hub’. As part of the repositioning exercise, Nestlé had introduced new products like chilled coffee and cheaper portable coffee machines that make instant coffee. New product launches were intended to improve the image of Nescafé as an innovative and adventurous brand. Nestlé planned to roll out the campaign in 90 percent of the markets where it had operations by the end of 2014 and cover the rest in 2015.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the importance of repositioning a brand when its performance is declining
• Explore the strategies that can be followed by companies to reposition their old brands
• Analyze the steps taken by Nestlé to reposition the Nescafé brand to make it appealing for the younger customers
• Suggest future steps that should be taken by Nestlé to further improve the performance of its Nescafé brand
• How brands can impact the performance of a company

Keywords

Coffee, Instant Coffee, Nestlé, Nescafé, REDvolution, Coffee Machines, Nespresso, Nescafé Alarm Cap, Nestlé Coffee-mate Creamer, Fresh Coffee, Social Media, The Pod, Nescafé Red Cup Machines, Shakissmo, Starbucks