Introduction

 The success of any organization largely depends on how well they know their customers and develop appropriate marketing strategies for their chosen customer segmentation. If a company does not know their customers well, it becomes hard for it to develop products that would meet their needs. Equally, if the company does not know who their customers are they are most likely to waste a lot of resources in trying to sell their products to the wrong customer base. It is, for this reason, it is necessary for a business entity to know their target customers and their behaviors and hence develop marketing strategies that are well aligned with their customers’ needs. Doing so would however require a company to look in the entire market for potential customers and segment it into groups and the focus on the market segment whose needs align with what their products offer. A company must choose the most profitable market segment. In this paper, the general aim is to review nestle company and its coffee product named Nescafe with the aims of understanding its consumers' behaviors as well as identify areas for improvement in its current market segmentation and targeting strategies.  The paper will thus be divided into several sections. The first section will review and describe the nestle's background. The second section will conduct a competitor analysis of nestle coffee brand i.e. Nescafe by comparing it with two competitors to helps us understand where the products stand in the market. The third section will discuss two factors, one internal and one external that are most likely to influence consumers when contemplating buying or not buying Nescafe products. The fourth section will discuss the concept of market segmentation and apply it to the case of Nescafe. The final section will develop market strategies mainly the targeting strategies and positioning strategies that Nescafe should adopt to grow and improve its performance in the market.

 Background of the company (Nestle)

Nestle history date back to 1866 when its founder made a breakthrough in infant food. In the early days, the company traded under the name Anglo-Swiss condensed milk Company and its main product was infant food. However, over time the company expanded the market and grew its product portfolio to include infant food, chocolate among others.  In 1905 the Anglo-Swiss condensed milk merged with another company known as nestle and become Nestlé & Anglo-Swiss.   The merged company continued to expand across the various international markets and expanding its product portfolio as well. In 1938, the company launched Nescafe, a powdered extract of pure coffee’ that retains coffee’s natural flavor but can be easily prepared by simply adding hot water. In 1954, Nestlé & Anglo-Swiss merges with Swiss company Alimentana, which produces Maggi soups, bouillons and seasonings. The merger resulted in a new company known as Nestlé Alimentana. The company did not stop there on its quest to expand and grow its product portfolio, through acquisitions and merger the company continued to grow into new international markets and continued to expand its product portfolio (Nestle, 2019a). Currently, nestle is a global company with operation in every corner of the world and with its products being sold across the world. The company product portfolio has also grown steadily and as of 2019, the company pride itself in having some of the strong brands in various food category such as Nescafe, Maggi, coffee mate  

 Product background; Nescafe

 During 1930, most brazilin coffee farmers experienced hardship and loss due to a lack of available market for their coffee produce.  At that time the farmers' produce coffee in surplus which pushed the coffee price down causing much hardship and loss to the farmers as their earning was not sufficient to support their living. group of Brazilian bankers who sympathize with the coffee farmers approached nestle and requested them to find ways of increasing coffee consumption and decreasing the surplus that was hurting prices paid to farmers.  Determine to help, nestle used its expertise in milk processing to develop soluble coffee. The development of soluble coffee comes as a relief to many farmers as it increased global consumption hence reducing surplus and increasing the price of coffee beans.  When the soluble coffee was introduced into the market, it gained popularity to become staple beverages of us army forces during the Second World War. By the 1950s, soluble coffee was already common beverages among youthful consumers. This positive uptake of soluble coffee helped increased global consumption and hence reducing the surplus. It thus helped boost farmer earning as initially intended. However, not only the farmers benefit. The breakthrough in soluble coffee was also a blessing to nestle. Through this breakthrough, it was able to create one of the most respected and well-known coffee brands in the world, i.e. Nescafe.  The company has over the years improved the original soluble coffee products. As of today, the company has developed various tastes of the soluble coffee from Nescafe classic to Nescafe gold, Nescafé shakissimo, Nescafé Azera Americano among others (Nestle, 2019b)

Competitor analysis

 Nestle is a company that has a wide product portfolio. One of its well-known product brands is Nescafe. Nescafe is soluble coffee which is used to prepare instant coffee.  One can simply be prepared coffee by adding it to hot water.  Although the company was the pioneer of the soluble coffee product, other companies also ventured into the soluble coffee business.  This simply means that Nescafe has several competing brands in the market which include Peet's, Farmer Brothers, the Coffee Bean & Tea Leaf, Starbucks, and Kraft Heinz’s Maxwell house coffee.

 Despite the increasing competition, nestle still dominates the soluble/instant coffee market globally. According to Euromonitor international (2019), nestle holds 50 percent of the total market share for instant coffee.  It, however, faces rivals from other firms at the global level and at the national level in almost every country where it operates.  At the global level, the company faces stiffs competition from Starbuck's incorporation and Maxwell House coffee brand.  When nestles instance coffee brand i.e. Nescafe  is compared to  Starbucks  instant coffee brand and Maxwell house coffee brands,  in term of quality and prices, the  result  are best shown by the conceptual map below