to know the consumer preference about nescafe coffee

To Know Consumer Preference About NesCafe Coffee In Surat City

PROF. V. B. SHAH INSTITUTE OF MANAGEMENT 1

Chapter 1

Introduction



1.1 Industry Profile

1.1.1 FMCG Industry Overview

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap

bars,embossed with the words “Made in England by Lever Brothers”. With it, began an

era of marketing branded Fast Moving Consumer Goods(FMCG).

The FMCG industry manages consumer packaged goods – production, distribution to

marketing i.e. those categories of products tha are consumed at regular intervals.

Examples include food & beverage, personal etc. The industry is vast and offers a wide

range of job opportunities in functions such as sales, supply chain, finance, marketing,

operations, purchasing, human resources, product development and general management.

Global leaders in the FMCG segment are Sara Lee, Nestle, Reckitt Benckiser, Unilever,

Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi and Mars etc.

The Indian FMCG industry is the fourth largest industrial sector that has stayed

recessionresilient and shows signs of bright future.

FMCG companies are rushing to the bottom-of-the-pyramid market with custom-made

products. Estimated at close to 350 million, this consumer segment is the biggest and

perhaps the fastest growing in the FMCG Sector currently valued at approx US $14

(Source: IBEF). Also with the emergence of organized retail many of the big FMCG

giants will look to tie up with retail players thereby pushing their product by virtue of

B2B Sales.

FMCG Round Table

The FMCG corporate round table saw more than 50 corporates attending the event. The

topic of the discussion ranged from ‘Rural Marketing’ to ‘Distribution Channles’, with

the studentsalso getting an opportunity to present their views on topics like innovation

brand promotion and cost effective distribution models, to name a few. Key learning’s for

the students from the round table were to work hands-on as many live projects as possible

as well as to have an in-depth preparation on their preferred sector



Outlook

There is a huge growth potential for all the FMCG companies as the per capita

consumption of almost all products in the country is amongst the lowest in the world.

Again the demand or prospect could be increased further if these companies can change

the consumer’s minset and offer new generation

products. Earlier, Indian consumers were using non-branded apparel, but today, clothes

of different brands are available and the same consumers are willing to pay more for

branded quality clothes. It’s the quality, promotion and innovation of products, which can

drive many sectors.

Companies that patronize us :-

Blue Star Ltd.

Goodlass Nerolac

BIDCO Oil Refineries,Kenya

Asian Paints

Britannia Industries

Carlsberg

Coca Cola

Glaxo Smith Kline

Glencore India

Godrej Consumer

Aries Agro



GTC Industries

Hindustan Pencils

ITC Foods

Johnson & Jhonson

Kansai Nerolac

Lakme Lever

Lexi Pens

Doneal

Nataraj Pencils

Parle Agro

Pepsi

Philips Electronics

Pidilite Industries

Rachi Soya

Sapat Group

Videocon

Perfomance

In India, the FMCG industry is the fourth largest sector with a total organized market size

of over US $15 billion in 2007, as per ASSOCHAM, and can be classified under the

premium and popular segments. The premium segment (~25%) caters mostly to the

higher/upper middle income consumers while the price sensitive popular or mass



segment (~75%) consists of consumers belonging mainly to the semi-urban or rural areas

that are not, and cannot afford to be, brand conscious.

The market growth over the past 5 ears has been phenomenal, primarily due to

consumer’s groeing disposable income which is directly linked to an increased demand

for FMCG goods and services. Indeed, It is widely acknowledged that the large young

population in the rural and semi-urban regions is driving demand growth, with the

continuous rise in their disposable income, life style, food habits etc. On the supply side,

the wide availability of raw materials, vast agricultural produce, low cost of labour and

increased organised retail have helped the competitiveness of players.

At a time when the economy and other large industrial sectors such as automobiles,

aviation and financial services are reeling from the global slowdown, the consumer goods

sector in India has managed to defy the trend. According to the recent reports by Zeus

Consulting, India’s FMCG industry has so far been resilient to the slowdown in the

economy and a dip in consumer sentiment, with most companies posting double-digit

growth in net profits in the first half of fiscal 2009, backed by healthy sales. As very

categorically said by the Amway India Enterprises managing and chief executive, Mr.

William Pinckney, “I am not saying that our company is recession-proof but it is

recession-resilient.” This statement on the whole stands strong for most the leading

players in the FMCG sector.

While a price hike and cost-cutting were the first lines of defense in a bid to protect

margins, Indian manufacturers were able to let logic rather than bottom lines dictate

measures which increased marketing efforts, a well-though product mix and new

launches remain promising. Adi Godrej, Chairman and MD of Godrej Consumer

Products Limited(GCPL) and Chairman of Godrej Industries feels that the best policy

would be to provide tremendous fiscal and monetary stimuli to the economy, “...(stimuli

is needed) especially in industries connected through and that will generally create

multiplier factors. FMCG already seems to be doing quite well and FMCG sector will

have its best year in 2009-10.”, he said.



Future Prospects

The only threats to this strong growth trajectory remain the high portion of unorganized

trade, the limited distribution network of new entrants and the pressure on profit, margins

due to increasing competition. But these are likely tobe of diminished importance as

proportion of organized trade increases and players invest in improving distribution.

Going forward, the industry prospects remain attractive and new graduates can hope to

leverage the training and on-the-job learning at the leading players in various functional

roles, across the Metros as well as the interior heartland on India.

FMCG

Fast-Moving Consumer Goods (FMCG) - or Consumer Packaged Goods (CPG) –

are products that are sold quickly and at relatively low cost. Examples include non-

durable goods such as soft drinks, grocery items, toiletries, soap, cosmetics, tooth

cleaning products, shaving products and detergents, as well as other non-durables such as

glassware, bulbs, batteries, paper products and plastic goods. Though the absolute profit

made on FMCG products is relatively small, they generally sell in large quantities, so the

cumulative profit on such products can be substantial.

The term FMCGs refers to those retail goods that are generally replaced or fully used up

over a short period of days, weeks, or months, and within one year. This contrasts

with durable goods or major appliances such as kitchen appliances, which are generally

replaced over a period of several years.

FMCG have a short shelf life, either as a result of high consumer demand or because the

product deteriorates rapidly. Some FMCGs—such as meat, fruits and vegetables, dairy

products, and baked goods—are highly perishable. Other goods such as alcohol,

toiletries, pre-packaged foods, soft drinks, and cleaning products have

high turnover rates.



The Indian FMCG sector with a market size of US$14.8 billion is the fourth largest sector

in the economy. The FMCG market is set to double from USD 14.7 billion in 2008-09 to

USD 30 billion in 2012. FMCG sector will witness more than 60 per cent growth in rural

and semi-urban India by 2010. Indian consumer goods market is expected to reach $400

billion by 2010.Hair care, household care, male grooming, female hygiene, and the

chocolates and confectionery categories are estimated to be the fastest growing segments.

At present, urban India accounts for 66% of total FMCG consumption, with rural India

accounting for the remaining 34%. However, rural India accounts for more than 40%

consumption in major FMCG categories such as personal care, fabric care, and hot

beverages. In urban areas, home and personal care category, including skin care,

household care and feminine hygiene, will keep growing at relatively attractive rates.

Within the foods segment, it is estimated that processed foods, bakery, and dairy are

long-term growth categories in both rural and urban areas. The growing incline of rural

and semi-urban folks for FMCG products will be mainly responsible for the growth in

this sector, as manufacturers will have to deepen their concentration for higher sales

volumes.

The following are the main characteristics of FMCGs:

From the consumers' perspective:

o Frequent purchase

o Low involvement (little or no effort to choose the item – products with

strong brand loyalty are exceptions to this rule)

o Low price

From the marketers' angle:

o High volumes

o Low contribution margins

o Extensive distribution networks

o High stock turnover

http://en.wikipedia.org/wiki/Brand_loyalty

http://en.wikipedia.org/wiki/Contribution_margin

http://en.wikipedia.org/wiki/Distribution_(business)

http://en.wikipedia.org/wiki/Stock_turnover



1.1.2 SWOT Analysis

Strengths:

Low operational costs

Presence of established distribution networks in both urban and rural areas

Presence of well-known brands in FMCG sector

Weaknesses:

Lower scope of investing in technology and achieving economies of scale,

especially in small sectors

Low exports levels

"Me-too" products, which illegally mimic the labels of the established brands.

These products narrow the scope of FMCG products in rura l and semi-urban

market.

Opportunities:

Untapped rural market

Rising income levels i.e. increase in purchasing power of consumers

Large domestic market- a population of over one billion.

Export potential

High consumer goods spending

Threats:

Removal of import restrictions resulting in replacing of domestic brands

Slowdown in rural demand

Tax and regulatory structure



Product Characteristics & Industry Segments

Product Characteristics

Products belonging to the FMCG segment generally have the following characteristics:

They are used at least once a month

They are used directly by the end-consumer

They are non-durable

They are sold in packaged form

They are branded

The main segments of the FMCG sector are:

Personal Care: oral care; hair care; skin care; personal wash (soaps); cosmetics

and toiletries; deodorants; perfumes; paper products (tissues, diapers, sanitary);

shoe care.

Household Care: fabric wash (laundry soaps and synthetic detergents); household

cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners,

insecticides and mosquito repellants, metal polish and furniture polish).

Branded and Packaged Food and Beverages: health beverages; soft drinks;

staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates;

ice cream; tea; coffee; processed fruits, vegetables and meat; dairy products;

bottled water; branded flour; branded rice; branded sugar; juices etc.

Spirits and Tobacco: An exact product-wise sales break up for each of the items is

difficult.



Advantages To The Sector

Govt. Policy

Central & State Initiatives

Foreign Direct Investment (FDI)

Market Opportunities

Vast Rural Market

Export- “Leveraging the Cost Advantage”

Sectoral Opportunities

Dairy Based Products

Packaged Foods

Oral Care

Beverages



The top 10 companies in FMCG sector

S. NO. Companies

1 Hindustan Unilever Ltd.

2 ITC (Indian Tobacco Company)

3 Nestle India

4 GCMMF (AMUL)

5 Dabur India

6 Asian Paints (India)

7 Cadbury India

8 Britannia Industries

9 Procter & Gamble Hygiene and Health Care

10 Marico Industries



1.1.3 History of Coffee

The global spread of coffee growing and drinking began in the Horn

of Africa, where, according to legend, coffee trees originated in the

Ethiopian province of Kaffa. It is recorded that the fruit of the plant,

known as coffee cherries, was eaten by slaves taken from present

day Sudan into Yemen and Arabia through the great port of its day,

Mocha. Coffee was certainly being cultivated in Yemen by the 15th

century and probably much earlier. In an attempt to prevent its

cultivation elsewhere, the Arabs imposed a ban on the export of fertile coffee

beans, a restriction that was eventually circumvented in 1616 by the Dutch, who

brought live coffee plants back to the Netherlands to be grown in greenhouses.

Initially, the authorities in Yemen actively encouraged coffee drinking.

The first coffeehouses or kaveh kanes opened in Mecca and quickly spread

throughout the Arab world, thriving as places where chess was played, gossip was

exchanged and singing, dancing and music were enjoyed. Nothing quite like this

had existed before: a place where social and business life could be conducted in

comfortable surroundings and where - for the price of a cup of coffee - anyone

could venture. Perhaps predictably, the Arabian coffeehouse soon became a centre

of political activity and was suppressed. Over the next few decades coffee and

coffeehouses were banned numerous times but kept reappearing until eventually

an acceptable way out was found when a tax was introduced on both.

By the late 1600’s the Dutch were growing coffee at Malabar in India and

in 1699 took some plants to Batavia in Java, in what is now Indonesia. Within a

few years the Dutch colonies had become the main suppliers of coffee to Europe,

where coffee had first been brought by Venetian traders in 1615. This was a

period when the two other globally significant hot beverages also appeared in

Europe. Hot chocolate was the first, brought by the Spanish from the Americas to

Spain in 1528; and tea, which was first sold in Europe in 1610. At first coffee was



mainly sold by lemonade vendors and was believed to have medicinal qualities.

The first European coffeehouse opened in Venice in 1683, with the most famous,

Caffe Florian in Piazza San Marco, opening in 1720. It is still open for business

today. The largest insurance market in the world, Lloyd's of London, began life as

a coffeehouse. It was started in 1688 by Edward Lloyd, who prepared lists of the

ships that his customers had insured.

The first literary reference to coffee being drunk in North America is from

1668 and, soon after, coffee houses were established in New York, Philadelphia,

Boston and other towns. The Boston Tea Party Of 1773 was planned in a coffee

house, the Green Dragon. Both the New York Stock Exchange and the Bank of

New York started in coffeehouses in what is today known as Wall Street.

In 1720 a French naval officer named Gabriel Mathieu de Clieu, while on

leave in Paris from his post in Martinique, acquired a coffee tree with the

intention of taking it with him on the return voyage. With the plant secured in a

glass case on deck to keep it warm and prevent damage from salt water, the

journey proved eventful. As recorded in de Clieu's own journal, the ship was

threatened by Tunisian pirates. There was a violent storm, during which the plant

had to be tied down. A jealous fellow officer tried to sabotage the plant, resulting

in a branch being torn off. When the ship was becalmed and drinking water

rationed, De Clieu ensured the plant’s survival by giving it most of his precious

water. Finally, the ship arrived in Martinique and the coffee tree was re-planted at

Preebear. It grew, and multiplied, and by 1726 the first harvest was ready. It is

recorded that, by 1777, there were between 18 and 19 million coffee trees on

Martinique, and the model for a new cash crop that could be grown in the New

World was in place.

But it was the Dutch who first started the spread of the coffee plant in

Central and South America, where today it reigns supreme as the main continental

cash crop. Coffee first arrived in the Dutch colony of Surinam in 1718, to be

followed by plantations in French Guyana and the first of many in Brazil in the



state of Pará. In 1730 the British introduced coffee to Jamaica, where today the

most famous and expensive coffee in the world is grown in the Blue Mountains.

The 17th and 18th centuries saw the establishment across Brazil of vast

sugar plantations or fazendas, owned by the country’s elite. As sugar prices

weakened in the 1820’s, capital and labour migrated to the southeast in response

to the expansion of coffee growing in the Paraiba Valley, where it had been

introduced in 1774. By the beginning of the 1830’s Brazil was the world’s largest

producer with some 600,000 bags a year, followed by Cuba, Java and Haiti, each

with annual production of 350 to 450,000 bags. World production amounted to

some 2.5 million bags per year.

The rapid expansion of production in Brazil and Java, among others,

caused a significant decline in world prices. These bottomed out in the late

1840’s, from which point a strong upward movement occurred, reaching its peak

in the 1890’s. During this latter period, due mainly to a lack of inland transport

and manpower, Brazilian expansion slowed considerably. Meanwhile, the upward

movement of prices encouraged the growth of coffee cultivation in other

producing regions in the Americas such as Guatemala, Mexico, El Salvador and

Colombia.

In Colombia, where coffee had been introduced by the Jesuits as early as

1723, civil strife and the inaccessibility of the best coffee-growing regions had

hampered the growth of a coffee industry. Following the “Thousand Days War”

of 1899 to 1903, the new peace saw Colombians turn to coffee as their salvation.

While larger plantations, or haciendas, dominated the upper Magdalena river

regions of Cundinamarca and Tolima, determined peasants staked new claims in

the mountainous regions to the west, in Antioquia and Caldas. New railways,

relying on coffee for profit, allowed more coffee to be grown and transported. The

opening of the Panama Canal in 1914 permitted exports from Colombia’s



previously unreachable Pacific coast, with the port of Buenaventura assuming

increasing importance.

In 1905 Colombia exported five hundred thousand bags of coffee; by 1915

exports had doubled. While Brazil desperately tried to control its overproduction,

Colombian coffee became increasingly popular with American and European

consumers. In 1914 Brazil supplied three-quarters of U.S. imports with 5.6

million bags, but by 1919 that figure had fallen to 4.3 million, while Colombia’s

share had risen from 687,000 to 915,000 bags. During the same period Central

American exports to the U.S. had risen from 302,000 to 1.2 million bags.

In spite of political turmoil, social upheaval and economic vicissitude, the

20th century saw an essentially continuous rise in demand for coffee. U.S.

consumption continued to grow reaching a peak in 1946, when annual per capita

consumption was 19.8 pounds, twice the figure in 1900. Especially during periods

of high global prices, this steadily increasing demand lead to an expansion in

production throughout the coffee-growing regions of the world. With the process

of decolonization that began in the years following the Second World War, many

newly independent nations in Africa, notably Uganda, Kenya, Rwanda and

Burundi, found themselves in varying degrees dependent on coffee export

revenue.

For US coffee drinkers, the country’s wettest city, Seattle, has become

synonymous with a new type of café culture, which, from its birth in the 1970s,

swept the continent, dramatically improving the general quality of the beverage.

This new found 'evangelism' for coffee has spread to the rest of the world, even to

countries with great coffee traditions of their own, such as Italy, Germany, and

Scandinavia, adding new converts to the pleasures of good coffee. Today it is

possible to find good coffee in every major city of the world, from London to

Sydney to Tokyo; we are drinking more and, more importantly, better coffee.



The importance of coffee to the world economy cannot be overstated. It is

one of the most valuable primary products in world trade, in many years second in

value only to oil as a source of foreign exchange to producing countries. Its

cultivation, processing, trading, transportation and marketing provide employment

for hundreds of millions of people worldwide. Coffee is crucial to the economies

and politics of many developing countries; for many of the world's Least

Developed Countries, exports of coffee account for more than 50 percent of their

foreign exchange earnings. Coffee is a traded commodity on major futures and

commodity exchanges, most importantly in London and New York.



1.2 : Company Profile

NesCafe

Brand Value $17.7 BAs of November 2013

Industry: Beverages

Founded: 1938

Country: Switzerland

Website: www.NesCafe.com

Sales: $10.7 B

#27 World's Most Valuable Brands (According to Forbes List)

1.2.1 Introduction TO NesCafe

NesCafe is a brand of instant coffee made by Nestle. It comes in many different product

forms. The name is a portmanteau of the words "Nestle" and "cafe". Nestlé's flagship

powdered coffee product was introduced in Switzerland on April 1, 1938 after being

developed for seven or eight years by Max Morgenthaler.

If necessity is the mother of invention then profit may be the mother necessity. As the

Great Depression gripped the United States in the 1930's and coffee sales plummeted

there was a definite need for the coffee growers to find new ways to sell their product.

NesCafe came to the rescue.

http://www.nescafe.com/

http://www.forbes.com/powerful-brands/list

http://en.wikipedia.org/wiki/Instant_coffee

http://en.wikipedia.org/wiki/Portmanteau

http://en.wikipedia.org/wiki/Switzerland

http://en.wikipedia.org/w/index.php?title=Max_Morgenthaler&action=edit&redlink=1

http://3.bp.blogspot.com/_pof4Gn28jgo/SNwphUsbvHI/AAAAAAAABpY/RKpCIfhLS78/s1600-h/1.jpg



In 1867 Henri Nestle, a German chemist living in Switzerland, had invented a baby

formula for women who couldn't nurse. By 1900 he had set up production facilities in

several countries, including the United States, where he also made condensed milk. Over

the next thirty years the company expanded their products to include powered chocolate

milk mix and other confectionary products.

In 1930 the Brazilian government approached Nestle to create a new instant coffee that

would give the consumer another option and at the same time increase the dwindling

coffee exports of Brazil. It took eight years but in 1938 Nestle introduced NesCafe.

Instant coffee was not a new idea; it was originally invented by a Japanese chemist

named Satori Kato in 1901 and had been marketed and sold by various companies with

disappointing results. NesCafe revolutionized the way instant coffee was made.

Early methods of making instant coffee involved brewing a batch of high-strength,

concentrated coffee and then boiling it dry in stainless steel drums; the residue left behind

was instant coffee. The heat involved in the boiling process destroyed most of the

aromatic and flavorful properties of the coffee. When reconstituted in water the result

was a pungent, bitter decoction that little resembled coffee.

Nestle developed a new process for dehydrating the concentrated coffee which vastly

improved the quality. In entailed spraying a fine mist of the solution into a heated tower

where the droplets turned to powder almost instantly. They then added carbohydrates in

the form of dextrose, dextrin and maltose which helped preserve the flavor.

Nestle struggled to come up with a name for this new product which would inspire the

public to buy it. They combined the word Nestle and the Italian word for coffee, caffee,

http://2.bp.blogspot.com/_pof4Gn28jgo/SNwpmLbbPsI/AAAAAAAABpg/noF9eXHqfHg/s1600-h/2.jpg



or café in hopes that the Italian inference would create an aura of romance and capture

the imagination. Apparently it worked; through an aggressive, and expensive, ad

campaign that targeted the American housewife NesCafe became a huge success for

Nestle and doubled its global market share.

WWII rebounded the country from the depression and did much to further the NesCafe

name as instant coffee became a staple of the soldiers' ration kits.

While instant coffee accounts for only about 25% of coffee sales world-wide. NesCafe is

bar far the dominate player in the arena. NesCafe remains the second most recognized

brand name in the world, second only to Coca-Cola.

Branding and marketing

NesCafe, a brand introduced by the Nestlé Company, can be traced back to the 1930s. In

the United States, the NesCafe name was used on its products until the late 1960s. Later,

Nestlé introduced a new brand in the US called "Taster's Choice", which supplanted

NesCafe for many years. Taster's Choice was also introduced into Canada at the same

time, and continues to be sold as a separate product, branded as superior to NesCafe, and

is higher priced.

In the United Kingdom, a television advertisement campaign, the Gold Blend

couple starring Anthony Head and Sharon Maughan ran in 12 installments between 1987

and 1993.The first 11 episodes were released as a promotional compilation video

called Love Over Gold in 1993. A novelisation of the same name written by Susan

Moody (under the pseudonym Susannah James) was released in the same year.

In 2003, the company reintroduced the NesCafe brand in the US, and the product is now

known as NesCafe Taster's Choice. It is sold in US supermarkets in both glass and plastic

packaging.

http://en.wikipedia.org/wiki/Television_advertisement

http://en.wikipedia.org/wiki/Gold_Blend_couple

http://en.wikipedia.org/wiki/Gold_Blend_couple

http://en.wikipedia.org/wiki/Anthony_Head

http://en.wikipedia.org/wiki/Sharon_Maughan

http://en.wikipedia.org/wiki/Susan_Moody

http://en.wikipedia.org/wiki/Susan_Moody



While the NesCafe brand was created for soluble coffee, it has subsequently been used as

an umbrella brand on a number of instant coffee products, including, in the UK, Gold

Blend and Blend 37 freeze-dried coffees.

In 2006, NesCafe launched the new coffee machine system "Dolce Gusto" ("sweet taste"

in Italian). The system allows consumers to make various styles of coffees themselves

(cappuccino, latte macchiato, espresso, lungo, etc.). Additionally, hot chocolate and cold

drinks can be prepared with the machine. The machines are now sold in more than 60

countries worldwide. Unlike other NesCafe products, most Dolce Gusto beverages use

roasted and ground coffee, instead of instant coffee.

Other marketing activity included experiential marketing/relationship marketing, which

led NesCafe to become the headline sponsor of Good Food Show 2008 at Birmingham

NEC as part of their campaign to drive awareness of the increased NesCafe collection.

About 95% of consumers at this popular event rated the NesCafe Collection stand the

best at the show. NesCafe used advanced 3D technology to engage their consumers, led

by iD Experiential.

In the UK in August 2009, NesCafe unveiled a £43 m ad campaign for NesCafe, focusing

on the purity of its coffee and featuring the strapline "Coffee at its brightest".

Nestlé claims that 3,000 cups of NesCafe are drunk every second.

1.2.2 Products of NesCafe

NesCafe products include:

NesCafe Original Blend

NesCafe Classic

NesCafe Clasico

NesCafe Dolca

NesCafe Gold Blend, (in Sweden called 'Lyx' as in 'Luxury')

NesCafe Gold Blend Decaf, (in Sweden called 'Lyx' as in 'Luxury')

NesCafe Gold Blend Half Caff

http://en.wikipedia.org/wiki/Umbrella_brand

http://en.wikipedia.org/wiki/Dolce_Gusto

http://en.wikipedia.org/wiki/Dolce_Gusto

http://en.wikipedia.org/wiki/Relationship_marketing

http://en.wikipedia.org/wiki/Good_Food

http://en.wikipedia.org/wiki/Birmingham_NEC

http://en.wikipedia.org/wiki/Birmingham_NEC

http://en.wikipedia.org/wiki/3D_computer_graphics



NesCafe Black Gold

NesCafe Spécial Filtre (in France)

Nescafe Blend 43

NesCafe Blend 37

NesCafe Decaff

NesCafe Half Caff

NesCafe Partners Blend (Fairtrade)

Café Parisien (The Paris experience)

NesCafe Suraya

NesCafe Alta Rica

NesCafe Alta Rica Decaff

NesCafe Allen

NesCafe Espresso

NesCafe Red Cup (available in several European countries)

NesCafe Green Blend (with more antioxidants, available in Sweden)

NesCafe Azera (barista style instant coffee)

NesCafe Café de Olla

NesCafe has a speciality range which includes:

NesCafe Cappuccino

NesCafe Cappuccino Unsweetened

NesCafe Cappuccino Skinny

NesCafe Cappuccino Decaffeinated

NesCafe Decaffeinated

NesCafe Latte Macchiato

NesCafe Latte

NesCafe Latte Skinny

NesCafe Ice Java Coffee Syrup

http://en.wikipedia.org/wiki/Fairtrade



NesCafe has a Café Flavours range which includes:

Vanilla

Irish Cream

Mocha

Double Choca Mocha

Mocha Skinny



Chapter 2

Review Of

Literature



“A. Kyle” researcher of USA had made research on AWASOME INSTANT COFFEEs

on December 31st, 2011. He find out in his research that coffee is only in the market

which can instantly. There is no comparison for this product. It saves time.

“EddieE” (2011) from Geecheeland had made research on Amazon Verified Purchase. In

that he found that it has a very good flavor. Researcher has ratted this very good.

Researcher also research that when he need a cup and do not want to brew an entire pot

but want a I've gotten myself into while preparing the drink, and then push another few

seconds worth of espresso out of the capsule. Does this make a world of difference in

strength? I doubt it...but it gives me just that much darker of a drink and it makes me feel

like I'm getting the most bang for my buck.

Offcourse, the fact that I can get that much more espresso out of the capsule b y waiting a

bit isn't necessarily all the capsule's fault, but it is truly my only caveat (I also wonder if

it's possible to make recyclable capsules...). Either way, unless I've really overdone the

amounts of milk or espresso (or haven't gotten back to the machine in time to turn it off),

getting a 'watered-down' cappuccino is not possible and, in my opinion, purely an

'operator problem' (see tip above).

Also something to note: a generally accepted typical single shot of espresso is made up of

8g of ground coffee and the final product shouldn't be any more than 35mL. The

instructions on the package tell you to pour about 40mL (and there is exactly 8g of

espresso in the capsule). In other words, if you overdo the espresso capsule, you'll be

getting a noticeably watered down espresso (as for the whole cappuccino, I usually can't

tell if I've overdone it a touch).

Guests have always commented on the excellent look (use clear glasses for quite the

show), feel, and taste of the foam and milk. I have to agree that compared to using other

capsule-based machines where one has to purchase an extra milk-frother (and deal with

the clean-up, supplies, etc), this system easily produces a comparable (at least) milk and

foam experience, with very little hassle (if any).

When it comes to flavors, there's been a long-standing tie between Cappuccino and the

Latte Macchiato in my household. We tend to always have a supply of Cappuccino

around with the occasional box of Macchiatto every month or two. Cappuccino is

definitely a favorite. Top notch. Never had a problem with a bad after-taste, or at least

nothing but the great taste of good espresso.



For those who like to know where their coffee comes from: the milk is from France and

the coffee capsules are from England (although the actual 100% ground and roasted

arabic beans themselves, I don't know). Also, there's 8g of ground coffee in the espresso

capsules (the Latte Macchiato has less -- in fact, the Macchiato box recommends 50mL

of espresso for a capsule that contains 6.5g... in other words, the amount of espresso that

you'd find in a fairly small single shot with the amount of water reserved for a small

double shot...perhaps one of the reasons I tend to prefer the Cappuccino).

And off-course, buying the boxes from Amazon.com with the subscribe and save is the

most inexpensive option I've found.

Also, make sure to sign-up online at Dolce Gusto's website for the award points you get

with every box. With a box of three from Amazon (through subscribe and save), AND

factoring in the 10 award points you get with every box (with which you can redeem

Amazon gift cards), the price per box drops to a little over 7 dollars (compared to ~9

dollars a box at Sur la Table and other retailers).

And since I'm a money-saving statistics addict, I'm especially happy about the fact that

the online rewards program keeps track of all the points you've ever recorded (thus telling

me how many boxes I've ever purchased). This helps me calc. how much money I've

saved in total in comparison to, say, Starbucks.

All in all, if you're not quite willing to shell out major bucks for a real espresso machine,

and have limited counter-space to begin with, the Dolce Gusto machine is an easy choice

(they just released new and improved versions, too). And, as of early October '10, they've

revamped their boxes, giving them a classier, more matte- like finish (along with a recycle

symbol on the bottom) and a cleaner look in terms of pictures and text. Great

improvement to the design, and a fun, refreshing face-lift.

Greg Márquez (OC, California) has make an research on Verified Purchase I have both a

Dolce Gusto "Piccolo" machine, and the Tassimo coffee maker. I have tried making

cappuccinos on both machines, and by far I prefer the Dolce Gusto. For my palate, it has

a much more authentic cappuccino test. I think that this is because the Dolce Gusto

machine uses a high pressure, 15 bar system and the Tassimo does not. The Tassimo does

make a delicious drip style coffee, especially from the Starbucks selections. I genera lly

do not like sweetened coffee drinks, and again for me, the main difference between the

Dolce Gusto "Cappuccino" and the "Skinny Cappuccino" seems to be the sweetner added



to the milk capsule of the regular cappuccino. I really look forward to my daily Dolce

Gusto Skinny Cappuccino and highly recommend this product.

Greg Márquez (OC, California) has made an research on cappuccino deliciouso on

December 30,2010. I have both a Dolce Gusto "Piccolo" machine, and the Tassimo

coffee maker. I have tried making cappuccinos on both machines, and by far I prefer the

Dolce Gusto. For my palate, it has a much more authentic cappuccino tast. I think that

this is because the Dolce Gusto machine uses a high pressure, 15 bar system and the

Tassimo does not. The Tassimo does make a delicious drip style coffee, especially from

the Starbucks selections. I generally do not like sweetened coffee drinks, and again for

me, the main difference between the Dolce Gusto "Cappuccino" and the "Skinny

Cappuccino" seems to be the sweetner added to the milk capsule of the regular

cappuccino. I really look forward to my daily Dolce Gusto Skinny Cappuccino and

highly recommend this product.

Jacob Hantla (Chandler, AZ United States) ha made an research on Great Cappuccino!

Easy to Make, Fine-tune to your taste, on April 28, 2009 The cappuccino and the Latte

Macchiato are where the Dolce Gusto machine really shines. On the cappuccino, I get a

great cup of cappuccino with perfect foam, perfect flavor. I did not expect such quality

when I got the machine. The plain espresso & coffee lived up to those expectations; the

cappuccino and macchiato blew them away. I have begun to fine-tune the drink to my

flavor preference. A little less milk, a little more espresso for some extra strength. Or for

a little later in the afternoon, when I want a lighter beverage, I can do more milk less

espresso. I like the free that Dolce Gusto gives to make me feel like a barista and have

some control over my drink. The cost, since each beverage takes 2 pods, is about a dollar

apiece. A bargain, considering the great taste, convenience, and ease of preparation.



CHAPTER 3

THEORETICAL

FRAMEWORK



Chapter 3 : Theoretical Framework

CONSUMER PREFERENCES

The underlying foundation of demand, therefore, is a model of how consumers behave.

The individual consumer has a set of preferences and values whose determination are

outside the realm of economics. They are no doubt dependent upon culture, education,

and individual tastes, among a plethora of other factors. The measure of these values in

this model for a particular good is in terms of the real opportunity cost to the consumer

who purchases and consumes the good. If an individual purchases a particular good, then

the opportunity cost of that purchase is the forgone goods the consumer could have

bought instead.

We develop a model in which we map or graphically derive consumer preferences.

These are measured in terms of the level of satisfaction the consumer obtains from

consuming various combinations or bundles of goods. The consumer’s objective is to

choose the bundle of goods which provides the greatest level of satisfaction as they the

consumer define it. But consumers are very much constrained in their choices. These

constraints are defined by the consumer’s income, and the prices the consumer pays for

the goods.

We will formally present the model of consumer choice. As we go along, we will

establish a vocabulary in order to explain the model. Development of the model will be

in three stages. After a formal statement of the consumer’s objectives, we will map the

consumer’s preferences. Secondly, we present the consumer’s budget constraint; and

lastly, combine the two in order to examine the consumer’s choices of goods.

THE THEORY OF THE CONSUMER

Consumer make decisions by allocating their scarce income across all possible goods in

order to obtain the greatest satisfaction. Formally, we say that consumers maximize their

utility subject to budget constraint. Utility is defined as the satisfaction that a consumer

derives from the consumption of a good. As noted above, utility’s determinants are



decided by a host of non-economic factors. Consumer value is measured in terms of the

relative utilities between goods. These reflect the consumer’s preferences.

Theory of Consumer Preferences

Consumer preferences are defined as the subjective (individual) tastes, as measured by

utility, of various bundles of goods. They permit the consumer to rank these bundles of

goods according to the levels of utility they give the consumer. Note that preferences are

independent of income and prices. Ability to purchase goods does not determine a

consumer’s likes or dislikes. One can have a preference for Porsches over Fords but only

have the financial means to drive a Ford.

These preferences can be modeled and mapped through the use of indifference curves.

In order to graphically portray consumer preferences, we need to define some terms.

First, since we will be working in two dimensions (2-d graphs), we assume a two good

world. These could be any

two goods. One common treatment is to define one good, say food, and let the other

good be a composite of all other goods. For expository simplicity (making things easier

for me), let’s define the two goods as Good X and Good Y. The axes of the graph then

measure amounts of Good X on the horizontal, and amounts of Good Y on the vertical.

Each point in this Cartesian space then defines some combination of goods X and Y.

We call these combinations commodity bundles.

The goal of the theory of preferences is for the consumer to be able to rank these

commodity bundles according to the amount of utility obtained from them. In other

words, the consumer has different preferences over the different combinations of goods

defined by the set of commodity bundles.

In order to develop a model we need to make some assumptions about the consumer’s

preferences . There are four assumptions. The first is decisiveness. Here, given any two

commodity bundles in commodity space, the consumer must be able to rank them. In



Figure 1, suppose we randomly chose two commodity bundles A and B. This

assumption means that the consumer must be able to say that they prefer commodity

bundle A over B, or B over A, or that bundles A and B provide the same level of utility.

The second assumption is consistency. The consumer must be consistent in

preference and rankings. Again referring to Figure 1, suppose we now include

bundle C. Let the consumer prefer commodity bundle A over B, and also

commodity bundle B over C. Then by this assumption the consumer must prefer A

over C.

The following two assumptions are not required to develop the theory of the

consumer, but simplify matters significantly.

The third assumption is non-satiation. In other words, more is always better than less.

More formally, any commodity bundle with at least as much of one good and more of the

other must be preferred. Commodity bundle A in Figure 1 has two straight lines running

through it. This creates four quadrants, to the northeast, southeast, southwest and

northwest of bundle A. All commodity bundles to the northeast of A contain more of both

X and Y then does A. Therefore, by the assumption of non-satiation, any bundle in this



quadrant is preferred to A. The opposite is true for bundles to the southwest of A. They

contain less X and Y than does A, hence must be less preferred. The quadrants to the

southeast and northwest contain more of one good but less of the other; hence we cannot

determine preference rankings with respect to A.

The last of the assumptions is convexity, which is the most difficult to explain. It is based

on the notion that as a consumer consumes more and more of a particular good, the

additional utility obtained decreases. We define marginal utility as the change in utility

due to an incremental increase in the consumption of a given good. Convexity says that

marginal utility declines as consumption increases. Note that the total utility continues to

increase if marginal utility is positive (which it must be for non-satiation to hold), but

total utility increases at a decreasing rate if marginal utility is declining.

An indifference curve is a collection of all commodity bundles which provide the

consumer with the same level of utility. The indifference curve is so named because the

consumer would be indifferent between choosing any one of these commodity bundles.

In Figure 1 the curved line which passes through commodity bundle A represents an

indifference curve. All the commodity bundles on U0 provide the same utility as does

bundle A.

Any commodity bundle above the U0 indifference curve must be preferred to any

commodity bundle on U0. Conversely, any commodity bundle on U0 must be preferred

to any bundle below it. The choice of commodity bundle A to derive U0 was completely

arbitrary. It could have been any other commodity bundle. This means that each

commodity bundle has an indifference curve running through it.

Figure 2 shows a family of three indifference curves. An indifference curve represents a

greater level of utility as we move further to the northeast from the origin. Why? (The

student should examine the consumer preference assumptions for the answer.) Therefore

indifference curve U2 has a higher utility level than U1 which has a higher utility level

than U0.



Note that indifference curves are negatively sloped. This is the case because of non-

satiation. Indifference curves can not be upward sloping because the consumer cannot

be indifferent between two commodity bundles if one has more of both goods.

The big question is why the indifference curve is bowed inwards. The quick and dirty

answer is the assumption of convexity. Recall that convexity results from diminishing

marginal utility, i.e., as a consumer consumes more and more of a given good, the

additional unit of that good provides less utility. As we move along an indifference curve

from left to right,the consumer is consuming more and more of good X and less and less

of good Y. Thus the marginal utility of the additional unit of good X declines whereas

the marginal utility of the foregone Y increases. Since by an indifference curve’s

definition that each commodity bundle provides the same level of utility, the consumer is

willing to give up less and less good Y as he or she consumes more and more good X in

order to hold utility constant. This trade off between goods X and Y along an

indifference curve is an important topic. It is called the marginal rate of substitution

(MRS).

Figure 3 shows four commodity bundles, A, B, C and D, along an indifference curve.

As we move to the right along U1, we are increasing the amount of good X by

equalincrements of an



amount X. The amount of good Y that must be given up as we move from bundle A

to bundle B ( Y0), from B to C ( Y1), and from C to D ( Y2) gets smaller and smaller.

This is true because the additional utility from the additional increment in good X

provides less and less utility, while the additional unit of good Y the consumer is

giving up contains more and more utility. This gives rise to why the indifference

curve bows inwards.

The marginal rate of substitution reflects the maximum amount of good Y the

consumer would be willing to give up in order to obtain an additional unit of X. The

consumer would be happy to give less Y since it would place the consumer above U1 at a

higher utility level. However, the consumer would not be willing to give up more Y since

it would place the consumer below U1 at a lower level of utility.

The MRS can be portrayed as the slope of the indifference curve. This would show the

amount of good Y given up per unit of X. The slope between points A and B is Y0/ X,

between B and C is Y1/ X, and between C and D is Y2/ X . Notice that since Y is



declining, the slope is getting flatter and flatter. For very small increases in good X, the

slope of the indifference curve becomes the slope of the tangent to it. We general define

MRS as the absolute slope of the tangent to an indifference curve. In Figure 4 the

tangent gets flatter and flatter as we move from A to B, B to C and C to D.

To sum up, the slope of the indifference curve represents the value to the consumer of

the additional unit of X in terms of the amount of Y they are willing to give up. As we

move from left to right along an indifference curve, the slope gets flatter reflecting a

decrease in the value of the additional unit of good X.

This theory of the consumer has given us many tools. Indifference curves map or

graphically represent consumer preferences. The properties of these indifference curves

reflect the four consumer preference assumptions. The slope of an indifference curve, the

MRS, reflects the value placed on the additional unit of a good in terms of the other

goods the consumer would be willing to give up. These concepts will be used extensively

in the next few chapters.

The Budget Constraint

Using these families of indifference curves, we can model consumer preferences showing

how the consumer would rank commodity bundles according to the utility each bundle

provides. Having a map of consumer preferences, however, is not enough to explain the

choices consumers make. Choices are also a function of our constraints, namely the

consumer’s income and the price of goods.

In order to simplify the presentation, we assume that income is exhausted over the

consumer purchases. This means we are excluding savings. The budget constraint

would then say that income is equal to the sum of consumer expenditures.

Expenditures on a particular good is the product of the amount of the good purchased

times its price. We can then write the budget constraint as:



I = Px*X +Py*Y.

In this equation the consumer has expended all income, I, across both goods X and Y,

where Px and Py are the prices of X and Y, respectively. To graph this budget constraint

into commodity space requires rewriting the budget constraint in terms of good Y, the

variable on the vertical axis. Using simple algebra, we can rearrange terms to produce

the following budget line:

Y = I/Py - Px/Py * X.

In the equation of a line (Y = mX + b), the slope is given by m, the number mult iplied

with X, and the Y intercept is given as b. Referring to the budget line, its slope is

Px/Py and the Y intercept is I/Py. Figure 5 illustrates these characteristics of the

budget line.

The budget line divides commodity space into two. The commodity bundles

which are affordable are shown as being on or below the line. Income is

completely spent for those bundles on the line. We exclude the commodity

bundles below the budget line since all income is not being spent. The commodity bundles above and to

the right of the budget line are beyond the reach of the consumer, given their income



and the prices of goods X and Y.

Note the intercepts. The Y intercept represents a commodity bundle that contains only

good Y. This is the amount of good Y that the consumer could purchase if they spent

their entire income on good Y. The same is true for good X’s intercept. I/Px is the

maximum amount of good X that this consumer can purchase, given their income and

the two goods’ prices.

The budget line plays two important roles. The first is determined by the level of

income. The more income the consumer has to spend the greater number of the

commodity bundles that are affordable. An increase in income would be portrayed as a

parallel shift outwards of the budget line. It is a parallel shift because we are holding the

prices of goods X and Y constant, therefore there would be no change in the line’s slope.

The second role for the budget line is to act as a price line. A price line demonstrates the

relative price of two goods. A relative price is the price of one good in terms of another.

For example, let Pb = $0.50/banana be the price of bananas, and Po = $1.00/orange the

price of oranges. The relative price of a banana in terms of oranges is ½ orange. If the

consumer buys a banana then they necessarily forgo purchasing one half orange. If we

take the ratio of the banana’s price to the price of an orange, we get:

Thus the slope of the budget line shows the relative price of good X in terms of good

Y. If the price of good X increases, then the amount of good Y that is foregone

increases. There is an increase in the relative price of good X. Since we are holding

income and the price of good Y constant, this increase in good X’s price results in a

decrease of the budget line’s X intercept. The line swivels inward.

Relative price is an important tool. It shows how much of one good that the consumer

must necessarily give up in order to obtain more of another. The flatter the budget line,

the less costly the good on the horizontal axis in terms of the good on the vertical axis.

The steeper the budget line, the more costly the good. Note that relative price is shown

solely as the budget line’s slope. The distance from the origin does not reflect prices.



Consumer Choice

The consumer’s objective is to allocate income between goods X and Y so that they

achieve the greatest amount of utility, i.e., to reach the highest indifference curve

possible within their budget constraint. They must choose that commodity bundle on

their budget line which has the highest level of utility. Utility levels, as we have seen,

are measured by indifference curves; therefore the consumer tries to reach the highest

feasible indifference curve.

In Figure 6, we examine several possible choices for a consumer. Should they choose

commodity bundle B? It is on their budget line and so exhausts income. But does B

provide the highest level of utility? The answer is no because there are other affordable

commodity bundles within the budget constraint that lie on a higher indifference curve.

The commodity bundle which maximizes utility is commodity bundle A. All other

feasible commodity bundles lie below A’s indifference curve.

The utility maximizing commodity bundle is determined by the tangency of the

indifference curve to the budget line. At the point of tangency, the slope of the

indifference curve is equal to the slope of the budget line. In other words, the marginal

rate of substitution is equal to the relative price of X in terms of Y. This means that the

amount of good Y that the consumer must give up for another unit of good X is equal to

the amount they are willing to give up.

Utility Maximization: MRS = Px / Py.

Recall that MRS can be interpreted as the value to the consumer of the additional unit of

good X. The relative price of good X represents the consumer’s opportunity cost.

Therefore, utility maximization is achieved when the marginal benefit of consuming

more good X is equal to its marginal cost in terms of Y.

Returning to Figure 6, commodity bundle B is not utility maximizing. Note that the



tangent to U0 at B is steeper than the budget line’s slope. In other words, MRSb > Px/Py.

This says that the value to the consumer of the additional unit of X is greater than its

costs. Utility rises by consuming more good X at the expense of less Y. This would move

the consumer down to the right along the budget line. Utility is again maximized at

commodity bundle A.



CHAPTER 4

RESEARCH

METHODOLOGY



CHAPTER 4 : RESEARCH METHODOLOGY

Introduction

“Research is a careful inquiry or examination to discover new information or relationship

and to expand and to verify existing knowledge.”

According to professor Gifford Moody, research is a method of discovering truth,

through critical thinking. He says” Research comprises defining and redefining problems;

formulation hypothesis or suggested solution, collecting, organizing and evaluating data

making deductions and making conclusions; and at last carefully testing the conclusions

to determine whether they fit the formulated hypothesis.”

4.1 SCOPE OF THE STUDY:-

The scope is limited area of Surat city like katargam, varachha and adajan area

and has not considered the entire Surat city.

4.2 OBJECTIVES OF STUDY:-

Primary objective:

The primary objective of carrying out this research is “To study the consumer

preference about NesCafe Coffee in Surat city”

Secondary objective:

- To derive information about the major competitors.

- To determine the actual demand and preference of consumers.

- To identify the factors affecting purchase of consumers.

- To know the consumption pattern of consumers.



4.3 IMPORTANCE OF THE STUDY:-

- The study will help to understand the preference of customer while purchasing

NesCafe Coffee.

- Information about the major competitors of the business to help the firm to

identify the threats of business.

- The firm will come to know the needs of customers and will be able to fulfill

the needs.

- The study will help to know where the company stands in the mind of

customer.

- The suggestions given by respondents can help us to make changes according

to the demand of people.

- To know the consumption pattern of customers.

4.4 Research design:

Research design is important primarily because of the increased complexity in the market

as well as marketing approaches available to the researchers. It is an important tool to

study buyer’s behavior, consumption pattern, brand loyalty, and focus market changes. A

research design specifies the methods and procedures for conducting a particular study.

According to Kerlinger, “Research Design is a plan, conceptual structure, and strategy of

investigation conceived as to obtain answers to research questions and to control

variance.

Types of Research are:

Descriptive Research

The type of research adopted for study is descriptive. Descriptive studies are undertaken

in many circumstances when the researches is interested to know the characteristic of

certain group such as age, sex, education level, occupation or income. A descriptive study

may be necessary in cases when a researcher is interested in knowing the proportion of



people in a given population who have in particular manner, making projections of a

certain thing, or determining the relationship between two or more variables.

After reading a many research paper and books, researcher realized that there are many

problems accured in past studies on consumer preference towards NesCafe Coffee. So

researcher has selected a general public or customers of Surat city for the resea rch. They

just want to know that how consumers satisfied more and what are the basic factors

influencing customers for purchasing Nescafe coffee and overcome mistakes which stand

in existing study.

So researcher has adopted Descriptive Research.

4.5 Sources of data:

There are two types of data collection,

1. Secondary Data

2. Primary Data

1. SECONDARY DATA :

“Any data, which have been gathered earlier for some other purpose, are known as

secondary data.” Secondary data are already gathered by any other or someone else.

Like magazines, books etc.

Researcher has used secondary data like websites, magazines, and books.

Websites like,

business.usi.edu/cashel/241/text%20files/CONSUMER.pdf

www.ihmctan.edu/PDF/notes/Research_Methodology.pdf

www.slideshare.net/anilkumarkhadka/research-methodology-notes

www.icap.org/PolicyTools/.../4DataAnalysisandInterpretation

www.sagepub.in/upm-data/18534_Chapter5.pdf

http://www.icap.org/PolicyTools/.../4DataAnalysisandInterpretation



www.strativity.com

www.slideshare.net/.../a-project-report-on-consumer-preferences.com

So Researcher has used above all website for research paper and other

information.

2. PRIMARY DATA :

Primary data are those which are collected at the first hand either by the researcher or

by someone else especially for the purpose of the study is known as primary data.

Questionnaire is to be filled up by an informal rather than by the researcher.

Tool or instrument for primary data is Questionnaire which is used by researcher in

this research report.

4.6 RESEARCH INSTRUMENTS:

For collecting the primary data “Questionnaire” is to be taken as research instrument. A

questionnaire consist a set of questions presented to respondents for their answer. It is

most common instrument use to collect primary data. Here from collecting primary data

structured questionnaire is taken for research as research instrument.

Sampling is a process of obtaining the information about the entire population by

examining a part of it. The effectiveness of the research depends on the sample size

selected for the survey purpose.

http://www.strativity.com/



4.7 SAMPLING:

1) Sampling Unit:

Sampling Unit refers to the questions “who is to be surveyed?”

Before conducting the market survey, it is necessary to decide the target

population that will be sample would cover under market survey for effective

market research. So Researcher have survey the various customers of major areas

of Surat city.

Researcher selects a sample unit between 15 to 45 age people from different areas

of Surat city.

2) Sample Size:

It refers to the question “How many people should be surveyed?”

The 200 respondents have taken interview in Surat city to acquire the desire result

of research.

4.7.2.1 Pre-testing the questionnaire :

Once the questionnaire is ready, it should be Pre-Tested. Pre-Testing of

the questionnaire implies that it is tried out on a few respondents and their

reaction to the questionnaire is observed. It helps the researcher decide whether

any changes in the question-content of the wording of questions.

No. of

Respondents

Tea Coffee Both Nothing

30 6 18 5 1



If coffee or both than,how many person purchase NesCafe Coffee?...

No. of

Respondents

Yes No

23 19 4

The enough sample size should be taken for much realistic result. The large

sample size is not possible due time limit.

It is produced sampling plan and sampling size on the basis of pre-testing.

Determine the size of sample for effective result, so Researcher has taken 30

respondents and make study and from this study Researcher has got 6 person who

preferred tea, 18 preferred coffee, 5 preferred both and one person giving

unfavorable response. From this, researcher got 13 favorable and 5 unfavorable

responses for purchasing Nescafe coffee.

I.e. Researcher got 19*100/23 = 82.61%

Here, Researcher has taken 95% (Z) confident level and tolerable error (e) 5%, so

at 95% confident level is 1.96 and 5% tolerable error is 0.05

n = p x q (Z/e)2

Where, n= sample size,

P= probability of success

q = Probability of failure

z = Confident level at 95%

e = tolerable error at 5%



So,

P = 0.83, Q = 0.17, Z = 1.96, E = 0.05

= 0.83 * 0.17 (1.96/0.05)2

= 0.83 * 0.17 (1536.64)

= 204.82

= 200 (Approximately)

Here, Researcher has taken 200 sample size and conducting field survey.

3) Sampling Procedure:

Sampling procedure may be of two types, probability sample & non-probability

sample. Probability sample is known as random sample and non-probability

samples as non-random samples, both of these, Researcher has selected the non-

probability sampling procedure because survey of total population is impossible

due to time limit.

4) Sampling Plan:

Sample Element : Customers

Sampling Method : Convenience Sampling Method

Extent : Surat city

Time Duration : 6th January 2014 to 5th March 2014.



4.7.4.1 Convenience Sampling Method:

It means selecting sample units at convenience of the interviewer. It is also

known as accidental sampling because the respondents whom the

interviewer meets accidently are included in the sample. It may be used

for simple purpose such as testing ideas or gaining ideas or rough

impression about a subject of interest.

It does not require a list of population.

4.8 LIMITATION:-

- As the sample size is very small so project may not give perfect result.

- It is very difficult to collect all information for future in short time.

- Information is collected only from customers.

- Respondent’s answers might have influence or bias.

- Survey is limited only for some areas of Surat city.



Chapter 5

Data Analysis &

Findings



Chapter 5 : Data Analysis & Findings

Demographic Details

Age

(Table 1)

(Chart 1)

Interpretation

It is interprete that age from 15-20 are giving more preference to NesCafe

Coffee and 26-30 age group are giving less preference so if company want

to grow than they have to make to aware above 26 age groups.

0204060

AGE

% of No. of

Responses

Responses No. of Responses % of No. of Responses

15-20 102 51

21-25 63 31.5

26-30 12 6

31-35 15 7.5

36-40 5 2.5

41 – above 3 1.5

Total 200 100



Que. 1) What do you prefer?

(Table 2)

Responses No. of Responses % of Responses

Tea 41 20.5

Coffee 118 59

Both 31 15.5

Nothing 10 5

Total 200 100

(Chart 2)

Interpretation

Survey is conducted of the people who prefer tea, coffee, both and nothing and the above

graph shows that 20.5% of respondents prefer tea, 59% prefer coffee, 15.5% prefer both

and rest of respondents prefer neither tea nor coffee. It is good for NesCafe that more

customer are prefer coffee as compare to other drinks so company take advantages by

more attracting them.

0

10

20

30

40

50

60

70

Tea Coffee Both Nothing

People Preference Towards Tea & Coffee

% of Responses



Que.2) If coffee than of which brand you like most?

(Table 3)


NesCafe 95 63.76

Bru 41 27.52

BrookBond 11 7.38

Tetly 2 1.34

Starbucks 0 0

Total 149 100

(Chart 3)

Interpretation

From the above survey done, 95 respondents from 149 were like most Nescafe

means more than half of total mostly prefer Nescafe brand. (Approximately 64%).

So company can attract customer by providing new products compare to other

competitors.

0

10

20

30

40

50

60

70

80

90

100

NesCafe Bru BrookBond Tetly Starbucks

No. of Responses

% of Responses



Que.3) Give rank to the brands of coffee as per your choices.

(Table 4)

Brand 1 2 3 4 5 Total Rank

NesCafe 100 23 11 9 6 649 1

Bru 35 57 36 15 6 547 2

BrookBond 10 44 53 29 13 456 3

Tetley 2 13 31 70 33 334 4

Starbucks 2 12 18 26 91 255 5

Total 149 149 149 149 149 2241 -

(Chart 4)

Interpretation

From the above graph we can say that NesCafe is on 1st position, Bru on 2nd,

BrookBond on 3rd, Tetley on 4th and Starbucks stands on last position. From this, it is

conclude that NesCafe is more satisfying customer among competitors.

0

100

200

300

400

500

600

700

NesCafe Bru BrookBond Tetly Starbucks

Preference Among Different Brands

Total



Que.4) Since how many months/year you are preferring coffee?

(Table 5)


1-3 months 17 11.41

3-6 months 41 27.52

year 61 40.94

> 1 year 30 20.13

Total 149 100

(Chart 5)

Interpretation

From the survey, 11.41% proportion of respondents is preferring coffee from 1-3 months.

27.52% people prefer coffee from 3-6 months. So the customer who are using in last 6

month, company has to make promotional activity to make more users.

11.41%

27.52%

40.94%

20.13%

Duration Preferring Coffee

1-3 months

3-6 months

year

> 1 year



Que.5) Do you purchase NesCafe Coffee?

(Table 6)


Yes 111 74.5

No 38 25.5

Total 149 100

(Chart 6)

Interpretation

The above graph shows that 74.5% respondents purchase NesCafe Coffee and 25.5%

people intake other brands coffee. So it is very good point for NesCafe that high number

of customer preferring this brand.

0

10

20

30

40

50

60

70

80

Yes No

People Preferring NesCafe Coffee

% of Responses



Que.6) If yes, how often do you purchase Nescafe Coffee?

(Table 7)


Daily 12 10.81

Once In a Week 42 37.84

15 Days 24 21.62

Monthly 33 29.73

Total 111 100

(Chart 7)

Interpretation

According to bar graph, 42 was highest amount of responses from 111 respondents, who

purchasing NesCafe Coffee in every week. Only 12 persons purchasing NesCafe Coffee

daily. So company has to make that type of offer that customer prefer to take coffee every

day.

12

42

24

33

Daily

Once In a Week

15 Days

Monthly

Time Period of Purchasing NesCafe Coffee

No. of Responses



Que.7) How much gram packet of Nescafe coffee you prefer?

(Table 8)


5 gram 23 20.72

50 gram 39 35.14

100 gram 34 30.63

More Than 100 gram 15 13.51

Total 111 100

(Chart 8)

Interpretation

20.72% respondents prefer packet of 5 gm and 35.14% respondents prefer packet of 50

gm of NesCafe Coffee. So company has to increase the packat size of less gram packets

to consume more coffee.

21%

35%

31%

13%

People Preferring Diferent Packet of NesCafe Coffee

5 gram

50 gram

100 gram

More Than 100 gram



Que.8) Mostly through which source do you know about Nescafe coffee?

(Table 9)


Friends 16 14.41

Advertisements 41 36.94

Relatives 19 17.12

Others 35 31.53

Total 111 100

(Chart 9)

Interpretation

From the above char, it is conclude that people get source of NesCafe Coffee from any

areas. So it can says that NesCafe is popular among peoples.

14%

37%

17%

32%

Sources of NesCafe Coffee

Friends

Advertisements

Relatives

Others



Que.9) Which are those factors that force you to prefer Nescafe coffee?

(Tick mark any two factors on which you think more while purchasing)

(Table 10)


Quality 79 22.38

Price 56 15.86

Taste 64 18.13

Brandname 57 16.15

Refreshment 54 15.3

Advertisement 43 12.18

(Chart 10)

Interpretation

22.38% respondents think more about quality of coffee while purchasing coffee. 18.13%

respondents think more about taste of coffee while purchasing coffee. So company has to

concentrate on increase quality and taste to attract more customer.

0

5

10

15

20

25

Factors Affecting NesCafe Coffee

% of Responses



Que.10) How will you rate the following features of Nescafe coffee? (Out of 5)

1=poor, 2=average, 3=good, 4=very good, 5=excellent

(Table 11)

Factors 1 2 3 4 5

Price 7 14 31 9 50

Quality 0 10 16 35 50

Quantity 1 7 51 42 10

Taste 2 3 17 50 39

Brand name 2 3 23 51 32

Refreshing 2 1 23 48 37

Availability 2 4 11 55 39

(Chart 11)

Rating of Features

Interpretation

From this chart, we can say that price and quality of NesCafe Coffee is equally excellent

because almost half of respondents give 5 rates to price and quality. So it is conclude that

company is having good rate in quality and price but they have to make NesCafe

availability in market and increase quantity to satisfied more customer because customer

want more quantity in product at purchase time.

0 50 100 150

Price

Quality

Quantity

Taste

Brandname

Refreshing

Availability

1

2

3

4

5



Que.11) How much you are satisfied with Nescafe Coffee?

(Table 11)


Highly Satisfied 46 41.44

Satisfied 47 42.34

Neutral 14 12.62

Dissatisfied 4 3.6

Highly Dissatisfied 0 0

Total 111 100

(Chart 11)

Interpretation

41.44% respondents are highly satisfied with NesCafe Coffee and 42.34% respondents

are satisfied with NesCafe Coffee. So company reputation will increase in market

through word of mouth by satisfied people and company don’t require to make

advertisement.

05

101520253035404550

Satisfaction With NesCafe Coffee

No. of Responses

% of Responses



Que.12) Are you satisfied with the quantity given in the place of price you pay?

(Table 13)


Highly Satisfied 28 25.23

Satisfied 53 47.75

Neutral 23 20.72

Dissatisfied 5 4.5

Highly Dissatisfied 2 1.8

Total 111 100

(Chart 13)

Interpretation

28 respondents are highly satisfied and 53 respondents are satisfied with the quantity

given in place of price they pay. So it is interprete that customer are satisfied with the

quantity given so they have to work on other criteria like price, quality and so on to make

them satisfied.

0

10

20

30

40

50

60

HighlySatisfied

Satisfied Neutral Dissatisfied HighlyDissatisfied

Satisfaction With Quantity

No. of Responses



Que.13) Would you suggest other people to have Nescafe coffee?

(Table 14)

Responses No. of

Responses

% of Responses

Yes 91 81.98

Rarely 16 14.41

No 4 3.6

Total 111 100

(Chart 14)

Interpretation

91 respondents say that they will suggest other people to have NesCafe Coffee. So it is

interprete that more customer will recommend other to have NesCafe Coffee, so

company’s market share will increase by joining new customers.

0

20

40

60

80

100

Yes Rarely No

Suggests To Prefer NesCafe Coffee

No. of Responses



Chapter 6

Testing

of

Hypothesis



Chapter 6 Testing of Hypothesis

X2 TEST

Que. 2. If Coffee, than of which brand you like most?

H0 : There is no association between gender and preference of brand in Coffee.

H1 : There is an association between gender and preference of brand in Coffee.

Actual value

Row Labels 1 2 Grand Total

1 65 30 95

2 22 19 41

3 4 7 11

4 1 1 2

Grand Total 92 57 149

Frequency

Row Labels 1 2 Grand Total

1 58.65771812 36 95

2 25.31543624 16 41

3 6.791946309 4 11

4 1.234899329 1 2


X2cal = 0.109466368

X2tab = 9.488

X2cal = 0.109466368 < X2tab = 9.488, So the H0 is not rejected. It means there is no

relationship between gender and preference of brand in coffee.



Que. 5. Do you purchase NesCafe Coffee?

H0 : There is no association between gender and purchase of NesCafe Coffee.

H1 : There is an association between gender and purchase of NesCafe Coffee.

Actual value

Row Labels 1 2

Grand

Total

1 71 21 92

2 40 17 57


Frequency

Row Labels 1 2

Grand

Total

1 68.53691275 23.46308725 92

2 42.46308725 14.53691275 57


X2 Cal = 0.340832817

X2tab = 9.488

X2 Cal = 0.340832817 < X2tab = 9.488, So the H0 is not rejected. It means there is no

relationship between gender and purchase of NesCafe Coffee.



Que. 13. How much you are satisfied with NesCafe Coffee?

H0 : There is no association between gender and the satisfaction level towards NesCafe

Coffee.

H1 : There is an association between gender and the satisfaction level towards NesCafe

Coffee.

Actual value

Row Labels 1 2

Grand

Total

1 38 8 46

2 26 21 47

3 5 9 14

4 2 2 4


Frequency

Row Labels 1 2

Grand

Total

1 29.42342342 16.57658 46

2 30.06306306 16.93694 47

3 8.954954955 5.045045 14

4 2.558558559 1.441441 4


X2cal= 0.003427659

X2tab= 9.488

X2cal= 0.003427659 < X2tab=9.488, So the H0 is not rejected. It means there is no

relationship between gender and the satisfaction level towards NesCafe Coffee.



Z-Cal

Q-5. Do you purchase NesCafe Coffee?

I have taken 30 samples before survey for pilot study in which 23 respondents were

prefered coffee and 7 were preferred tea or nothing. And from 23 respondents, 19

puchase NesCafe Coffee, it means…

P= 0.83

Q=0.17

H0 : 83% customers purchase the NesCafe Coffee.

H1 : 17% customers not purchase the NesCafe Coffee.

Where ,

X= respondents who says yes=111

n = sample size=149

p= X/n

=111/149

=0.74

Z= |𝑝−𝑃 |

√𝑃𝑄 /𝑛

= |0.74−0.83|

√0.83∗0.17/149

=2.903

So, Zcal = 2.903

Ztab = 1.96 (5% of significance level)

Zcal = 2.903 > Ztab = 1.96

Zcal = 2.903 > Ztab = 1.96 , So the H0 is rejected. It means that there is no

relation between the pilot study and actual study of this research.



Chapter 7

Finding And

Conclusion



Chapter 7 : Finding And Conclusion

7.1 Findings

It clearly shows that mostly all people prefer coffee than tea.

Among the total respondents, majority of respondents are consuming coffee since

one year.

According to analysis it has been observed that maximum important factors for

coffee have been given to quality and taste.

Mostly all the people in India which are middle or higher class are consuming

Nescafe Coffee.

Departmental stores are mostly situated in each area of Surat city and so even

maximum people are aware of Nescafe Coffee.

According to the survey maximum respondents finds proper quantity of Nescafe

Coffee in place of price given.

Even the maximum respondents are satisfied with the NesCafe Coffee.

Approximately 42% respondents are well satisfied the NesCafe Coffee so they are

sure that they will suggest other people to have NesCafe Coffee.



7.2 Conclusion

Marketing plays a vital role in the growth and development of the country. Growth and

development always keep a peace in the economy. Now the modern marketing faces the

high competition. The consumers are satisfied only when information is collected from

the consumers. The marketing is a consumer oriented marketing. It begins with the

consumers.

It is well concluded that Brand Image of NesCafe Coffee is good. In the big competitive

market, there are majority of people who still prefer only NesCafe Coffee. Company

image of NesCafe is very high. It is well concluded that NesCafe Coffee is excellent in

quality and taste. The findings of the study reveals that consumer preference on NesCafe

Coffee usually consumed by everyone due to its quality, good taste, quantity, availability,

refreshing etc. NesCafe is an old and trusted brand and caters to the need of every

consumer. In India, it enjoys very high brand awareness. It offers reasonable priced and

good quality product, which helps her to maintain its position in the market. NesCafe

should give some promotional and other offers so that price conscious people should also

be attracted to purchase its product. Question on factors has been asked to identify much

affecting factors in while purchasing the NesCafe Coffee. The survey revealed that two

factors: Taste and Quality are the most important factors. The findings of the study

reveals that consumer preference on NesCafe Coffee usually consumed everyone due to

its quality, good taste, quantity, availability, refreshing, etc. hence company must

maintain this strength and try to satisfy the need by providing value and satisfaction to

the consumers.



Chapter 8

Suggestions



Chapter 8 : Suggestions

8.1 Suggestions

Currently, small amount of people consumed nothing i.e. tea and coffee, so there will be

chance for NesCafe to convert those people into consumer of coffee of their brand. Bru is

the upcoming competitor for NesCafe, so NesCafe should try to provide best products for

maintain good image. There were requirement of promotional activity by NesCafe in few

rural or under developed area like varachha, kamrej and rander. The company can

maintain their best position in market by providing more flavor of coffee and promotional

activities. According to survey, few respondents were dissatisfied with NesCafe Coffee,

so meet those persons and know the actual problem for their dissatisfaction and solve out

the problem and try to convert them from satisfied customer to loyal customer.



Reference

(A) Bibliography

(B) Annexure



(A) Bibliography

The above information was gathered through the following sources :-

Books :

Philip Kotler “Marketing Management” 13th edition, Pearson education

publisher, Third Indian re-prints, to 003.

Links of Websites :

business.usi.edu/cashel/241/text%20files/CONSUMER.pdf

www.ihmctan.edu/PDF/notes/Research_Methodology.pdf

www.slideshare.net/anilkumarkhadka/research-methodology-notes.com

www.icap.org/PolicyTools/.../4DataAnalysisandInterpretation.com

www.sagepub.in/upm-data/18534_Chapter5.pdf

www.strativity.com

www.slideshare.net/.../a-project-report-on-consumer-preferences.com

www.slideshare.net/.../a-project-report-on-customer-preference-towards-

HULproducts.pdf

http://www.icap.org/PolicyTools/.../4DataAnalysisandInterpretation

http://www.strativity.com/



Annexure

-Questionnaire



Questionnaire

Dear respondent,

I, Prashant Dhanani management student conducting a study on “A study on consumer

preference about Nescafe Coffee in Surat city”. This exercise is a part of project towards

fulfilling the requirement of graduate management course, VNSGU, Surat. I would be

graceful if you could provide with some of your valuable time to fill this questionnaire. I

assure you that use conveyed by you will be used for academic purpose only. I thank you

in advance for your co-operation.

Yours faithfully,

Prashant Dhanani

________________________________________________________________________

Instruction: Use tick mark (√) for your favourable answer.

1. What do you prefer?

Tea

Coffee

Both

Nothing

2. If coffee than of which brand you like most?

Nescafe

Bru

Brook bond

Tetly



Starbucks

3. Give rank to the brands of coffee as per your choices.

Brand Name Nescafe Bru Brookbond Tetley Starbucks

Rank

4. Since how many months/year you are prefering coffee?

1-3 months

3-6 months

1 year

More than 1 year

5. Do you purchase Nescafe coffee?

Yes

No

6. If yes, how often do you purchase Nescafe coffee?

Daily

Once in a week

15 days

Monthly

7. How much gram packet of Nescafe coffee you prefer?

5 gram,

50 gram

100 gram



More than 100 gram

8. Through which source do you know about Nescafe coffee?

Friends

Advertisements

Relatives

Others

9. Which are those factors that force you to prefer Nescafe coffee?

(Tick mark any two factors on which you think more while purchasing)

Factors Quality Price Taste Brand Name Refreshment Advertisement

Tick mark

12. How will you rate the following features of Nescafe coffee? (Out of 5)

1=poor, 2=average, 3=good, 4=very good, 5=excellent

Factors 1 2 3 4 5

Price

Quality

Quantity

Taste

Brand Name

Refreshing `

Availability

13. How much you are satisfied with Nescafe Coffee?



Highly satisfied

Satisfied

Neutral

Dissatisfied

Highly dissatisfied

14. Are you satisfied with the quantity given in the place of price you pay?

Highly satisfied

Satisfied

Neutral

Dissatisfied

Highly dissatisfied

15. Would you suggest other people to have Nescafe coffee?

Yes

Rarely

No



Personal Details

Name : __________________________________________________________

Age : __________________________________________________________

Gender :__________________________________________________________

Address :__________________________________________________________

Occupation :__________________________________________________________

Income : 10000-15000 [ ]

16000-25000 [ ]

26000-35000 [ ]

36000-45000 [ ]

46000-Above [ ]

Contact No. : _________________________________________________________

E-mail : _________________________________________________________

to know the consumer preference about nescafe coffee

Education

fmcg companies

fmcg sector

fmcg segment

indian fmcg industry

fmcg industry overviewin

big fmcg giants

industry profile1

innovation of products