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WELCOME TO

THE WORLD OF COFFEE


2005
GOLDEN
Marketing Plan
Nescafe Gold
Best Drinking Moment
Premium Segment is in introductory stage :
Pioneer Marketing Strategy

Premium Segment
Mixed Segment

R&G Segment

Regular Segment

BCG Matrix Model


Coffee is the most popular drink nowadays.

36
Instant Coffee 41

CSD 41
34

Bottle water 31
25

Instant Coffee 39 UHT/Pasteurized 28


drinking yogurt 13
CSD 38
18
Bottle water 28 3 in 1 coffee 16
UHT/Pasteurized drinking yogurt 20 5
Beer 26
3 in 1 coffee 17
Beer 15 UHT/Pasteurized / 18
Sterilized Milk 12
UHT/Pasteurized / Sterilized Milk 15
Alcoholic drink except 4
Alcoholic drink except beer 14 beer 24
Milo Ovaltine 12 15
Milo Ovaltine 8
Iced coffee hawker 8
RTD Coffee 8 Iced coffee hawker 9
6
UHT/Bottle soya milk 7
RTD Coffee 5
Energy drink 7 10

Milo/ Ovaltine UHT 6 UHT/Bottle soya milk


7
7
UHT/Bottle/Can branded fruit juice 4
2
Energy drink 12

Milo/ Ovaltine UHT 8


3
UHT/Bottle/Can Male Female
6
branded fruit juice 2 Source : Coffee U&A study, 2003
Coffee is more popular day by day ,
52% of Hot Drinks Value

Mio. Bht
7,000  Market is growing every year.
+14%
+14%  Coffee consumption is booming.
6,000 (esp out of home)
+6%
+6%
+11%
+11%
5,000 2,421
1,341 1,777
4,000
200 206 266
 People lifestyle is westernized &
3,000
modernized.
2,000
 People have less time / work harder.
3,504 3,372 3,410  Coffee is the part of image enhancer.
1,000

0
2002 2003 2004
 More players jump into coffee market.
 Coffee is their part of life.
Coffee Market Size by segment
More opportunity to grow premium segment

Mio. Bht
300  Consumers are more sophisticated.
+29%  Premium Coffee is well adopted.
250 +3%
+1%
200

150
266
100 200 206
 People spend more on coffee (per
50 transaction & consume more)
 Consumers are still looking for and
0 willing to pay for coffee great taste.
2002 2003 2004  Opportunities is there but HOW?

Premium Coffee Market Size


How about the premium segment today?

Mio. Bht
 Few players with less competitive
300
+29% degree.
 No one owns this market.
250 +3%
+1%  No one invested the market before,
Nescafe Gold starts in 2004
200
 Market size can be doubled in next
3 years!
150
266
100 200 206 + Nescafe Brand is highly accepted.
+ N. Gold is highly recognized and get
50 success in 2004
+ High barrier to enter the market
0
2002 2003 2004 - Green Tea Booming.
-“Health Concern” Perception
Premium Coffee Market Size - Substitute product
We need to understand where we are today!

Competitor

Understanding
Ourselves

Consumer/Shopper
Main competitors today ...

 Sara Lee Trading – Moccona Royal Gold, Moccona Espresso

+Key competitor with total >30% market share.


+Price is a bit lower.
+Before 2004, they lead the market.

-They focus mix segment.


-Brand Image
-Not good product taste
Main competitors today ...

 Trading companies – Taster Choice, Maxim, UCC etc

+High product image.


+High flexibility.

-Low corporate image.


-Product Supply Fluctuation.
-Not invest in the market.
Nescafe Gold is one step ahead the others!

Product Price Brand Image Promotion Distribution Techo.

Nescafe Gold

Moccona

Imported

Nescafe Gold Key priority is to drive the total category


Let’s review where we are ....

Strength Weakness

• Positive brand image & product. • Low flexibility


• Big investment to drive.
• Endorsed by Nescafe / Nestle
• Various pack size to serve
• Uniqueness
• High technology in the business

Opportunity Threat

• Coffee is booming. • Substitute product : Green Tea, Tea


• Consumer is more sophisticated. • Health Concern.
• Needs for premium coffee exist. • Smuggling Product
• Premium coffee is more popular.
• Changing in people lifestyle
N. Gold market share shows promising trend...

50%
45%
45%
43%
40%
37%
35%

30%

25%
21%
20% 18% 19%
17%
15% 12% 13% 13%
12% 13%
12%
10% 13%
12%
5%

0%
2002 2003 2004
Nescafe Gold Moccona Royal Gold Tasters Choice green
Moccona Expresso Others
Having a good start in 2004

(Mio Bht)
300 Market is growing by +29%
While N. Gold sales is about 4 times higher!
250

206 266
200

150 Market

N
. Gold
100

50

99
26
0
2003 2004

Premium Market Size vs Nescafe Gold sales 2003-2004


SEGMENTING
Age

0 - 15 24% of population : 15,462,944 People

16 - 30 21.2% of population : 13,658,934 People

31 - 45 24.2% of population : 15,591,803 People

46 - 60 24.8% of population : 15,978,376 People

60 Up 5.8% of population : 3,736,878 People


Targeting : Product Specialization
Age

0 - 15 Demographic + Psychographic

16 - 30 • At certain age
• Educated, Modernized
• Socialized, Dynamic
31 - 45 • Out going, Trendy
• Cool
• Confident, Unique
46 - 60

60 Up
Getting to know consumer is vital
Youth : 16-30 Spend 70% of their time out of home

KEY INSIGHT

Home • 19 yrs old is the age of having the first cup of coffee

• Do not appreciate the taste and Image of Nescafe


School/Office
• New Coffee Shops are changing the way they look
at coffee. Coffee is becoming more of a social drink
Entertainment • Key Need states are Quick/energy boost/kick start,
• Have a nice place
Thirst Quenching
for lunch
• Shopping at Mall Snacking (Iced coffee)
• Playing sport • Key Psychographics
• Going to cinema Want to Experience life &
• Hang out with friends
Want to Grow themeselves
Work hard, Play hard
Family builder : 31-45

KEY INSIGHT
Home
• The age of adapting hot coffee
Office • Coffee is becoming a part of their everyday life
• Key Need states are Kick start,
Key activities : Refreshment during the day
• Business Dinner
Mental renewal
• Going to fitness / sports
• Going to theaters • Key Psychographics
• Socializing with friend ; Career and success are the key focus
at lunch or drinking in
evening before go home Now they have goals that they want to pursue
• Have a nice place for • Coffee ignites their spirit, gets them ready, bring
meal with family
their confidence, lets them focus, settle their
• Shopping complex with
family thoughts, initiates social bonding
No time to dream: 46-60

Home KEY INSIGHT


• Heavy users : More coffee appreciation
Office
• Coffee is a part of their everyday life
Key activities : • They spend relatively more time at home with family
• Business Dinner • Key Need states are Kick start,
• Deliver / pickup sons
from schools Mental renewal
• Going to public park Relaxing and Rewarding oneself
• Socializing with friend ; • Key Psychographics
mostly at lunch
• Have a nice place for They’ve accomplished certain things and now looking
meal with family for life’s small pleasures.
• More traveling; personal
Appreciate good things in life
business
They have much more focus on the family
Understand consumer is the key to succeed.
All 16-30 yrs 31-45 yrs 46-60 yrs 60 yrs up
Bas : Instant Coffee % % % % %
At home 92 97 89 91 93
Office 8 3 6 11 6
In car/on the way 01 0 5 0 0
Base : 3 in 1 coffee % % % % %
At home 79 85 69 79 82
Office 17 5 23 17 15 - Regular at home
School/Education institution 1 10 2 0 0 - Big opportunity : office
Base : Hot coffee at hawker % % % % %
Street vendors/hawker 63 50 64 76 56
At home 17 43 23 4 20
Office 12 0 0 6 25 - As breakfast
All 16-30 yrs 31-45 yrs 46-60 yrs 60 yrs up - Convenience oriented
Those consuming Instant Coffee yesterday % % % % %
Before breakfast 54 29 54 52 57
During breakfast/as the breakfast 33 43 26 34 34
After lunch till dinner 10 0 5 11 11

Those consuming 3 in 1 coffee powder % % % % %


Before breakfast 42 13 22 42 52
During breakfast/as the breakfast 31 37 31 35 25
After lunch till dinner 20 10 30 20 17
Those consuming Hot coffee at hawker % % % % %
Before breakfast 23 18 20 11 36
During breakfast/as the breakfast 23 10 0 41 17
After lunch till dinner 15 0 0 20 20
After dinner till before bed time 22 9 66 10 25
CIRCUMSTANCES OF CONSUMPTION Base: 617

INSTANT COFFEE
HOME (93%) OUTSIDE (10%)

As breakfast 55
With breakfast at home 15
During break 3
Having snacks at home 8 As breakfast 2
Before breakfast 6 Working 2
Watching TV/ VDO /listen music/ radio / reading 4 Hanging with friends 2
After meal 4

Base: 270

3 IN 1 COFFEE
HOME (80%) OUTSIDE (23%)

As breakfast 48 During break 10


With breakfast at home 10 As breakfast 4
Relaxing 7 Having snacks 4
Before breakfast 6
Watching TV/ VDO /listen music/ radio / reading 4
POSITIONING: Place product in consumer’s mind.

Nescafe Gold ...

make you sense the real coffee feeling


POSITIONING: Place product in consumer’s mind.

Nescafe Gold ...

bring out the best in you.


We do not sell Coffee,

We sell Best drinking moment


More room to grow the business
(Mio Bht)
600
+22%

500
+24%
400
+29%

300
525
200 430
345
266
100 206 Market

0
2003 2004 2005 2006 2007

Market Size of Premium Segment in next 3 years.


Are you ready for 2005?
Our Vision

Lead and Grow the Premium Coffee Market and


Become The Most Preferred/Aspirational
Coffee Beverage Brand in Thailand
What to achieve ...

2005 Objective

 Achieve 145 Mio. Bht Sales ( 42% market share)

 Lead and profitably grow the total premium coffee market

Long Term Objective

 Own the premium segment : Think of premium coffee,


Think of Nescafe Gold

 Achieve 65% market share in next 5 years.


How to achieve ...

3 main strategies

 Recruit new user : Regular Segment


(by 15%) : Out of Home
: New new user

 Increase consumption : As Breakfast


: 2 cups a day (or more)

 Turn competitor user : Expect 20% conversion rate


Every single element is ready to strike ..

 Great product on earth

 Right pricing to tempt the consumers

 Full distribution to ensure product availability

 Communication and Promotion to drive success

Success is in the arm reach!


Nescafe Gold is ready ...
to rock the market.

Nescafe Gold Army

New Affordable Range with Proprietary Packaging


Nescafe Gold

Doypack w/ zipper EdenII jar Stick in box

70g 35g 200g 100g 8 sticks x 2g

Price 120 Bht 65 Bht 420 Bht 230 Bht 35 Bht


Right product at right time!

 Highly accepted brand with positive image – Nescafe Gold.

 Premium&Modern Look with reliable quality at proper price range.

 Attractive pack size to serve various group & purpose.

Jar Line Pouch Stick in box

Loyal Shopper Recruit new user Increase Consumption


-100g & 200g -70g & 35g -2g.
-X-Citing shape -Trial pack size -Out of Home/Convenience
-Premium / Modern -Zipped Lock -Modern/Cool
-New Design
X-Citing to drive $ALES

Innovation : Limited SKUs

 Nescafe Gold 3 in 1 in Q3 : Out of home

 Nescafe Gold Decaf in Q3 : More cups a day / Health Concern

 Nescafe Gold Mocca in Q4 : More cups a day

Renovation : Packaging Modification – Special Packaging

 Valentine’s , X’ Mas

 Recipe Application – Nescafe Gold Frappe’


Pricing reflect high image & reliable quality.

Brand Index

Nescafé Gold 100  Skimming Pricing to build business both

Moccona Royal Gold 77


retailer & vendor.

 Price is less sensitive.


Taster’s Choice 74
 Establish Price&Quality Relationship
UCC 124
 Build Image and Perception while deliver
Maxim 135
promised quality
Others 125
Where to find our product : Distribution Channel

Modern Trade contributes 95% of business


Hypermarket Supermarket Convenience
Store
Alternative trade channel to widen the
distribution

 Out of home / Food Service Channel


- Restaurant, Hotel, QSR

 Alternative channels
- Entertainment section, Book store
360 degree of communication to bomb
the town!

Print
Quality coffee

In-store activity

TVC
$ Market Growth $

Cinema

Sampling OOH
P/R
Rapidly increase Awareness through Mass Media

TVC : Prime Time (Throughout the year)


Rapidly increase Awareness through Mass Media

Prime Time
 Channel 3 / 7 / 9
 Soft Opera after news
 News Program
 Morning News Program

+ Increase awareness
+ Direct to target group
+ Induce Trial

 Hit > 9,000,000 people


TVC : Prime Time (Throughout the year)
Rapidly increase Awareness through Mass Media

Alternative but Attractive Media

Tie-in Program

Magazine Ads
Cinema
& Internet

+ In line with target lifestyle


Unique and strong communication + Increase awareness
+ Build positive image
+ > 800,000 people
Rapidly increase Awareness through Mass Media

PRINT
Event to create excitement.

- Excite consumer
- Create Loyalty
- Nescafe Gold consumer > 1,000 people
join the activities
Promotion to drive sales

Get free Gold Mug when buy Nescafe Gold in July


Merchandising at point of sales to activate
the purchase.

Impactful Merchandising drives sales & visibility : Home shelf & Out of shelf.
Dominate Visibility on Shelf and in Store
Product Trial by continuous Sampling

In store

350,000 Wet sampling - in Modern Trade : AM / PM Consumption


Product Trial by continuous Sampling

In Office

Dry
200,000 wet and dry sampling - in offices Sampling

: AM / PM Consumption
Product Trial by continuous Sampling

Cinema

- Fit to target group lifestyle.


- > 120,000 people
Attract Opinion Leaders through targeted
PR and CRM activities

PR CRM Activities

Special Gold kit sent


to 400 opinion leaders
(CEO, government officer, celebrities)
Ensure product availability by sales incentives

Special Incentive in Q1

• Achieve stretched target

• Make sales team having more focus in Nescafe Gold

• Drive distribution to ensure having no OOS in store

• Part of total integrated campaign to ensure success


Action & Strategy to drive the business

Achieve 145 Mio sales


and grow the category

Increase Turn Competitor’s


Recruit new user
Consumption User

- Create awareness by TVC, - New product Launch : Decaf, - Create awareness by TVC,
Magazine Ads, other Media Limited Edition : Mocca Magazine Ads, other media

- Sampling in store, office, - No OOS in store - Sampling in store, office,


cinema cinema
- Sampling in store, office,
- P/R and CRM Activities cinema - Impactful merchandising
at store
- New Product Launch :
Decaf, 3 in 1 - New Product Launch

- In store Promotion - New packaging


It is time to drive great beverage on earth.

Type Detail Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Total Cost
Media TVC 29,800,000
PRINT 2,700,000
Cinema 2,400,000
Sampling In store 17,000,000
Office 13,000,000
P/R 600,000
Promotion 6,000,000
Innovation Limited/New Product 700,000
Packaging 600,000
Incentives 1,200,000
Others 3,000,000
Total 77,000,000

Integrated activities to ensure the success


Awareness & Trial are the key driver!

Incentives
84% of investment is spent to ensure awareness & Trial.

Innovation

Other Media

TVC & Sampling are key to succeed.


Promotion

Sampling

TVC

0 5 10 15 20 25 30 35

Investment grouped by spend type


We invest for the future .....

(Mio. Bht)
16 10

9
14

8
12
7

10
6

Sales
8 5
Spending

4
6

3
4
2

2
1

0 0
Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec

2005 Monthly sales & Spending


We invest for the future .....

Mio. Bht 2003 2004 2005 2006 2007

Market 206 266 345 430 525

Market
Share
12.6% 37% 42% 45% 47%

Sales 26 99 145 194 248

COGS 8 45 65 87 124

MC 18 54 80 107 124

Commercial
Fund
4 55 77 82 85

Profit 14 (1) 3 25 39
We invest for the future .....
600Mio Bht. 45

Right investment make profit 40

500
jump up high! 35

30
400
25
Market
300 20 Sales
Profit
15
200
10

5
100

0 -5
2004 2005 2006 2007

Projected Market size & Nescafe Gold sales & Profit in next 3 years
N. Gold market share continuously fly high and higher...

50% Firm market Leader Position 47%


45%
45%
42% 45%
40%

35%

30%

25%
19% 19%
20% 18% 20%
15%
15% 12% 12%
12% 11%
12% 11%
13%
13%
10% 13%
12%
9%
5%

0%
2002 2003 2004 2005 2006 2007
Nescafe Gold Moccona Royal Gold Tasters Choice green
Moccona Expresso Others
How to ensure the result?

 Quarterly performance review Mio.


2003 2004 2005 2006 2007
Bht

Market 206 266 345 430 525

Market
12.6% 37% 42% 45% 47%
300 Share
50% 47%
45%
45%
250
40%
42% 45% Sales 26 99 145 194 248
35%
200
30% COGS 8 45 65 87 124
25%
150
266 20% 18% 19% 19%
20% MC 18 54 80 107 124
15%
15% 12% 12%
100 200 206 12%
12% 11%
13%
10% 13%
11%
13%
12%
Comm
9%
50 5% ercial 4 55 77 82 85
0% Fund
2002 2003 2004 2005 2006 2007
0
Nescafe Gold Moccona Royal Gold Tasters Choice green
2002 2003 2004 Moccona Expresso Others
Profit 14 (1) 3 25 39

+ Sales, Market Share, Financial Outlook : Investment / Profit


+ Set KPI in quarterly basis

 Research in Q3 2005 to check attitude & usage


Nescafe Gold is ready ...

Market
300

250

200

• Coffee premium segment is growing by > + 20% every year. 150


266

• Out of home consumption is booming. 100

50
200 206

• Consumer is opened to premium coffee. 0


2002 2003 2004

Competition

• No one drives the market seriously today, but Nescafe Gold.


• Nescafe Gold gain many competitive advantages.
• Competition is not aggressive today.

Consumer

• Age 30 – 60 Years with modern lifestyle


• They are looking for great taste of coffee.
• They are opened to many kinds of media.
Nescafe Gold is ready ...
Tools to hit

• Attractive Product to serve consumers needs.


• Right pricing to make people buy.
• Full distribution to ensure sales.
• Communication & Promotion to drive success.

Print
Quality coffee

In-store activity
TVC $ Market Growth $

Cinema

Sampli OOH
P/R
Nescafe Gold is ready ...

Future Outlook

• Market is expected to grow by > +20% for next 3-5 years.


• Nescafe Gold will grow > +30% in next couple years.
• The 1st comer always enjoy the big piece of cake.

We invest for the future ...


Nescafe Gold

Ready to strike the market


WELCOME TO
THE WORLD OF COFFEE
THANK YOU