Introduction

On the 7th December 1992, 30 million viewers watched episode 12 of the Nescafé Gold Blend
saga in which the hero Tony told Sharon - 'I love you!' This was one of the high points of
perhaps the most successful advertising campaign in this country in recent years. The success of
the campaign rested on the fact that advertising had become drama and that the audience had
become hooked on the storyline. More importantly, the audience was able to identify the
advertising with the product and increases in sales could be clearly related to the campaign - for
example, within a year of the romance going on air in November 1987, sales had risen by 12and
over the next few years, Nescafé Gold Blend was able to grow its sales volume by 60 creating a
£100 million brand by 1996.

This case study charts the success of the Gold Blend television saga in achieving the marketing
aim of making the product accessible to the majority of coffee buyers. The case study then goes
on to show how the packaging of Gold Blend and the product itself have both been improved to
add to its enviable market success of today. There are two parts to the television success story:

 The first part started in November 1987 and involved the development of an
extraordinarily successful campaign.
 The second part started in November 1993 and shows how the success was broadened to
attract a younger target audience.

It shows how Nestlé understood the nature of the highly segmented coffee market and was able
to broaden the appeal of the brand to fresh segments of that market at the right time.

Strengthening the position of Gold Blend

Positioning is a key aspect of marketing. The position of a product is the way it is perceived by
consumers in terms of the key features they want to get out of the product i.e. those aspects
which they see as giving value for money. For example, in purchasing instant coffee, consumers
may weigh up value for money in terms of price, the quality and taste of the coffee. An
individual business producing coffee needs to decide where it will position itself in the market,
for example it could choose position:

 high price combined with high quality and taste of coffee - an 'up market' position.
 middling price combined with middling quality and taste of coffee - a 'mid market'
position.
 relatively cheap price combined with low quality and taste of coffee - a 'down market'
position.

Organizations identify a range of segments in the markets in which they operate e.g. a younger
audience of drinkers who may be trying out coffee for the first time, people who, because of the
long-hours they work, need coffee to 'pep them up' at regular intervals during the working day,
older more sophisticated drinkers at dinner parties etc. It is important to have a good
understanding of these segments and how your product can meet the needs of different segments
in the overall market. Organizations must choose a sector of a particular market in which they
want to compete. The sector chosen will depend on: the ability of the producer to make quality
products, the extent of competition in different market segments, chances of making profits in
different segments and so on. There are dangers in any chosen segment. If you locate your
product 'up market,' there may not be sufficient demand for the product. If you locate mid-
market, there may be a lot of competition and it may be difficult to differentiate your product
from the competition. Down market you can only sell at low prices and your product may be
seen as being inferior.

Appealing to a larger audience

The Nescafé Gold Blend story, which we focus on in this case, shows how Nestlé made sure the
product was positioned to meet the needs of the most appropriate audience for the product. In the
late 1980s, Nestlé briefed the advertising agency McCann-Erickson to produce creative new
ideas to ensure that the product appealed to a wider audience. Advertising agencies provide the
expertise needed by organizations when communicating their products. Gold Blend was
launched by Nestlé in the mid sixties. It used the new freeze dried technology to provide a
smoother, richer taste and was sold at a price premium to Nescafé of around 25 It reached a peak
brand share of 7.8in 1969, but thereafter drifted away slightly until the mid 1980s when the share
was around 6.5. Up to 1987, advertising had concentrated on the product itself using the
mnemonic of a gold bean to suggest product superiority - 'Nothing is as good as gold....Gold
Blend'.

The problem was that, although Nescafé Gold Blend performed well as a product and was seen
as upmarket and high quality, it was not accessible for the bulk of coffee buyers. The product
message was only interesting to a minority of upmarket coffee drinkers. The brand's appeal was
therefore limited. However, given the broad acceptability of the product, McCann-Erickson
believed that a great opportunity existed. For many people in this country, coffee drinking has
become an accepted and regular part of life. Coffee is also seen as something of a luxury - people
don't want to drink just any coffee, they want to drink the sort of coffee that makes them feel
good about themselves. During the 1980s and 1990s, rising living standards have meant that
increasing numbers of consumers are willing to spend more on their purchases. It was therefore
decided to create advertising which, through its popular appeal, would make the brand more
accessible to the mass market while still maintaining its quality, upmarket image and premium
positioning.

Creating a more emotional approach

It was decided that the advertising should increase the customer's involvement more with the
product by creating a more emotional campaign. The targeted result of the advertising campaign
was: 'Gold Blend would be the coffee you drink to demonstrate your sophistication'. The adverts
therefore created a sophisticated world into which the consumer would become involved. Gold
Blend would become a powerful brand to which anyone could relate. The brand would continue
to be positioned in the same area of the market i.e. high quality, premium price etc, but it was to
be a position to which an increasing number of consumers would aspire.

The creative insight - the original "Power of Love" story

The task set for the creative team was to produce a campaign that was talked about as much as
TV programmes. The team came up with the novel idea of producing a sequence or series of
adverts with an interesting storyline. At the time television viewers in the UK showed an avid
interest in a number of upmarket 'soaps,' such as Dallas and Dynasty. There was also another
important upmarket series called Moonlighting which featured two highly competitive stars who
were clearly 'meant for each other.' However, something always conspired to keep them apart. It
was a sophisticated romance with a theme that appealed immensely to the women who were to
be the target of the Gold Blend series. The 'sophisticated romance' became the campaign theme
and featured two central characters, Tony and Sharon, who were not only attracted to each other,
but also shared a common appreciation of the finer things in life, including Nescafé Gold Blend.

The other original element was that each episode ended with a cliff-hanger, leaving the viewer
wanting to know what happened next. Just as TV companies advertise future episodes with
trailers and press advertisements, this campaign was to be conducted in the same way. In the
days before the second episode, small black and white press ads appeared in the TV listings
pages, therefore creating widespread media interest in the popular press.

The success of the first series

Originally the first series was intended to run for six episodes. Due to its success, it ran for 12
episodes over five and a half years. There was a series of spin-offs based on the advertisements,
including a full-length novel about the characters, called Love Over Gold, which became a
bestseller. The success of the book led to a new tradition for Gold Blend; major promotions
based on romantic themes were organised on each subsequent St. Valentine's Day. The Love
Over Gold compact disc reached number three in the album charts within two weeks of its
release in 1993. Even the search for a new Gold Blend girl for the second series of
advertisements captured the nation's imagination. The Sun newspaper joined in the search and
more than 4,000 women applied for the job.

As the story reached its climax, interest was so extreme that employees from both Nestlé and
their advertising agency were offered large sums of money to reveal what happened next. All
good stories come to an end and in early 1993 the first series closed with a compilation screening
of all eleven episodes and a final commercial to round off the plot.

Summary of the advertising strategy

Target

 The first series and thus the campaign was to be targeted at:
 Women of any class, who saw themselves as slightly more discerning than the norm, but
who were not coffee connoisseurs.
 For the second series, a greater emphasis was put on younger women.

Objectives

 To position Gold Blend as an upmarket coffee, in a class of its own, worth every penny,
but which anyone could drink.
 To build an emotional bond between the target consumer and the brand, through the
shared Gold Blend world of sophistication and romance and hence to broaden the appeal
of the brand to new, less overtly upmarket users.

Evaluating the success of the campaign

There can be little doubt the advertising strategy had been a success. Nescafé Gold Blend had
increased its volume share of the instant coffee market from 6.6to 9.0 between 1987 and 1993. In
the same period, advertising recall (the rate at which consumers could remember the advert and
its key messages) had risen from 18to 36. However, the main success of the advert had been with
the over 45's. Nestlé felt that in order to secure a higher market penetration it would be necessary
to create a new series which was targeted at younger consumers.

The new storyline

The new storyline once again focused on the 'Sophisticated Romance.' However, instead of a
story of a couple brought together through the coffee, but kept apart by events, it was the classic
battle between romance (and Gold Blend) on the one hand and material wealth on the other,
represented by two male suitors.

Taking another leaf from the television programme makers' books, the advertising agency ran a
trailer ad for the new campaign in the summer of 1993, as the first commercial which was to
appear in November, 1993. By early 1996 the second series had run for six episodes and had
proved on all key measures - awareness, appeal, involvement, brand awareness, and sales - to be
building on the success of the first.

Sales are now over 60higher in volume terms than before the campaign started, over a period in
which there has been no growth in the instant coffee market, as a whole. By 1996, Gold Blend
had a 13share of the overall market, making it the second biggest brand behind Nescafé granules.
Research indicated that the aim of the second series, to promote Gold Blend among a younger
target audience, was working. Between 1986 and 1993, market penetration grew by 46among
over 45s but by only 4among under 45s. Since 1993, the pattern has changed. From 1993 to
1996, penetration grew by 14among over 45s and 15among under 45s.

Improving the product

So far we have concentrated on the way in which advertising enabled Gold Blend to improve its
position in the market, while making the lifestyle associated with the product accessible to a
much larger target audience of consumers. While this was happening the product itself was not
standing still. Today organisations are only able to maintain ongoing success through continuous
improvement. Over the period studied, Nestlé implemented a number of key product changes.
Gold Blend has always done well in product tests. It regularly outperforms its major competitors
in blind product tests. Since 1971 the product has seen a number of improvements; the most
recent being an improved in-jar aroma in 1994.

Improving the packaging

Packaging is an important part of any product. The box, bottle or jar that contains a product can
mean the difference between good and poor sales performance. Research into packaging design
is thus an essential ingredient of marketing.

As Gold Blend has changed, so too has its packaging:

 1965 - The original Gold Blend jar was curved with fluted sides.
 1982 - Gold Blend was re-launched with the fluted jar being replaced by a smooth-sided
jar bearing the first version of the current Gold Blend logo with gold-edged red lettering.
 1987 - The square jar was introduced with metallised labelling.
 1997 - Gold Blend was re-launched with a unique 'waisted' jar design which has been
protected by trademark.
 Recent customer research has revealed that the new design for the jar has created the
upmarket image Nescafé Gold Blend seeks to maintain. Typical customer comments are:
 "It's distinctive and unusual."
 "You expect something luxurious and expensive when you pick it up."
 "I might even keep the jar afterwards to put things in. It's very attractive!"
Answer the following questions:

1) Why did Nescafe changed its positioning? Based on the concept of “positioning”, you are
required to identify on what basis is Nescafe doing it’s positioning. Identify its old and
new positioning statements.

2) Identify the target market of Nescafe Gold from the case study. Which segmentation
variables have they applied to identify their target market. Explain in detail. Which
differences would you like Nescafe to promote for creating value for customers.

3) Comment on the marketing mix of Nescafe.

Good Luck