Marketing Management

Coach : Marcel Saucet GROUP 4 : Yushi CHEN - Cindy CARIOT - Maxime CHEMELLO - Elsa CHATA - Christelle BUI

the products have some particularity in order to enhance the unique aspect of Nespresso: . etc.5 billion cups consumed everyday) Coffee market in French is worth 1. it is also Nespresso who opened the coffee pod segment as it was the first company to launch coffee makers working with pods. In coffee markets. coffee of higher quality. Hence. The brand became famous through its coffee makers working with pods. And with the development of globalization. it is that their strategy is based on their relationship with their clients. 57% in volume and 56% in value. which means Nespresso can operate more in this field . . Excellence and high quality products are part of their strategy. They listen carefully to the consumer needs and demands in order to promote fidelity within their clients. its tasting and on machines maintenance. there is hardly any existing producer can do as good hard capsule as Nespresso does. coffee is still one of the most worldwide popular beverage (approximately 1.Introduction : Launched 30 years ago. .Practical. there is potential growth in developing countries such as China since people with different cultures come together.g. then it increases 30% per year after that) In the capsule coffee market. So. Nespresso is a subsidiary of Nestlé and one of the world’s leader on the coffee market. Nespresso wanted to innovate by creating the “Nespresso experience”. In 2005. we will analyze the company and its strategies through the SWOT.Personalized advises 24/24. In this case.g. SWOT analysis Internal diagnosis STRENGTHS A high visibility internationally: Nespresso. The year 2002 has seen an increase of prices because of the emergence of organic coffee. It enables Nespresso to have a better access to R&D and communication skills. it’s also a way to socialize with other people – it’s a western culture. 7/7 on coffee. Nespresso takes benefit from the visibility and the financial power of Nestlé.Airtight capsules in order to preserve the aroma.105 billion euros. External diagnosis OPPORTUNITIES The economical crisis doesn’t have enormous impact on coffee sales. the capsule segment is increasing rapidly since 1990 (e. so despite some decline. which is one of the worldwide leader concerning consumer goods products: the turnover represents 58 billion euros. coffee time) isn’t just about taking a break. A wide range of services in order to improve customers’ satisfaction: . is part of Nestlé. A high focus on the clients: One of the key factor of the success of Nespresso. convenient and designed machines to attract a large public. the company employs 250 000 people in 85 countries. Being part of the Nestlé Group helped Nespresso to become the European leader in the production of espresso machines. it still has potential to dig and grow Drinking coffee at work (e.Very high quality products and a large range or aromas (12).

An efficient R&D policy to promote innovation: Nespresso machines are combining. the company wants to illustrate an image of perfection. and high demand. The brand is present in hotels.Deliveries are guaranteed within two working days.. a high practicality. It is very hard for competitors to take market share for Nespresso because the brand deposited 1700 patents. when customers order on the web site. which are arranged to create a convivial atmosphere.Personalization of the clients: each client is considered as a special member and feels unique when he receives his e-mail to tell him that he might run out capsules. Moreover. high quality. Promotion As the concept of the Logo. he knows that he will have to buy only capsule from the brand. and a high technology to make coffee Entry barrier on the market Even if. restaurants. the brand is the only to make capsule which fit the machines. luxury goods stores which improve the brand image of prestige. where people can meet to drink coffee. . an attractive high design. Customers are ok with the price of capsule coffee/machine and willing to spend money if such quality and facility are worth paying . -Stimulation of the senses through the theatralisation of the stores. A distribution channel Nespresso first chose to distribute their products through B2B services. Senseo concentrate a big part of the market share. A customer will think that if Georges Clooney drinks this coffee it is because it is very high quality product and he will think that he has at least one thing in common with a star: they drink the same coffee. -Personalized services -Communication: choosing a star such as Georges Clooney to promote the brand is a really efficient promotion mean by the fact that Georges Clooney embody distinction. prestige. so when a customer buys a machine. This research of perfection is made through experiential marketing.

And consumers are extremely sensitive to prices. Malongo. Even if water and juicy drinks are healthier. Capsules are not environmentally friendly because they can’t be recyclable. It can be explained by the high difference of communication budget between soft drinks and coffee. Production of trash The recycling centers of capsules are not large enough yet . Moreover there is now a problem of adaptation to the new responsible consumer. The new focus on health and well-being is dangerous for Nespresso because Coffee is not considered as a healthy drink. at these times of people awareness about global .31 € the Nespresso Capsule. This included an attempt to offer its customers a real feeling of belonging to an elite group. The way that the brand taps the market is weak Indeed. its prices are too high (0. However. such as Illy Café. That could be a problem because coffee is a basic product so there is a high price competition. Patents The protection of the Nespresso patents can be harmful to the company Traditional offering on coffee marking is losing grounds. The brand has been able to take advantage of its strenghs and of the available opportunities. In fact. Nespresso’s customer are very loyal. This case study has really helped us to understand the strategy of Nespresso. coffee trends develop new coffee consumption. so the company has to develop its R & D solutions. Ségafredo. This is very good model. getting a city life and being refined and hedonist.16€ for Casino) and there is any distribution of the coffee in the supermarkets and hypermarkets so it’s difficult for the consumer to supply himself. 20% more expensive than the other brands : 0. it has decreased in volume (Minus 1.6% between 2005 and 2006). In France. 2% in volume. THREATS Coffee market is in a wide competition against soft drinks. Thanks to that. Starbucks. even if the consumption of coffee has raised in value (+ 4. Coffee bars are very competitive too. so it is not recommended. The low-cost segment and the top of the range segment (capsules) only are dynamic and still rise. Nespresso… There is a consumer paradox: they want environmental and societal friendly products (it explains the growth of fair-trade segment) and they look after practical products. there is a big threat for Nespresso. But these segments are very competitive in terms of innovation and communication. They are people that express their social status through their consumptions and they like to show themselves and what they get.WEAKNESSES Target very elitist The target of Nespresso are people from 28 to 49 years old. the consumption of coffee has decreased significantly for 30 years with younger consumer and soft drinks consumption has raised. from 5 Billion for Coca-Cola to 100 Millions for Nespresso. between 2005 and 2006).

Nespresso is the creator of the capsules concept. and Cosi). colors. It can be sensed from the logo of Nespresso – the “N” that represents the male/female balance. • ESPRESSOS: consists of 7 kinds of capsules (Ristretto. but rather “the ultimate coffee experience”. Arpeggio. which also is a reminder of Chinese pattern of the perfect Yin/Yang. restaurants. Target B to B: Hotels. the intensity of Cosi is 3. graceful and elegance”. Livanto. b) Marketing Mix Product Nespresso products are synonym of high quality – not only about the high quality coffee or the machines. • DECAFFEINATOS: consists of 3 kinds of capsules (Decaffeinato Intenso. provided by Nespresso is its accessories. luxury shops. their solving like for example the fact that customers can bring their used pods in Nespresso shop is still not satisfying for a lot of people. roasted and ground with the utmost skill in each Nespresso capsule that is made of aluminium. to stay afloat in a very competitive environment. flavors. which provides consumers more than just drinking coffee. Even if they try to come up with solutions. Nespresso must concentrate its efforts on environmental issues.g. Pods are a real catastrophe for the environment so they have to think about other solutions. This is in coherent with the company strategy of offering unique product and experience in order to establish the premium brand image with coffee capsules and an extensive selection of machines. Customers can choose by aroma. getting a city life and being refined and hedonist. Capriccio. this particular segment . Thus. and cup size as they want from The 16 Grands Crus in different colors. etc. intensity.) The Capsules The finest coffees in the world are blended. companies. Volluto. 1) Strategy and marketing mix at Nespresso a) Targets and Positioning Target B to C: The main target of Nespresso are people from 28 to 49 years old. airlines companies… Positioning : The key positioning of Nespresso is that the brand « propose to live a fabulous experience through a coffee tasting that linked pleasure. Decaffeinato Lungo). These capsules with different aromas have the intensity level in the range of 1 to 10. They are people that express their social status through their consumptions and they like to show themselves and what they get. They want people to take part of Nespresso Club. Customers can choose their favorites from the three categories within a wide range of different features (e. but also about after-sale service. For example. Roma. the brand have to rethink its strategy towards ecology. Decaffeinato. As is shown by the name. Apart from this inseparable pair of two items.environmental issues.

• PIXIE: consists of 6 kinds of machines (KRUPS PIXIE – electric red. • PURE ORIGINE: consists of 3 kinds of capsules (Indriya from India. KRUPS PIXIE – electric indigo. MAGIMIX PIXIE – electric lime. harvesting. The process from the bean to the cup takes 9 stages: cultivation. Ultra Compact Nespresso Brewing Unit with ergonomic capsule insertion and automatic ejection of used capsules. Machines of this range automatically switch off after last use. processing. KRUPS PIXIE – electric titanium. but the process and skills used by Nespresso still preserve the entirely natural flavors. and exclusive to Nespresso Pixie. Nespresso utilizes the unique technology and controls all stages of the production in order to ensure coffee of consistent quality. • LUNGOS: consists of 3 kinds of capsules (Fortissio Lungo. . MAGIMIX PIXIE – electric steel blue. therefore to reach the strategic objects of the company. Dulsao from Brazil).contains no caffeine. roasting. grinding. Rosabaya from Columbia. so is to say that they are pure. Finezzo Lungo). transport. customers are free to pick what they want from a wide range of machines since there are different colors and functions. decaffeination. Also. blending. Vivalto Lungo. automatic illuminated water level detection. capsule system and finally. What’s special about this range is the fact that there’s no mix with other aromas in each kind. These three are served in Lungo cup (100ml). The Machines The Nespresso coffee machines are beautifully designed and easy to use. MAGIMIX PIXIE – electric aluminium).

to froth and warm milk for lattes. • . MAGIMIX CITIZ – retro white. This range is featured with automatic volume control and used capsule container (12-14 capsules). KRUPS AUTOMATIC AEROCCINO – piano black. It is a basic type of Nespresso. MAGIMIX CITIZ & MILK – white. MAGIMIX CITIZ – silver chrome. MAGIMIX CITIZ & CO – black limousine). KRUPS CITIZ – frosted Aluminium. MAGIMIX AUTOMATIC AEROCCINO M100 – glam red. KRUPS AUTOMATIC – piano black. MAGIMIX CITIZ & MILK – limousine black. KRUPS CITIZ & CO – grey. MAGIMIX AUTOMATIC M100 – smooth silver. MAGIMIX CITIZ & MILK – silver chrome. MAGIMIX CITIZ – limousine black. KRUPS CITIZ & MILK – titan. MAGIMIX AUTOMATIC M100 – glam red. MAGIMIX AUTOMATIC AEROCCINO M100 – smooth silver. The Nespresso Citiz & Milk coffee machines feature a Nespresso Aeroccino Plus on the same base. MAGIMIX MANUAL AEROCCINO M100 – grey. KRUPS CITIZ – titan. KRUPS MANUAL AEROCCINO – piano black. KRUPS CITIZ & MILK – fire engine red.ESSENZA: consists of 11 kinds of machines (KRUPS MANUAL – piano black. • CitiZ: consists of 10 kinds of machines (KRUPS CITIZ – fire engine red. KRUPS AUTOMATIC – titanium). cappuccinos and frappuccino. MAGIMIX MANUAL M100 – grey.

• Price Comparative prices per cup (average of 7g of coffee per cup) . LATTISSIMA – black.LATTISSIMA: consists of 6 kinds of machines (LATTISSIMA – red. All the Nespresso coffee machines are covered by 3 or 2 Year Guarantee. and this is also from a view of comprehensive marketing perspective. and it is worth pointing out that “the Nespresso coffee machines are the only machines that are capable of revealing the true character and rich aroma of the coffee contained in each capsule”. LATTISSIMA uses premium Nespresso capsules for fuss free. DELONGHI LATTISSIMA – chrome. but now it is no longer available. consistently excellent expresso – perfect for people who want the time saving benefits of a capsule system without sacrificing the quality of the coffee. DELONGHI LATTISSIMA – gris tech. DELONGHI LATTISSIMA – creamy white). • CUBE: this used to be one type of the machines. which is to say that Nespresso creates an exclusive market for its products with innovation and simplicity. DELONGHI LATTISSIMA – premium.

2. The club and the shop are the only two ways to buy capsules.3 Spresso Capsule fair trade 1. Nespresso offers the most expensive capsules on the market: from 0.16 0.076 0.092 € € € € € € Coffee in doses Brand Monoprix Carrefour Jacques Vabre Maison Du Coffee Alter Eco L’or Dolce Gusto Tassimo Malongo Malongo Nespresso Type of coffee Soft capsule Soft capsule Soft capsule Capsules Senseo Soft capsule Soft capsule Dose Capsules T disc Capsule 1.2.28 0. Nespresso practices a policy of high price and the customers agree to pay for it. So Nespresso is not threatened by the competitors and can take benefit form a situation of monopole.057 0.10 0.13 0. That is why.11 0. they are design and elegant.084 0. Place Nespresso based its distribution channel on his Nespresso Club.17 0. its shops and its website: The Club: to join this club. through the promotion.31€ to 0. he knows that anyway he will have to buy Nespresso capsules. Moreover. They don’t have to reduce their prices since they know that the customer will have to buy the Nespresso capsules if they want to use their machine and when a customer buys a Nespresso machine. Buying a Nespresso machine is choice of the customers which bonds him to be fidel and loyal to the brand.31 € € € € € € € € € € € As we can notice on the table. .Ground pure Arabica coffee for traditional filter machines Type of coffee Price per cup Monoprix Carrefour Jacques Vabre Maison Du Coffee Alter Eco Malongo Ground Ground Ground Ground Ground Ground Arabica Arabica Arabica Arabica Arabica Arabica packet packet packet packet packet Bio and fair trade packet from fair trade source 0.37€ for special products.25 0. To have an access to these special services. The shop is a key factor of differentiation for Nespresso. the customer will have to pay a spread.25 0.23 0. inside we discover a real sensory experience and there is a personal service.25 0. the brand image conveys the idea that all Nespresso customers are exceptional and prestigious.3 Spresso Capsule Price per cup 0.046 0. These shops are present in big cities (15 in France). The fact that the brand deposited the numerous patents. it is really hard for their competitors to reproduce capsules which fit the machine.092 0. you have to buy a machine. it helps Nespresso to develop sales and to improve reputation.

com mostly for capsules. each universe. le Bon Marché. Fax Post Via the Nespresso Club You can buy machines only via: Same distribution channels as capsules Huge non-alimentary stores as Galerie Lafayette. but 3 times on 4. all the product. and Nespresso creates a special place for them: the Nespresso professionals club Promotion – Communication The "Grands Crus" Nespresso. In Nespresso shops: this is a small distribution channel that looks like a gallery and always place far from supermarket. they want a direct contact with the consumer during the sale. GMS/GSS Nespresso uses mass retailers to sell their machines so as to: stay competitive To develop competition The consumer has to use Nespresso distribution channels For professionals. The company Nespresso has distinguished itself with the quality of its products and its smart service but also thanks to aa very strong and organized communication strategy! Who is behind Nespresso and how the communication of the company works? Response.. Nespresso offers one week free try of two Machines: the ES 100 and the ES500. But for capsules even professionals have to buy these on Internet. and after they directly sale their machines. Two categories of product are different in their distribution channels: the capsules and the machines (and attachment). They use mainly three ways of promotion: . chic. Nespresso is in direct relation with the client all the time and it helps him to make his choice..nespresso. an actor full of sex appeal and class but also global gray matter.The sensory experience: warm atmosphere. consumer add an attachment. a perfect universe to sample and appreciate a coffee. elegant. It reminds also Nespresso shops with the design of the website. Phone: this is the most relevant example of direct sales. design. The website: there is an online shop via Nespresso Club. the cleverness for a perfect tasting. The website is very experiential because it reminds the consumer every ambiance of Nespresso. You can buy capsules only via: Internet and the website www. Nespresso uses direct distribution channels. The consumer discovers the Nespresso universe.

and the company achieves it goals by casting a famous actor who also has almost the same image as Nespresso. (See some example of Displays ad below) . Nowadays TV has shown to have a big influence on people. A huge success if we rely on the results obtained: Recognitionscore = 66% (standard 31%) Accreditation Score = 85% (standard 56%) http://www.youtube.Television Displays Newspaper Media communication is a very powerful way to promote Nespresso products and its luxury image. the Ad displays in town etc. Moreover this ambassador. Nespresso now tries to develop its image and get a reputation among the general public.com/watch_popup?v=DfyeXrdZZ1o&vq=small http://www. it doesn’t target the whole customers. It also allows the company to be close to a large number of it targets. The brand promotes a luxurious and an elegant image. the bus. Georges Clooney has been chosen by the member of the Nespresso Club things that strengthens even more the idea of proximity with the customer. The first operation in this direction was the advertising campaign with George Clooney (See some example of TV ads below). The strategy could then be adapted according to the will of the company to attract new customers in some cities in which it feels like there is some potential. However.com/watch_popup?v=UjtwCf5WWUU&vq=medium#t=114 Displays are also a very strong way to promote Nespresso everywhere: the stop bus. The company chooses to target according to the cities and by frequency.youtube.

Nespresso is well known as a very good brand on the coffee market. In order to carry on being one of the world’s leader. design agency owned by Interpublic group. But Nespresso does not only use traditional channels of communication. the senses. Nespresso products are only compatible between each other. • Information to the consumer : Exclusivity of sales in Nespresso shops or on the Nespresso website. we do not just drink coffee: it is " Ultimate Coffee Experience". it surf more and more on the trend of experiential marketing. With Nespresso. seduction of the ambassador. Nespresso has also its own magazine that allows special customers to be aware of tendencies and of launching of new products of the company. Not only does the packaging and the communication campaign help the differentiation but the identification of the customer to the brand and the products ensures a great loyalty from them. • Positioning Symbol: The luxury positioning is obvious through the quality with the price as a vector of evidence. Nespresso has developed a part of its marketing surfing on this new trend. (See some example of Nespresso magazine front page below) Nespresso's positioning is very high. In brief… •Visual impact : The products' design is simple. the feelings. has been declining for seven years in the overall communication strategy of the brand. Experiential marketing. classy and modern. A philosophy that FutureBrand Paris. can develop a strong relationship between the consumer and the brand. by taking into account the imagination. it has to : . magazines and press ads are very important to reach the upscale customers.Base on the consumption trendies and on the consumer’s needs c) Recommendations . • Identification : Product quality.Finally.

wordpress.html .rdc.fr/actualites/marques/r42129W/nespresso-a-toute-vapeur. Finally.fr/2010/01/nespresso-les-rois-de-la-communication-de-luxe/ http://www.strategies.- Besides. Nespresso should widen its target but by still keeping its upscale positioning. one of the best strategies the company has to follow would be to innovate for every product and every campaign Communicate a lot in order to establish itself in front of clients as the best.com/2007/03/13/nespresso-la-marque-qui-donne-l %E2%80%99exemple/ http://habitat. Sources http://visionary.

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