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Coach : Marcel Saucet GROUP 4 : Yushi CHEN - Cindy CARIOT - Maxime CHEMELLO - Elsa CHATA - Christelle BUI
.105 billion euros. In 2005. And with the development of globalization. coffee of higher quality. there is potential growth in developing countries such as China since people with different cultures come together. etc.Airtight capsules in order to preserve the aroma. it is also Nespresso who opened the coffee pod segment as it was the first company to launch coffee makers working with pods. SWOT analysis Internal diagnosis STRENGTHS A high visibility internationally: Nespresso. A wide range of services in order to improve customers’ satisfaction: . . which means Nespresso can operate more in this field . so despite some decline. coffee is still one of the most worldwide popular beverage (approximately 1. Being part of the Nestlé Group helped Nespresso to become the European leader in the production of espresso machines. Nespresso takes benefit from the visibility and the financial power of Nestlé. Excellence and high quality products are part of their strategy. it is that their strategy is based on their relationship with their clients. 57% in volume and 56% in value. They listen carefully to the consumer needs and demands in order to promote fidelity within their clients. Nespresso wanted to innovate by creating the “Nespresso experience”. coffee time) isn’t just about taking a break. The brand became famous through its coffee makers working with pods. the capsule segment is increasing rapidly since 1990 (e. A high focus on the clients: One of the key factor of the success of Nespresso. then it increases 30% per year after that) In the capsule coffee market. In coffee markets. convenient and designed machines to attract a large public. The year 2002 has seen an increase of prices because of the emergence of organic coffee.Personalized advises 24/24. the products have some particularity in order to enhance the unique aspect of Nespresso: . it’s also a way to socialize with other people – it’s a western culture. So. In this case. it still has potential to dig and grow Drinking coffee at work (e.g.Practical. the company employs 250 000 people in 85 countries.g. Nespresso is a subsidiary of Nestlé and one of the world’s leader on the coffee market. there is hardly any existing producer can do as good hard capsule as Nespresso does.Very high quality products and a large range or aromas (12). its tasting and on machines maintenance. 7/7 on coffee. External diagnosis OPPORTUNITIES The economical crisis doesn’t have enormous impact on coffee sales. is part of Nestlé.5 billion cups consumed everyday) Coffee market in French is worth 1. we will analyze the company and its strategies through the SWOT. which is one of the worldwide leader concerning consumer goods products: the turnover represents 58 billion euros.Introduction : Launched 30 years ago. It enables Nespresso to have a better access to R&D and communication skills. Hence.
restaurants. he knows that he will have to buy only capsule from the brand. . 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. high quality. The brand is present in hotels. a high practicality. where people can meet to drink coffee. -Stimulation of the senses through the theatralisation of the stores. which are arranged to create a convivial atmosphere. luxury goods stores which improve the brand image of prestige. Promotion As the concept of the Logo. an attractive high design. and high demand.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. the brand is the only to make capsule which fit the machines. and a high technology to make coffee Entry barrier on the market Even if. -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. the company wants to illustrate an image of perfection.. so when a customer buys a machine. This research of perfection is made through experiential marketing. Senseo concentrate a big part of the market share. when customers order on the web site. An efficient R&D policy to promote innovation: Nespresso machines are combining. prestige. Moreover.Deliveries are guaranteed within two working days. Customers are ok with the price of capsule coffee/machine and willing to spend money if such quality and facility are worth paying . It is very hard for competitors to take market share for Nespresso because the brand deposited 1700 patents. A distribution channel Nespresso first chose to distribute their products through B2B services.
Malongo. The way that the brand taps the market is weak Indeed. 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. The new focus on health and well-being is dangerous for Nespresso because Coffee is not considered as a healthy drink. Nespresso’s customer are very loyal. And consumers are extremely sensitive to prices. But these segments are very competitive in terms of innovation and communication. Moreover there is now a problem of adaptation to the new responsible consumer. Patents The protection of the Nespresso patents can be harmful to the company Traditional offering on coffee marking is losing grounds. even if the consumption of coffee has raised in value (+ 4. between 2005 and 2006). Starbucks. such as Illy Café. Even if water and juicy drinks are healthier. 2% in volume. so it is not recommended. The brand has been able to take advantage of its strenghs and of the available opportunities. Ségafredo. That could be a problem because coffee is a basic product so there is a high price competition. THREATS Coffee market is in a wide competition against soft drinks. It can be explained by the high difference of communication budget between soft drinks and coffee. In France. at these times of people awareness about global . Production of trash The recycling centers of capsules are not large enough yet . They are people that express their social status through their consumptions and they like to show themselves and what they get. Thanks to that. Capsules are not environmentally friendly because they can’t be recyclable. 20% more expensive than the other brands : 0.6% between 2005 and 2006). coffee trends develop new coffee consumption. the consumption of coffee has decreased significantly for 30 years with younger consumer and soft drinks consumption has raised. its prices are too high (0.16€ 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. In fact. This is very good model. This included an attempt to offer its customers a real feeling of belonging to an elite group. However. there is a big threat for Nespresso. getting a city life and being refined and hedonist. it has decreased in volume (Minus 1.WEAKNESSES Target very elitist The target of Nespresso are people from 28 to 49 years old. This case study has really helped us to understand the strategy of Nespresso.31 € the Nespresso Capsule. from 5 Billion for Coca-Cola to 100 Millions for Nespresso. so the company has to develop its R & D solutions. Coffee bars are very competitive too.
colors. Apart from this inseparable pair of two items. They are people that express their social status through their consumptions and they like to show themselves and what they get.) The Capsules The finest coffees in the world are blended. Target B to B: Hotels. • ESPRESSOS: consists of 7 kinds of capsules (Ristretto. 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. companies. luxury shops. Thus. 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. • DECAFFEINATOS: consists of 3 kinds of capsules (Decaffeinato Intenso. but rather “the ultimate coffee experience”. the intensity of Cosi is 3. Volluto. which also is a reminder of Chinese pattern of the perfect Yin/Yang. Capriccio. Customers can choose by aroma. roasted and ground with the utmost skill in each Nespresso capsule that is made of aluminium.environmental issues. These capsules with different aromas have the intensity level in the range of 1 to 10. 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. Livanto.g. the brand have to rethink its strategy towards ecology. For example. to stay afloat in a very competitive environment. Nespresso is the creator of the capsules concept. flavors. and cup size as they want from The 16 Grands Crus in different colors. Arpeggio. getting a city life and being refined and hedonist. this particular segment . Nespresso must concentrate its efforts on environmental issues. Customers can choose their favorites from the three categories within a wide range of different features (e. Even if they try to come up with solutions. and Cosi). Decaffeinato Lungo). Pods are a real catastrophe for the environment so they have to think about other solutions. restaurants. Decaffeinato. provided by Nespresso is its accessories. b) Marketing Mix Product Nespresso products are synonym of high quality – not only about the high quality coffee or the machines. It can be sensed from the logo of Nespresso – the “N” that represents the male/female balance. graceful and elegance”. As is shown by the name. etc. which provides consumers more than just drinking coffee. Roma. 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. They want people to take part of Nespresso Club. but also about after-sale service. intensity.
• LUNGOS: consists of 3 kinds of capsules (Fortissio Lungo. • PIXIE: consists of 6 kinds of machines (KRUPS PIXIE – electric red. automatic illuminated water level detection. The process from the bean to the cup takes 9 stages: cultivation. grinding. so is to say that they are pure. harvesting. • PURE ORIGINE: consists of 3 kinds of capsules (Indriya from India. The Machines The Nespresso coffee machines are beautifully designed and easy to use. Machines of this range automatically switch off after last use. Nespresso utilizes the unique technology and controls all stages of the production in order to ensure coffee of consistent quality. MAGIMIX PIXIE – electric lime. Finezzo Lungo). KRUPS PIXIE – electric indigo. . processing. Also. MAGIMIX PIXIE – electric aluminium). Dulsao from Brazil). KRUPS PIXIE – electric titanium. MAGIMIX PIXIE – electric steel blue.contains no caffeine. Rosabaya from Columbia. What’s special about this range is the fact that there’s no mix with other aromas in each kind. customers are free to pick what they want from a wide range of machines since there are different colors and functions. but the process and skills used by Nespresso still preserve the entirely natural flavors. blending. Ultra Compact Nespresso Brewing Unit with ergonomic capsule insertion and automatic ejection of used capsules. decaffeination. transport. therefore to reach the strategic objects of the company. Vivalto Lungo. These three are served in Lungo cup (100ml). capsule system and finally. roasting. and exclusive to Nespresso Pixie.
MAGIMIX CITIZ & CO – black limousine). KRUPS CITIZ & CO – grey. KRUPS AUTOMATIC – piano black. KRUPS CITIZ & MILK – fire engine red. MAGIMIX AUTOMATIC AEROCCINO M100 – glam red. MAGIMIX MANUAL AEROCCINO M100 – grey. MAGIMIX AUTOMATIC M100 – smooth silver. KRUPS CITIZ – titan. The Nespresso Citiz & Milk coffee machines feature a Nespresso Aeroccino Plus on the same base. MAGIMIX CITIZ & MILK – limousine black. KRUPS CITIZ & MILK – titan. MAGIMIX AUTOMATIC AEROCCINO M100 – smooth silver. KRUPS MANUAL AEROCCINO – piano black. MAGIMIX CITIZ – silver chrome. cappuccinos and frappuccino. MAGIMIX CITIZ & MILK – white. • CitiZ: consists of 10 kinds of machines (KRUPS CITIZ – fire engine red. MAGIMIX CITIZ – retro white. MAGIMIX MANUAL M100 – grey. MAGIMIX AUTOMATIC M100 – glam red. It is a basic type of Nespresso. MAGIMIX CITIZ – limousine black. KRUPS AUTOMATIC AEROCCINO – piano black. MAGIMIX CITIZ & MILK – silver chrome. to froth and warm milk for lattes. KRUPS AUTOMATIC – titanium). This range is featured with automatic volume control and used capsule container (12-14 capsules).ESSENZA: consists of 11 kinds of machines (KRUPS MANUAL – piano black. KRUPS CITIZ – frosted Aluminium. • .
but now it is no longer available. All the Nespresso coffee machines are covered by 3 or 2 Year Guarantee. DELONGHI LATTISSIMA – chrome. • CUBE: this used to be one type of the machines. LATTISSIMA – black.LATTISSIMA: consists of 6 kinds of machines (LATTISSIMA – red. LATTISSIMA uses premium Nespresso capsules for fuss free. DELONGHI LATTISSIMA – creamy white). and this is also from a view of comprehensive marketing perspective. DELONGHI LATTISSIMA – premium. which is to say that Nespresso creates an exclusive market for its products with innovation and simplicity. DELONGHI LATTISSIMA – gris tech. • Price Comparative prices per cup (average of 7g of coffee per cup) . 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”. consistently excellent expresso – perfect for people who want the time saving benefits of a capsule system without sacrificing the quality of the coffee.
That is why.057 0.3 Spresso Capsule Price per cup 0. Moreover. Nespresso offers the most expensive capsules on the market: from 0.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. through the promotion. you have to buy a machine. it is really hard for their competitors to reproduce capsules which fit the machine.17 0. he knows that anyway he will have to buy Nespresso capsules.31 € € € € € € € € € € € As we can notice on the table.25 0. These shops are present in big cities (15 in France).31€ to 0. Buying a Nespresso machine is choice of the customers which bonds him to be fidel and loyal to the brand. its shops and its website: The Club: to join this club. they are design and elegant.13 0.25 0. .28 0. Place Nespresso based its distribution channel on his Nespresso Club. inside we discover a real sensory experience and there is a personal service.084 0. 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.2.25 0.16 0. it helps Nespresso to develop sales and to improve reputation.2.11 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. To have an access to these special services.092 0. The shop is a key factor of differentiation for Nespresso. The fact that the brand deposited the numerous patents.10 0.076 0. The club and the shop are the only two ways to buy capsules. So Nespresso is not threatened by the competitors and can take benefit form a situation of monopole.046 0.37€ for special products. Nespresso practices a policy of high price and the customers agree to pay for it.23 0. the brand image conveys the idea that all Nespresso customers are exceptional and prestigious. the customer will have to pay a spread.3 Spresso Capsule fair trade 1.
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. elegant. all the product. and after they directly sale their machines. It reminds also Nespresso shops with the design of the website.. le Bon Marché. But for capsules even professionals have to buy these on Internet. a perfect universe to sample and appreciate a coffee.. The website: there is an online shop via Nespresso Club. but 3 times on 4. chic.The sensory experience: warm atmosphere. and Nespresso creates a special place for them: the Nespresso professionals club Promotion – Communication The "Grands Crus" Nespresso. You can buy capsules only via: Internet and the website www. Two categories of product are different in their distribution channels: the capsules and the machines (and attachment).nespresso. 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. The website is very experiential because it reminds the consumer every ambiance of Nespresso. Nespresso is in direct relation with the client all the time and it helps him to make his choice. an actor full of sex appeal and class but also global gray matter. consumer add an attachment. The consumer discovers the Nespresso universe. In Nespresso shops: this is a small distribution channel that looks like a gallery and always place far from supermarket. Nespresso uses direct distribution channels. Phone: this is the most relevant example of direct sales. Fax Post Via the Nespresso Club You can buy machines only via: Same distribution channels as capsules Huge non-alimentary stores as Galerie Lafayette. the cleverness for a perfect tasting.com mostly for capsules. Nespresso offers one week free try of two Machines: the ES 100 and the ES500. each universe. design. They use mainly three ways of promotion: .
it doesn’t target the whole customers. and the company achieves it goals by casting a famous actor who also has almost the same image as Nespresso. Moreover this ambassador. The brand promotes a luxurious and an elegant image.youtube.com/watch_popup?v=DfyeXrdZZ1o&vq=small http://www. 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. (See some example of Displays ad below) . the Ad displays in town etc. Nespresso now tries to develop its image and get a reputation among the general public.com/watch_popup?v=UjtwCf5WWUU&vq=medium#t=114 Displays are also a very strong way to promote Nespresso everywhere: the stop bus. It also allows the company to be close to a large number of it targets. The company chooses to target according to the cities and by frequency. The first operation in this direction was the advertising campaign with George Clooney (See some example of TV ads below). However. Georges Clooney has been chosen by the member of the Nespresso Club things that strengthens even more the idea of proximity with the customer. Nowadays TV has shown to have a big influence on people.youtube.Television Displays Newspaper Media communication is a very powerful way to promote Nespresso products and its luxury image. the bus. A huge success if we rely on the results obtained: Recognitionscore = 66% (standard 31%) Accreditation Score = 85% (standard 56%) http://www.
can develop a strong relationship between the consumer and the brand. the feelings. (See some example of Nespresso magazine front page below) Nespresso's positioning is very high.Base on the consumption trendies and on the consumer’s needs c) Recommendations . • Information to the consumer : Exclusivity of sales in Nespresso shops or on the Nespresso website. Nespresso products are only compatible between each other. • Identification : Product quality. seduction of the ambassador. magazines and press ads are very important to reach the upscale customers. In brief… •Visual impact : The products' design is simple. Nespresso is well known as a very good brand on the coffee market. Nespresso has also its own magazine that allows special customers to be aware of tendencies and of launching of new products of the company. A philosophy that FutureBrand Paris. design agency owned by Interpublic group. we do not just drink coffee: it is " Ultimate Coffee Experience". In order to carry on being one of the world’s leader. • Positioning Symbol: The luxury positioning is obvious through the quality with the price as a vector of evidence. But Nespresso does not only use traditional channels of communication.Finally. classy and modern. it surf more and more on the trend of experiential marketing. by taking into account the imagination. has been declining for seven years in the overall communication strategy of the brand. the senses. Nespresso has developed a part of its marketing surfing on this new trend. Experiential marketing. With Nespresso. 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. it has to : .
html . Finally.fr/actualites/marques/r42129W/nespresso-a-toute-vapeur.rdc.- Besides. Sources http://visionary. 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.fr/2010/01/nespresso-les-rois-de-la-communication-de-luxe/ http://www.wordpress.com/2007/03/13/nespresso-la-marque-qui-donne-l %E2%80%99exemple/ http://habitat. Nespresso should widen its target but by still keeping its upscale positioning.strategies.
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