Nestlé is a global company which recognizes that in order to be a successful company, one has to be competitive and cost efficient. The company put its customers first, and plans to create long lasting relationships with them, creating a luxurious exclusive experience for their coffee customers through its sub-brand Nespresso.
After having positioned itself as a luxury brand, the Nespresso brand struggled with several weak aspects in its positioning during the economic recession. Communication and marketing are therefore key factors in successfully fending its place in the global scenario for a company such as Nestlé; it is important to have a clear and concise view of how Nespresso functions in its current market, and how the future marketing plan and positioning could pan out for Nespresso.
With this in mind, we will suggest a five-year plan as to how Nespresso can improve its marketing communication skills and recommendations enhancing the Nespresso brand and image.
The global market for Nespresso is very large; this report will therefore only be looking at the French market, giving a more detailed account of the French market rather than a superficial overall account.
[...] Looking at the current corporate and marketing strategies it is evident that Nespresso is so new in the market that it has not implemented the defense strategies that might be necessary in a couple of years time. The next section will look go further into detail on the strengths, weaknesses, opportunities and threats of Nespresso SWOT Strengths The main strength of Nespresso is the recognized quality product of the brand. An Sustainable Quality™ Program” has been launched in 2009 to preserve sustainable high quality for its coffee supply chain. [...]
[...] It is therefore understandable that the market for capsules and the market for machines are related, and as Nespresso is the leader in sales of capsules of coffee, it also benefits from a strong position in the market for machines. In Europe, machine sales are constantly increasing; they have doubled between 2005 and 2007, from 500,000 machines a year to nearly a million per year. In 2008, close to 1.4 million machines were sold, showing a dramatic increase in the sales of Nespresso products (www.Nespresso.com). [...]
[...] Marketing plan 6.1 Future objectives and strategies Nespresso has managed to establish itself as a brand, helped by a successful promotion campaign with 85% of agreement (“Affichage: Nespresso” Marie Moudier, 01/03/2007, Strategies Magazine), Nespresso has also established itself as the global market leader and also the market leader in France. This creates an opportunity for Nespresso to look to the future and think about new objectives and strategies. The first objective is to reach more people, increase the image and market share of Nespresso. [...]
[...] The status of market leader and the new design Nespresso created placed it in a position to set prices based on demand rather than supply, forcing the consumers to buy the coffee at a price three times higher than regular filtered coffee. The consumers therefore buy the product based on the image of the coffee created by celebrity endorsements, which means that the consumers who buy Nespresso feature right on top of the Maslow hierarchy; by buying a Nespresso product, the consumers want to satisfy their need to belong to a social group, their self-esteem needs, recognition and social status needs. [...]
[...] In the case of Nespresso, the PLC and the BCG Matrix are closely linked: growth in the product life cycle often translates into a STAR in the BCG Matrix Marketing Strategy Framework 5.1 Current corporate and marketing strategies Nespresso is currently the market leader in the coffee pod industry, and has therefore created a position, which needs constant defense from its competitors. Nespresso's current corporate strategy is a defense strategy, defending its market share from the competitors mentioned in the competitor analysis, mainly Senseo, Tassimo and Dolce Gusto. [...]
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