Nespresso is a global company and is considered a true pioneer in the world. It is a benchmark of the coffee market. It is positioned effectively in high-end and strives to offer its customers the best in quality. This company is growing and has an average annual growth above 30% since 2000. It became in a short time one of the flagship brands of the Nestle group. The group then Nespresso accumulated sales of over 2.8 billion in 2009.
The first Nespresso machine model was created in 1988, but it has not been successful. However, the company managed to make new machines that was more attractive and functional. This captivated audiences on a large scale.
It now has over 4500 employees around the world, and 70% of them are in direct contact with consumers. In addition, they are present in over 50 countries. The strategy of this group is to differentiate the products they offer to clients, their prices and the distribution means to put in place to market their brand.
Tags: Nespresso, Nestle group
[...] We can therefore, from the three elements of the mix, describe and analyze the strategy and business model of Nespresso. The group's strategy is to differentiate their product offerings to customers, their prices and the distribution means that they are to put in place to market their brand. • Regarding the product, Nestlé wanted to combine an integrated system to the edge. A careful selection of the best coffee is made to produce high quality and provide the best to meet the customer needs. [...]
[...] However, the premium positioning of Nespresso allows consolidating its position on the market as the leader because of the feedback from consumers, that "Nespresso coffee is good." The premium coffee market does not have many protagonists, but the group remains as the leader because of the pricing strategy, it has reduced the prices of machines in order to attract a younger audience as well as not equipped customers while maintaining the price of the capsules. This allows an illusory image because the client does not pay attention to the actual cost of purchase. • In terms of distribution, there are three patterns: Direct Distribution, Indirect Distribution, the direct and indirect distribution. Nespresso has chosen to focus on direct distribution. This choice of distribution is an innovation in high-end coffee market. Most competitors use indirect distribution or a mixture of both. [...]
[...] The bulk of their business model is based on the regular purchase of a commodity (pods) at a relatively more expensive price than average and knowing that customers want to amortize the cost of purchasing the machine, consumption of coffee (which is more of a product containing caffeine and therefore causing a form of addictive behavior among consumers) remains strong and does not decrease. To conclude, we can say that the Nespresso strategy is simple, introduce new habits with the release of new flavors. It has been discussed before; the new tastes allow new customers to identify themselves or get identified in a usual situation and to associate it with this coffee. This is where much of the strategy of brands lies on the market grades of coffee pod. [...]
[...] This machine is costly even if there are discounts or promotions; the purchase of coffee capsules seems so much cheaper. Off the price of coffee on an average is six times more expensive at Nespresso. In the mind of the customer the purchase of the coffee machine and price of capsules sold in shops belonging to the brand or on the internet do not seem really expensive. Even if the quality is best you knew Nespresso place its products on a high-end market, that the product usually is regarded as basic. [...]
[...] This method avoids Nespresso to offer its products to distributors. One can then see the great success of this strategy, Nespresso boutiques attract many customers rushing on the latest innovations and products. For example, the store raises the curiosity of many customers lined up to purchase and consume the brand. Many major events are also conducted on-site sales to make the "buzz" that put everything in its power to the consumers' sight. The economic model Nespresso is in the market for coffee pods, which greatly upset the coffee market, because the ground coffee is down 3 to each year when the cafes are increasing rapidly by nearly 40% per year .The upscale market is dominated by Nespresso, which involved several years ago the famous actor G.Clooney to its brand image. [...]
Online readingwith our online reader
Content validatedby our reading committee