Nespresso is a subsidiary of Nestlé. Nestlé is a Swiss company, created in 1966. This is one of the main actors of agro-alimentary in the world. They have many brands: Chocapic (cereals), Vittel (water), Maggi (frozen), Nescafe (coffee)… Their turnover is around 60.9 Billion d’€. So, they are N°1 Groups food world. Their currency is “Good Food, Good Life”. By the way, Nespresso is market of the coffee in dosette. Their concept results in a machine allowing to produce a espresso starting from a specific capsule, corresponding to a small cup.
The market of the coffee in France.
In 2007, 91,6% of the French households bought coffee und household spends on average 48,81€ for their coffee (on 12mois). Gone it of the coffee in “dosette” in 2010 at 1 billion euros is estimated, of which the half for Nespresso. Therefore, in France, this is a powerful market. For the year 2006 to 2010, the coffee consumption is in fall in France, because the spending patterns change.
Profile of consuming French of the coffee
In France, 90% of people drink coffee, including 85% the every day. The large consumers are growing old, these consumers consume all the day morning, midday, after midday, and the evening. Next, 44% of the 15-24 years never state not to drink coffee. The primary reasons of the coffee consumption are: gustatory pleasure, or the coffee makes it possible “to remain waked up” and awake the morning. Lastly, the coffee can be consumed “to have a break”, in particular with work with the “coffee break”.
Nespresso in some dates
1986: NESTLE launches Nespresso, the first model of machine integrated is marketed. However, the result obtained is not that desired, indeed failure and handing-over in question of the project. 1988: deferment granted by NESTLE, Jean-Paul Gaillard becomes chairman, one notes a change of strategy marketing. So, it’s business success. 2003-2010: the Nespresso Club passes from 450,000 members to more than 10 million.
Criterion of segmentation & target of Nespresso
The segmentation of Nespresso is done according to the socio-economic variables, thanks to income, psychographic with attraction for new technologies, places of purchase thank to shops, Internet and telephone, und finally favors required with the quality of the coffee. At the beginnings of the brand: the target is B to B, Nespresso was only addressed to the professionals From the change of strategy marketing: the target change und become B to C, individuals, social and economic category more raised, between 30 and 40 years.
The product of Nespresso is positioning on confidential diffusion, proposal for a true lifestyle, wine traditions, created limited series, and take place on prestigious shops.
Positioning compared to the competitors
The place of Nespresso is exclusive distribution and it’s a closed circuit. The place is taking place around 50% of the sales are done on Internet, 25% per phone and 25% in the shops. The marketing strategy “ONE TO ONE” makes it possible to better determine waiting of the customer. The strategy of auto-distribution is represented thanks to Nespresso holds its own network and direct circuit. The advantages of these strategies are reduced costs and speed of launching. But, they are also disadvantages like restricted market and heavy investment. There are different distribution network for the machines like co-branding with KRUPS or MAGIMIX, the large surfaces specialized like distributors and logic of selective distribution agreement.
A BtoB network is set up, while creating Nespresso Business Coffee Solutions and the brand wishes to become the reference of the professionals.
Compared to the competitors, the prices of Nespresso are higher but they contribute to make of a product daily consumed a true luxury item, but they have a very broad range.
Price of a machine
Price of a capsule
149 € to 1790 €
59 € to 169 €
56 € to 109 €
For the machine, the design is very important and you can ppersonalized your machine. As for the capsule, the principal product with the sale of the complementary product and they have offer varied and code colors. They have many service: Nespresso have 1,700 patents.
At the beginning, the logo is the most important for Nespresso. “N” is means of recognition of the brand. The base-line of the brand is “Nespresso, what else?”, who is recognized in all over the world. As for the advertising campaign, Georges Clooney is an emblematic character of the brand incarnates the values of Nespresso and Nespresso create the event without wearying the spectator, surprises without disappointing, it’s challenge of Nespresso. Internet is means of communication very exploited by the brand and social networks: interactivity with the consumer person receiving benefits of reference and viral marketing.
These operations stimulate the sales, reinforce the top-of-the-range image and create traffic. Nespresso created a lot of event and they have a lot of prestigious partners. The company was also one of the first to be launched out in mobile marketing. Nespresso conserve this place of leadership on its segment of market. Their market shares increase; particularly thanks to Nespresso cultivates an image looked after thanks to the external communication and publicity.
Strategy of development of consumer loyalty
60% of the new customers buy the product of Nespresso because they knowledge by members, and it is above all thanks to the image of differentiation of the brand, Nespresso wants to offer an image of luxury to its customers. As for the “Nespresso club”, it intends to offer a service exclusive and personalized to the customers. Nespresso created a multiplicity of tools allowing of make loyal its customers like Nespresso Magazine who explain the product and actuality of the brand, proposing collections and limited editions. Nespresso grow the consumer loyalty thanks to many services like follow-ups personalized of the customer, shops, E-mailing, and they send presents for his members.
Nespresso have good marketing strategy and functions very well. Its number of members increasing each years. Its innovations are regular and offer a wide selection of flavors. Nespresso preserve his image of luxury and increase his market in the professional world.