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INTRODUCTION
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Nespresso is the brand name of Nestl Nespresso S.A., an operating unit of the Nestl Group based in Lausanne , Switzerland. Nespresso machines brew espresso from coffee capsules, a type of pre-apportioned single-use container of ground coffee and flavorings. Launched 30 years ago, Nespresso is a subsidiary of Nestl and one of the worldwide leaders of coffee market. The brand became very famous thanks to the coffee maker based on capsules. More than a simple coffee, Nespresso managed to create litterally a Nespresso experience by its innovative concept.
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Nespresso offers a number of different machines for sale. The machines carry the brand names of well known kitchen equipment manufacturers such as Krups, Magimix, Miele,Siemens, and DeLonghi. They are manufactured by the Swiss company Eugster / Frismag, one of the world's largest coffee machine producers. Eugster/Frismag (based in Amriswil, Switzerland) is little known to the public because the company is strictly an original equipment manufacturer (OEM). In 2000, Nespresso began distributing machines bearing the "Nespresso" brand. In August 2011 Australian brand Kogan announced they were developing the "Ez-press", a coffee machine compatible with Nespresso pods.
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Nespresso capsules are sold exclusively by Nespresso and are more

expensive than portions of ground coffee purchased "loose".


The

cost per serving is up to three times higher than that of alternative brewing methods. capsule material and perforated top are both made of aluminum. For health reasons, the interior of most of the capsule is lined with food-grade lacquer.
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The

CHANNEL STRUCTURE

Manufacturer (Nespresso)

Nespresso Call Centre (Telephone Orders)

Nespresso Company Owned Stores (Boutiques)

Nespresso Websites

Consumers (Nespresso Coffee Club Members)

Nespresso has gained its Brand Equity due to its Exclusivity. Has

complete control over its distributions channels thereby ensuring its availability as a premium products. Helps Nespresso in charging higher prices than local competitors due to its unique offering in distributions channels which is by selling coffee pod only through its self-owned shops.

Transfer

of Nespresso Coffee Pod License to other parties like mall owners , hotels, Theater owners etc. where footfalls is high like local super mart which will increases its reach and availability . also add up Franchise models in their strategies for distributions.
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Vending Machine can also be installed at various places

Can

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Will

meet huge increase in coffee demand globally and thereby serving its potential customers. in expansion of the business by exploring possible untapped business opportunities. franchise models Nespresso will get wide customer base as well as regular revenues from its franchises.

Helping

Under

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By

using direct channel Nespresso is giving up lot of lucrative opportunities like:


Meeting Growing Demand of customers Preventing themselves from exploring news channels which might be profitable. Social media Marketing like Facebooks , Twitter. Adoptions strategies of Low cost competitor like Sara Lee which provide low cost coffee pods .
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Transfer of variable cost to third parties. Reaching

wider set of customer in developed as well as in developing

countries.
Greater

understanding of changing customers taste & preference

regarding coffee.
Implementation of appropriate marketing mix . Enhanced brand knowledge & Imagery.

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In

early 2010, major Swiss and French supermarket had providing with much cheaper new coffee pods as compared to Nespressos which is 20% higher in price. Sara Lee has been started providing the coffee pods for Nespresso coffee machines These pods have available in more than 2000 French supermarket at 10% low price than that Nespresso pods With gradual loss of the market share in coffee market, Nespresso is fighting an infringement case against many competitors regarding Nespresso Patents.
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Nestec loses Nespresso capsule patent dispute A German court has rejected an application by Swiss food giant Nestle to ban the sale of unlicensed coffee capsules for its Nespresso coffee machines in Germany. Nestl Sues Sara Lee in Coffee War accusing the latter of contravening its patents. In December 2010, Sara Lee announced that they would start selling their capsules in the US under the Douwe Egberts name and since mid 2011, Sara Lee has expanded sales of its capsules into other countries, such as Spain where they are sold under the "Marcilla" brand.
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