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generic rivals?
• This is a very lucrative niche market for Nespresso which has enjoyed a 30 per
cent annual growth rate.
• The rivals are specifically interested in Europe, although, due to its share of
this market for Nespresso (90 per cent).
• Due to the exclusive way that the capsules are sold there is potentially an
alternative route to the market (via supermarkets) for generic products (as
long as they don’t infringe patents).
Why is Nestlé’s response to this onslaught ‘not to respond’?
• Nespresso is a successfully and clearly positioned product as the ‘Louis
Vuitton of coffee’ and they need to protect that position.
• Doing something different, i.e. cutting prices could easily lead to a price war
and devalue the brand.
• The Nespresso offer goes beyond the coffee-maker and pods with the
addition of a highly personalised customer service which the generic
competitors cannot offer.
Stages in segmentation and positioning
3. What bases could marketers use to segment the coffee market?
• The main principle to bear in mind is that segmentation is about the market,
i.e. customers, not products. The three main bases can be used in this case:
2/1 Age and life-cycle stage segmentation is the process of offering different
products or using different marketing approaches for different age and life-
cycle groups
2/2 Gender segmentation divides the market based on sex (male or female)
1- Market Segmentation Segmenting Consumer Markets
2/3 Income segmentation divides the market into affluent, middle-income or low-
income consumers
4/3 User status (nonusers, ex-users, potential users, regular user, first time
user
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
To the extent that a company can differentiate and position itself as providing
superior customer value, it gains ________.
A) contingent liability B) complementary assets
C) core competencies D) competitive advantage
E) service life
Answer (D)
Differentiation and Positioning
Choosing the Right Competitive Advantage
A difference is worth establishing to the extent that it
satisfies the following criteria:
Preemptive Affordable
Communicable
Not easy to To pay for the Profitable
And visible
copy by rivals difference
• “To multi-taskers who need help remembering things, Evernote is digital content
management application that makes it easy to capture and remember moments
and ideas from your everyday life using your computer, phone, tablet, and the
Web.”
The full mix of benefits on which a brand is differentiated and positioned is known as the
brand's ________.
Answer (value Proposition)
________ consists of arranging for a market offering to occupy a clear, distinctive, and
desirable place relative to competing products in the minds of target consumers.
A) Targeting B) Differentiation
C) Segmentation D) Positioning
E) Mass customization
Answer (D)
________ positioning involves meeting consumers' lower performance or quality requirements
at a much lower price.
Answer ( Less for much less)
The winning value proposition would be to offer ________.
Answer (More for less)