Marketing Report on Nespresso

8643 Words May 19th, 2011 35 Pages
Autumn
10
Marketing management and Strategy A case study on the Nestlé sub-brand: Nespresso
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1. Introduction

Nestlé is a global company who recognizes that to be a successful company you have to be competitive and cost efficient. They put their customers first, and wish to create long lasting relationships with them, creating a luxurious exclusive experience to their coffee customers through their sub-brand Nespresso.
Having positioned themselves as a luxury good, the Nespresso brand faces several weak points in their positioning during the current recession. Communication and marketing are therefore key factors in the international competition for a company such as Nestlé, and it is
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4. Analysis
4.1 Market analysis

About coffee
Coffee is the second most traded good in the world, after oil, coffee is therefore the most traded good in the food market. With about 6 million tons sold per year, it generates a turnover of 60 billion dollars (Mark Pendergrast 1999). To illustrate better these titanic figures, we can say that 2 billion cups of coffee are drunk each day all around the world, or about 2000 to the second. The coffee market in general is increasing with about 1% per year, and in parallel to this the current coffee is declining by 1%.
(http://www.europtrade.fr/Originesetanecdotes/Quelqueschiffres/tabid/184/language/fr-FR/Default.aspx)
This can be explained by the fact that the demand for coffee has been evolving for some years. Indeed, if the current coffee is losing speed, it is not the same for coffees call "greedy", such as cappuccino, which know a rise of 2.5%. Several brands have followed this direction, such as Kraft Jacobs Suchard and Douwe Egberts of course Nestlé through Nespresso.

The capsules
The current market is answering to the expectations of Nestle, as Nespresso is the worldwide leader of coffee in capsules. With sales of about $ 2 billion of capsules per year in recent years, we can say that Nespresso occupies a prominent place on the capsule market. In terms of global market share,

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