Boosting sales of the Nespresso System

Résumé du document

Nespresso is the result of an innovation process that started inside the Nestle Company: a new idea of coffee that combines the quality of an espresso coffee and the convenience of the use of capsules. The process of launching this product inside a big company like Nestle was not an easy one. Innovations often bring some kind of fear in people's mind, i.e., there are barriers that must be broken during the process. Hiring someone from the outside and changing the structure, in order to make the company more agile and fast were the weapons to fight against them and to make the project move on.

Renovation is important for every long term strategy, especially in a field that is technology driven. Nestle was already a leader in instant coffee in the market, but those characteristics of innovation and renovation made the company discover another market to target, even though for many specialists, the market was already saturated.

Extraits

[...] The company has to increase its sales without damaging this image. There is a high risk of brand dilution. Because of this, the company has virtually no room, in order to broaden its targeting, and therefore many ideas that managers already had cannot be implemented. That is why some more planning is necessary, so that the company can reach the billion target within 10 years Implementation In order to reach its target, Nespresso managers have first to raise awareness about the product. [...]

[...] But we will have to be very cautious concerning the choice of the channel and the period of time. Targeted cable networks are a good option. The investment in advertising and other communication means will increase to SFr 3 millions Long-term: Positioning Nespresso as a status brand We plan to reach our 1-billion turnover target within 10 years, that is to say, per year approximately SFr 80 million increase in sales. Promotion tools They will have a key role at this stage. [...]

[...] For example, organizing some events with well-known people for the introduction of a new machine design, or sponsoring some cultural or sportive events, such as being the official coffee of the Cannes Film Festival. We will also emphasize the design. It will help Nespresso to differentiate from its competitors and attract more customers. We can also cooperate with some famous design schools to hold a contest, in order to design new Nespresso machines. Through this kind of activities, the company can strengthen the brand image. Distribution A new retail format, different from the traditional boutiques, would be developed. Some Nespresso cafe outlets, serving espressos and coffee-based food such as Tiramisu could be opened. [...]

[...] Internationalization Entering new markets will also be a way to increase sales in the long term. For example, more attention should be paid to the Northern European countries, which are leading countries in terms of coffee consumption. Research and Development R & D is very important to keep a competitive advantage over the competitors and to maintain the leadership position in the market. R&D will focus on machine improvement, in order to provide the customer an even more convenient system, but also on process improvement that allows reducing production costs, in order to decrease the prices and to increase the margin. [...]

[...] To achieve this goal, Nespresso has to target the same customers, instead of targeting new consumers. Still keeping the same image of gourmet coffee, selling only coffee and coffee-related products for 2 different reasons - i.e. avoiding the waning of the brand and prevent cannibalism amongst the different divisions of the Nestle group - Nespresso has to offer its customers new opportunities to enjoy the espresso they like, even when they are not at home or at the office. The Nespresso has to be sold as a whole experience rather than a simple technical product. [...]