Business Model of Nespresso

Topics: Nespresso, Marketing, Retailing Pages: 3 (625 words) Published: December 1, 2010
Nespresso Business model:

Nespresso is a subsidiary of giant Nestlé which was created in 1986.Before launching e-business the capsules sales where operated by telephone and the machine sales by retailers. The Nespresso Club was created in this period of company development. In 1998-1999 Nespresso launches its web site and the next year open its “Grande Boutique” in Paris. The Nespresso advent began its existence. The specific distribution channels and the idea of private club reinforce the sense of belonging. The client does not feel to be simple people who buy the product but clients develop the feeling to be an exceptional person supported by the Nespresso service. The e-sales improve the Nespresso data and improve the marketing Nespresso’s operations. Since this huge change Nespresso has now a machine for cappuccino and the new collection for Lungo coffee. This company does not offer a simple “excellent café” but a real design item which is integrated in the home décor.

1) Customer segments
Nespresso’s main target is the upper middle class, workers in the office, hotels and restaurants. The Nespresso coffee is quite expensive and vehicles a prestige image for people who drink it at home in family or with friends. In the office the use of Nespresso machines is very frequent particularly during negotiations with clients and other stakeholders. Nowadays, Nespresso can target fashionable people who are concerned by the last trends.

2) Value Propositions

Nespresso embodies the most sophisticated coffee concept ever developed. * Perfectly portioned highest quality Grand Cru coffees
* Smart and easy to use machines and capsules with unique innovate design * Personalized service
* Nespresso club functionalities are increased
* Exceptional coffee experience
The concept (machine, capsule, service) is protected by 70 patents and allowed Nespresso to create an economic model closed to competition. Not only can...
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