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  • Topic: Coffee, Coffee preparation, Fair trade
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  • Published : September 26, 2011
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Launched 30 years ago, Nespresso is a subsidiary of Nestlé 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. All this case long we are going to analyze the company and is strategies throughout the SWOT, the positioning, the targeting ant to finish the marketing mix of the brand.

SWOT analysis:
External analysis:
Opportunities| Threats|
Coffee becomes one of the most popular drinks in the world. More than 1.5 billion cups are drunk, every day, worldwide. Huge market.| Coffee is facing stiff competition from other soft drinks. Hard competition on this sector.| «going out for a coffee » has become synonymous with informal meetings or social occasions. | The advertising campaigns that have been developed by the soft drinks companies, have communication budgets significantly higher than those of the coffee companies.| Over the last 30 years, one can observe that non-alcoholic soft drinks have become much more successful.| Current trends which emphasise paying attention to one's well-being and health tend to favour the consumption of so-called healthy drinks which are beneficial for the body such as fruit juices and mineral waters.| New types of coffee consumption are developing notably via the success of American-style coffee bars such as Starbucks.| Traditional offerings on this market are losing ground.| Sales in terms of value progressed slightly as a result of the increased popularity of fair trade coffee and capsules (Nespresso, Tassimo, Senseo, etc.), both of which have a strong growth potential.| Prices for end users have increased significantly.| Some of the consumers are ready to pay more for a more upmarket coffee.| The hard discount channel is increasing its influence on this market.| Capsules have proved popular with coffee enthusiasts of all ages, and it is therefore not surprising that Nespresso see this segment as a strategic growth opportunity.| | The dynamism in this market has obviously been accompanied by a significant rise in the number of specific machines sold for the capsules segment.| |

The roasted coffee market has also seen significantly improved performances for fair trade products.| | There is also increasing awareness of issues associated with fair trade and sustainable development.Customers are extremely responsive to promotional offers on coffee.| | Consumers are more and more demanding about the quality of their coffee. | | Consumers also expect an increasing ease-of-use in relation to coffee.| | Consumers are increasingly taking ethical issues into account in relation to their consumption of coffee, and hence the fair trade coffee segment has grown strongly.| |

Internal analysis:
Strengths| Weaknesses|
The coffee industry has recorded record profits every year since 2001.| coffee consumption among young people has declined significantly| Coffee is the most traded commodity in value on world markets with the exception of oil.| Over the last 10 years world prices for coffee have fallen steadily, reaching a low of 44 US cents per pound of Arabica in 2002.| The coffee market in France is worth 1.105 billion euros and represented 143 089 tonnes in 2006| The sale price of coffee that goes back to the producer is minimal once all the middlemen have taken their cuts. Some of these intermediaries are renowned for singularly unscrupulous business practices.| The capsules segment has increased by 57% in volume and 56% in value during 2005 in the mass retail channel. The market has grown by approximately 30% annually since 2005.| Coffee is mainly drunk in northern countries. Most of the producer countries drink, considerably less, both in quantity, and in quality, and frequently only instant coffee is available to them....
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