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Nespresso: Case Study

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Nespresso: Case Study
Nespresso (innovation)
1. What is Nespresso’s customer value proposition?
Customer value proposition: always start with the needs. The customer has money, so the company will give the customer a value proposition
The company has to deliver the value and then communicate it “competitively”.

Need
Value proposition

Caffeine
Quick
Good taste
Good smell
Convenience
Texture
Lifestyle
Status
Novelty
Variety
Consistent high quality, fresh taste and personalized, exclusive coffee experience and service on daily basis, delivered to your door.

New category
New System
Emotional benefit of exclusivity / club

Product / value / lifestyle

2. Why took so long to commercialize?
R&D worked in isolation from marketing
NO INSIGHT
Marketing Miopia
Tried wrong market
Technical hitches
No management support
Too much Nestle thinking
Didn’t follow 9 steps

3. Where is Nespresso vulnerable in 2014?
Substitute cheaper capsules
Sustainability – small returns
No margin on machines
Lost lawsuits
Vulnerable in USA

4. What would you advise Nespresso to do to-day (2014)?
Continue innovation
Enter in new markets. Latam is not developed
Grow
Raise awareness
Raise penetration / Shop in shops / Geographical expansion
Widen distribution
Retain exclusive image / Create Lifestyle
Block competition
Diversification

Benefits of Lang… the marketing director responsible to launch Nesspresso
Relentless
Ambitious
Previews experience launching Malboro clothes
Entrepreneur
But,
Not a team player
Less than honest
No eye for operational detail
No company loyalty
When the business become stable, you can’t have a risky person managing the business.
5. Ideas to overcome the vulnerability
B2B… Target restaurants, offices, hotels
Improve loyalty by: extensions, ambassador club, signature coffees
At the end is about building a luxury brand.
They need to keep the brand fresh, exclusive
6. Take away:
Follow the 9 steps
R&D must work with marketing
Bring in outsiders at beginning
Trust those with intuition and
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