Coffee is a brewed beverage with a bitter, acidic flavor prepare from roasted seeds of the coffee plant. Coffee can be served hot or cold and it has been around for centuries. Recently, Nestle had thought of a great way to revolutionize the coffee industry by introducing “Nespresso”. Rather than having to use coffee bean and turn them into coffee, the Nespresso machine uses a capsule to brew rather than the coffee bean. Imagine you want a cup of coffee, you simply have to insert a capsule into a Nespresso machine, and there you go, isn’t that great?
In terms of marketing, it had been perceived as an exclusive luxury good. The Nespresso machine is very compact, user-friendly, high quality and superb design. According to the blog: http://www.zdnet.com/blog/perlow/nespresso-pixie-the-apple-of-espresso-machines/17390, “Nestle Nespresso system is the caffeine version of the Apple ideology: user friendly, compact, high-quality, superb design, but ultra-proprietary. They say that IT industry is driven by coffee.
In terms of the product, Nespresso is a patented, foil-sealed proprietary capsule that contains ground espresso coffee. When it is inserted into a Nespresso-compatible machine will produce a very rich, high quality espresso shot. Officially, Nespresso does not allow coffee capsule purchase from other choice, resulting in limited choice of flavors. In terms of the price, it is relatively high compared to the traditional coffee beans in terms of the serving portion. Also there is very limited downward pressure on capsule price as consumer have no choice but to purchase the capsule from Nespresso. The capsule price range from $0.57 to $0.64 each.
For the distribution, due to popularity, there has been an increase in well-known kitchen brand such as Krups, Siemens, and Magimix offering number of machines to support Nespresso capsule. They distribute their product in two main channel; in-home and out-of-home which includes Nespresso Professional for workplace, Nespresso Gastronomy in top restaurant and Nespresso Aviation for airlines. In addition, on the marketing side, Nespresso rely heavily on advertisement, use brand ambassador George Clooney as the brand, promoted on magazine, and give out discount/cash back when purchase Nespresso machine with capsules for example. Also, if purchased in bulk, you can get a certain discount depending on the promotion.
(NESPRESSO AD)
(NESPRESSO REVIEW)
