Factors for Marketing Excellence

On the Marketing of the Brand "Nespresso"


Seminar Paper, 2018
16 Pages, Grade: 1,3

Excerpt

Table of contents

List of figures

1 Introduction

2 Nespresso
2.1 Overview
2.2 Product

3 Customer Loyalty Management
3.1 Reference object
3.2 Customer segmentation and target groups
3.3 Loyalty instruments
3.4 Targeted partnerships

4 Customer experience and service experience

5 Conclusion and future outlook

6 Table of literature

List of figures

Figure 1: Types of coffee

Figure 2: Example – Nespresso boutique

1 Introduction

The best marketing plan is no use if in the realization is a lack of excellence in the realization. “Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services” (Kotler, 2012, p.27).

Marketing excellence should be great about the whole entire process. There it is more about defining the market, searching for the right market segments, choosing certain goals, understanding the competitive edges, developing a brand proposition, marketing through all communication channels, and so on (Kreutzer & Kuhfuß, 2013, pp. 177).

In this paper marketing excellence will be analysed through a best practice of the brand Nespresso. Due to this, the main marketing excellence instruments will be pointed out. At first a short overview to the brand Nespresso and its main products will be given. After this the paper takes attention to customer loyalty management. In this chapter different points of Nespresso great relationship management will be examined. A further focus on this paper is the customer and service experience of Nespresso. Finally a conclusion and future outlook will be given.

2 Nespresso

Before the excellent marketing of Nespresso will be analysed and reflected a short overview of the company is shown. In addition a short insight into the products of Nespresso will be presented. But already in this part certain points regarding to the marketing of Nespresso can be identified.

2.1 Overview

Nespresso was originated through a coffee pilgrimage. Eric Favre, employee of Nestle, was searching for the best Espresso in Italy in 1975. Thereby he tasted an excellent coffee in Rome which was made in a very special manufacturing process. After returning home, he tried to imitate the coffee at home and convinced his bosses to try the coffee with consumers and finally patented it. In 1986 the portioned coffee system was born through Nespresso and carried out pioneering work. Nespresso focuses on private customers and business customers and inspires them through a strong brand, quality, unique service offering.

The headquarter is located in Lausanne (Switzerland) and stores are represented in 62 countries. It is an international network with more than 600 boutiques in 55 countries. Nespresso consist of more than 10.500 employees. The brand is pointing out that 70% of the workforce is in direct customer contact. Therefore the employees are well-trained and qualified (Nespresso, 2015). In the next subchapter a short insight to the products of Nespresso will be presented.

2.2 Product

Nespresso is concentrated to offer a high class quality coffee to its customers. Special coffee beans are used to fulfil the quality standards. Just about 1-2% of the worldwide grown coffee is suitable to meet the quality standards and unique aroma and flavour profiles. The coffee is portioned into coffee capsules which are produced in three different production facilities in Switzerland with over 1000 employees. Thereby they also have independent acknowledgments with ISO 22000, ISO 14001 and OHSAS certification and also CDP climate change and water, DJSI reporting.

The offered varieties differ in their coffee blends and roasting degree with the intensity and aromatic profile what is identifiable through different capsules with different colours.

The graphic shows a small selection of coffee types from the product range of Nespresso

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Types of coffee (Nespresso, 2018)

If customers buy a coffee machine of Nespresso, the coffee maker is just compatible with the capsules of the brand. Nespresso does have a lot of coffee machines in 3 different categories which stay for sustainable consumption. It is the “classic line” with 24 permanent Grands Crus, nine limited editions and variations. Another category is the “vertuo line” with 20 permanent Grands Crus and the “pro line” with 13 Grands Crus and two exclusive versions for fine dining (Nespresso, 2018).

3 Customer Loyalty Management

In addition to the measures that create customer satisfaction, successful marketing companies do have a customer loyalty programs. This is necessary to change casual customers in loyal customers. The importance of customer loyalty management increased dramatically over the last years. In the following a best practice approach of Nespresso regarding to loyalty management will be analysed and gets a significant part.

3.1 Reference object

The reference object determines for what the customers are bind to. Reference objects can be individual products, product groups, a brand or the whole company (Kreutzer, 2014, p. 31). The reference object of Nespresso can be grouped in different levels which are interconnected to each other. The focus lies on the performance which includes portioned high-class coffee into capsules, elegant coffee machines and very exclusive customer service. This means that employees are also part of the reference object. The workforce of Nespresso has to make a huge contribution. Employees often receive training courses to improve the personal behavior in contact with the customers and being able to provide competent information. Thereby they also get informed over the latest trends and developments e.g. through a training program which is called “Nespresso Science of Coffee Program” (Boutique Hotelier, 2015). The brand Nespresso itself stands above these elements. For increasing the recognition value an image of the company, huge marketing expenses were spend by Nespresso. Only in Germany an amount of 26 million euros was spend on magazine ads, TV-spots as well as online banners in 2015.

Just after combining the interaction between the reference persons, the product and service a sustainable customer loyalty to the company can be created (Birger, 2016). In that way it is not just selling coffee, it is more selling an experience (customer experience will be explained in chapter 5). Nespresso has set itself the goal to offer “moments of pure enjoyment and intensive pleasure” to its customers´ (Nespresso, 2018).

3.2 Customer segmentation and target groups

Regarding the customer segmentation, Nespresso distinguishes two business areas. On the one view it is the consumption at home what belongs to the private customers. The second business area belongs to the Out-of-Home consumption with the business customers. Regarding to the business customer a further segmentation is possible. It is divided into hotels, restaurants, luxury shops, airlines as well as the office sector. The sales figures by business customers have increased the last years. Nespresso intensively searches for business customers who also reach a lot of people to get the brand more famous. Airlines like British Airways or Lufthansa provide their first class customer coffee with Nespresso capsules. The brand pays attention to its exclusivity and premium demand to differentiate itself from their competitors (Hall, 2013, p. 55-57). Consequently Nespresso is also an exclusive coffee supplier for high class hotels. An example is the worldwide represented hotel group “Radisson Blu” where customers in their hotel rooms can enjoy the taste of Nespresso coffee (Nespresso, 2018). To get a higher level of awareness by more sophisticated persons Nespresso works together with exclusive retail stores like Prada, Mont Blanc or car companies like Lexus where Nespresso coffee machines are positioned in the reception areas. By focussing on premium business customers the right signals are sent out to ensure reliability (Gallouj, 2010, p. 712).

In the range of B2C a clear selection criterion exists which is the willingness to pay more money for coffee. Persons who are looking for low coffee prices are not customers of Nespresso. The company is positioned in the premium segment which affects the price of Nespresso products. Therefore the target group are lifestyle orientated people who are willing to pay more for coffee, with a higher income in a majority of clients aged over 25 (Nespresso, 2013).

3.3 Loyalty instruments

Nespresso ensures that customers keep their loyalty with a mix through binding and a special connection with the company. Nespresso attracts potential customers with their relatively cheap coffee machines.

But it is important to know, that customers are very limited to Nespresso coffee, because just compatible Nespresso capsules fit and work with the coffee maker. To avoid negative feelings due to the dependency, Nespresso employees are instructed to clear up potential customers to the advantages of Nespresso coffee machines and the great possibilities to get an exclusive Nespresso club membership. Besides the ligation in the system there are also organizational and financial loyalty instruments. If customers are member in the Nespresso club they benefit from advantages like exclusive services and cash discounts (Cohen, 2013, p. 35 – 37). Members of the club can recruit other potential members. Thereby they will be rewarded with unique vouchers (further information to the Nespresso club are explained in chapter 4).

Due to this an important component of loyalty instruments are social-psychological points with the focus on high customer satisfaction. On the one hand Nespresso creates a sense of community and on the other hand a lot of different measures for the voluntary emotional connection are created. The system should feel like a friendship with Nespresso.

3.4 Targeted partnerships

To have a successful loyalty management with high product quality, it is necessary to have targeted and selected partnerships. Nespresso works together with companies like Miele or DeLonghi which manufacture the machines in license. The development and the design of Nespresso are determined by Nespresso itself. Nowadays, anybody knows the success that ecology or sustainability have their capacity to influence the behaviour and the consumption of customers. With the trend to sustainability Nespresso creates great marketing for itself. In this point they search for cooperation with coffee farmers to increase the quality and decrease the pollution of the environment with good working conditions. The good image is encouraged by the “Nespresso AAA sustainability coffee program” or also “the positive cup”. Equally high-ranking NGOs like Rainforest Alliance, Fairtrade and IUCN are in cooperation with Nespresso. Hereby the company promotes for sustainability with its program (NSAB) Nespresso Sustainability Advisory Board where they focus on social and environmentally aspects.

In this context the company sets three key goals which are proudly present to the publicity. Nespresso gave the information that they want to spend 500 million CHF on the sustainability program till 2020 (2014-2020). They want to empower any employee to contribute to their sustainability agenda and catalyse innovation bythe Nespresso sustainability innovation fund. This means that the total company engagement is of crucial importance (Duvoisin, 2016). The brand ambassador George Clooney is also part of it to underline the brand and its campaigns. But also other celebrities like Nicole Kidman, Robbie William or Tiger Woods were involved in advertisement spots. This cooperation’s are very important for the branding and recognition value of Nespresso (Lenzen, 2013).

[...]

Excerpt out of 16 pages

Details

Title
Factors for Marketing Excellence
Subtitle
On the Marketing of the Brand "Nespresso"
College
University of Applied Sciences Kempten
Grade
1,3
Author
Year
2018
Pages
16
Catalog Number
V459408
ISBN (eBook)
9783668904880
ISBN (Book)
9783668904897
Language
English
Tags
factors, marketing, excellence, brand, nespresso
Quote paper
Andreas Mederer (Author), 2018, Factors for Marketing Excellence, Munich, GRIN Verlag, https://www.grin.com/document/459408

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