Nespresso Marketing Techniques and Positioning Strategies

This report provides an overview of the marketing techniques and positioning of Nestlé Nespresso, commonly known as Nespresso. It covers the company's positioning statement, the four P's of the marketing mix that the company has used to reinforce its positioning, and how it evaluates the effectiveness of its marketing efforts. The report also includes information on the company's product mix, promotional mix, pricing strategies, and retail operations.

Principles and
practices of marketing
- PPM

Table of Contents
2) INTRODUCTION.......................................................................................................................2
MAIN BODY...................................................................................................................................2
3) Positioning of company..........................................................................................................2
4) 4 of the marketing P's used by Nestle Nespresso to reinforce positioning.............................3
Marketing mix ............................................................................................................................3
5) How Nespresso current evaluates the effectiveness of it's marketing efforts and what it ...16
can do further............................................................................................................................16
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19
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2) INTRODUCTION
Marketing principles and practices are the framework for presenting an organization's
product, price, promotion, and distribution strategies (Kotler and et. al., 2019). This report is an
overview of the marketing techniques and positioning of Nestlé Nespresso, commonly known as
Nespresso. The company is an operating unit of the Nestlé Group and was established in 1986.
Nespresso coffee machines are famous and unique for brewing espresso and coffee from coffee
capsules, also known as pods in home or professional machines. The company is rooted in coffee
expertise, innovation and the farmers who work with the company. The company has limited
editions of 30 original coffees, 35 Vertuo coffees and 17 specialty coffees, as well as some other
global rarities. The report will provide an overview of the company's positioning over the past
three years and the four P's of the marketing mix that the company has used to reinforce its
positioning. Finally in the end, KPIs are used to evaluate the effectiveness of your company's
marketing efforts.
MAIN BODY
3) Positioning of company
Nespresso is a global success in positioning the UK market over the past three years. The
reason for Nespresso's effective positioning in the UK market is the identification of optimal
PODs and POPs. The company's positioning statement to customers states: "For the elegant
customer who is looking for a unique coffee experience, Nespresso offers not only coffee from
the coffee shop, but also a variety of luxurious and high-quality products”. It reflects the brand's
dedication and love for customers , tailor-made maid service". From the past three years, the
company has positioned its brands and products on four basic criteria, namely functional design
of the capsule, high-quality original coffee, excellent service and strong communication.
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Last year, Nespresso developed its own new coffee machine with airtight pods, allowing
customers to make Italian-style coffee at home at a fraction of the cost. This is the company's
broad positioning strategy, including technology and competitive pricing. With this positioning,
the company achieved a turnover of more than $6.3 billion in 2020, an increase of 7% over 2019.
The company's niche positioning is for those customers who are behaviorally looking for barista-
style coffee at home and Nespresso to be able to offer it at a relatively low cost. The company
was able to gain an edge over its competitors by patenting its technology. Additionally, in order
to target the market with Nespresso’s new machines, the company is targeting and targeting the
market by offering customers free access to the Nespresso Club.
4) 4 of the marketing P's used by Nestle Nespresso to reinforce positioning
Marketing mix
4.1) Product mix
Nespresso products are classified under the three i.e. services, coffees and machines. The
company in the range of coffees has three segments Vertuo, Original and Professional. All the
coffees in the menu of the Nespresso contain 4 different attributes in order to differentiate them
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Illustration 1: Illustration 1: Welcome to
Nespresso, discover our range of Coffee Capsules
and Coffee Machines, 2022
(Source:Welcome to Nespresso, discover our
range of Coffee Capsules and Coffee Machines,
2022)

from each other. The four attributes are Capsule, Intensity, Arabica/Robusta and Aroma profile
(HIGHEST QUALITY SUSTAINABLE, C O F F E E , 2 0 2 2 ) .
The company from last three years, to reinforce the positioning of this product as working on its
quality as the quality is everything for the Nespresso. To serve best coffee to the customers the
company in year 2020 has started to focus on the field for the selection of the best coffee beans.
The finest beans are arrived at the production unit of the Nespresso. All the wide range of
coffees of the Nespresso from original to Vertuo and to professional the company is following
the product life cycle as the model of the product mix to fit all the aromatic and taste profiles, in
all sizes to reinforce their position in market. Machines of the Nespresso are the unique product
that company has innovated in last three years using the best upgraded technology
(C O N T I N U O U S I N N O V A T I O N A N D D I S T I N C T I V E D E S I G ,
M A C H I N E S , 2 0 2 1 ) .
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Illustration 2: All_Nespresso_Coffees, 2020
(Source: All_Nespresso_Coffees, 2020)

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The Nespresso has the global presence for its product like coffees and machines it offers
to the customers with its Boutiques, e- commerce platforms and customer relationship centres.
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Illustration 3: CONTINUOUS INNOVATION AND DISTINCTIVE DESIGNMACHINES, 2021
(Source:CONTINUOUS INNOVATION AND DISTINCTIVE DESIGNMACHINES, 2021)

These are the places where the company display all its products (Craig Andrews, Shimp, 2017).
Currently from last three years to expand the business and to boost the positioning company
currently has 802 boutiques in almost 500 countries. The digital platforms of the Nespresso is the
one stop coffee shop that allow customers to enter the world of Nespresso through one tap. For
the display of all the items the company has its own websites and mobile apps through which
customers can easily order their coffee, machines and other accessories.
The Nespresso has exclusive method of packaging of its coffee in a hermetically sealed
aluminium capsule. In order to improve the branding and positioning of the company in 2019 the
company has with the other coffee manufacturers has joined hands to recycle its aluminium
coffee capsules under the global recycling scheme. For this company has partnered with the
Swedish start up company Velosophy in order to develop iconic bicycle from the recycled
Nespresso capsules. In year 2020, the company has also developed capsules on the market that
are made from the 80% recycled aluminium. The products of the Nespresso undergo the product
life cycle in order to maintain its positioning in the market and also to protect the product from
entering into the declining stage.
4.2) Promotional mix
Promotion of the products like coffee, machines and other accessories of the Nespresso is
highly important in order to gain long term sustainability (Leading Brands And Their Social
Activity: Spotlight Focus: Nespresso, 2021). The company effectively use the social media
marketing and content to influence the customers and to promote the brand and its new products
through social media content (Chaffey & Ellis-Chadwick, 2019). The Nesspresso with the help
of the social media marketing and activity has started recycle, reduce and reuse campaign.
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The company ensure that the brand's ethos are known to their consumers and company doesn't
disappoint their values. Therefore, through social media content the company informed the
consumers regarding the recycling of their pods as well as crafting with the coffee packing. For
that company demonstrated on their social media page that how customers can transform the
pods into Christmas tags. Also to increase the brand image the company conducted the social
media campaign named “Can't Say No To A Giveaway” which was a online competition through
its social media channels (Leading Brands And Their Social Activity: Spotlight Focus:
Nespresso, 2021). In this customers had to share their picture of themselves making coffee or
coffee setup or either a image of their favourite coffee at he Nespresso with
#MyNespressoMoment on their personal social media account.
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Illustration 4: Leading Brands And Their Social Activity:
Spotlight Focus: Nespresso,2020
(Source: Leading Brands And Their Social Activity:
Spotlight Focus: Nespresso,2020)

Then simply tag the Nesspresso and comment friend they want to win this challenge. This was
very effective technique to spread the brand awareness. All such social media content and
campaign are highly effective for the Nesspresso in reinforcing of its positioning in the market of
UK and all across the world as through this company is able to represent itself among large
number of target audience. Also through company retain customer by developing customer
engagement.
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Illustration 5: Leading Brands And Their Social Activity: Spotlight Focus:
Nespresso, 2020
(Source: Leading Brands And Their Social Activity: Spotlight Focus:
Nespresso, 2020)

In the year 2019 the company has launched its new marketing campaign to celebrate the
arrival of summer, in which company launched vibrant coloured campaign featuring the
Nespresso Barista Creations over the ice iced coffee for the first time in the menu segment of
coffees. Also for this company stirred this campaign with fresh new summer time music to
increase the favourite summer moments by curating the mood, place through music (Nespresso
uses a premium positioning to connect with two different targets, 2021).
This content was demonstrated in front of B2C market segment. For the B2B the company
launched the marketing content for the promotional activity in name of series called “Quality
pairings”. This was especially designed for the Nespresso's professional segment of market in
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Illustration 6: Nespresso uses a premium positioning to connect with two
different targets, 2021
(Source: Nespresso uses a premium positioning to connect with two different
targets, 2021)

which company featured the restaurants, cafe's and hotels to ensure that Nespresso is in top of
their mind in order to use coffee machines or other products.
4.3) Price
Nespresso over the past 3 years has made rapid advancements in driving it's marketing
campaign forward and has used variety of strategies in it's price planning and related offers
across it's online and offline channels. The company has went on record and stated that it has
been paying additional premium for procuring better quality of coffee under it's AAA sustainable
quality program which has led to a 30-40% increase in the overall payment the firm pays for
acquiring coffee than other competitors in the industry and in 2019, Nespresso paid 32 million
USD in AAA premiums. The company pays this exorbitant price and inflates it's margins on
purpose to position itself as the best quality procurer and seller of coffee in the UK market where
every potential consumer get their money's worth of value.
Nespresso has diversified it's operations in the UK has been pricing it's premium segment
products such as Vertuo coffee making machines at an affordable pricing of 79 pounds and with
attractive offers such as additional 3 months of free coffee and a milk frother to build brand
value and achieve perception as an affordable coffee alternative in the market with remarkable
build quality evidenced by the picture above. The company in the wake of the current pandemic
where physical locations have lost viability all over the UK due to constant lock-downs and
governmental regulations has also started introducing aggressively priced bundles which over a
lot of value to the customers and promote online sales of coffee pods and machines. A great
example is the Nespresso Vertuo bundle which comes with an efficient built coffee machine and
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Illustration 7: Figure 7 (Nespresso, 2022)

200 free capsules of premium grade coffee along with 2 cappuccino cups and saucers with a
combined estimated value of 350 pounds being sold for 99 pounds making it a great deal for UK
customers. Another avenue of price mix which the company has used for strengthening it's
market position in UK is the Nespresso subscription service. The company in recent years has
provided the option to it's customers to tailor and customize their own choice coffee and
machines and get them delivered to their chosen locations in the UK. The machines can be
chosen at a discounted price of 50 pounds on it's regular cost of 150 pounds or more and the
prices of the coffee varies according to the average number of coffee cups the buyer consumes
daily as 2 cups roughly translate to 25 pounds which is quite affordable. The fee that people pay
for this subscription is also turned into credits which can be used again on the company's website
to buy a host of goodies and getting a subscription also makes one eligible for membership
discounts which all contribute in reinforcing it's market positioning as a customer oriented coffee
brand.
4.4) Place
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Illustration 8: Figure 8 (Nespresso unveils experiential store with AR at Trinity
Leeds, 2022)

Nespresso has over the years beefed up it's retail operations across many locations in the
UK and has been focusing on using technologically advanced measures to drive it's market
position as a coffee oriented brand that treats the product as novelty and provides the most
professional service available to it's customers. A great example is the evidence given above
which showcases one such new store which has been opened by the firm in Trinity Leeds in
2022 and has been laced with Augmented Reality solutions and technology to provide a unique
customer experience over it's competitors in the coffee industry. The store displays the branding
of “coffee as an art” which lays emphasis on it's new retail driven approach in UK as the new
stylish store outlook is designed to give customers a lavish feel and display coffee as an art form
rather than a product which can be a successful targeting approach for diehard coffee lovers. The
new store has a dedicated area called 'Taste and discover' where the company has been
promoting the community to come together and build their own coffee recipes and taste the
many varieties of blends made by Nespresso which is a step towards positioning itself a
community builder and harbourer of coffee making enthusiasts.
Nespresso has also used the marketing element of place to boost it's market position in
terms of sustainability and building a better brand image in the eyes of environmentally
conscious people by involving itself in a new scheme called 'Podback' in which customers can
recycle their used coffee pods at home by collecting special bags at supermarkets and dropping
off the wastes at marked recycle outlets all across UK. The scheme was set by Nespresso's parent
company, Nestle and the firm has partnered with Morrison's through this scheme which not only
boosts it's sales through a popular supermarket outlet but also establishes it's market position as
green and sustainable.
Another smart use of place utility by Nespresso can be found in it's marketing approach
used for it's annual festival campaign in which it partnered with artists and sound designers to
use augmented reality experiences at it's retail shopping windows to generate environmental
awareness and appear futuristic to UK's general public. The goal of all these smart and
innovative use of retail locations is to build the position of the brand as sustainable and futuristic
focusing on customer convenience.
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Figure 1 Nespresso website layout
Figure 2 Nespresso registration page
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5) How Nespresso current evaluates the effectiveness of it's marketing efforts and what it
can do further
Figure 3 Nespresso Subscription benefits activation
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Figure 4 Nespresso Plus Subscription metrics
Nespresso is a major presence in the coffee retail industry and the budget it spends on it's
digital marketing and offline product promotion is a heavily budgeted operation which is
carefully evaluated by the company using metrics of measurement of various types. A majority
of the company's operations take place online through it's website some of which are listed
below.
 Ordering of it's coffee pods, blends and machines
 Subscription of it's coffee and machine delivery service
 Coffee related accessories such as milk frothers
 Professional Help
 Detailed list and information about it's product and services
The company has been using digital technologies and metrics to measure the impact of
it's promotional tactics as the company's staff and most of it's advertisements list the website in
them to undergo digitisation and drive online growth. The examples of such metrics consist of
dedicated applications which measure daily traffic that directs to a website and use SEO (Search
Engine Optimization) to build higher and more authentic google search result ranking which also
helps in proper positioning in the online marketplace (Ecommerce SEO Guide: How Online
Stores Can Drive Organic Traffic in 2020, 2022). The website also asks for a compulsory login
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and the company can analyse the number of new visitors and buyers it is attracting by looking at
the number of new accounts made everyday and the volume of purchases happening online on
it's platforms.
The company can also use Key Performance Indicators (KPI's) to better analyse and
investigate the results of it's money spent on building it's extensive marketing campaign as they
are a measurable value associated with the most vital business goals and objectives that must be
completed by Nespresso which will help the firm in keeping most of it's major marketing
processes under constant regulation for better quality control (Kotler, and et.al., 2019). Some of
the KPI's that the enterprise can establish are listed below.
 Average number of Nespresso Plus subscriptions per month
 Number of Vertuo premium coffee machines sold
 Daily website traffic and new accounts made
The above mentioned KPI's can help track the number of people buying it's memberships,
number of it's high end machine sales and their digital marketing efforts which will be
instrumental in determining effectiveness of sales promotion and advertising campaigns.
Since it has been established that Nespresso is using advanced technology in many
elements of it's marketing mix such as Augmented reality in it's retail locations, the same
technological avenues can fuel the robustness of it's current existing evaluation measures of
marketing performance. The company can install special software and sensors in their newly
made hi-tech stores such as the one in Trinity Leeds which can measure the heat signatures of
customers that enter the premises of Nespresso in order to maintain a record of the number of
visitors that the company is attracting per day. This can be useful to judge the effectiveness of
every change the firm brings in it's marketing campaign, whether positive or negative. The
company can use it's popular social media handles to measure traffic generated and judge the
effectiveness of it's digital marketing by analysing the amount of likes, shares and comments on
different posts (Chaffey & Ellis-Chadwick, 2019).
CONCLUSION
The above concluded report went into detail regarding the process of scope of the entire
marketing campaign and it's relevance and importance for firms operating in industries which are
prone to disruptions and are subject to intense competition such as the coffee industry. The report
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highlighted the important models and theories of marketing with special emphasis on the 7 P's of
marketing out of which 4 were focused on including Product, Promotion, Price and Place.
Analysing all these marketing efforts of coffee retailers was instrumental in gaining knowledge
about the various promotional campaigns being used for promotion, the thought that went behind
design of attractive coffee and machine product lines, the technological integrations happening in
physical retail stores and the pricing strategy of the retail company. The report also included the
current ways in which coffee companies measure their marketing efforts and also listed more
ways in which it can streamline and do so in a better and more efficient way.
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REFERENCES
Books and Journals
Kotler, P and et. al., 2019. Marketing Management 4th European edition. 4th ed. Pearson.
Craig Andrews, J., Shimp, T. A., 2017. Advertising, Promotion, and other aspects of Integrated
Marketing Communications. 10th ed. South- Western: Cengage Learning.
Chaffey, D. & Ellis-Chadwick, F., 2019. Digital Marketing Strategy, Implementation and
Practice. 7th ed. Harlow, Essex: Pearson.
Online Referencing
Ecommerce SEO Guide: How Online Stores Can Drive Organic Traffic in 2020, 2022 [online]
available through <https://www.bigcommerce.com/blog/ecommerce-seo/#executive-summary>
Nespresso, 2022 [online] available through <https://www.nespresso.com/uk/en/>
Nespresso unveils experiential store with AR at Trinity Leeds, 2022 [online] available through
<https://www.chargedretail.co.uk/2022/01/24/nespresso-unveils-experiential-store-with-ar-at-
trinity-leeds/>
WE WANT TO HAVE A POSITIVE IMPACT, WHO WE ARE, 2022. [Online], Available
through:<https://nestle-nespresso.com/about_us/who_we_are/>
HIGHEST QUALITY SUSTAINABLE, C O F F E E , 2 0 2 2 . [online], Available
through:<https://nestle-nespresso.com/our_products/coffee>
C O N T I N U O U S I N N O V A T I O N A N D D I S T I N C T I V E D E S I G ,
M A C H I N E S , 2 0 2 1 . [online], Available
through:<https://nestle-nespresso.com/our_products/product>
Leading Brands And Their Social Activity: Spotlight Focus: Nespresso, 2021. [online],
Available through:<https://www.social-republic.co.uk/blog/leading-brands-and-their-social-
activity-spotlight-focus-nespresso/>
Nespresso uses a premium positioning to connect with two different targets, 2021, [online],
Available through:<<https://strategyonline.ca/2021/06/17/nespresso-uses-a-premium-
positioning-to-connect-with-two-different-targets/>
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