Nestle Nespresso: Marketing Strategies, UK Positioning & Evaluation

This report provides an overview of Nestlé Nespresso's marketing principles and practices, focusing on its positioning in the UK market over the past three years. It examines the company's positioning statement, emphasizing its commitment to providing a unique coffee experience with luxurious and high-quality products. The report delves into the four Ps of the marketing mix—product, promotion, price, and place—detailing how Nespresso reinforces its positioning through product quality, innovative machines, promotional campaigns on social media, and pricing strategies like premium pricing for quality and subscription services. It also touches upon Nespresso's efforts in sustainability, such as recycling programs and partnerships. Finally, the report considers how Nespresso evaluates the effectiveness of its marketing efforts and suggests further improvements.

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
3
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 ) .
4
Illustration 2: All_Nespresso_Coffees, 2020
(Source: All_Nespresso_Coffees, 2020)

5

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)