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Nespresso's Luxury Market Strategy Analysis

Nespresso has strengths in technology, quality, customer service and recognition. However, it has weaknesses in brand awareness, market penetration, marketing returns and price compared to alternatives. Opportunities exist to expand into luxury markets like yachts and increase its international customer base beyond 23%. Threats include reachability and competition from other coffee brands. The document recommends penetrating luxury segments and introducing Nespresso bars in major North American cities to target high net worth individuals and increase sales.

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Rajesh NNV
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30 views2 pages

Nespresso's Luxury Market Strategy Analysis

Nespresso has strengths in technology, quality, customer service and recognition. However, it has weaknesses in brand awareness, market penetration, marketing returns and price compared to alternatives. Opportunities exist to expand into luxury markets like yachts and increase its international customer base beyond 23%. Threats include reachability and competition from other coffee brands. The document recommends penetrating luxury segments and introducing Nespresso bars in major North American cities to target high net worth individuals and increase sales.

Uploaded by

Rajesh NNV
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

PRICE & OPPORTUNITIES:

Luxury Market Strategy:

Strengths:

1. Focus on technology and innovation.


2. High quality coffee provider.
3. Nespresso Club.
4. Customer Service
5. Recognition from International institute of coffee.
6. Willingness to take the risk. - Management support
7. Well trained sales representatives for the coffee machines.
!

Weakness:

1. Image of Nestle on Nespresso.


2. Average awareness rate was less than 5% in the international market
3. Penetrated less than 1% of the house hold.
4. Low return on investment in the marketing initiatives.
5. Nespresso system was more expensive than alternate coffee.

Opportunities:

1. Just like they entered the airline industry, Nespresso can consider diverse luxury
markets (e.g.: Luxury Yachts, etc)
2. Penetrate the International market to increase customer base as the market share is
only 23%.

Threats:

1. Reachability of the product.


2. Alternate substitute of Nespresso - competitive Italian and many other brands in the
market.

Recommendations:

1. Nespresso should spread across luxury segments such as Yachts, Cruise Liners,
private charter airlines
2. To introduce Nespresso concept in North American markets by establishing hip, stylish
coffee bars in top cities of North America. For e.g.., New York City, Miami, Los Angeles,
etc
Justifications for point 1 in Opportunities:

1. To target international high net worth individuals.

2. To increase sales and customer base.

Justifications for point 2 in Opportunities:

3. The growth in popularity of European lifestyle in cuisine and fashion in the United
States.
4. Considering the growth and popularity of other coffee shops such as Starbucks, the
same concept can be applied to the high end Nespresso.

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