Essay Nespresso SA
Nespresso SA is one of the most successful brands renowned for its coffee machines manufactured and supplied internationally. However, in spite of the tremendous success of the brand in the late 1980s – early 1990s, the brand has faced a considerable downturn in its development. At this point, the introduction of technological innovations has played the key part in both the rise and downturn of the brand. To put it more precisely, Nespresso became one of the first companies introducing coffee machines for household use. In addition, the company conducted aggressive international market expansion policy to expand its global market share. However, since the mid-1990s, the company has faced the steady decline of its brand because of the lack of innovations and by the early 2010s, the brand apparently needs the revival because its rivals have already started to outpace the company and push it out of the traditional markets, where the position of Nespresso was traditionally strong.
History of the brand
Nespresso SA, a Nestlé Group company was founded in 1986 being inspired by Luiggi Bezzera’s original espresso coffee concept, it developed a revolutionary system of portioned, encapsulated coffee and dedicated machines that interacted to deliver perfect coffee (Nespresso, 2014). The company offered the technology that had four initial coffee varieties including Capriccio, Cosi, Decaffeinato and Bolero (now known as Volluto), and the first two machines offered (the C100 and C1100) were designed to resemble mini espresso machines. The target markets of the company mirrored the concept of the coffee machine created by the company which was first tested and launched in the office coffee sectors of Switzerland, Japan and Italy as the major target markets for Nespresso.
Another important stage in the development of the company was 1989, when The Nespresso system was introduced in the Swiss household market with Turmix as machine partner. The company offered the new product offering the coffee making service to customers, who used the new product. The Nespresso Club was created to offer a range of exclusive and personalised customer services (Nespresso, 2014). At this point, it is important to place emphasis on the fact that the personalised approach to each customer has become a distinctive feature of the Nespresso brand since that time on (Nespresso, 2014). Moreover, it was during the late 1980s the company has grown particularly concerned with the brand image and branding of the company and its products. In terms of the new branding policy, the first Nespresso consumer mailing was introduced with a member-get-member offer (Nespresso, 2014). The growth of the company at this stage was entirely consumer driven that revealed the importance of customers for the company and its branding strategy.
The next stage in the development of Nespresso brand was 1991, when the first Nespresso capsule recycling program was introduced in Switzerland with 34 collection points (Nespresso, 2014). At this stage, the company chose a different coffee machine production strategy. While Nespresso developed its own machines, Eugster became their exclusive producer (Nespresso, 2014). At this stage, the company had started the new marketing policy using the full potential of its coffee machines as a successful marketing product. Nespresso was introduced in the household sectors of France and the United States to mark the first major expansion of the company in international markets. The US as well as French market became the major markets for Nespresso by that time. Furthermore, the distinctive marketing depicting Nespresso as the ultimate coffee experience played a key role in inspiring the brand’s development. In such a way, the brand expansion involved the strategy of entering new markets to make Nespresso the global leader among coffee machines manufacturers.
The next year the company expanded its services introducing chocolate squares which were introduced as an accessory. The next year, Toscana (now Arpeggio) became the sixth Nespresso coffee variety after Roma (Nespresso, 2014). The second line was installed at the Nestlé factory in Orbe to double capsule production capacity and meet demand (Nespresso, 2014). The company attempted to use the diversification of its products and services to attract more customers. However, at this stage the company has started to ignore technological innovations and its brand image as an innovative company offering exclusive products has started to decline, especially during the late 1990s – early 2000s (Newel, 2011). Today, the brand needs revival and the company should consider the introduction of the new product, the new Nespresso Coffee Machine designed as a tap built into any tabletop and controlled by smart phones (Pine & Gilmore, 2009). The introduction of the new product will contribute to the revival of the brand that has been in decline since the mid-1990s because the new product will match the overall progress of the technology and new opportunities the technologies offer to consumers (Masterson & Picton, 2004).
The advertising and/or other agencies involved in developing the brand communications
Recently the company has contracted Deep Focus to promote its brand and conduct the promotional campaign of its new products. In this regard, the Deep Focus is the good choice for the promotion of the new Nespresso Coffee machine because this advertising agency focuses on the use of the full potential of social media and use of the contemporary telecommunication systems and mass media to reach the target customer group of the company (Mohrman, 2008). As the company targets at the younger customer group, the Deep Focus should focus on this group and promote the new Nespresso coffee machine to make them buying the new coffee machine which is the innovative product in the market so far.
The current marketing material
The current marketing material allows the company to create the new product. On the one hand, Nespresso has well-developed technology of the production of the high quality coffee machines which the company may use as the basis for the design and creation of the new coffee machine (Volti, 2005). On the other hand, the development of the contemporary electronics, information technologies and telecommunication systems allows the company to maintain the communication between users’ smartphones and virtually any other device equipped with the up-to-date technologies. In such a way, at the moment, Nespresso just has to combine the available technologies and the existing coffee machines which the company keeps manufacturing en mass. The combination of existing coffee machines of the company along with new technologies that allow maintaining the interaction between the coffee machine and smartphones of customers.
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