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Nespresso, What Else?

March 8, 2009

nespresso
Having a Nespresso machine is one thing, but getting some capsules another! After researching online I was lead to believe that there are several retailers where you can by machines and capsules – but no, you can buy only machines. Unless you live in London and buy at Harrods.

Nestlé Nespresso SA, a subdivision of Nestlé Group, is an exclusive and premium coffee brand that provides copyright protected single-serving “capsules” containing ground coffee. nespresso_capsules1They also approach several appliances manufacturers such as Siemens, De’Longhi, Miele, Krups and Magimix to build top-quality machines and stylish accessories promoting their brand and coffee, which exclusively run with Nespresso branded capsules. They also apporach brands like Alessi to design exclusive branded espresso tableware for them.

nespresso-machines

The coffee industry is a highly competitive market with rivals all over the globe and after oil; it has become the second most targeted product worldwide. Given the stiff competition and the current economic downturn, many suppliers struggle to sustain their businesses. Nevertheless, organisations that are providing exclusive and high quality coffee (AA ranking) appear to gain a secure position.

In 2003 Nespresso introduced the NESPRESSO AAA SUSTAINABLE QUALITYTM with an additional “A”, which stands for their assurance and commitment to consistent excellence “from the coffee tree to the coffee cup” and their highly respectful fair trade conditions in coffee production countries.

Nespresso is located in Paudex, Switzerland and employs approximately 2,500 staff worldwide. Its machines are sold globally through retail channels, while the capsules are sold exclusively through their webpage with the exception of 175 premium coffee boutiques. These boutiques are located in the following markets (Source: Nestlé Nespresso SA Corporate Communications):

  • Argentina: Buenos Aires
  • Australia: Sydney
  • Austria: Vienna (2), Linz, Salzburg, Graz
  • Belgium: Antwerp, Brussels
  • Brazil: Sao Paulo
  • Czech Republic: Prague
  • Denmark: Copenhagen
  • France: Bordeaux, Lyon (2), Lille, Marseille, Nantes, Nice, Paris (4), Strasbourg and Toulouse
  • Germany: Düsseldorf, Hamburg, Munich, Frankfurt
  • Hungary: Budapest
  • Israel: Tel Aviv
  • Italy: Milan (2), Rome, Turin
  • Luxembourg: Luxembourg
  • Netherlands: Amsterdam (2), Rotterdam
  • Portugal: Lisbon
  • Russia: Moscow
  • Spain: Barcelona (4), Madrid (2), Valencia
  • Sweden: Stockholm
  • Switzerland: Basle, Bern, Geneva, Lucerne, Lugano, Paudex (Lausanne), St. Gall, Zurich, Fribourg, Bienne, St. Moritz
  • UK: London (2)
  • USA: New York

Nespresso created a TV campaign with George Clooney in order to promote their premium brand. The clip also describes the rich taste of the blends and also shows what the luxurious interior of the exclusive Nespresso coffee boutiques is supposed to look like.

Serving customers mainly through their web page is a good strategic plan in order to provide their customers with the ultimate coffee experience. Having all traffic online allows Nespresso to have direct customer contact through emails or discussion boards, and also provides them with unique customer data access through membership (it is only possible to order capsules online if you join the Nespresso Club – which also forms a special connection with customers and opportunity to turn them into brand advocates) Such an amount of information offers excellent opportunities for database marketing and tailored sales strategies. By having the main service exchange online, Nespresso retain control of supply channels and hence, can assure high quality standards that build a premium corporate brand identity. In my opinion, certainly an interesting, very customer focused and successful business model.

Now then… I will have to be patient and allow three days until I receive the premium capsules in order to use my machine!

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16 comments

  1. It’s a very smart move to have the customers buy the caspules online! as you say, direct costumer contact is guaranteed. However, it just sucks that you have to become first a member of the nespresso club to order some of those capsules! this almost inevitable condition doesn’t leave you with another choice. this idea just really bothers me..
    but hey, nespresso’s business model is very successful! and they definitely emphasize the exclusiveness of the brand.. and if it doesn’t bother you as much as it does me, ordering online brings a lot of advantages, like saving time.


  2. I have also a Nespresso machine and enjoy the coffee everyday. Luckily I live in Zurich which allows me to buy all I need in store. I became a member of the Nespresso Club right after buying the machine, but have never considered ordering on-line. The aspect, that a club membership is a simple marketing strategy never came to my mind, how naive. Nevertheless, I haven’t suffered any direct mail attacks or junk mails from Nespresso yet, so I guess they will only address members with useful news.
    Your comment gave me information I haven’t had before, I assumed that every major city in countries that sell Nespresso also offer capsules.
    @Lilia: If you live in one of the listed locations, you can buy your capsules in selected stores.
    @Joy: It’s a shame you had to wait for your coffee. But if I counted correctly by now you should be happy and drinking espresso


  3. it’s a very good idea to choose clooney for this job: a stylish man for a stylish product.
    i didn’t know that you only can buy the nespresso capsules through their webpage – but it shows what target audience nespresso has…
    and if you don’t have internet, you surly have georges number. maybe he’s gonna bring some capsules along as he did with the martini 🙂


  4. @LiliaLaura: I felt similar aversion as you with respect to becoming a member. Since I bought the machine in Switzerland and assumed you have such boutiques all over England, as you have them in Switzerland. But no, only in London. I found out that you can get some over ebay, but finally I ended up becoming a member – it was the easiest way (they build great barriers). But…you know what? Right now, I don’t mind anymore and are even satisfied 🙂

    @Annemarie: Yes in the meantime I have received the capsules and are enjoying espresso already…mmmh!

    @Parasite: You can also order the capsules via a call centre, which also provides Nespresso with direct customer data. But I think your option of having George bringing the capsules along sounds much better…including the Martini of course! 🙂


  5. I also have a Nespresso machine and order my capsules strictly online and don’t mind at all to be member of the club, because it’s very convenient for me to get everything I need delivered at home. I think they are very strong in customer focus and service. The deliveries are priced reasonably and very fast (mainly only 2 days), all is wrapped in good qualitative packaging, so there is no damage to the products. Overall, Nespresso do a good job in representing their brand as a premium one (packaging, service, delivery, information). And even if some people complain about the waste – I am from Switzerland, we recycle everything anyway. 🙂 Go on then world – take that as an ideal example for eco-friendly behaviour!


  6. I love coffee and i like Nespresso. The thing i dont like about what they do is the fact that you have to buy their coffee for their machine. Once you are in, your trapped. Obviously, from their point of view this is a good thing. they ca control quality and by selling direct or only at special retailers they max their profits.

    Also it cant be good for the environment with all these little packages. Even if they are recycled, you are recycling something, the process of which has an impact, but you are recycling something that does not need to be made in the first place. If you get a coffee machine that can take regular ground coffee you dont have to recycle as much as there is not soo much to recycle in the first place.

    Nespresso is also made by a mega company, support the small guy!


  7. @dave: good point there! this pushy-like “insisting” on an absolute monopoly just really bothers me. that’s something i have been complaining about SONY too: if you have a sony camcorder and plan to produce a video/dvd you’re totally trapped, because sony tends to work only with sony combatible technology. that’s why i don’t buy and use sony anymore..

    i think there are two ways of how to judge about the nespresso business model: either from the side of the product itself or from the side of its marketing strategy. it’s up to you folks to choose which of those two sides carries more weight! if nespresso totally satisfies your coffee needs i am sure you don’t care anymore about the ordering conditions… i think that’s the essence of a successful marketing strategy: a strategy that lets the consumer forget about it!

    @joy: of course you’re enjoying your coffee now! it’s a great marketing strategy 😉 so you better be satisfied.


  8. Nespresso is the iPod of the coffee industry, i think: stylish, exclusiv and a garant for quality. In the different campaigns all these factors are perfectly represented – George Clooney is elegance, isn’t he?! The odyssee of buying the capsules is exclusivity. Damn it. At least, the heaviest argument, how it always should be, is the product: the taste of nespresso, which is really hard to beat.


  9. A great and beautiful product, they just have one store here at Shinkong, but still not a good location, i reckon they move downstairs where everyone can enjoy them. I mean they can run rings around starbucks.

    For capsule, we get them directly from the distributor, I work for Fairmont Beijing and we have them in every room, so we kinda tag along.

    But the thing that impressed me the most is how passionate their people are in selling the products, I was there just to check the outlet out as an F&B fans, but ended up with a machine on my hand and 25 box of different coffee flavors. Before I know it I was sharing the experience with the whole office. It’s really the PASSION of the product, combined with good training (they must have employed a brilliant HR to train them so well) that made the product superb.

    George Clooney is just the topping, the cherry sort to say.

    I have to say I expected a bit more from their website, it doesn’t engaged me that much? It’s ok but could be more “flavory” shall we say.

    But nevertheless, still sipping through my nespresso…what else?


  10. @Adhi: Thank you for sharing your personal experience with the brand I found it very interesting. Personally, I have never met a Nespresso Sales Person, but after what you’ve said I am very interested. When I am next time in London or Zurich, I’ll try to get myself in one of their boutiques…however, I am already so excited by the Brand and its products, I may be a bit biased 🙂

    I agree with you about their webpage, there is definitely room for improvement.

    @David: Interesting viewpoint to say: “Nespresso is the iPod of the coffee industry”.


  11. the moment you get in one of those nespresso boutiques is just magic! everybody is smiling at you, the athmosphere is great, the employees are very polite (almost to polite…) and you can get everything there! you even can the capsules leave there! in switzerland its quite easy to get the capsules and everything. so for me its great! and i just love it! i mean, the coffee is just great! 😀 (i go and have one now…)


  12. I drink nespresso coffee because I like the taste of it and it’s the touch the button effect!


  13. one more nice topic in your blog and nice comments too keep it up, by the way Graz is a very lovely city I enjoyed it so much


  14. The Nespresso coffee products sucks. The machines break after 12 months which is why they only give a one warranty so they charge their naive customers $135 to repair the machine. The coffees are enclosed in aluminum and often there are aluminum pieces found when brewing. I bought a Nespresso machine only to have the machine blow up in flames. The coffee tastes like urine. I was so upset I went out and my friend introduced me to Illy coffee .


  15. That is very important indeed. It is the people who do not take advantage of that who are the ones who normally do not succeed. If you stick with it and learn the ways, this industry can earn you a lot of money!! Good article, nice work .

    ~Sara~
    (G.O.R)


  16. Heya i am for the first time here. I found this board and I to find It truly useful & it helped me out a lot. I am hoping to provide something back and aid others such as you aided me.



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