Nespresso "What Else?" - Marketing Plan

1. Eli Hua Jenny Kuei Elaine Lorent Haoran Fan Grace Liu

2. COMPANY BACKGROUND • Overview (Grace) • Nespresso Analysis (Haoran) • Target Market (Jenny) • Marketing Strategy(Eli) • Action Plan(Eli, Elaine) • Financial Analysis(Elaine) • Measurements(Elaine)

3. THE COFFEE INDUSTRY • Consumers aged 60 and plus • Consumers aged 40 to 59 • Consumers aged 25 to 39 • Consumers aged 13 to 24

4. COFFEE PRODUCTS  Roasted Coffee  Single –Cup Coffee  Instant Coffee  Ready-to- Drink Coffee

5. MARKET TREND OF COFFEE • 83% of adults drink coffee in the U.S. • Hispanic Americans have the highest coffee consumption • At-home consumption • Demand for convenience due to fast- paced lifestyle • Increase in environmental awareness • Health benefits of coffee • Premiumization is a key driver • Quality drives profitability

6. SINGLE CUP COFFEE INDUSTRY • 32% of US household own a single-cup brewer • Market growth • The single-cup coffee category plays a significant role in the growing coffee market

7. PRODUCT LIFE CYCLE

8. COMPETITION ANALYSIS

9. COMPETITION ANALYSIS

10. ALTERNATIVES • Tea • Increasing number of the U.S. population drinking tea rather than coffee • Healthier choice • Larger choices in term of tastes and preference

11. NESPRESSO ANALYSIS • Customers Female (60%), Male (40%) Age: 35-49 High income High social class High purchasing power • Product Finest green coffee Selected Capsules and innovative machines

12. NESPRESSO ANALYSIS • Service Direct relationship Nespresso Club • Distribution Official website Boutiques Well-known Department Stores • Market Share 7% in U.S. market Contributes 15% to global sales

13. SWOT Analysis strength • Hign-quality coffee • Variety and innovation • Genuine coffee machines • Energy saving and environmentlly friendly • Strong customer service • Nespresso Boutiques • Perfect B2B solutions • Luxury image weakness • Expensive pricing • High costs • Not to go service • Limited distribution opportunity • Ethical and sustainble business trend • Coffee becomes a more and more popular drink • Single-cup coffee plays an increasingly important role in total coffee market threat • Out of home • Challenges from other drink alternatives • Challenges from other coffee brand competitors • Coffee consumption habit in US market • Coffee beans supply

14. KEY TO SUCCESS • The market for single serve coffee is at growth phase. • U.S. consumers seek after high-quality and sustainable coffee. • The consumption at home increases these years. • Even though the competition in the one cup-coffee industry is intense, Nespresso targets a market that is really narrow and high standard. • Nespresso communicate an image of exclusiveness and luxury lifestyle.

15. CRITICAL ISSUES • Enhance the brand essence and shift the positioning in consumer’s mind. • Promote the quality and features of having espresso and its unique experience. • Increase brand awareness by higher exposure in more aspects. • Acquiring the target markets that have not been reached, and convert them into users. • Enlarge the distribution of Nespresso in other American cities that welcome a concentrated number of the core target group. • Increase the trial of Nespresso coffee within our target group.

16. MARKETING STRATEGY • Marketing Objective: Increase the U.S. market share from 7% to 12% by 2016 by raising brand preference and expanding the market. • Financial Objective: 2012  2013: 9.1% growth 2013  2014: 15% growth = 4.9billion of revenue

17. TARGET - DEMOGRAPHIC • 35-49 years old middle to upper middle class male and female who have attained bachelor’s degree or more. • Annual Household income: $60,000+

18. DEMOGRAPHIC - 35-64 DISTRIBUTION • In 2010, there are 31.6 M of males and 32 M of of females in age 35-49 • Mostly located in East and West coasts, Northeast

19. DEMOGRAPHIC – EDUCATION ATTAINMENT

20. DEMOGRAPHIC – POTENTIAL MARKET

21. PSYCHOGRAPHIC • Busy Busy Busy! • Seldom spend time cooking and go mid-high end restaurants • Active in social events, visit museums, galleries and concerts • Sports fans and love outdoor activities – Skiing, cycling, tennis, golf • Participated in financial investment and charity • Only watch certain programs on TV- financial news, sports • Online shopping after work • Travels a lot for fun and for work, join airline memberships • Shopping preferences • High-end, luxury brand retail/department stores • Crate & Barrel, Barnes & Noble, Bloomingdales, Nordstrom, Ann Taylor • Coffee to them are energy booster . Also it’s a little treat for relaxation at work and to spend leisure time alone or with colleagues/clients

22. MEDIA EXPOSURE • TV • Spending 15-18.8 hours per week. • Financial/Sports programs. • Radio • 8% above average in radio consumption (6.5-6.8 hours/week) • Print • 4% acove average consumption in print media • magazines, newspapers, travel/business/finance publications • Enjoy reading • Internet • 88.8% of Gen X are monthly internet users. 29-34 hours/weak. • 74.5% using social media at least once/month (Facebook 65.6%, LinkedIn 41%, Google+ 29%, Twitter&Pinterest 10%), and 28% don’t use social media • Mobile • 63% owns smartphones and 41% owns tablets • 80% makes consumptions online.

23. START WITH CONSUMER “I am leading an active and busy lifestyle in the city and I love it. To escape, I enjoy sharing warm and relaxing moments with the people I love. I highly value quality in the products I buy and I am willing to pay for it. I fully enjoy treating myself with the special luxuries that make life better and make me feel unique and privileged.”

24. LET’S EXAMINE OURSELVES • Positioning For people belong to higher social classes who distinguish themselves by what they possess, Nespresso delivers a strong commitment and dedication to serve and accompany their customers into their ultimate coffee experience. • Tone & Manner Exclusive, uniqueness, privileged, elegance, inspirational

25. OUR BARRIER We have.. Premium coffee Aspirational image Luxury experience/atmosphere BUT.. People don’t know how good Nespresso is! BECAUSE… They never try it!

26. IDEAL LOCATIONS • New geographic markets chosen based on: • Closeness to our target group caracteristiques • Density of the population • Purchasing power • Final decision: Baltimore, MD; Hartford, CT; Whashington DC; Houston, TX; °Opening repartition within two years to share the burden.

27. ACTION PLAN Goal Increase trial to make people believe we are the best! Our Acts • Nespresso Experiential Tour • Expand boutiques in new places • Reach target audience in their “favorite” places • Coop with other brand/Sponsor events that fit consumer lifestyle

28. NESPRESSO EXPERIENCE TOUR • Raise awareness (visibility / Mobile-capsule stores) & Brand preference (trial) • Communication: promotional sales; advertising; PR; direct marketing • Multiple ways to get access to the trial • Incentive to buy our products later on • Agenda: from beginning of October to the end December

29. NESPRESSO EXPERIENCE TOUR

30. REACH IN THEIR FAVORITE PLACES • Airport • VIP Lounge • On board (First & Business Class) • Hotel & Resorts • Hotel rooms • High end vacation resorts

31. COOP WITH OTHER BRAND/SPONSOR EVENTS • Cultural • Museum lounge • Exhibition cooperation • Sport • ATP Tennis Tours

32. MEDIA TIMELINE – 2014

33. FINANCIAL

34. EFFECTIVENESS MEASUREMENT • Trial measurement • Comparison sample distributed and return on promotion sales • Sales metrics • Number of sales per new boutiques (><existing stores) • Increase in overall sales + growth • Further: instill more pressure on the best sales channel • New customers acquisition • Subscription to the Nespresso Club • Conversion through our promotional sales • Communication • Pre-test: focus group • Post-test: public relation, social media, direct marketing, advertising (Billboard and print)

35. THANK YOU!