from exploring consumer trends to establishing a new...
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Alexander von MaillotMarketing ManagementPrague – 5th May 2010
From exploring consumer trends
to establishing a new category
Objective for today:Success based on the right trends and understanding consumer needs works in any economic situation
• Coffee consumption / Trends
• THE Innovation
• Launch Execution
• Results
• Conclusion
Like a Like SexMachine man...
Coffee consumption without mega changes
Can we create a hype
?
Long-term trends:– More soluble coffee– More white cups– Fast growing coffee
shops / coffee on the go– Modern drinks like Latte
Macchiato and Cappuccino
– More Coffee Connoisseurs
50% Roast & Ground Coffee
– Mostly prepared as Turkish Moccha style
– HH penetration of coffee machines very low (20% vs. >80% in WE)
– Most of cups consumed black
CZ&SK Coffeecharacteristics:
50% Soluble Coffee
>70% of cups are consumed
with milk
From trends to understanding consumer needs
Consumer insight:“I’m not able to prepare Latte Macchiato at home”
Strong demand for white cups and especially Latte Macchiato and Cappuccino in line with growth of coffee shops
Further research:strong interest in coffee system
Launch of mega Innovation in Western Europe but Eastern Europe out of scope …
Closed portioned coffee system:
• Closed = only NDG capsules can be used
• Black and white cups without any mess
• Easy, clean, fast and fool proof preparation
• Coffee shop quality coffee & coffee specialties
• coffee machine family beverages system
“Never give up mentality” enabled us to get green light for launch evaluation
• First East European Market to launch NDG
• First mover situation, no competition on market
• Speed was needed
– From NDG research results to launch within 4 months
– Joint Business Plan with machine partner within 2 days
Business Plan required entrepreneurial spirit
Very strong investment needed
– Decision for “traditional approach”
– Mass media to generate quick awareness
– Strong PR “NDG – the gift of Xmass”
– Very strong focus on tastings
– Launch in Oct –> support Nov + Dec
– Weighted distribution of 90% in 3 weeks
– Distribution of Capsules in all electro shops
• 0 awareness for coffee solutions / capsule systems• 0 experience on retailer side• 0 experience on Nestlé side to deal with Electro shops
40 Mio. CZK
Close cooperation with machine partner and clear channel strategy were crucial
Flagship stores Home & Cook
Launch season 2007 and full year 2008 with excellent results
• Best selling SDA (Small Domestic Appliances) in 2008 and 2009
Outstanding consumer feedback:
– 94% of consumers are fully happy with NDG
– 61% stated „best coffee
I ever had”
Machine sales 40% above
plan
During crisis we reached new record sales2009 double sales vs. original Plan
• NESCAFÉ became market leader
in total coffee
3rd highest HH penetration
in EUROPE
DESPITE double costs in ratio to GDP vs.
Europe (1% vs. 0,5%)
Nestlé become a significant player on the R&G market thus strengthen it's position on the total coffee market
YTD in GLOBUS = 30,1%
No.1YTD in GLOBUS = 30,1%
No.1
YTD in HM R&G = 19,5%
No.2YTD in HM R&G = 19,5%
No.2
YTD on R&G market = 12,8%
No.3YTD on R&G market = 12,8%
No.3
30,1%
29%
18,6%
14,5%
7,8%
23,8% 30,0% (Nr. 1)Share on Total coffee
Nestlé shares 2007
Nestlé sharesYTD
Coffee Market 2009
R&G
Soluble
Slovakia beats US in machine sales
1:85 Machines/capita
1:85 Machines/capita
Machine sell–out 2009:
USA13.300USA
13.300Slovakia18.400
Slovakia18.400
vs.
Invest and harvest …
Key success factors:
• Dedicated resources• Be first • Make it big or don’t do it• Speed to market • Fast distribution• sales motivation• Strong PR (Internal + External)• Employees the best Ambassadors
- 2,940 machines sold to employees- 2,400 at HQ = 3,3 pcs/employee
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