nespresso brand extension (tea pods) marketing plan
DESCRIPTION
A speculative marketing plan for Nespresso Brand Extension into Tea Pods. Aptly named Nesquisite T, it is to be introduced in selected markets and using strategies based on consumer analysis.TRANSCRIPT
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.TBy NESPRESSO
Group 2: Amanda, Linda, Claire, Kitty, Aaron, Julien, Marie-Sibylle
Marketing Management: Term ProjectMay 28th, 2014
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AGENDA
1. Background of the company2. Understand the marketplace and customer needs3. Designing a customer-driven marketing startegy4. Construct an integrated marketing program to
deliver superior value5. Build profitable relationships 6. Financial feasibility
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1Background of the company
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1 Background of the company
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Background of the company
Brief history:
• Founded in 2014
• Owned by Nestlé: « Good food, Good life. »
• Nesquisite.T by Nespresso developed a revolutionary system of portioned, encapsulated tea
• Manufacture both machines and the capsules they use
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The Marketing Process
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Marketing plan is mainly composed of 5 steps:
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2Understand the marketplace and customer needs
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2 Understand the marketplace and customer needs
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a) Market description • In the world: increasing trend of tea consumption: retail
value of global tea consumption rose to $40,75 billion in 2012 (50 % more than in 2007)
• UK: one of the biggest tea market in the world (history, culture)
• Increasing demand of tea pods = +17% between 2007 and 2012 in UK
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a) Market description
• New way of drinking tea adopted • Expectations in term of quality and services = not satisfied
Unsatisfied demand/need
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b) The major segments on the market of tea pods
Two segments of tea pods buyers who have similar buying processes in this UK market:
- The 40-50 years old housewives in UK
- The youths starting their career: 25-40 years old (tea is more healthy than coffee, trendy, organic product and fair-trade products, high standing of life and incomes)
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c) Customers needs and wants
• Usually, to drink good tea you mainly have to buy loose tea not convenient to prepare
• Our two segments want to save time
Need of high standing tea but easy, convenient and quick to prepare on the market of hot tea
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d) Competitors• Low level of competition but the company
implanted are very strong
Indirect competitors : Harrods, Teavana, East India Company, Le Palais Des Thes, Kusmi Tea Paris all high price & very good quality, Kusmi Tea for add & distribution
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d) Competitors
Direct competitors (differently positioned in order to avoid competing in the same field):
- Keurig Green Mountain: specialized in the coffee and tea market, very good know-how and quality of their products
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- The newcomer Unilever: use its reputation to penetrate this flourishing market
- The Starbucks’ Verisimo (cheaper): use its stores to catch the most possible market shares
d) Competitors
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e) SWOT analysis
Strengths Weaknesses
- Tea market is huge in the UK- Existing loyal customers- High-end and luxurious image that no other tea pod machine companies can compete with- Famous spokespersons- Premium product quality
- Higher prices- Limited distributions of products
Opportunities Threats
- The demand (UK tea buyers have the highest revenue, so they are more able to buy high-end tea)- Convince new customers (pre-ground tea users)- Huge market, continually growth since 2007- Find new tastes (UK consumers need of quality), diversify the offer (large range)
- Huge and powerful competitor: Keurig- More affordable competitors: Starbucks - Substitute products (soft drinks, coffee…)- Potential entry of new actors (no high entry barriers)- Low switching costs for the customers
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f) Objectives and Issues
• First year objective: success in London
• Second year objective: extend the product to other countries and continents
MKT actions & tea pods adapted to each country
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Issues
• To know the same success than the brand got with Nespresso coffee
• The coffee pod market nowadays a little saturated
Invest a lot in the tea pods market which propose big growth perspectives
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3 Designing a customer-driven marketing strategy
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3 Designing a customer-driven marketing strategy
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Selecting Customers to serve
Market segmentation: Process of dividing a market into distinct groups/segments of buyers with similar behaviour
Demographic: Age: 25-50 years; Income: affluent consumersGeographic: Pilote stores in major cities, first one located in London Psychographic: Social class: High social class, Personality criteria:
elegant, hedonic, innovative, want to be part of a private group Behavioral: Loyalty status: people who promote themselves the brand
(word of mouth, blogs…) = addictive consumer
Market targeting: Process of evaluating each market segment’s attractiveness and selecting one to enter
Micromarketing: the company decides to tailor its offer to meet specifics customers expectations: use of local and niche marketing
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Choosing a Value PropositionPositioning Map: Tea pods market
Price
High
Low
Orientation LuxuryBasic
Nesquisite.T by Nespresso
Keurig Green mountain
Others
Unilever
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Starbucks
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Choosing a Value Proposition
Differentiation: Differentiate the market offering to create superior customer value Competitive advantages owned by Nesquisite.T by Nespresso:
• Image of exclusivity / High brand identity• High-quality & wide range of products • Extensive customer service (home delivery, Nesquisite.TClub)• Premium pricing
Positioning strategy: Position the market offering in the minds of target customers Up-market / exclusivity Catch phrase: “Culture in a cup”
Value Proposition: “More for More” approach: gives prestige to the buyer
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4 Construct an integrated marketing program to deliver superior value
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4 Construct an integrated marketing program to deliver superior value
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Product
• 16 unique flavours• New flavours yearly• Brand and logo will be on all packaging
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Price
• 0.30 Euros per pod• Similarly priced as Nespresso capsules• High price reflects the high quality image that
surrounds Nesquisite.T
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Place
• Exclusive Distribution
• Online Website
• Boutique Stores
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Promotion
• High end parties at flagship store
• Membership card
• Limited edition teapods
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Online Promotion
• Campaigns online, in magazines and on TV with Jamie Dornan and Emma Watson
• Social media campaign: contest:– Best tea mix contest (viral mkt)– Customers upload pictures with #nesquisite.T.love
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4 Construct an integrated marketing program to deliver superior value
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5 Build profitable relationships
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CRM
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• Huge database information – Newsletters (monthly): news, the specific events,
new products or limited editions– E-mailing campaign: attract for Christmas – Catalogues per mail
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CRM
• MEMBERSHIP CARD AND CLUB: = Very select club of original and high quality tea-lovers sense of belonging
– “Frequent drinker card”: capsules = credits– 3 levels of membership: privileges
• Bronze: acquired by buying Nespresso machine
• Silver: limited edition tea flavors
• Gold: VIP tastings + new product launching
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Nesquisite.T
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1Background of the company
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6 Financial feasibility
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Objectives
First year:
• Financially: Achieved 7% market shares, sales: 39 millions €• Break-even: Reach this point before the end of the year
Second year:
• Financially: - Double the level of sales in London - Reach the break-even point in all new
implementation
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More experimented & more aggressive
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Budget: First year
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Nesquisite.T: Products Tea pods Tea machines
Average retail price (ARP) 1 pod: 0,30€ 1 machine: 220€
Global sales 75% 25%
Level of sales to profit 29 250 000 € 9 750 000 €
First-year retail sales goal: 39 millions €
Break-even calculation = FC/(ARP-VC) = …*ARPTea pods Tea machines
Fixed Costs (marketing expenses, payrolls, equipment) 13 000 000 €
Variable Costs (average production costs) 0,18 € 120 €
Break-even point 24 375 000 € 10 833 460 €
Analysis (at the end of the year)
Profit29 250 000 > 24 375 000
Little loss9 750 000 < 10 833 460
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Group 2: Amanda, Linda, Claire, Kitty, Aaron, Julien, Marie-Sibylle
THANK YOU FOR YOUR ATTENTION QUESTIONS?