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Nespresso is one of the benchmark brands in the coffee market, particularly in the relatively small coffee sector. new market for coffee capsules for home machines. A revolution in the coffee beverage industry that changed the way coffee is consumed. Nespresso is undoubtedly a case in point. example of innovation and creativity. The company took a risk at the outset, offering customers a way of drinking coffee at home that involved maintaining an exclusive relationship with the brand (buying one of its coffee machines implied exclusive consumption of its capsules). The proposal, However, has proved to be a success. We analyse its Canvas model to find out how it works and the keys to its business.
Origin of Nespresso
Nespresso is one of the world's leading brands. Swiss company Nestlé. The idea came from its founder Eric Favre who was visiting an Italian espresso café in 1975. He observed how the baristas took care of every detail when creating the coffee that made this place so popular. Favre took the decision to carry out a business venture which would was to create small domestic machines that would be able to create a high quality espresso.. This project took shape in 1986 when Nestlé created the Nespresso brand and launched its first machine. In the beginning, it marketed four types of capsules and the sales of its machines were focused on the luxury market. Today the brand has its own exclusive Club. for lovers of good coffee and a strong, well-positioned brand image.
Nespresso's business model
The Nespresso's business model falls within the B2C model (Business to Consumer) and B2B model (Business to Business) as it has two distinct lines of business:
- On the one hand a line focused on the domestic consumer with small machines and a wide range of capsules to choose from (B2C)
- On the other hand, a line focused on big businessoffices and even hotels (B2B)
In both cases, it is a business model oriented towards a specific audiences, who value the product that Nespresso offers as well as the unique experience of being part of an exclusive Club.
Nespresso Canvas Canvas
- VALUE PROPOSITION: Nespresso's value proposition is clear: the best coffee you can drink, at home".
- CLIENTS: Nespresso mainly targets two profiles: on the one hand a medium-high purchasing profile and on the other hand a business/professional user.
- CHANNEL: to deliver this proposal, it uses various channels: telephone, physical shops, post or internet.
- RELATIONSHIP: the relationship, one of the most key aspects, is managed by through the Nespresso club, which not only regularly rewards and rewards its customers, but is able to proactively alert a customer when it is time to have his or her machine cleaned.
- INCOME: the main revenue streams are two; the main one comes from the sale of capsules (bait&hook model), while a lower revenue stream comes from coffee machine manufacturers licensing their technology).
- RESOURCES: To deliver this business model, the main resources used by Nespresso are logistics, capsule production and advertising.
- ACTIVITIES: The activities that consume these resources are manufacturing (capsule production), R&D and the management of the Nespresso club.
- ALLIANCES: the most relevant alliance the company has is with various coffee machine manufacturers (Krupps...etc).
- COSTS: the The cost structure supporting the business model has 3 key elements; cost of marketing and advertising, cost of production and cost of logistics.
VALUE PROPOSAL
The Nespresso value proposition is to offer a new experience in enjoying the best coffee at home. A perfect, exclusive coffee, with an aroma and taste of high value. Nespresso offers its own personal value through two flagship products: machines and coffee capsules, both of which are of excellent quality. The combination of the two elements that are part of the Nespresso business make the customer the protagonist of an authentic experience of luxury and exclusivity.
A strong resemblance in structure is on Gillette's business model qThe bait and hook (+)
CUSTOMER SEGMENTS
- The main target customers for Nespresso's business are those who are not satisfied with just any coffee, but want to they seek the utmost excellence regardless of the high cost involved.. They are customers who want to feel part of an exclusive place, something that Nespresso achieves through its Club, where they receive personalised treatment in accordance with their requirements.
- On the other hand, the second group of customers refers to businesses that cater to upper-middle class travellers and guests, such as hotels, cafés, caterers or restaurants. They use the Nespresso brand and Nespresso products for add value to your business and offer an exclusive atmosphere to your customers.
CHANNELS
NESPRESSO'S MAIN SALES CHANNELS ARE:
- WebsiteFrom the Nespresso website, the customer can manage all kinds of activities related to the Nespresso service, from buying its innovative machines and capsules to finding its exclusive Boutiques or contacting Customer Service.
- BoutiquesNespresso's exclusive shops offer a sensory experience in which the aesthetics of the premises transport each visitor to the origins of the brand and its care and excellence in coffee.
- Hypermarkets and large appliance shopsNespresso's coffee machines and capsules are another of the spaces where the Nespresso brand markets its coffee machines and capsules in a way that is more accessible to any customer.
ACTIVITIES
THE MAIN ACTIVITIES CARRIED OUT BY NESPRESSO ARE:
- Marketing and advertising campaignsare key to maintaining and even improving the brand image, attracting new customers and remaining positioned in the market in the face of competition.
- Research and development of new productsThe company's coffee processing and processing systems: increasingly compact and advanced machines, as well as improvements in the conservation and cultivation of coffee to always offer maximum excellence in the preparation and final taste of the coffee.
- Management and opening of new boutiques in strategic spaces
- Maintenance and development of the web platform.
- Quality control of the harvested coffee by selecting the best crops.
- Events and collaborations with celebrities for the development of advertising campaigns to enhance brand image.
CUSTOMER RELATIONS
HOW DOES NESPRESSO CONDUCT ITS RELATIONSHIP WITH ITS CUSTOMERS?
- Nespresso ClubThe club: is the exclusive space for customers to feel that they are part of a space in which they will obtain numerous privileges. This club allows access to promotions, events and other exclusive activities of the company.
- Customer service centres (web platform)Nespresso: customers can resolve all their doubts through the Nespresso website where they will find different forms of contact such as an online chat or a section with frequently asked questions.
You may be interested to see el canvas Nestle (see TIP) in depth and the connection to Nespresso.
SOURCES OF INCOME
NESPRESSO'S TWO SOURCES OF REVENUE ARE AS FOLLOWS:
- Sale of exclusive coffee machines.
- Sale of coffee capsules.
To enjoy the highest quality coffee, customers and owners of some of their machines are obliged to buy only the brand's capsules.
RESOURCES
WHAT RESOURCES DOES NESPRESSO USE TO MAINTAIN ITS PRIVILEGED MARKET POSITION?
- Coffee machinesThe coffee machines offer advanced designs and the latest technologies to achieve the best coffee of the highest quality.
- Coffee capsulesNespresso differentiates itself from its competitors by offering increasingly innovative formulas that increase the variety of flavours to suit the most demanding customers.
- AdvertisingThe company's successful advertising campaigns are one of its most valuable resources for maintaining a good position in the market.
PARTNERS
THE MAIN PARTNERS INVOLVED IN NESPRESSO'S BUSINESS ARE THE FOLLOWING:
- Owners of coffee plantations and crops.
- Coffee machine manufacturersDeLonghi, Koening, Krups, Siemens...
COST STRUCTURE
THE MOST IMPORTANT COSTS THAT NESPRESSO CARRIES OUT ARE THE FOLLOWING:
- Investment in major marketing and advertising campaigns with the sponsorship of major television stars
- Logistics costs necessary for the distribution of coffee machines and capsules to points of sale or private households
- Salaries for Customer Service staff in the Boutiques
- Platform development and maintenance
- Coffee production from the plantations that the company manages and actively participates in the recovery of coffee through the Reviving Origins" programme
NESPRESSO CURIOSITIES
- If not properly recycled, a Nespresso capsule can take between 150 and 500 years to degrade.
- Each Nespresso coffee capsule contains around 55 mg-65 mg of caffeine. In addition, each capsule contains 16 calories, a 43 % fat content and a 38 % carbohydrate content and a 10 % protein content.
- All capsules are allergen-free and contain only pure 100% coffee, making them suitable for everyone.
