Introduction

Nespresso, established in 1986 as a subsidiary of the Swiss group Nestlé, has grown from a
supplier to the coffee machine market into a global success story within the high-end
consumer segment. Initially, it was Nespresso's strategic repositioning to the premium market
that propelled it to worldwide acclaim. Today, Nespresso boasts a turnover approaching $3
billion, with more than 300 boutiques in 60 countries as of 2014. The brand's success hinges
on its unique market positioning, emphasizing elegantly designed coffee machines, superior
quality coffee, exceptional service, and innovative communication. Nespresso's strategy of
exclusive distribution channels and a prestigious brand club has cultivated a loyal customer
base, reinforcing its luxury image. However, in the face of escalating competition,
particularly from Jacobs Douwe Egberts, Nespresso must continue to bolster its premium
positioning to maintain its market leadership.

Q1 : Why has Nespresso’s repositioning on the consumer market led to the success of
the brand?

Positioning refers to the strategic process of establishing a brand or product in the minds of
consumers relative to competing offerings, creating a unique image and identity. It involves
identifying the target market and crafting a marketing mix that communicates a clear,
distinctive value proposition that appeals to the target audience. Effective positioning helps a
brand to differentiate itself from competitors, resonate with consumers' needs and
preferences, and foster brand loyalty.

Repositioning, on the other hand, involves altering the existing brand or product image to
better align with market changes, consumer preferences, or competitive pressures. This can
involve changing the target market, modifying the value proposition, adjusting the marketing
mix, or redefining the brand's identity. Repositioning can help a company revitalize its brand,
tap into new market segments, or respond to competitive threats.

In the case of Nespresso, repositioning to the high-end consumer market involved several
strategic marketing actions. Firstly, it shifted its target market focus from general coffee
machine consumers to affluent, quality-conscious individuals who value exclusivity and
premium experiences. This shift was supported by an integrated marketing strategy that
highlighted Nespresso's unique selling points: elegantly designed machines, high-quality
coffee, and exceptional customer service.

By adopting a premium pricing strategy, Nespresso reinforced the perception of high value
and exclusivity, which appealed to its target audience. The creation of exclusive distribution
channels, such as boutique stores and an exclusive membership club, further enhanced the
brand's prestige and differentiation. These elements of repositioning not only helped
Nespresso to stand out in a crowded market but also to build strong brand equity and
customer loyalty.

Repositioning can also address market dynamics and competitive pressures. For Nespresso,
repositioning allowed it to maintain a competitive edge by emphasizing its luxury positioning
amidst growing competition from other coffee brands and compatible capsules. By
continuously reinforcing its high-end market positioning, Nespresso ensured it remained
relevant and desirable to its target consumers, thereby sustaining its market success and
profitability.

Q2 Will the unique positioning of Nespresso enable it to resist new competition from
Jacobs Douwe Egberts?

Jacobs Douwe Egberts (JDE) stands as a formidable competitor in the global coffee market,
formed through the merger of Douwe Egberts and Mondelez. JDE's strategic positioning
revolves around catering to a wide spectrum of coffee consumers, from mass-market instant
coffee enthusiasts to those seeking premium whole bean options. Their approach emphasizes
accessibility and convenience, leveraging extensive distribution networks that place their
products prominently in supermarkets, retail stores, and online platforms. This broad market
reach ensures JDE's offerings are readily available to a diverse consumer base, underscoring
their strategy to capture market share across different segments.
In contrast, Nespresso pursues a niche high-end market positioning, meticulously targeting
affluent and discerning consumers who prioritize premium coffee experiences. Nespresso
distinguishes itself through a blend of luxury branding, exclusive distribution channels, and
an unwavering focus on exceptional product quality and design. The brand's strategy revolves
around curated coffee selections, elegantly designed machines, and a prestigious membership
club, all aimed at cultivating an aura of exclusivity and sophistication. Nespresso's marketing
efforts are marked by aspirational messaging and endorsements from prominent figures such
as George Clooney and Penelope Cruz , reinforcing its image as a pinnacle of coffee
excellence.

The divergent approaches of Nespresso and JDE highlight distinct market strategies:
Nespresso's commitment to luxury and premium exclusivity versus JDE's broader appeal and
accessibility across various coffee product categories. While JDE's widespread distribution
network and diverse product portfolio pose significant competition, Nespresso's unique
positioning as a luxury coffee brand ensures a loyal customer base that values prestige and
quality. To sustain its competitive edge, Nespresso must continue to innovate, enhance and
expand its high-end offerings while leveraging its strong brand equity and exclusive customer
experiences to maintain leadership in the premium coffee segment. More reachable regular
retail store, own website to purchase easier set up own coffee cafe

Q3 Show how brand persona can be an effective way for positioning.

In marketing strategy, creating a brand persona is a powerful tool for positioning a product or
service effectively within the market. A brand persona embodies the characteristics, values,
and identity that a brand wishes to convey to its target audience. It is essentially a fictional
representation of the brand's ideal customer or audience, shaped by demographics, behaviors,
interests, and aspirations. By developing a clear and compelling brand persona, marketers can
humanize the brand, making it relatable and memorable to consumers.

The persona works by guiding all aspects of brand communication and strategy. It helps in
crafting consistent messaging that resonates with the target audience, influencing everything
from advertising content and tone to product design and customer service interactions. For
instance, a luxury brand might create a persona that embodies sophistication, exclusivity, and
impeccable taste, aligning all marketing efforts to evoke these qualities.

Effective positioning through a brand persona involves meticulous planning and alignment
with market research insights. Marketers delve into understanding consumer preferences,
pain points, and aspirations to develop a persona that not only attracts but also engages and
retains customers. This process ensures that the brand's messaging and offerings are
compelling and relevant, ultimately influencing consumer perceptions and purchase
decisions.

In today's digital age, the reach and impact of a brand persona are amplified through digital
and social media platforms. Digital marketing allows brands to target specific segments of
their audience with tailored messages and experiences, leveraging data analytics to refine and
optimize campaigns in real-time. Social media, in particular, facilitates direct engagement
with consumers, enabling brands to humanize their persona through interactive content,
customer feedback, and influencer partnerships.

Moreover, digital reach media strategies such as search engine optimization (SEO), pay-per-
click (PPC) advertising, and content marketing enhance brand visibility and credibility
online. By aligning the brand persona with digital marketing tactics, marketers can effectively
position the brand in the minds of consumers, driving awareness, engagement, and ultimately,
loyalty.

In conclusion, developing a compelling brand persona is instrumental in positioning a brand

effectively within the competitive landscape. By leveraging digital and reach media
strategies, marketers can amplify the persona's impact, engaging with target audiences in
meaningful ways that foster long-term relationships and differentiate the brand in the
marketplace.