Nespresso marketing research - Essay Example

number the paper Nespresso marketing research Introduction The marketing field has experienced a paradigm shift in the past century. A similar trend has been noted in the current century where major changes have occurred. Broadly defined, marketing research basically serves to answer tough managerial questions that assist in the growth of organizations. In addition, it seeks new knowledge on market dynamics. In the process, set objectives are met ultimately assisting the organization to improve on its current situation (Parasuraman 12). Nespresso is a major brand in the market of portion coffee, which is a fast growing segment in the market that cannot be ignored. This product comprises of high quality production coffee which packed in small aluminum cups from high end machines made by them. The Nespresso system offers a rare and refined quality coffee to its consumers that in unrivalled. This outstanding combination of uniqueness and convenience makes it popular especially for the working class. This research paper provides a brief history of Nespresso’s development, the challenges it may encounter in the current market and suggested practices in order to capitalize fully on their market share. Methodology This research design consisted of exploratory research done using a local pilot survey by the researcher. A questionnaire design was used due to its in expensive, convenient, and extremely efficient way of collecting a large amount of sample data and varied information from the target audience. In addition, its simplicity and convince in matters pertaining beverages, restaurant dinning behaviors, and consumer interests were taken to be advantageous in this marketing research. The research design included a wide variety of close ended questions intended for the espresso consumer related to the research objectives, and were guaranteed to provide positive required results. The various Sources of information used in the course of this research include the following: Nespresso Public information such as Annual Reports to Shareholders as well as other Government Reports all of which can be accessed for public review. Company marketing information, advertising, company press releases, and state and local news sources Subscription based information that include sales reports, receipts, expenses, and Business Credit Reports On-Line internet research and third party references Trade Associations, Directories and Publications One on one telephone interviews with both current customers, employees, and prospective clients Various private industry sources that show market trends and shifts Every effort is made to provide accurate and relevant information to the subject of research. The information provided is available on the day the data was gathered from Nespresso operations and market interactions. History and challenges of Nespresso The underlying technology of Nespresso originated from Geneva, and Nestle the mother company acquired commercial rights in 1974. The idea was to combine the rich market dynamics with technology and experience to come up with a unique product for a specific target market. However, this was marred by a number of technical problems that threatened to stall the project such as production and distribution costs which were higher that the turnover. Through highlighting such pitfalls, and identifying potential challenges as the market grows this report hopes to place Nespresso in a better position to grow and gain a competitive advantage. Marketing objective In the process of defining the scope of this marketing research, quite a number of areas were identified as crucial and critical for the growth of the organization. A careful review if the most important areas gave way to the isolation and identification of the following key points as the research objectives. To determine the frequency of using Nespresso products by the target market To determine which service and or products offered by the organization best satisfy market demands To identify the reasons why the target audience utilize Nespresso’s products To determine the target audience preferences and behaviors To determine the potential of Nespresso products in other markets To discover how much the consumer is willing to invest in Nespresso products To identify any potential threats to Nespresso’s bid to penetrate new markets, and how to successfully mitigate them. Results Consumer behavior Majority of respondents (52%) consume Nespresso coffee for leisure purposes. This is normally done in various Nespresso outlets during meetings and acquaintances. In a similar fashion, home consumers who have purchased Nespresso machines enjoy the beverage as a norm. The second most popular reason to consume Nespresso products was as a meal with 33% of the respondents agreeing to this. This was attributed to the high quality of the product and its uniqueness in providing customer satisfaction. Rankings after the top two consumer reasons were as follows: overcome sleep (8%); energy gaining (4%); gain concentration during the long journey and meetings (3%). On close analysis, age came out as a major player in determining consumer behavior on reason and time of consumption of the various products offered by Nespresso. Majority of the respondents also preferred taking their coffee in outlets as opposed to purchasing a coffee maker or getting a take out. The graph below gives a pictorial representation of the same Nespresso products Attributes Majority (64%) of the respondents preferred the sugar and chocolate products with the remaining percentage of respondents either going for the biscuits or opting to purchase the Nespresso dispenser for personal or commercial use. The most frequent response to “How much are u willing to spend on a Nespresso product?” was $2 - $3 on the beverage which was given by 26% of the respondents. 22 per cent were willing to spend more than $3 per cup, and 19 per cent of the respondents thought it was okay to spend more than $ 5 per cup as long as it was quality and the service was excellent. Demographics Out of the total number of respondents that the survey covered, 81 percent were coffee consumers and could be considered as Nespresso’s clientele. However, the remaining 19 percent ether did not like coffee or preferred an alternative. Out of those who were product consumers of Nespresso, 48 percent agreed to use their preferred Nespresso brand at least twice daily. 22 percent of the respondents consumed the same at list once per week, and the remaining 11 per cent were occasional users ranging from bi monthly to at list once in every two months. In terms of age majority (52 percent) of the consumers were between the ages of fourteen to 25 years. 30 percent of the Nespresso product users were above 25 years of age, and the remaining percentage was of children below the age of fourteen. Therefore, it is apparent that the target market of Nespresso’s products lay between the ages of 14 and 25 years where most of consumers are. Recommendations The results and findings in this report do not cover all the objectives conclusively. However, this is not to say they are incorrect or cannot be used to determine a course of action to be taken. It should be noted that subsequent reports will be necessary to provide more insight, and cover more objectives that will aid in better performance of Nespresso coffee. Wider market capture will indeed be a great option for Nespresso. This can be achieved through diversifying their range of products so as to reach extensively the age group below 14 and above 35 years. In addition, effort can be made to reach customers beyond restaurants and home markets there by increasing sales and product popularity. It is evident that with time, the range of products offered by Nespresso has gained much popularity. However, it is of concern how previously managed markets such as restaurants are losing face. Much as new markets offer great potential it is essential to retain old clientele base. For this reason, the range of products and services offered currently should be rebranded and given a new look. In the case of rival products, the uniqueness of Nespresso as an organization and its products shall always give it a competitive advantage. It is and shall always remain a question of how prepared the organization is at satisfying the customers’ requirements, and what efforts are made to see it through the market dynamics. Conclusion Most people hitherto consumed espresso away from the comfort of home, in restaurants, vending machines, and public areas. Home consumption was limited due the perceived high price of espresso machines and purported complexity and unavailability. However, this has changed over the years, and consumers have shifted from traditional coffee drinking habits and settled for a liking of imaginative, fashionable, quality priced specialty beverage. These tendencies are inclined towards the idea that customary coffee popularity is declining, and a major shift in market preferences has occurred. The pleasure-seeking coffee world has been revolutionized and has led to espresso being observed as a stylish drink. Today, the typical espresso coffee drinker can be seen as a city resident with astute tastes in food, and a keen eye on health and fitness. Identification of such shifts and market tendencies by Nespresso puts it a par above the rest and offered a great market advantage. The well educated and affluent age group of 15-35 year old now offers a new and vibrant market to capture for the Nespresso team. From the analyzed sample data, it is clear that the outdoor market especially from homesteads and consumers outside traditional cafeteria is a potential ground. This provided a new market of coffee consumers who when cautiously attended to with quality and precision would boost sales exponentially. Furthermore, the introduction of a new market base would mean new requirements essentially changing the traditional walk in clientele. For this Nespresso would require reinventing itself so as to fit correctly into the market, and tap into this new venture. Appropriate changes have to be effected within and without the organizations operations so as to prepare the management and staff for the entrant market. This includes training of affected employees, and properly investing in the required infrastructure capable of meeting the new market demands. In addition to that, the new range of products based on market demands should entice the customers, and properly reflect the key attributes of the products. Finally, emphases have to be made on the points which match the target market lifestyle, requirements, and expectations. The opportunity presented by the new market is great and offers numerous avenues of growth and development. Appendix Sample Market Research Questionnaires In order for us to serve customers better, we need to find out what you think of us. Please take a few minutes to answer the questions while your coffee is being prepared. Your honest opinions, comments and suggestions are extremely important to us. Thank you, Nespresso coffee 1. In terms of distance which of the following is nearer to this location (indicate both where applicable) Home Work None 2. What is your reason for choosing nespresso and its range of products (indicate where applicable) Proximity to work or home Quality of service delivered with Nespresso products Convenience when compared to other beverages Quality of products sold Good price 3. How did you get to know about Nespresso and ots related products? (Kindly select one option only) Print media advertisement Personal recommendations or referral Outside advertisement From an employee of the organization Other 4. How often do you take coffee or consume Nespresso’s products on average? (Kindly give an estimate) ______ (per month. Week) ______Other Everyday 5. Of our range of services, which would you suggest an improvement on? Customer care and complaints desk Service outlets management Delivery 6. Kindly indicate how you would prefer to be served ______________________________________________________________________ 7. Operating hours of all our outlets are strictly from 8 am to 9:30 pm weekdays and Saturdays we are open from 9:30 am to 10 pm. What changes in our operating hours would you recommend to better our service? 8. Kindly indicate your age bracket below(circle one) Under 14 15-25 26-39 40-59 Over 60 9. Briefly comment on the services you received from any of our outlet and rate it compared to services received elsewhere Excellent Commendable Satisfactory Poor Works cited Parasuraman, A., D. Grewal, and R. Krishnan. Marketing Research. Houghton Mifflin Harcourt Publishing Company, 2007. Print. Read More