Marketing : Nespresso Entering Kiev Market - Business Plan Example

Nespresso Entering Kiev Market Stundent’s Institute’s This report is basically a marketing plan designed for Nespresso entering Kiev Market. This report encompasses the purpose of the plan, situation analysis etc. In this report it has been discussed what kind of hurdles Nespresso may face while entering Kiev, Ukraine, which is a new and international market. It also includes target market, brand positioning and marketing mix. The report also encompasses market development which shows how Nespresso will survive and struggle. Finally, there is an exit strategy for Nespresso. Thus, this report will give an overall view of the possible hurdles and the outcomes that Nespresso might have to face. Keywords: Nespresso, Kiev, International Market Introduction According to Nespresso (2011), “As the worldwide pioneer, Nespresso redefined the way coffee lovers around the world enjoy their Espresso coffee through a unique combination of premium quality Grand Cru coffees, smart coffee machines and exceptional customer services.” “Kiev is the capital city of Ukraine, its largest economical, political, educational and cultural centre. Kiev offers endless opportunities for tourism” (Kiev, 2011) From the facts above, it is obvious that Nespresso has been doing great in international markets and Kiev seems to be a good investment for Nespresso. Even so, there are bound to be hurdles and opportunities at the same time. Therefore, the analysis done ahead will give us an insight on how Nespresso will do on entering Kiev. Purpose of the Plan The purpose of this business plan is to analyze the possibility of survival in Ukrainian market, to define the entry, marketing mix, and even to formulate an exit strategy, just in case. The situation analysis will help us learn whether it is feasible for Nespresso to enter Kiev or not. Thus, this business plan will help us foresee the outcomes of Nespresso entering Kiev market. The Idea Kiev is a good place for tourists, plus the people of Kiev not only eat local food but also eat continental food. They have Italian and French restaurants as well. They also like to eat fast food, American and Russian dishes. Thus, given that the people at Kiev have taste buds for food other than local Ukrainian dishes (Kiev, 2011). People all around the world crave coffee and if the coffee you are having is Nespresso then it is difficult to resist. Nespresso does not only give high quality coffee, but also provides an unmatched personal service. These days, service has become just as important as the product, and Nespresso proves that it is excellent at both and that is what makes it so much better than other coffees. According to Nespresso (2011) “At Nespresso, creating the perfect coffee is at the heart of what we do. Delighting coffee lovers is why we do it.” Hence that is basically the idea behind entering Kiev as well, to satisfy not only the need of taste buds but also the need of good service seekers. Situation Analysis In this case, the situation analysis will be done with the help of 5C’s. (Net MBA, 2010) Company Nespresso is espresso made by Nestle, it has a healthy rapport in the market not only locally but also in international market, be it west or east. Nespresso not only produces excellent quality coffee but also gives quality service which a huge plus. It also has a huge range of Nespresso machines which are smart, stylish and user friendly. Collaborators Nespresso works with its Ecollaboration partners to improve its sustainability (Nespresso, 2011) Customers When it comes to coffee, there are those who go for supreme quality, then there are those who have coffee on daily basis and will go for coffee of any kind, some don’t like plain coffee and like to create drinks that have coffee with caramel, chocolate and other syrups. Nowadays, kids also tend to go for coffee as a beverage. For kids, however, there is more sugar involved. Thus, coffee is for all market segments, and Nespresso can cater to the needs of all. Competitors For Nespresso, there are a lot of competitors. When entering international market, the risk faced due to competitors is very high. Therefore it is essential to give to the customers what others are not giving or what other might not be able to give. In Nespresso’s case quality and product combine to give customer a delightful experience. Context The people of Kiev seem to be very adaptive as they not only eat local food but international food as well. They have a lot of coffee stores in Kiev, therefore Nespresso can have a great chance of success at Kiev. Mission and Objectives The mission of Nespresso entering Kiev is to provide excellent quality coffee and service to coffee lovers in Kiev. It will also sell its full range of smart and stylish coffee machines with a variety of designs, functionalities and prices, for both home and out-of-home (Nespresso, 2011). The principal edge will be the excellence that Nespresso gives in everything it does for its customers. Nespresso’s objectives for Kiev might be: (Webhome, 2001) 1. To capture 60% market share of Kiev by 2012 2. To reduce carbon footprint per cup by 20% (Nespresso, 2011) 3. To increase its capacity to recycle capsules by 75% (Nespresso, 2011) 4. To capture 40% market share in the segment of espresso machine’s market. The Entry The entry of Nespresso in Kiev seems profitable as Kiev can benefit from Nespresso by getting a great coffee with great service. There are opportunities for Nespresso in Kiev because there are a lot of coffee lovers there which can be proven by the number of different coffee shops in Kiev. The entry is further explained below; Target Market and Brand Positioning The target market for Nespresso is vast. It consists of all those who are neither too poor nor too rich. It consists of lower upper class, upper middle class, middle class and perhaps lower middle in some cases. Nespresso is not only different and unique, it also has class. It gives excellent quality coffee and service as well. Moreover, since it is Nestle’s product it has the positioning of being great quality product. Nestle is recognised throughout the world. Nespresso’s positioning can therefore be, “Nespresso, the ultimate coffee experience” (Future brand, 2009) Marketing Mix The Marketing Mix for Nesprersso is as follows: Product Nespresso has nespresso machines, capsules that contain aromas of coffee with different flavours and different accessories for Nespresso machines like trays etc. Those who buy Nespresso machines and capsules get to become members of Nespresso club which helps them in learning more about nespresso. Price The price of Nespresso is high because its design and quality both are tremendous. Therefore, customers are willing to pay a higher price as well. Promotion The promotional campaigns of Nespresso are always appreciated and liked by the customers. Nespresso normally promotes its coffee makers more than its capsules because customers who buy coffee makers will eventually buy capsules too. Moreover, Nespresso promotes sustainability which is appreciated alot nowadays. Customers want to use products that are environmental friendly. This may include their “recycle the capsules” promotion as well. Place Nespresso machines and capsules are sold over the internet as well as in nespresso shops. These nespresso machines and capsules are also available in different electrical appliances’ stores. This makes it easy for the customers to purchase the machines and the capsules. Financial Scanning and Controls Entering new markets is always a risk and the financial risk on entering new markets is the greatest. The CSFs for this plan are To promote nespresso machines To promote use of capsules To maintain relationships with the suppliers To carry out promotional campaigns that will attract people of Kiev To train the employees on customer satisfaction and on giving quality service To sample the product at first to attract new customers The KPIs for Nespresso are as follows: To reduce carbon foot print To reduce energy consumption To recycle capsules To keep employees safe Improve working conditions for employees To assess whether employees are satisfied or not To assess whether customers are satisfied or not Market Development In first year what Nespresso needs to do is that, it should focus on existing customers who are normally the tourists in case of Kiev, in the same year Nespresso should also target coffee lovers who are competitors’ customers. In the first year Nespresso needs to develop strategies that will help them get to the intended market. These include advertisements etc. In the second year, Nespresso should target elders or young adults who are not fans of coffee. This will require introducing new flavours and a range of new drinks etc that will attract the customers. This will also require heavy promotions and sampling as well. In the third year, Nespresso should target kids and should give them a different range of coffee with cream base etc. Exit Strategy The exit strategy for Nespresso in Kiev’s case could be liquefying the asset. All the top level managers and operational managers are involved in the exit when it is done. So it should be designed properly. (Robert, 1996) Final Thoughts The final thoughts for this business plan are that it could be a success because coffee lovers are there all over the world now. If played properly, Nespresso will be able to get a good deal of market share not only because of what it actually does in Kiev but also because of the brand image that Nespresso has around the globe. There are a lot of risks involved but then every organisation and entrepreneur has to take risks in order to be successful. References Nespresso (2011). Media Centre. Retrieved from http://www.nespresso.com/mediacenter/index.php?page=about-us Kiev (2011). Information. Retrieved from http://www.kiev.info/ Kiev (2011). Food. Retrieved from http://www.kiev.info/food/index.htm NetMBA (2010). Situation Analysis. Retrieved from http://www.netmba.com/marketing/situation/ Webhome (2001). Preparing you Business Plan. Retrieved from http://webhome.idirect.com/~kehamilt/bizplan1.html Future Brand (2009). Nespresso. Retrieved from http://www.futurebrand.com/work/featured-cases/nespresso/ Burgelman, Robert (1996). A Process Model of Strategic Business Exit: Implications for an Evolutionary Perspective on Strategy. Strategic Management Journal. 193-214 Read More