This week The Wall Street Journal interviewed Jean-Marc Duvoisin, the recently appointed CEO of Nestlé Nespresso SA. Duvoisin is a Nestlé lifer who in March was put in charge of Nespresso, the company’s branch of single-serve capsule coffee.
The global market for single-serve coffee now accounts for $12 billion in sales, and Nespresso represents 5% of total sales for Nestlé, according to the WSJ article. Duvoisin’s plans for global marketing include targeting North America, Latin America, and the Far East as growth areas for the Swiss based company.
The current obstacles for Nespresso by region are; the North American market for single-serve coffee is largely controlled by entrenched power Keurig, Europe has been introduced to Nespresso but the penetration rates are lower than desired and the populations of China and Japan are traditionally tea drinkers.
Nespresso’s problems by region illustrates how global marketing solutions aren’t one size fits all, but work best when they are specifically tailored solutions that take into account culture and current market state. In the article Duvoisin also acknowledges that he will implement some of his solutions immediately while others will take more patience.
Plans That Are Still Brewing
Duvoisin expressed that Nespresso will have the patience to see through market development in China. He is quoted saying “we should develop in China and it will take a long time, we are not in a hurry. That’s because people drink tea but they’ll come around to coffee.”
One area that Nespresso is operating from a disadvantage is that their competitors’ products are more widely available. Their business model is designed so that sales come mostly from online instead of supermarkets. So during Duvoisin’s plan for expansion he will need his websites to rank well, particularly in global search marketing.
Ecommerce for perishables is still a risky business model because customers want the same freshness that they get from buying at a store, so to overcome this Nespresso has to develop a more efficient system of delivery. Peapod’s success has shown there is an opportunity for online grocery delivery and Nespresso could be the first mover to operate strictly with coffee. Nespresso should adopt smart website features, similar to Netflix Streaming, that allow customers to build a profile. Customers could record their ratings of certain blends, automatically time their reorder frequency and receive recommendations. Features like these would help turn customers into brand loyalists.
How Duvoisin handles his global web operations will be a instrumental in his success. For lessons on how others have successfully managed their global operations, read Improve Global SEO.
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