The Nespresso’s products are voluntarily more expensive because of the image of the product. Nespresso wants to give a luxury and upscale image to his products and play on the design and on the quality to justify the price. The Nespresso’s products are products which are bought by wealthy customers. The customers are ready to pay a higher price in order to have a different and high quality product. They also want to receive a very good customer’ services and a personalized relation with the firm.
There are four different channels of distribution. First the espresso machines are distributed in electrical goods shops. The potential customers can only buy a coffee machine in this kind of shops, the capsules and the accessories are not distributed in these shops.
The customers can also buy espresso machines, capsules and accessories in the 15 Nespresso shops. These shops are the base of the experiential marketing strategy developed by Nespresso. All has been designed so that the customers make themselves comfortable: the atmosphere is warm. The potential customers can taste the different flavours of coffee, try the espresso machines and listen to the advices of specialised salesmen. The aim is that the customers see the purchase as a pleasant experience which will make them want to come back in the shop and buy other Nespresso products. These shops are a real show window for the brand, to show the customers the “Nespresso’s drinker way of living”.
Finally, the coffee machines, the capsules and the accessories are also available on Internet and by phone thanks to the Nespresso services. However, these services are reserved to the members of the Nespresso club. Thus, the customers have to register trough the website and/or buy an espresso machine to enjoy Nespresso services and order capsules. Indeed, buying an espresso machines, the customer enters in the club which permits him to order capsules by phone and on Internet (the capsules are only distributed to the members of Nespresso club).
The capsule’s coffee proposed by Nespresso is a luxury product. So the price of the capsule is very high (0,31 Euros) : we can indeed notice that the price of the product is the higher of the market, three times higher than the retailer’s brands that are invading the coffee’s market. But Nespresso is also widely more expensive than some famous brand like Jacques Vabre for example whose capsules are sold at 0,13 Euros.”
Nespresso household machines are currently sold in more than 16,000 points of sale, predominantly large department stores. Thus, Nespresso machines can be found in such prestigious retailers as Harrods in Great Britain, Les Galleries Lafayette in France, Kaufhof in Germany, Bloomingdale’s in the U.S.A, and Ginza in Japan. Nespresso household machines and capsules are also available to customers through a growing number of Nespresso Boutiques in major European cities.
A cup of Nespresso coffee at home costs 31 cents. There exist still more expensive coffee capsules. A cup of Nespresso can be fifteen times more expensive than a cup of filter coffee. The high price is no obstacle to the commercial success of Nespresso, with an annual sales growth of 35%. Nespresso has developed a sophisticated marketing strategy, but also stresses on quality.