STUDENT EXAMINATION NUMBER Y1401956

MODULE NO: __MAN00056M_________________

MODULE TITLE: ____Brand Management________________________________

Tutor: Prof. Fernando Fastoso___________________________________

Title: Final assessment____________________________________

Word Count: _3000___________

Brand identity

1) Nespresso CBBE model (Keller et al., 2012:54-80; 2001).

a) Salience- ‘must have’ coffee services

Unique luxurious coffee experience.

Strong global presence, high brand awareness, high recall and high brand recognition among up-scale target consumers and coffee lovers (exposure to Nespresso boutiques in expensive neighborhoods, five star hotels and restaurants, recommendations by club members). Moderate awareness among all others (connection to George Clooney, media buzz about the pioneering company in the coffee capsule market).

b) Performance

Superior quality, total control, high level of care (service) and innovation, Service effectiveness (efficiency and empathy), personalised services

c) Imagery

Sophisticated, stylish, personalized, up-scale, capsule coffee pioneer, coffee connoisseur, superior experience of taste, elegant and unique, 30 and up

d) Judgments

Expertise, trust, reliability, value for money, good quality, innovation

e) Feelings

Strong, sense of prestige and high social status, social excitement and approval, sensual pleasure, satisfaction, comfort, delight, aesthetic pleasure

Nespresso club membership- sign of belonging, loyalty, long-term relationship/ partnership, customer- defining part of a luxury brand

f) Resonance

Brand meaning

Brand responses

Brand relationships

Brand identity: innovators of trendy ‘must have’ coffee services

a) Salience

With a strong global presence (over 7 million club members and 410

Nespresso boutiques in 62 countries (Nestle Nespresso SA, 2015, Facts and

Figures)), Nespresso is recognised as an exclusive and privileged integrated

household coffee services brand ( Giehl et al,2012:93; Mintel Oxygen, 2014). It

is perceived as ‘the Louis Vuitton of coffee’ (Betts, 2010:14) and a ‘leading

quality coffee company for portioned coffee’ (Giehl et al, 2012: 93). It is known as

a pioneer of the coffee capsule system which overall, gives Nespresso higher

credibility, higher brand awareness recognition and recall, as well as, first priority

in purchasing considerations (Nestle Nespresso SA,2015; Khamis, 2012).

Nespresso has created a good recall in consumers’ minds by introducing

boutiques and celebrity endorsements. Brand’s ambassador, George Clooney,

mediates the brand identity and meaning and also increases credibility, mass

brand recognition, and a positive brand equity (Seno & Lukas, 2005; Petty,

Cacioppo & Schuman, 1983) 1( McCracken (1989) 2 the depth and breadth of

brand awareness increased by linking the brand directly to the Hollywood star’s

recognition, thus eliciting brand recall whenever the star and his activities are

mentioned (Keller et al,2012: 68-9).

Overall, Nespresso enjoys a high brand salience among high-end

consumers and coffee lovers that care about luxurious trends and superior coffee

quality. The golden N logo and ‘what else’ slogan is easily recognised by people

1 http://arno.uvt.nl/show.cgi?fid=1156632

who possess knowledge about coffee quality and luxurious goods. Nespresso’s

research shows that the brand has “40% of aided and 90% of unaided brand

awareness level among the Swiss”. Brand asset valuator’s survey showed that

“brand awareness increased from 70% in 2000 to 96% in 2005”( Giehl et al, 93-

94).

The depth of brand awareness is high only among a specific group that

can easily evoke, recall and recognise the brand and the N logo because of

being exposed to Nespresso boutiques in prestigious neighbourhoods and

experiencing brand’s product in five-star hotels, restaurants and airlines. All

others who can’t afford to be in prestigious places moderately recognise the

brand (without having deep awareness) by being exposed to TV commercials

and outdoors advertisements with George Clooney. This celebrity linkage gives

additional cues in consumer’s minds and connects it with the Nespresso brand

but doesn’t specifically help consumers understand the services Nespresso

provides( Keller, 2001:9)3 Because of brand’s exclusivity the breadth of brand

awareness is relatively low. Nespresso is easily evoked in customer’s minds

when glamorous coffee consumption or capsuled coffee is mentioned but only

amongst the limited public. Other cues such as pleasure, luxury, and exquisite

coffee taste connect target consumers to the Nespresso brand and enhance

relatively low breadth of awareness among the general populace. Because the

brand is meant to be consumed only at home as an everyday luxury or in

Nespresso boutiques the breadth is not as extensive as it could have been.

3 http://www.sba.pdx.edu/faculty/ahutinel/Read/11.pdf

Brand Meaning

b) Performance: “Dedication to quality, style and service to delight consumers” ( Nestle Nespresso SA, 2015).

Primary ingredients and supplementary features: Quality, innovation and service.

Nespresso is an up-scale brand that offers ‘unique and luxurious coffee

experience’ by offering extensive coffee-related products of superior quality such as

high performance coffee machines, wide range of coffee capsules, chain of

glamorous café boutiques, exclusive club membership and 24/7 customer services

( Nestle Nespresso SA, 2015). “Nespresso‘s attractiveness rests on a number of

peak performances:” exclusive services and competent consulting, commitment to

superior quality of coffee and coffee machines and attractive product design (Lux-

Arenz, 2014). The outstanding performance “spans the entire valuation chain: from

the cultivation and stringent selection of the coffee beans, the roasting process,

packaging, all the way to the specially designed machines with a technological

innovation, the unique high-pressure brewing method”( Ibid). Nespresso has

pioneered award-wining innovations and designs and have been granted over

1.7000 patents; however , after expiration in 2011 patent extension on the coffee

capsule system was revoked by the European Patent Office ( BBC, 10 Sept, 2013).

(E-Fortrade, The Nespresso case 2014:39).

Service effectiveness, efficiency and empathy: Nespresso has its own distribution

channel which enables to provide 48h capsule delivery to the club members. Also,

Nespresso provides personalized customer services such as 24/7 information and

advice services online, on the phone and in boutiques ( BRW Financial Review,

Nespresso, Services, 2014). High level of care, flexibility and trust among the company

and Club Members is the forefront of Nespresso services. Customers can conveniently

send machines for repair and ask any questions related to the use of Nespresso

products through various channels at any time (Nestlé Nespresso S.A., 2014:4).

Machine assistance services include collection of the machine, providing a loan

machine, fixing and returning with a 6 month warranty extension. Over 70% of

employees have direct contact with customers (Nestle Nespresso SA, 2015) and

Nespresso boutiques “offer excellent customer service, which invariably equates to

detailed production information” (Khamis,2012). Despite such reputation Nespresso

received complaints on the efficiency of the service and promptness of performance

(Hussey,2013).

Product quality, variety and design: Nespresso coffee machines are smartly-designed,

convenient, innovative, sleek and stylish and of high performance and quality. They

“manage the exact balance between water temperature, pressure, quantity and speed”

to create a “perfect cup of coffee every time” with a single push of a button (Nestle

Nespresso SA, 2014).They produce delicious coffee with great ease and cleanliness; all

28 models are reliable and simple to operate (Ludlow, 2015) Range of revolutionary

designs suit different lifestyles and provide personalized coffee experience. Nespresso

offers 23 blends of unique aromas and flavours in elegant hermetically sealed pods

“designed to preserve the complex, volatile aromas and prevent oxidation” to create

finest coffee of professional quality (Nespresso,2014; Khamis,2012). Wide range of

tastes are offered online and can be delivered or picked up in a Nespresso boutique

‘responding to varied demands of individual consumers’ (Slywotzky, Weber, 2011).

Nespresso also offers premium selection of deserts and accessories to enhance the

coffee experience ( Nespresso,2014).

Premium Price:  Nespresso’s own pods range from 29p to 35p per capsule (Mintel

Oxygen, 2014). Machine prices vary from 90 to 850 pounds (Ludlow, 2015).

c) Imagery: upmarket image.

Nespresso is all about sophistication, style, elegance, simplicity and privilege. Social

positioning of Nespresso is expressed through the brand ambassador George Clooney

who represents a personification of what the brand stands for (Independent, 2007). He

“embodies the glamorous, cosmopolitan lifestyle that Nespresso signifies” (Khamis,

2012).

Nespresso is for the chosen true and sophisticated “gourmet’’ coffee lovers who

have or strive to have a luxurious lifestyle (Khamis, 2012). Nespresso is more than a

coffee. It provides a genuine experience that combines luxury, perfection and pleasure (

McCann, Nespresso Case). It portrays privileged and elegant lifestyle to the target

consumer who is more likely to be successful, over thirty and have high income (Giehl

W., 2012:93). The brand claims to satisfy the need of convenience and ease of having

café quality coffee drinks, as well as, having personalised ‘feel-good’ experience and

sense of belonging in an exclusive Nespresso Club.

Nespresso succeeded to encrypt the luxurious brand image into consumers’ minds

effecting the strength of brand associations through rich image and intensive advertising

(Keller et al, 2012:64). A persuasive message of a ‘must-have’ product experience is

emphasized in Nespresso commercials and 4 the notion of pleasure and ease is very

clearly delivered to the public through the signature last coffee drop close-up in every

ad.5 Sensorial experience and pleasure in an elegant manner is communicated through

sophisticated luxurious design of products and high-profile atmosphere of the

Nespresso boutiques (Khamis,2012). Coffee capsules are called Grand Crus and are

portrayed as highly valuable collectible items (Independent, 2007).

Brand responses

d) Judgments - “Well recognized, loved and respected reference for highest

quality around the world” (E-Fortrade).

Nespresso is thought to be the best brand in the coffee capsule market. By the

media it received a coffee cult and a luxury goods status (FT, 2009). It is also seen as a

game changer of coffee consumption and a controversial brand in terms of sustainability

and ethics (Independent, 2007).

It is seen as an innovator and a trend-setter with an impeccable reputation and

distinctive design; a brand that appeals to the coffee-literate consumers (IMD, 2014;

Khamis, 2012). Through Nespresso Club Membership the company has “established

‘privileged relationship’ with consumers who show reciprocal enthusiasm for the brand” (

E-Fortrade, The Nespresso case 2014: 39). Nespresso has a high recommendation

rate:60% of Nespresso’s new customers come through word-of mouth and 50% of Club

members first experience the brand through existing members (Ibid, Lux-Arenz,2014)

which proves the high performance of the brand.

4 https://www.youtube.com/watch?v=jaLw8bklpgc5 http://www.campaignlive.co.uk/thework/1220567/

Quality: Nespresso provides “unsurpassed product quality and proven coffee expertise”

for high-income households and individuals (Khamis, 2012). It reassures consumers on

quality by using rational justifications of better taste and exclusive services with low

perceived risk with its AAA quality program. While the quality of products and services

is rarely questioned, the prices for capsules are thought to be expensive (Lovell, 2014).

Blind tasting test by coffee experts at Choice found that Nespresso coffee from

capsules tasted ‘musty’ and ‘watery’ (Hurley,2013, BRW, July 2013). Another taste test

showed that “capsules lacked flavour and tended to have an artificial or plastic

tang”(Herron,2013).

Value for money. Nespresso has been able to maintain this claim of highest quality, so

it had time to develop into an important brand value: perfection, which is also repeated

in the brand positioning „perfect espresso indulgence“.

http://www.brand-trust.de/en/insights/articles/2013/Nespresso-strong-Brand.php

Credibility: Nespresso is perceived as a trustworthy and credible brand because of

being affiliated with Nestle-a well-known food and drink company. It is seen as Nestlé’s

mass-market product that is mainly successful due operational convenience rather than

better taste (E-Fortrade, The Nespresso case 2014:14-38). Expertise, trust and like

ability are achieved through opinion leaders, celebrity endorser George Clooney, and by

being featured in the media (independent, 2007, thu 4)).The fact that Nestle invented

the coffee capsule system gives it a high credibility.

Superiority: Boutique- status-based setting, brand-specific language and emphasis on

product quality and exclusivity protected by 1700 patents gives Nespresso highly

superior touch. People without even having taste the coffee know it should be better

than any other coffee and that the Nespresso club membership give a specific inclusion

into a glamorous coffee cllub( Nespresso,2014, Coffee).

e) Feelings

Nespresso is a “Feel-Good” brand that offers inclusion into an exclusive club for coffee

lovers. It portrays a strong sense of prestige and high social status.

The feel of a good life and luxury is often emphasized and linked to the brand by

including luxurious cars, up-scale setting and George Clooney in advertisements.

Social excitement and approval is also accompanied with sensual and aesthetic

pleasure, satisfaction, comfort, and delight. Nespresso boutique’s interior desing

reminds of a five-star hotel reception.(Wiggins and Simonian 10). As soon as the

customer is entering the Nespresso boutique, he lives a sensory experience:The smell

of the coffee, the look of the place: the warmth of the place, the taste: because

customers get the possibility to taste the coffee, the touch.

Elegance is felt through the sleek designs of machines and coffee pods, as well as the

up-scale digital presence.

http://www.nestle-nespresso.com/brand/brand-essence

Brand relationships

f) Resonance

Nespresso has a very loyal customer group base with a sign of belonging thanks to the Nespresso club .

Attitudinal attachment (lovemark: they see it as a special purchase). Long-term relationship with customers.

Sense of community: Their way to communicate through social media, mobile apps, direct marketing, and all kinds of media...

Active engagement: Nespresso asked their fans to choose the outcome of one of their famous ad.

“The machines are not the heart of the Nespresso business; the relationship with the coffee drinker is” (Lovell, 2014).

The brand welcomes coffee lovers and invites them into an exclusive relationship. Those who buy a Nespresso machine automatically become members of the Nespresso Club.

membership loyalty-long-term relationship/ partnership, part of a luxury brand.

Instead of being a retail business “it is a relationship business that knows its customers and can talk to them again and again.”

Nespresso Club membership- monthly newsletter, coffee tastings

Boutiques- the company calls “brand embassies” that provide opportunities for direct tangible engagement with the brand and enhance privileged experience.(Khamis)

direct relationship with its customers: 24-hour customer service, by mail, phone, fax, and email.

Nespresso inverts the logic of a coffee house as a “third place,” and patrons are drawn not to socialise and relax but to pursue their own highly individualised interests.

boutique service is merely the human extension of Nespresso’s online presence, whereby product information becomes increasingly tailored to increasingly individualised tastes.(khamis 2012)

emphasis on the individual is sold in terms of elegance, expedience and privilege.

Nespresso boasts that over 70 per cent of its workforce is “customer facing,” sharing their passion and knowledge with Club members.

“The Nespresso Club fosters direct relationships with our Club Members. Our coffee specialists provide advice and guidance to our consumers; they are in constant dialogue with the brand community. This constant interaction enables us to evolve to meet and anticipate our consumers’ demands.”- welcomes them into an exclusive relationship

global community of passionate coffee lovers, Our Club Members have become true brand advocates.

over 70% of Nespresso employees in the markets are in direct contact with consumers.

The Nespresso Club enables us to respond to individual needs and involve consumers in the brand experience

Through our boutiques, our Customer Relationship Centres and our e-commerce platform, we are able to deliver personalised services to our consumers.

“Our Club Members stand as the true representation of the Nespresso brand and a lifestyle that is refined and inspiring.”- exclusive club for coffee-lovers

Long-lasting consumers relationship- one of the pillars of the brand strategy.

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