Product details

This is part of a case series. Consumers and the coffee industry viewed the Nespresso system as a ground-breaking innovation. Nespresso created a new market segment: individual portioned coffee. In 1988, Nestle decided to launch a separate company to develop, produce, and market the Nespresso system. This move was intended to help Nespresso commercialize the product quickly and create a different atmosphere from that of corporate headquarters. This decision required an entrepreneur or 'champion' to take the reins of the new organization. Nestle enlisted Jean-Paul Gaillard, a former Philip Morris executive, to lead the business. Struggling sales numbers, negative market research, and technology issues had plagued Nespresso, and it was Gaillard’s responsibility to move the company forward. Initial consumer reports indicated this segment would enjoy high growth in the US and Europe. The Nespresso system presented entry barriers for competitors while introducing an easy process for consumers and a significant opportunity for Nestle. The company expected 2010 sales to approach CHF 3 billion with 30 percent annual growth. This case is suitable for courses in marketing strategy, global marketing, and market orientation. Nespresso is the fourth case in the seven-case Market Orientation series by Jean-Pierre Jeannet and Martha Lanning.