Nestle and the Multi-beverage Machine Market (A)

Economics, Strategy and Entrepreneurship

Markides C; Oyon D; Winig L

Costas Markides

2008

Nestle is considering whether to introduce a new multi-beverage coffee machine positioned for the mass market. The decision is complicated by the fact that Nestle already has a successful coffee machine (called Nespresso), that is positioned at the high-end of the market and has a best-selling instant coffee brand (ie, Nescafe) positioned for the mass market. The (A) case addresses the questions: (1) given the existing crowded coffee-machine market and Nestle’s own position at the top-end of this market (with its Nespresso machine), should the new machine (targeting the mass market) be introduced? and (2) if it is, what should be its positioning to allow it to differentiate itself not only relative to its existing competitors but also relative to two other Nestle brands – Nescafe and Nespresso? Should it be launched under the Nespresso or Nescafe brand name (or neither)? and how could Nestle avoid potential cannibalisation of its Nespresso and / or Nescafe sales?

Brand strategy, Market segmentation, New product launching

Coffee industry

CS-08-001

Switzerland

https://publishing.london.edu/cases/nestle-and-the-multi-beverage-machine-market-a/

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