7 Ps in a pod. #Nespresso and the #VertuoLine marketing Case Study for the Essential Enablers

POP display at a Nespresso boutique Chicago

I love coffee, I love tea

I love the java jive and it loves me

Coffee and tea and the jiving and me

A cup, a cup, a cup, a cup, a cup!

- Milton Drake "Java Jive "– Ink Spots

Like a horse and carriage, there has been a long partnership between Coffee and Business. They have 'lived together' if not been actually married for a long time.

The Coffee houses of England in the eighteenth century were places to do business. The famous insurance house for example  Lloyds of London was based on a coffee house. The market began in Lloyd's Coffee House, opened by Edward Lloyd in around 1688 on Tower Street in the  City of London.

In 2014 ‘’drink in ‘customers as opposed to the ‘to go’ customers, are seen networking and doing business in a coffee shop not so differently from the predecessors of eighteenth century England.

Many coffee drinkers have wanted to bring the coffee shop experience into their home. 

Clearly the full-scale  Gaggia machine coffee shop would be impracticable in most homes but  domestic filter machines, percolators , espresso  and cappuccino machines are ever more popular in our kitchens.

I have recently returned from facilitating a corporate graduate session on Marketing with the  talented folk from the Essentra Graduate scheme in Chicago, Illinois. Essentra are the international 'essential enablers' company with operations in production of filter products, porous technologies , component and protection solutions, and Packaging and Securing Solutions.

Q:What's new at Nespresso ?
A: The 13 pt intensity,
 limited edition, Cubania
 "..a moment of pure indulgence,
a gourmet dessert with syrupy texture,
caramel and roasted notes."

One of the case studies we worked  on was Nestlé Nespresso . 

The single delivery coffee pod sector has been dominated by Nestlé in Europe and the Grads looked into the launch of a new product especially designed for Canada and the USA markets - VertuoLine .

Time Line :

 1976, an employee of Nestlé , Eric Favre, , invented, patented and introduced the Nespresso system to the business market in Switzerland with little significant success.

 1988,  Jean-Paul Gaillard — the founder inventor of «Le Club» community — the product became a market success.

  1990, the firm signed a contract with Turmix, which started to sell Nespresso machines in Switzerland. Thereafter, other contracts were signed with Krups, Magimix, Alessi, Philips, Siemens and De'Longhi.

1996 The first patent application for Nespresso's process of brewing espresso from capsules containing ground coffee was filed.

In 2000, Nespresso began distributing machines bearing the "Nespresso" brand.

VertuoLine product on a shelf at Macy's, Chicago

In February 2014, Nespresso launched a new Vertuoline system.The VertuoLine  machines and capsules sold in the United States and Canada  are designed to appeal to the demand by North Americans in these countries for larger cups of coffee.

 The system produces both 230-millilitre (8.1 imp fl oz; 7.8 US fl oz) cups of coffee and smaller 40-millilitre (1.4 imp fl oz; 1.4 US fl oz) espressos, both with the crema that characterizes espresso coffees and the original line of Nespresso coffees. 

Nespresso simultaneously introduced eight coffee blends and four espresso blends in specially-designed VertuoLine capsules.

 The VertuoLine capsules cannot be used in the original line of Nespresso machines (now called the "OriginalLine"), which continue to be sold in North America.

The VertuoLine capsules are as follows:

Coffee

Stormio (intensity: 8) Odacio (intensity: 7) Melozio (intensity: 6) Elvazio (intensity: 4)

Hazelino (intensity: 6) Vanizio (intensity: 6) Decaffeinato (intensity: 6) Half Caffeinato (intensity: 6) Espresso Diavolitto (intensity: 11)Altissio (intensity: 9) Voltesso (intensity: 4)

Decaffeinato Intenso (intensity: 7)

Notice the larger sized  hemispherical
 shaped pods on the right hand size for VertuoLine

The VertuoLine system uses two technologies not found in the OriginalLine.

1.       The system uses "centrifusion" (a term created by Nespresso, being a portmanteau of 'centrifugal force' and 'infusion'), whereby it spins the capsule around in the machine at up to 7,000 rpms to blend the ground coffee and hot water.

2.        Each capsule has a bar code embedded on the rim, and the bar code laser scanning system reads 5 different parameters: cup size (coffee or espresso), temperature, rotational speed, flow rate and time the water is in contact with the ground coffee.

The VertuoLine system is intended to expand Nespresso's product line to offer coffee closer to the American style of filtered coffee, and thus expand Nespresso's market share in North America. In the United States, Nespresso had only a 3% share of the single-serve coffee market in 2013 (compared with 72% for Green Mountain’s Keurig system), while in Canada Nespresso had 4 to 5% of the single-serve market in 2013 (compared to approximately 53% for Keurig and 40% for Tassimo). In comparison.

Through their concession in Stores and malls, Nespresson Boutiques allow a direct line engagement of Club members with Nespresso. A place to bring their used capsules for recycling and find out 'what’s new?' in Coffee.

 Nearby to the Loyola University premises the Essentra graduates and I were working ,there was such a Nespresso boutique in a nearby Shopping Mall. The boutique was within the Sur La Table store - a Mecca for kitchen gadgets and all things kitchen.

Nespresso boutique within
 a Sur la Table store in Chicago 

Visiting the boutique and...

Demonstration at the Nespresso Boutique in
Sur La Table store in Chicago

... seeing the demonstrations and tasting the coffee made the case study all the  more real.

This VertuoLine system was designed to meet the tastes of the North American consumers, brewing the highest-quality American-style large-cup coffee and authentic espresso. Nespresso’s website state. 

“ For the first time ever, coffee lovers can experience large-cup coffee with crema. Silky, generous crema is a naturally formed foam of coffee and air. Representing unprecedented quality, it seals aromas in coffee and enhances the tasting pleasure.”

With VertuoLine, Nespresso want to accelerate their growth and become a leading player in North America’s fast-growing portioned coffee market. The business potential is strong. The US portioned coffee market is estimated to be worth USD 4.9 billion with around 40% growth last year.

 It is also estimated to contribute to half of the portioned coffee segment’s growth worldwide. Coffee is also the fastest growing category in Canada’s hot drinks market.

Nespresso’s Centrifusion™  technology produces large-cup coffee and espresso with the same, high-quality in-cup result. Centrifusion™ is their word for combining centrifugal and infusion, indicating that the capsule spins inside the machine, and water is injected into the capsule and “infused” with the ground coffee inside the capsule.

This technology provides an extremely high level of precision with each extraction parameter individually controlled.

Notice on the outer rim there are the bars
 of the bar-code that the VertuoLine machine's laser reads

One key difference I noticed is the size and shape of the capsules for VertuoLine  are different. The VertuoLine capsules are a hemisphere of a larger dimension compared to the conventional pod. These are a specially patented design which includes a barcode which is read by the laser in the machine.

The Nespresso concept (machine, capsule, service) is subject to 1,700 patents which protect Nespresso's ownership of the concept until the patents expire.

Nespresso has been often compared with printer manufacturers that tried to hinder the sale of generic ink cartridges, to achieve a 'vendor lock-in effect'.

Nespresso's patents began to expire in 2012 gradually allowing competitors to offer capsules and machines compatible with the Nespresso system.

A former CEO at Nespresso has started a rival firm, Ethical Coffee Company SA (ECC), to make compatible biodegradable capsules for the Nespresso machine.

Nespresso’s success is driven by their ability to deliver the highest quality coffees, continuous innovation, exclusive personalized services and a unique brand experience.

On our course we had used the Chartered Institute of Marketing’s ( CIM-UK ) definition of marketing-

“ The management process for identifying, anticipating and satisfying customer needs profitably”.

 Interestingly a spokesperson for Nespresso used similar language when questioned at the launch of VertuoLine :

“The privileged relationships and dialogue that we nurture with our Club Members and consumers allow us to anticipate their needs and exceed their expectations. Our unique direct-to-consumer business model, with our extensive retail network, 24/7 phone line and e-commerce platform, and our rigorous quality management from farmer to consumer are key factors in our continuous success.”

One of the Essentra grads' teams debating  the similarities
 and differences between Nespresso
and marketing of B2B  Porous product
type businesses they work in

The Essentra Grads. enjoyed studying the Nespresso story so far, using techniques such as the Marketing model , the  7 Ps , TOWS grids , Boston Consulting matrices ,Ansoff Grids and the like. They came up with some great thoughts on how things will look in the next years.

Because of Nespresso’s Bellwether notoriety in the media, the case study will be an ongoing reminder of the marketing techniques we learned and thought about in Chicago at the course

"Ah, how sweet coffee tastes — lovelier than a thousand kisses, sweeter far than muscatel."

— J.S. BACH, COFFEE CANTATA

Related links

The Marketing Model

 

Consumer Behaviour

 

Marketing Research part 1

 

Marketing Research part 2

 

  

Product 

 

Price

 

Promotion ( Marketing Communications)

 

Place

 

Marketing Management 

Kisses on the bottom - A good degree is not enough -Positive Mental attitude is back in vogue.

Paul McCartney’s album, “Kisses on the Bottom”  was released on the 7^thof February This is his 16^thSolo album. It has met with critical acclaim. It was given 4 stars by the Daily Mirror “This sweetly conceived tenderly sung collection of classics such as Paper Moon and Ac-Cen-Tchu-Ate The Positive ( track 7) is his finest album in years.”

The chorus line in Harold Arlen 1944 song with Johnny Mercer’s lyric’s “Accentuate the positive” goes

...You've got to accentuate the positive
Eliminate the negative
And latch on to the affirmative
Don't mess with Mister In-Between..

In 1998, a specialist in Strengths Psychology, Donald O. Clifton, Ph.D. (1924-2003), along with Tom Rath and a team of scientists at Gallup, created the online StrengthsFinder assessment.

In 2004, the assessment's name was formally changed to Clifton Strengthsfinder in honour of its chief designer. Based on a 40-year study of human strengths, Gallup created a language of the 34 most common talents and developed the Clifton StrengthsFinder assessment to help people discover and describe these talents. From the book there is an access code to go on-line and complete the questionnaire and print out your report.

"Hide not your talents.

They for use were made.

What's a sundial in the shade?"

-- Benjamin Franklin

Gallup brought out a version specifically for Strengths-Based-Selling

After discovering their talents through the StrengthsFinder assessment, readers will learn to use their strengths in every step of the sales process, including how to:

· measure cold calling success, and improve contact and conversation rates

· determine when to walk away from the wrong customer

· become a partner to customers, not just a vendor

· improve negotiating and closing strategies

· make the most of the honeymoon period with a new customer

· turn satisfied customers into engaged customers

I went on line for Strengthfinder 2.0 some time ago and have found the method very helpful. It 'revealed' my natural way of thinking, feeling or behaving. It suggested that I should focus on time practising these 'talents', developing my skills and building my knowledge base. It gave a useful set of ideas for action and an action plan template.

Clifton Strengthfinder 2.0 states, Hugh Alford's top 5 themes are
Input, Adaptability,Developer, Connectedness and Restorative

Another popular tool is CAPP’s Realise 2 which identifies 60 strengths according to three axis model ( dimensions) energy, performance and use.

The data from CAPP’s completed questionnaire is used to identify where candidates strengths lie across four categories  

1. Their realised strengths,

2. Their unrealised strengths,

3. Their learned behaviours

4. and their weaknesses.

Ernst and Young ( E &Y) were reported in the London Evening Standard Tuesday 14^th February 2012, to look for relationship development and problem solving as key attributes that they look for in their graduate trainees.

Those finally selected also demonstrate determination and resilience and are able to work hard and thrive in difficult situations.

E & Y need to know that their trainees are going to be able to cope if they are sent halfway across the world to work on a client project.

Coincidentally the attributes they look for in their trainees who may not be seen in the conventional sense as salespeople are key to the selling profession.

E & Y released the results of a survey of 1,000 students where it was attitude that was valued by E & Y more than a good degree. The survey of over 1000 UK students was devised by the Centre of Applied Positive Psychology CAPP and tested for employability skills.

Ernst & Young – Capp designed, developed and delivered  a capability for building strengths-based graduate recruitment across the business, including the development of Realise2 Lite as a graduate attraction tool.

Ernst & Young is a major graduate recruiter in the UK, and as one of the ‘Big Four’ professional services firms, is recognised as being a top place to work for many graduates. Notwithstanding this natural attraction of candidates to the firm.

To continue to attract the most talented and motivated people to join them, their graduate recruitment offering  has to be fresh and appealing for the emerging Generation Y of graduate talent. ( E and Y 's slogan is Quality in everything we do)

E& Y ‘s head of graduate recruitment stated that they interview over 3,000 bright graduates each year but only 25% have the all-round skills set that they recruit for.

 CAPP developed Realise2 Lite, a bespoke version of Realise2 that was tailored specifically to assess the 16 strengths required by Ernst & Young in their graduates.

Graduates who complete Realise2 Lite (it  costs less than £20) then  automatically receive a short feedback report detailing their Realised and Unrealised Strengths. They can then use this self-insight to improve their employability and to help them in their own career development decisions, through having a greater insight, awareness and language to talk about their strengths.

CAPP however stress that their Realise2 Lite is not used as part of any selection process for Ernst & Young, but purely as an attraction marketing tool.

But the top five skill sets were:-

· Pride in their work

· Problem solving

· Being true to themselves

· Building relationships

· And having a sense of humour

The five weakest were

· Resilience

· Time optimisation

· Showing courage overcoming their fears

· Taking risks

· Making themselves the centre of attention

“ a good degree from a respected university no longer guarantees students a job”

says E & Y's Stephen Isherwood.

Although 83% of students interviewed were confident about achieving their career aspirations, Stephen warned graduates against becoming complacent.

‘Students need to stay focused on what they are good at and develop their experience around these core areas, rather than trying to cover all bases. This in turn will help to build confidence in their abilities and improve their levels of resilience,’ warned Alex Linley, the director of CAPP.

CAPP’s Student completions which are in excess of 1,000 per month for Realise2 Lite, with over 18,000 students having completed the tool in the first 18 months since it was launched

There has been significant website and social media traffic through the graduate recruitment portal, driven by referral and recommendation of the various strengths activities, including Realise2 Lite

Differentiated student engagement at campus events through the strengths focus of Ernst & Young’s graduate recruitment campaigns is supported through Realise2 Lite

Differentiated employer brand and graduate attraction has been achieved, through positioning Ernst & Young as a graduate employer where you will be recruited for your strengths

Reaise 2  provides enhanced graduate employability through providing all graduates who complete the tool with increased insight and self-awareness of their strengths, together with a language of strengths that they can use on their CV and at interview.

Further reading

Strengths Based Selling
Authors: Tony Rutigliano and Brian Brim
Gallup Press: 2011
 220 pages
ISBN: 978-1-59562-048-4

Graduate Development Programme part 2, Marketing skills

We are coming up to the 20^th anniversary of the Maastricht treaty 1991 which transformed the then European Economic Unity into the European Union. So started the process of creating a  single currency for much of Europe.

Some four hundred years earlier there was sort of European Union in northern Europe and the Baltic states called the Hanseatic League . This was  a collection of trading  cities and their merchant guilds.

The ‘Hansa’ word is still to be seen today in business in the German international airline Lufthansa

One evening after work on the Filtrona Graduate Development Course in  Sales and Marketing skills programme held in Reinbek, the group went into the city of Hamburg- a former member of the Hanseatic league.

We visited a former merchant’s house in Deichstrasse, in the Old Hamburg District. The original house was  built in 1686  -various alterations took place over the following centuries. Strategically sited on the banks of a canal that connected to the medieval super highway of its time the River Elbe the house was both a building for business and a family home. So much for our so called modern home -office way of living!

Goods were lifted by pulleys and stored in the top floor over  the floors for domestic living down to the ground floor and its magnificent  room was the area for trading, buying  and selling and negotiation.

The house which has been restored to much of its original glory is now a restaurant. 

Adorned on the walls the plaques of the famous trading families of Hamburg .

There was something rather special about visiting a building built for business  400 years ago where much the same challenges  of  identifying ,anticipating and satisfying buyers’ needs profitably ( Marketing) we had been working on in the Filtrona Graduate Development Programme that afternoon.at te Wladhaus Hotel, Reinbek

The Graduate Development Module on Marekting covers topics asuch as:-

• Attributes/Skills /Knowledge of a Marketing Executive
• What are the differences and similarities in Marketing Tangibles (Products) vs Intangibles- (services)
• What are the marketing challenges in Outsourcing and Supply Chain Management
• Production Orientation and Market Orientation Real world considerations
• Marketing Research  Primary and secondary
• Product/Service     Product Life cycles implications of various stages
• Product-Portfolio Matrix (Boston Grid)
• Distribution/Logistics                                           
• Marketing Communication –                                 
• Advertising, PR,Sales Promotion, Sponsorship,Direct Marketing ( Post, web)
•  Telemarketing Exhibitions, Professional, Selling/Account Managing , e commerce and social media- the rise of mobile

Marketing management

Metamorphosis -An engineer becomes a marketer - Tom wows us!

On the marketing module delegates presented their individual companies through a marketing model which included the classic 4 Ps, SWOT analysis PESTLE factors, Timing  and effect of competition and the issues of supply chain and export marketing.

Tim talks us through the Marketing Model for Alliance Plastics

Andy, Guard 'Winston' , Alexandra Orlov look on with Tom at this "Awesome" presentation!

Much discussion and focus was placed on Pricing Strategy, e commerce , the explosive gross and implication of mobile communication, social media as well as convention concerns of implementing excellence in Customer care whether to end use customers or distributors and manufacturers who use Fitlrona’s equipment and products.

Zag's presentation on Moss plastics gets  Tim ponders!

Raj provokes our thinking over the future opportunities and threats to his export business

We were exceptionally well looked after by the staff at the Waldhaus Reinbek. They fed us superbly and introduced new things to our diet both food and drink. The rooms were very comfortable. It  a superb venue. www.walhaus.de  and even has a kegelbahn!

On return to UK ,I  pondered whether many of the skyscrapers of Canary Wharf or Manhattan would be around in 400 years time like theAlt-Hamburgerhaus( Schones Leben restaurant) .

However business looks in the next 400 years maybe like the vistors we were to the Alt-Hamburgherhaus in Deichstrasse we might still recognise some aspects of trading , exchanging ,negotiation and 'marketing' even if the environment and communication channels are as different as the old canals of Hamburg and our Internet of today.


Related Links
Graduate recruitment Attitude trumps a Good degree - Ernst and Young
http://fruitsofsuccesswithhugh.blogspot.com/2012/02/kisses-on-bottom-good-degree-is-not.html

Filtrona Graduate Development Programme part 1

Filtrona  http://www.filtrona.com/  is a leading international supplier of speciality plastic and fibre products with four operating divisions: Protection & Finishing Products, Porous Technologies, Coated & Security Products, and Filter Products.

Filtrona’s world network includes 28  manufacturing facilities, 46 sales and distribution operations and 5 research & development centres.

Filtrona group believe in investing in their newly recruited graduate talent.

These leaders of tommorow for the graduate development programme 2011, were drawn from within the group  from  such companies  as  Moss Plastics, Duraco, Steratape, Fltrona Porous Products, Paynes Worldwide and came from businesses in Indonesia, Russia , USA, Hungary and  the UK .

 After some team building in the UK they went to Germany to continue their programme. They visited the factory of Filtrona Porous Technologies in Reinbek which is  on the fringes of Hamburg, Germany,

 Some of the Filtrona graduate tean on the last day of their course in Reinbek, Hamburg Germany

The Graduate  Development programme is designed  and managed by Anthony James Management Training http://www.anthonyjamesmanagementtraining.co.uk/page5.html


The 12 module programme over 2 years includes topics such as:

• Management in Context - the culture of word class companies
• Project Management
• Understanding Key Purchasing Skills
• Negotiation Skills
• Understanding Business Finance
• Advanced Financial management skills
• An Introduction to Marketing
• Leadership Skills
• An introduction to selling skills
• Presentation skills
• Supply Chain / Operation Management
• An Introduction to Strategic Planning and Strategic Thinking

The scoring system - Horse Race in the lower ground floor- Kegelbahn, Waldhaus Hotel, Reinbek

There was some time to relax after work with a beer and learn the art of Kegel ( Skittles)

 After two days on Leadership  and Manangement training with Professor Howard Ward of  CEIBS - China Europe International Business School and I took them through three days of Sales and Marketing Skills. http://www.anthonyjamesmanagementtraining.co.uk/page2.html


The Graduate Programme on Sales and Marketing has been running since 2005 and is designed ot cater for the development needs of Graduates in roles such as  Business Development , Purchasing, Engineering,  Operations and Finance.

Our Sales and Marketing programme covered:

• Attributes Skills and Knowledge of a Professional Sales Person

• How do you envisage Industrial Selling changing in the next ten years?

• What are the differences bewteen Selling an intangible service and tangible product?

The Waldhaus  Hotel, Reinbek, Hamburg where the Graduate Developmnent took place in October

• What additional skills are required when selling through a third party such as an agent, distributor etc.?

• Selling Situations in the Client's / buyer's journey and approaching te challenges flexibly

• Managing your Customer/Client Zoo- Personality profiling.

Kevin's Balckburn Rovers Shirt - "Humbly Awesome!" the name of his team on the Grads' selling skills course.

• Communication Skills - Verbal , Vocal, Written

1. Questionning Skills in a businesslike but conversational style
2. Listening Skills
3. Notetaking
4. Non verbal communication- Body Language

• Cultural Diversity - introductions, business etiquette, cards and handshakes

• Personality Profiling and adapting one's behaviour. - Psychology of Selling

• Implications of Social media in B2B environments -

• Industrial Buying Motivators

• The Fitrona Offering what it is, does and means

• Persuasion Skills - Appreciation technique

• The BROKER  Selling Skills 6 step Process

• Handling and Answering Client objections e.g. Price increases, Delivery, Past experiences, Happy with incumbent supplier etc.

• How to gain commitment and get decisions
• -when to ask
• -how to ask
• -why to ask

The 'Hunbly Awesome " Team set to work on a exersise

• On going account development- cross selling and upselling

The "A team at work on an exercise

The Walls of the Waldhaus Hotel  Jagzimmer Conference Room were adorned with hunting trophies!

"Buy Sheep - Sell Dear" - The art of negotiation!

As a result of the week ,the grads go away  with a better understanding and appreciation of what is involved in professional modern selling in industry. They will up for the next module of their programme in the Spring in 2012.

Related links

Attitude or a good degree? Graduate recruitment

http://fruitsofsuccesswithhugh.blogspot.com/2012/02/kisses-on-bottom-good-degree-is-not.html