E101: Distribution
Ryan Poissant - MaRS
email: rpoissant@marsdd.com
twitter: @ryanpoissant
3
The Four P s
Product
Price
Place
Promotion 3
4
The Four
P s
Product
Price
Distribution
Promotion
5
3 Parts: Delivery, Sales, Service
6
2 Flavours: Direct, Indirect
6
It s OK and often optimal to mix &
match.
7
How to Choose?
8
Market type;
Existing, Re-segmented, New
9
Market Stage
10
Complexity
11
Price
12
Customer Preference
12
13Default Choices
New ExistingRe-segmented
Market
Type
Early MatureMidstage
Market
Stage
SimpleComplex
Product
Complexity
...
14
Other
Factors
14
• Size of market
• Diversity/complexity
of market
•  Proximity of market
• Completeness of
offering
• ...
15
Not just a tactic...
16
...for some a Strategy
Amazon
Dell
Apple
17
18
19
Background
1970 - Invented
1976 - Patented
1986 – Launched
Sold as a complete solution,
machines & coffee for a per cup...
20
Background
1970 - Invented
1976 - Patented
1986 - Launched
Sold as a complete solution,
machines & coffee for a per cup...
2121
Background
1989 - Jean Paul Gaillard named
Commercial Director.
Pivots
22
Separate machine & coffee.
Sell to consumers.
23
Machines
Made and serviced by 3rd
parties.
Sold through independent retail
stores.
Manufacturers handle delivery
and st...
2424
Coffee
Sold online and over the phone
direct to members of the Nespresso
Club.
Delivered direct to consumers in 24
ho...
25
Later
As market matured Nespresso
added their own brand machines
made by an OEM.
Added it s own retail boutiques to
fur...
26
Results
12 million
machines
20 billion
capsules
50
countries
30%
CAGR
over 10
years
~$3 billion
in annual
revenue
27
Thanks!
Ryan Poissant rpoissant@marsdd.com @ryanpoissant
Questions?
Comments?
Suggestions? 27
Distribution - Entrepreneurship 101
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Distribution - Entrepreneurship 101

  1. 1. E101: Distribution Ryan Poissant - MaRS email: rpoissant@marsdd.com twitter: @ryanpoissant
  2. 2. 3 The Four P s Product Price Place Promotion 3
  3. 3. 4 The Four P s Product Price Distribution Promotion
  4. 4. 5 3 Parts: Delivery, Sales, Service
  5. 5. 6 2 Flavours: Direct, Indirect 6 It s OK and often optimal to mix & match.
  6. 6. 7 How to Choose?
  7. 7. 8 Market type; Existing, Re-segmented, New
  8. 8. 9 Market Stage
  9. 9. 10 Complexity
  10. 10. 11 Price
  11. 11. 12 Customer Preference 12
  12. 12. 13Default Choices New ExistingRe-segmented Market Type Early MatureMidstage Market Stage SimpleComplex Product Complexity CheapExpensive Price Direct Indirect Channel Type
  13. 13. 14 Other Factors 14 • Size of market • Diversity/complexity of market •  Proximity of market • Completeness of offering • Cost of channel • Speed to market
  14. 14. 15 Not just a tactic...
  15. 15. 16 ...for some a Strategy Amazon Dell Apple
  16. 16. 17
  17. 17. 18
  18. 18. 19 Background 1970 - Invented 1976 - Patented 1986 – Launched Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices.
  19. 19. 20 Background 1970 - Invented 1976 - Patented 1986 - Launched Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices. 1988 - Acknowledged dud, Nestle considers shutdown.
  20. 20. 2121 Background 1989 - Jean Paul Gaillard named Commercial Director. Pivots
  21. 21. 22 Separate machine & coffee. Sell to consumers.
  22. 22. 23 Machines Made and serviced by 3rd parties. Sold through independent retail stores. Manufacturers handle delivery and stocking. Nespresso handles sales training.
  23. 23. 2424 Coffee Sold online and over the phone direct to members of the Nespresso Club. Delivered direct to consumers in 24 hours or less.
  24. 24. 25 Later As market matured Nespresso added their own brand machines made by an OEM. Added it s own retail boutiques to further control the sales message. Created Nespresso Pro channel to serve the office market.
  25. 25. 26 Results 12 million machines 20 billion capsules 50 countries 30% CAGR over 10 years ~$3 billion in annual revenue
  26. 26. 27 Thanks! Ryan Poissant rpoissant@marsdd.com @ryanpoissant Questions? Comments? Suggestions? 27

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