It s OK and often optimal to mix &match. 62 Flavours: Direct, Indirect
7How to Choose?
8Market type;Existing, Re-segmented, New
Default Choices 13 Channel Type Direct Indirect Market Type New Re-segmented Existing Market Stage Early Midstage Mature ProductComplexity Complex Simple Price Expensive Cheap
OtherFactors• Size of market• Diversity/complexityof market• Proximity of market• Completeness ofoffering• Cost of channel• Speed to market 14
15Not just a tactic...
16 Amazon Dell...for some a Strategy Apple
1970 - Invented 1976 - Patented 1986 – Launched Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices. 19Background
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. 20Background
1989 - Jean Paul Gaillard namedCommercial Director.Pivots 21Background
22Separate machine & coffee.Sell to consumers.
Made and serviced by 3rd parties. Sold through independent retail stores. Manufacturers handle delivery and stocking. Nespresso handles sales training. 23Machines
Sold online and over the phonedirect to members of the NespressoClub.Delivered direct to consumers in 24hours or less. 24Coffee
As market matured Nespressoadded their own brand machinesmade by an OEM.Added it s own retail boutiques tofurther control the sales message.Created Nespresso Pro channel toserve the office market. 25Later
~$3 billion in annual revenue 30% CAGR over 10 years 50 countries 20 billion capsules 12 million machines 26Results