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Sara Lee vs. Nespresso : missed target

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When I attended the “stratégie clients” show in Paris two weeks ago, I heard Julien Morel, the COO of Nespresso, explain how Nespresso was able to keep its market share in spite of new players like Maison du Café (Sara Lee) and Casino.

While in France I went to a supermarket to test the Sara Lee capsules by myself and I’ve got an explanation. Sara Lee’s coffee is simply not as good as Nespresso’s.

From a pure hedonic viewpoint the pleasure I took from a Sara Lee capsule was the same as a simple drip coffee.  The visual delight, the smoothness, the pleasure that I take each morning in choosing the color of my capsule … all that is missing in the Sara Lee experience.

My take:

Everyone was hoping that competition would lead to price drops; not at all. Sara Lee has miserably failed in proposing an equivalent product in terms of quality and only managed to come to the market with a flavorless Ersatz of Nespresso. I’ve never been so happy to buy from Nespresso actually.

Lessons lerned: if you want to enter a market make sure that you have understood the pre-requisites and that you meet the most basic KPI’s.

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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