2. E101: Distribution
Ryan Poissant - MaRS
email: rpoissant@marsdd.com
twitter: @ryanpoissant

3. 3
The Four P s
Product
Price
Place
Promotion 3

4. 4
The Four
P s
Product
Price
Distribution
Promotion

5. 5
3 Parts: Delivery, Sales, Service

6. 6
2 Flavours: Direct, Indirect
6
It s OK and often optimal to mix &
match.

7. 7
How to Choose?

8. 8
Market type;
Existing, Re-segmented, New

9. 9
Market Stage

10. 10
Complexity

11. 11
Price

12. 12
Customer Preference
12

13. 13Default Choices
New ExistingRe-segmented
Market
Type
Early MatureMidstage
Market
Stage
SimpleComplex
Product
Complexity
CheapExpensive
Price
Direct Indirect
Channel
Type

14. 14
Other
Factors
14
• Size of market
• Diversity/complexity
of market
• Proximity of market
• Completeness of
offering
• Cost of channel
• Speed to market

15. 15
Not just a tactic...

16. 16
...for some a Strategy
Amazon
Dell
Apple

17. 17

18. 18

19. 19
Background
1970 - Invented
1976 - Patented
1986 – Launched
Sold as a complete solution,
machines & coffee for a per cup
price to restaurants and offices.

20. 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.

21. 2121
Background
1989 - Jean Paul Gaillard named
Commercial Director.
Pivots

22. 22
Separate machine & coffee.
Sell to consumers.

23. 23
Machines
Made and serviced by 3rd
parties.
Sold through independent retail
stores.
Manufacturers handle delivery
and stocking.
Nespresso handles sales
training.

24. 2424
Coffee
Sold online and over the phone
direct to members of the Nespresso
Club.
Delivered direct to consumers in 24
hours or less.

25. 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.

26. 26
Results
12 million
machines
20 billion
capsules
50
countries
30%
CAGR
over 10
years
~$3 billion
in annual
revenue

27. 27
Thanks!
Ryan Poissant rpoissant@marsdd.com @ryanpoissant
Questions?
Comments?
Suggestions? 27