Senseo was established by the merger between the small electrical company Philips and Douwe Egberts, and it is the subsidiary of the Sara Lee Corporation. By 1995, both companies began combining their projects, 6 years after the concept Senseo was launched in the Netherlands. Senseo coffee makers are selling the cheapest at €70, that is to say, three times less than traditional espresso machines, while having a high-end design. It has attained a tremendous success with more than 6.5 million coffee makers sold in Europe since 2001.
Currently, the market is not well informed about the coffee crisis. All families own one coffee maker each: The success of the pod machines is confirmed, the rise in traditional coffee and espresso machine ranges are spreading widely.
In 2005, the sales volume of Senseo had increased significantly, with an explosion of 30%, 960,000 coffee makers were sold in France. In 2006 in France, Philips was number 1 in total market value of small appliances, and it had represented 16.2% market shares.
The market shares of the Senseo coffee market is 1.39% in volume and 1.42% in terms of value.
- Market shares of the Senseo market: 54% in value
- Market shares of the global market of Senseo coffee machines (including espresso): 38% in value.
In general, if the market for filtering machines resists the emergence of the pod machines, it does not compete with its performance:
The market for pod machines is booming, its performances have been at record breaking levels in recent years and nearly 5,247,000 pods of all types were sold between June 2006 and June 2007, representing an increase of nearly 2 .4% in one year, of which 1.2 million machine pods were sold.
Turnover for all machines is $313 billion which is equivalent to growth of 9.2% against 104.2 billion euros only for machines with pods.
The coffee market, while it is in relative decline, represents nearly 2 billion. There are 13% French homes which are equipped with a Senseo machine.
This figure is relative, because the coffee market is a market which is stable but yet is slightly declining. Penetration has been gradually warming up over the years for many reasons:
Taste: Cafes today are a bit better in quality and therefore calls for an adaptation to soft food rather than we are used to consume.
The complexity of its use: The coffee is not really a drink that can be eaten as a snack.
Branding traditional coffee
On the other hand, the coffee market is struggling to integrate profound innovations. When an innovation is made in the coffee sector, it takes time before consumers accept and adopt this innovation.
Currently, the typical market customers are based on major trends. We distinguish first the young who appreciate coffee for its invigorating and modern hand, yet it is increasingly late that they become daily users. Soft drinks are attracting more and more customers at the expense of coffee.
Seniors, themselves, limit their coffee consumption for health reasons.
In terms of image, coffee is perceived as a hot beverage for people under stress, which is rather negative. Similarly, there is the tendency to ‘home sweet home', that is to say, the will of the people to stay quietly at home rather than go to bars and cafes. The trend is more prevalent for snacking and fast food does not go in the direction of increased coffee consumption. However, daily, at work, mostly through vending machines, coffee consumption has increased substantially. Consumer habits keep changing regularly.
Tags: Senseo coffee market, electrical company, Philips and Douwe Egberts, traditional espresso machines, coffee crisis, French homes, coffee consumption
[...] Nespresso pods are differentiated by sales on the internet, by phone and in the brand's own stores (30 around the world in France). External analysis : Competitors Identification of competitors Direct competitors and indirect competitors (current competitors and new entrants) There are several categories of products that compete with the Senseo by Philips. The products are quite similar to the Nespresso coffee machine, and discount the espresso machines discounts. Indeed, these machines produce only coffee, and are intended only for private use. They are, therefore, identical to our product and we may thus say that these three machines are substitutable. [...]
[...] Abstract Competitor Analysis: Nespresso Forces Weaknesses Leader for 15 years (picture and - Single-use machine lower costs) - Ethical issues and practices Luxury Market related to pods Product Quality Customer Loyalty and reinsurance Patented Pods Dolce Gusto: Forces Weaknesses Association with the market leader - Price of pods still high Marketplace is wider (midrange) - Strong similarity with Tassimo Multi Beverage - Starting late Quality of product and recognized - branded Image versus Nespresso pods Use simple machine Tassimo: Strengths Weaknesses Broader Target (multi beverages) - late Launch compared to Positioning advantageous (more upscale the competitors than Senseo, Nespresso better - No choice of brand of accessibility) coffee (black card only) High brand awareness due to the drinks - The Price of the pods offered leads to the ruining of the Important communications budget appeal! [...]
[...] A critical analysis of the organization and the current marketing mix 1 - The organization - Marketing and sales organization Senseo is part of a mass market approach. 2-The strategy: - Assessment of the strategy and marketing mix: Targeting, positioning, brand policy, product policy, pricing, distribution and communication. The combination of Phillips and Sara Lee to form the concept called Senseo Co-branding is the specificity and strength of this concept in the sense that these two brands are complementary. Indeed, the first is specialized in high-end small appliances, while the second is in the field of coffee. [...]
[...] It experiences only inter- product competition from Nespresso, and weakens by contrast in the inter- segment competition with Dolce Gusto machines and Tassimo - Analysis of competitors considered the most dangerous - Power Currently, the competitor Tassimo is more dangerous, since the Tassimo machine has developed the same advantages as Senseo by offering even more features (multifunction machine). The price is higher, but it is justified by more features. It is a user friendly product and designed for the whole family like the one we represent. [...]
[...] In 2005, the sales volume of Senseo had increased significantly, with an explosion of coffee makers were sold in France. In 2006 in France, Philips was number 1 in total market value of small appliances, and it had represented market shares. The market shares of the Senseo coffee market is in volume and in terms of value. Market shares of the Senseo market: 54% in value Market shares of the global market of Senseo coffee machines (including espresso): 38% in value. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
