Tassimo coffee machine strategy -places.

by chee Leng (on coffee makers)

Second Cup with Tassimo

Second Cup with Tassimo

It is very interesting to note the different companies strategies, Nespresso is very into branding and ABTL advertising, while Keurig and Tassimo seems to pursue the same strategy -Places.

Tassimo after announcing a partnership with Costa coffee in Europe, has partnered Second Cup, the second largest coffee retailer in Canada.

The modus operandi is the same. Second cup coffee would be available in T-disc and Tassimo would be sold in all Second cup retail outlets.

Immediately, Tassimo has 360 (that is the number of outlets that Second Cup has in US) touch points, selling its machines.

So, what is the important ingredients here in the fight for the single serve coffee market?

It is Speed.

My $0.02

Who is doing what?

Keurig (GMCR) is forging numerous partnership with Starbucks, with Dunkin Donuts, with Boston Market etc. So, they are expanding their market.

But, the main crown jewel is definitely Starbucks. The latter however seems to have its own agenda and aim to launch its own single serve known as verisimo.

Theoretically, by getting many partnership, Keurig should be able to grow fast.

Tassimo,I noticed is also expanding by getting more partners on board. Currently, it is working with Costa coffee and Second cup and with the former, it is represented in Asia and places such as China and India.

Nespresso do not partner with others but tend to go big on advertising and promotion as seen in the recent advertising campaign in US.

Other brands such as Senseo is re-organizing and might be making a big wave. And Flavia is steadily making progress capturing more office market share.

Every companies has their own strategy and objective. But, to expand, the key remains the same -speed.

Asia Pacific

Europe is the stronghold of Nespresso and US is the home ground of Keurig. Both of them has build a remarkable presence in each market.

Thus, even if any companies would to launch a big offensive campaign, it is not easy to capture more market share.

You would noticed that Nespresso has waited for years prior to launching a marketing campaign in US. And Keurig did not announced any significant plans to enter Europe.

Asia Pacific, on the other hand is very fragmented. There is no one clear market leader. One of the reason is the size of the market, it is huge.

To be the undisputed market leader for single serve coffee market, it is to own the Asia Pacific market. And that includes China and India.

It is however not easy. Unlike the western market that are used to domestic coffee machine, most Asian are not used to this concept.

Thus, much of the marketing budget would go into educating them. Nespresso is in Asia for more than a decade and has done much of the educating.

speed to Market

Currently, it seems that Tassimo is doing what keurig is doing in US by partnering with various coffee retailer.

Personally, I think if it expands fast enough and launch its machines in Asia Pacific fast enough, it should capture good market share.

Keurig expansion into Asia could be impede by Starbucks plan to launch their own Verisimo (that being said, the Verisimo could be using K-cups as well).

With nothing announced, Tassimo should quickly launched their machine with Costa Coffee or find another native Asia Coffee chain to launch their coffee machine.

The market would get tighter when Senseo or even Flavia (traditionally office segment) decided to get into the market.

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