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Copy of Case Study: Tchibo Ideas_Group 3

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Tahir Tımış

on 28 May 2013

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Transcript of Copy of Case Study: Tchibo Ideas_Group 3

“To ensure that Tchibo continues to develop and sell products that satisfy customers’ needs, the “Tchibo ideas” Internet platform was introduced in the year under review. Consumers can use this platform to enter into dialogue with inventors and designers. Consumers describe their day-to-day problems, and inventors and designers propose solutions and product ideas. Thus, Tchibo gets to know consumers’ wishes better, and designers have the opportunity to produce their ideas with Tchibo. Tchibo can gain competitive advantages from this, as it enables the development of products that are geared to customers’ needs and have a strong innovative character.”
Extracted from Maxingvest Annual Report 2008
Q: Is Tchibo Ideas a platform that can generate products that will really support performance (e.g. , net sales of a weekly assortment) or will these products mainly be products that only sell to a niche?
A: It’s hard to draw the conclusion that Tchibo Ideas really support performance based on financial analysis of the company’s financial statement, but we think Tchibo Ideas indeed is an innovative marketing strategy, which keeps the company’s competitive power in the fierce competition of related industries. Q&A Key Issue Three:
Sustainability of Tchibo Ideas Key Issue One:
Innovative & Creative
on a regular, fast-paced basis. Competitors in the coffee market
—— Nestlé and Kraft

Competitors in the coffee shop market
——McDonalds’ McCafé and Starbucks

The competition in the non-food market
——Aldi and Lidl The Competition of Tchibo Facing in Various Markets It is important to create clear rules for users
Make sure ideas maintain genuine intention to better serve the customers
Give consumers more power and responsibility
Produce what is saleable to the masses
Be careful about patent license Implication Marketing and Selling Expenses
2007: 4,182
2008: 4,290
2009: 4,066
2010: 3,670
2011: 3,800
Implication: From 2007, the marketing and selling expense experiences a down trend. To some extent, the “Tchibo Ideas” platform contributes to that trend. Financial Performance after “Tchibo Ideas” Give consumers more power and responsibility
Produce what is saleable to the masses
Be careful about patent license Suggestion Tchibo’s intentions are questioned
Marketing gimmick Opponent Reduce marketing and research costs
Transform image from an old-economy company to an innovative company
Simple, smart and effective Supporter Fit into a specific theme
E.g. Card set with envelopes

Surprise, beautify, and simplify
customers’ lives
Follow up-and-coming trend
Be saleable to the masses
Low Cost and High quality Principle of selection Their own task
A similar task
An already solved task
Registration rules Ideas Check--Fairness Advantage through pictures
Observe for images
---Image quality
---Legal page
---Unwanted images
e.g. Accident, illness Ideas Check--Quality One of the crowdsourcing innovation platforms in Germany. Tchibo Ideas Tchibo was present in the German market via the 800 Tchibo shops,
Tchibo depots in supermarkets, and Tchibo Direct online. Tchibo depots exist in approximately 9,000 supermarkets in Germany.

Tchibo seleted its weekly products in accordance with a specific theme, often to match relevant seasonal events.

The target group is made of all 82.5 million customers in Germany. The average customer was 50 years old, and that 80% of the customers were female. The Marketing Mix Coffee Experience

Coffee Shop Experience

Non-Food Experience Three Pillars of Tchibo
(Business Model) 1949, created as a family business
1955, the first German coffee shop customers could both buy and drink coffee
1958, more than 77 stores, and “Gold Mocca” became the number-one
1970, Tchibo started to offer small products
1972 , Tchibo offered small products in the store for sale at a symbolic price
1987, "Tchibo Depots" was built
1996, a sister company “Tchibo Direct” was founded to sell goods online History and Development of Tchibo Ziying YE (52695522)
Jiexuan DONG(52840569)
Jia LIU(52716509)
Xin WANG(52766629)
Qiqi YIN(52680035) Case Study:
Tchibo Ideas Operating Profit (EBIT)
2007: 597
2008: 826
2009: 718
2010: 908
2011: 540
Implication: We cannot simply draw the conclusion that the “Tchibo Ideas” supports the company’s financial performance based on the analysis above. Financial Performance after “Tchibo Ideas” Research and Development Costs
2007: 127
2008: 149
2009: 149
2010: 152
2011: 163
Implication: “Tchibo Ideas” platform maintains the stable situation in research and development cost. Financial Performance after “Tchibo Ideas” Cost of Sales
2007: 3,676
2008: 3,626
2009: 3,460
2010: 3,673
2011: 4,041
Implication: Rise trend may be due to the inflation and specific design & manufacturing cost of “Tchibo Ideas” products
Financial Performance after “Tchibo Ideas” Marketing Expenses(in € million) Revenue(in € million) From everyday life
Task goal: Concrete Product








Task goal: Product Optimization Ideas Check--Content solutions tasks How it works? Tchibo Ideas: Formed in 2007
Tchibo Ideas was an Internet platform where consumers
could post their daily life problems and where other users
could propose imaginative solutions General positioning of Tchibo:
German coffee roaster and consumer goods retailer--offering
a different assortment of products every single week, it forced
Tchibo to maintain a fast pace of innovation while consistently
meeting consumer needs Background Sources from:
https://www.tchibo-ideas.de/index.php/loesungen/ansehen/haushalt/detail/idee/id/5994#
https://www.tchibo-ideas.de/index.php/loesungen/realisierte 29.01.2013
Half a cake
By: vomBodensee Tchibo innovative & creative on a regular, fast-paced basis. SLOGAN:
“a new experience every week,
is only available at Tchibo.” Amount of Tchibo shops Weekly products The consist of its customers The recognition of Tchibo 99% of Germans recognized the Tchibo logo 70% of households in Germany had made a purchase Key Issue Two:
How to select Ideas? Further Explanation However, “Tchibo Ideas” itself is a good marketing strategy, which keeps the company’s competitive power in the fierce competition of related industries.
“Sell to the niche” actually means to differentiate their product in order to satisfy the need of targeted customers, not just to make the products “fantastic” and “solely innovative”. Further Explanation In reality, considering the relatively high cost of designing and producing these unique products, “Tchibo Ideas” itself can not generate net profit at all. Therefore, it can prove that the company do these things not to pursue revenue. The aim behind these behaviors are to attract the customers to go to the store every week.

The incentive to create this platform is to establish a social network to promote their brand image and value. Further Explanation Q&A
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