Will new machines perk up coffee sales essays

Will new machines perk up coffee sales essays 1. Challenges that Kraft and other coffee sellers face are numerous in terms of competition and trends. Brand-loyal premium coffee drinkers are flocking to Starbucks, which expects to achieve a net revenue growth of 20% in fiscal 2005 . In the supermarket, sales are being taken not only by lower-priced private label brands but also by upscale whole-bean and ground packaged coffee. Tea accounts for an approximate 38% share of overall coffee/tea dollar sales. The coffee market in the US has been slow growing. Between 2002 and 2003, coffee consumption decreased from 3.2 to 3.0 cups per day. 2. Developing their own brewing machines will provide a mechanism which will allow Kraft to sell the coffee pods used in those machines. Since Krafts is a closed system, users will be forced to buy only the pods manufactured by Kraft. 3. Krafts business model for its Tassimo coffeemaker is very similar to HPs model for its printers and cartridges. Both products utilize closed systems. Refills for both products are sold by the manufacturer and the machines wont work with refills that arent designed for the specific machine. If the consumer wants the HP refill or the Tassimo refill, he or she must pay the price. From a business perspective, this creates long-term financial relationships with the customer and maximizes profitability of the organization. This is evidenced by the fact that the machine itself is distributed by Braun (a division of Gillette) while the T-discs are manufactured and distributed by Kraft. It prevents the use of competitors pods (or cartridges), including those offered by low-priced private label brands. While remanufactured cartridges and refill kits are available for HPs printers, consumers report problems with print quality and difficulty refilling the cartridges. From a consumer perspective this means several things, not the least of which is c ...