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Automatic Coffee Machines: Competitive Analysis

Literature Review

The academic study of marketing conceptual frameworks is not limited to theoretical research but includes practical implementation of what a student learns. Hence, it is useful to conduct one our own research aimed at using current skills. For this reason, the central idea of this paper is to conduct a competitive analysis in the chosen industry. Thus, it is necessary to use an in-depth competitive analysis in order to successfully promote the product, position it and conduct market research.

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The central tasks of this approach are to identify the strengths and weaknesses of the product, determine the target audience, study the development strategy and optimize the production mechanisms (Bavister, 2018). It is consumer trends that become the object of analytical research since, based on consumer needs, it is possible to develop strategic planning and improve product positioning.

Among the industries, the household appliances sector was chosen, which is represented by a large number of home items. This includes refrigerators, washing machines, dishwashers, vacuum cleaners, or coffee makers. It is the latter that will be the focus of this paper because, as it is known, the demand for automatic coffee machines has been actively growing in recent years (TMR, 2017). Moreover, according to Wood (2020), from 2020 to 2026, the average annual revenue growth in this sector will be 4.56%. From this data, it follows that the already diverse coffee machine market will be full of excess supply in the coming five years, which means that an early competitive analysis is vital.

It should be recognized that there are several likely reasons for the increased customer interest in this type of product. First of all, this trend is due to the gradual reorientation of consumers from street coffee shops to home/office coffee, which has a much lower cost of production. According to Moss (2015), each cup of street coffee costs Americans an average of $100-$500 per cup. This data is confirmed by Risen (2015), who cites statistics showing that the average cost per cup of coffee in the US is $2.70. At the same time, the use of a home coffee machine primarily relieves the financial burden on the consumer since, according to Moss, such a brewed cup of coffee costs an American twenty cents.

Furthermore, one does not rule out the fact that for many people, the use of a home device is much more convenient since it takes less time and does not require a visit to public institutions. Thus, to start the drip coffee machine in the morning after waking up does not take more than a minute, while personal presence in a coffee shop, on average, will take about five to ten minutes.

On the other hand, the increased demand for coffee machines may be due to the development of a society’s environmental consciousness, which dictates specific rules of living, among them the rejection of plastic and paper utensils, including disposable coffee cups (Yun & Kim, 2019). For example, many eco-activists use reusable utensils or ask street baristas to pour a drink into their container, but this may not be allowed everywhere. While take-out coffee shops are unable to develop effective alternatives to plastic products, consumers have no choice but to opt for homemade drinks. Finally, technological advances have reached incredible heights for kitchen appliances as well, so often, the modern coffee makers discussed in this competitive comparison have increased functionality: WiFi, Bluetooth, built-in scheduling, choice of reheat temperature, and even coffee break size (TechGuru, 2020).

To some extent, spoiled by technological advances, consumers expect a set of specific “smart” features from the coffee machine, the absence of which — which does not guarantee the poor performance of the device itself — can be considered as a lack of modernity. Consequently, all of this leads to the conclusion that coffee machines are an integral part of the modern kitchen, and therefore in high demand. In turn, this creates a large supply.

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Excel Comparison Table.

Comparison criterion 12-Cup Programmable Black Drip Coffee Maker with Glass Carafe, Built-In Timer and Automatic Shut-Off 10-Cup Black Digital Coffee Maker Pause to Pour 10-Cup Black Drip Coffee Maker with Glass Carafe 5 Cup Coffee Maker Black
Link Here Here Here Here
Brand BLACK+DECKER Brentwood Appliances PREMIUM Holstein Housewares
Depth (in.) 8.90 7.25 7.28 9.00
Width (in.) 11.70 8.25 9.84 7.00
Height (in.) 13.20 12.00 11.81 12.00
Weight (lb.) 5.5 3 2.56 3
Capacity (fl. oz.) 96 80 80 40
Wattage (watts) 975 800 700 600
Brew Strength Normal Normal Normal Bold, Normal
Number of Cups 12 10 10 5
Returnable (Days) 180 180 180 180
Manufacturer Warranty (Years) 2 1 1/4 1
Coffee Appliance Type Drip Drip Drip Drip
Add. Features No additional features Automatic shut-off, pause/interrupt, reusable Dishwasher safe parts, pause/interrupt, removable filter. Cord storage, power on light indicator
Price $2909 $2219 $2399 $2799

Summary Reviews

An analysis of the table above generally yields mixed results: while in some points one of the products clearly leads, in others, it can lose to a competitor. It is additionally worth acknowledging that for homogeneity of the sample, when searching for coffee machines on the site of the online store Homedepot.com a price filter was installed to compare competitors in the same class. Below is an extensive review of the comments and customer feedback collected for each of the products listed individually.

Black+Decker

More than ninety reviews were collected for this product, with an average customer rating of 2.7/5. As expected, customers rated the coffee machine’s strengths and weaknesses, with the latter being characterized by lower ratings. Among the positives, many customers noted the compactness of the device, the programmable setting, availability of a timer, the speed of the beverage creation, and the drip mechanism’s quietness. In addition, some noted the relative ease of care and cleaning. Negative reviews mostly assessed the defective product or fragility of components: for example, one customer had cracked glass when washing the container.

Brentwood Appliances

Comparatively, fewer reviews are available for this product, and there are only two on the website of the online store, and both are positive. Customers praise the automatic shutoff and the small size of the coffee machine. On Amazon, the average product rating is 3.2, with many customers rating the unit as a temporary, non-permanent product for the move. In addition, the price proposition is comparably leading, as other competitors in the lineup provide a higher price tag. Shortcomings were noted, including the lack of light indication, manufacturing defects, slowness, and low bowl capacity.

Premium

The average rating for this product is 3.4, with most of them positive. Many customers noted the convenient size of the product, but some complained that the capacity is too small to make the stated number of coffee cups. It was also noted that the prepared coffee is not strong but, according to consumers, tasty. The products’ price also attracted many, but one customer was angry that this coffee machine had programmable functionality. At the same time, the product has a relatively low price, the second lowest, which was repeatedly noted in the comments: in general, this is both a strength of the product and competitive advantage.

Holstein Housewares

The average rating for this coffee machine was 2.3, with many customers complaining about the coffee grounds filter’s uncomfortable shape and constant water leaks. In addition, it was indicated that the coffee machine was often returned because customer expectations regarding the quality, size, or reliability of the appliance were not met. While the compact size and color scheme appealed to consumers, there were complaints about the appliance’s lack of automatic shutoff. Several customer reviews were short on words, but in them, they pointed to a good, working coffee machine that was perfect for a small kitchen.

Analysis of Strengths and Weaknesses

The competitive analysis provides a description of product weaknesses and strengths, identifies points of differentiation, and PoD, which define the unique features of the product, and points of parity, PoP, which characterize the main customer expectations of the coffee machine. As a rule, if a product does not have outstanding features and is average according to the studied metrics, its strengths are considered as PoP because otherwise, a product that does not meet customer expectations would not be in demand. It should be said right away that both product technological descriptions and customer feedback were used for this analysis of a series of four devices, and while the data summarizes available information, it may not accurately reflect objective reality.

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Black+Decker

Among the strengths of this product highlighted by the table, particular attention should be paid to the volume of the chart: it is 96 fl. Oz (2.84 L), which is the only one of PoD. This is a high value, which not only creates appeal in the consumer’s mind (more=better) but also reflects one of the main PoP, namely the desire to brew as many mugs of coffee as possible at a time. Other strengths are the silent mode and the speed of brewing coffee. This also satisfies what the customer expects from a coffee machine: quick, well-brewed coffee without interfering with daily tasks. Among the weaknesses inherent in this coffee machine, it is worth highlighting the high-power consumption is the relatively large weight (about 2.5 kg), the lack of additional functions. In fact, the consumer gets a quality coffee machine, which copes well with its tasks but cannot surprise the customer.

Brentwood Appliances

The positive sides of the coffee machine under this brand are the comparatively small size of the device, which allows you to place it even in a small kitchen virtually. It is also a lightweight product, which means that its transportation and installation will not cause problems for the user. The average values of the chart capacity, the number of cups of coffee to be prepared, and the power consumption can also be attributed to the product’s strengths. In this sense, the PoP of the coffee machine not only meets the expectations of the customer and adds high functionality, forming a strong PoD. This equipment does not exclude weaknesses, among which should be highlighted the cheapness of plastic materials (which customers have complained about), which leads to frequent breakdowns and leaks of water and coffee.

Premium

This coffee machine takes up little space and has the least weight compared to the previous series, which is its strength. In addition, it does not require much electricity to operate, so customers interested in saving money can opt for it. Except for rare cases of defects, the coffee machine has a sufficient number of PoP: in particular, it meets the purpose, cooks quickly, has an average capacity, and a wide range of functions. However, among the disadvantages of the device should be noted cheap materials, which leads to rapid damage to the device during operation, and the lowest warranty service period: only 90 days. For this coffee machine, PoD is a functional feature of the equipment and low weight.

Holstein Housewares

The last in the series of appliances analyzed, according to customers, generally performs well, is small in size, and has the lowest PoD (power consumption). Built-in functionality and small size form the PoP, which is why many customers choose this product for purchase. However, it has a large number of disadvantages and weaknesses, including low bowl capacity and cheap materials. A large number of negative reviews were devoted to the discussion of inferior materials and frequent breakdowns during use.

Positioning Map

Positioning Map

On the above two-dimensional positioning map, the halfway measures are the final cost of the coffee machine to the consumer and quality. It is worth recognizing that the criterion of quality is subjective and was summarized from the analysis of comments and customer feedback, as well as warranty service. Consequently, the map clearly shows that the leader on two points is the product brand BLACK+DECKER, having the highest price and comparably high quality. After the coffee machines of this company, Holstein Housewares, PREMIUM, and Brentwood Appliances go one after the other (on the price axis).

According to their arrangement, it can be concluded that the most significant compromise of quality and price offer is characteristic of PREMIUM. At the same time, having the second-highest price in the series, Holstein Housewares provides the lowest quality products, which can be found by a large number of negative reviews. Thus, in the line under review, this coffee machine can be considered as the losings option. Brentwood Appliances’ products have the lowest price point, but in terms of material quality, this did not mean a wrong product. On the contrary, as shown, many reviews praised this coffee machine.

References

Bavister, S. (2018). The importance of competitor analysis for business growth. LexisClick.

Moss, G. (2015). Here’s how much money you could save by making coffee at home. Insider. Web.

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Risen, T. (2015). Americans pay an average $2.70 for coffee, while tipping 20 percent. US News. Web.

TechGuru. (2020). Ultimate guide to the best smart WiFi coffee makers for 2020. Nerd Techy. Web.

TMR. (2017). Coffee machines market. Transparency Market Research. Web.

Wood, L. (2020). Global automatic coffee machines market (2020 to 2026) — by type, application, and region. GlobeNewswire. Web.

Yun, S., & Kim, T. (2019). What do coffee shop entrepreneurs need to do to raise pro-environmental customer behavioral intentions? Sustainability, 11(9), 2666-2685.

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