SPSS - Customers

Merrild Kaffe A/S

Situation

Every year, Danes spend approximately €200 million (approximately $251 million) on coffee. Market leader Merrild Kaffe holds approximately one-third of the market share and sells a variety of coffee brands.

Challenge

The Danish coffee market is dominated by four companies: Merrild, Gevalia, Karat, and BKI. With a market penetration more than 90 percent of Danish households and a total consumption of approximately 30 million kilograms (66 million pounds) of coffee, there is little room for significant market expansion.

Henrik Ejsing Andreasen, chief analyst at Merrild Kaffe, explains, “We increasingly aim at gaining market share by selling high-quality coffee—especially with our Café Noir brand, which experienced a remarkable rise after a major campaign earlier this year.”

Solution

To stay ahead of the competition, Merrild Kaffe relies on SPSS Inc. products to predict trends and anticipate market response to known influences, such as price changes and marketing campaigns. For example, Merrild uses the software to determine if a new price strategy will result in increased sales, increased market share, temporary market expansion, or first-mover benefits.

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Results

“We assess the effect it will have on our own sales and on the market in general if, for instance, we reduce the price of one of our coffee brands by DKK 1 or 2 (approximately 16 to 32 U.S. cents). We are able, with a reasonable degree of certainty, to assess the effect of various sales and marketing campaigns. These campaigns provide valuable input for sales, key account and new business development, and marketing,” said Ejsing Andreasen. “It is very important that we follow the market closely and apply the correct tools—in this specific case, the SPSS Inc. solutions—to enable us to analyze data using accurate methods.”