La Cimbali

Hybrid innovation

La Cimbali

Established in 1912 by Giusepe Cimbali

First very small shop opened in Milan, Via Caminadella 6

Specialised in copper goods manufacturing

1930 Cimbali took over the SITI becoming Gruppo Cimbali

Copper manufacturing, coffee machines and soda water

Coffee machines had cylinder shape copper boiler

heated using natural fuels

Complicated coffee preparation

Barista had problems in keeping process under control

Poor beverages without aroma

Cimbali and Faema merged in 1995 and became the most

important group in their market
Leader in production of professional espresso machines

It promoted the authentic taste of Italian lifestyle

Operates in 100 countries
Main market outside Italy
Switzerland, France, Austria, Germany, Great
Britain, Spain, Portugal, Japan. Australia and US
Growing presence in Far East and Eastern Europe

80% exports of production

organization
Modern structure dedicated to
understand market requirements and
their translation to solutions to satisfy
any specific need
Efficient after sales service
700 assistant centers worldwide
Strong customer support
70 direct distributors
Highly dedicated professional service network
Highly skilled technical units
Superior R&D department
Subsidiaries and high skilled personal -Spain, France
and UK
Training facilities
Focus on innovation and invest in technology,
organization and dedicated training structures

product

Professional espresso and cappucciono machines

Product range the widest available in the market
200 models of traditional and fully automated
machines
Wide spectrum of options allow to meet specific
needs

Drinks that goes beyond espresso

Certified and high standard products

Designed in house

challenges
Continuous change

In living and consumption styles

In premises, quality of operators and
the ways of preparing and serving
the espresso coffee based drinks
In demand for solution to simply
barista work in guaranteeing quality
products to consumers

Aware of this continuous evolution today as ever Cimbali keeps

focusing on technological innovation to satisfy market demands

Our Market
B2B market with end-user insights very
important
Customers: Bars/Cafs, Restaurants, Hotels,
Convenient Stores, Bistros, Coffee Shops
Consumers: Individual coffee drinkers
Competitors: Competitors: Astoria, Bezzera,
Conti, Futurmat, Gaggia
Geography: Italy, Portugal, Spain, France,
Germany, UK, USA, Austria, Asia/Hong Kong

Market Trends
Technology trends

Technological advancements allow for more

efficient ways to deliver espresso

Demand for Espresso

Consumers continuously demand higher

quality espresso and faster service

Product Complexity

More and more choices and flavors create a

need for a much more advanced process

Coffee Industry Trends

Worldwide, we drink over 500 billion cups of coffee every year. Of

that number, 14 billion are Italian espresso coffees.1

According to the International Coffee Organization, world coffee

consumption could soar by 25% by 2020.2

In 2011, a National Coffee Association study found 40% of those

18 to 24 years old drink coffee daily, up from 31% in 2010. For
those 25 to 39 years old, 54% said they drink coffee daily in 2011,
versus 44% in 2010.3

Coffee consumers are increasingly aware of specialty coffee. At

the same time, the specialty coffee industry is constantly
evolving.4
-The Specialty Coffee Chronicle

Market segmentation
Consumer and Customer Needs
Multiple consumer segments

High quality vs. speed, and folks in the middle

Multiple customer segments

Traditional Espresso Machine Users

High quality, high touch process, skilled workers

Automatic Espresso Machine Users

Very fast and efficient, low skill and attention needed

All customers desire to save on energy use and

the amount of coffee needed for each espresso

Target Consumer Market

Consumers are segmented into multiple groups:
Extremely high quality, or in need of quick service,
with groups in between
Consumers focused on quality look for certain
attributes in their espresso
Aroma, foaming sound, professional touch

We will target the consumer who is in the middle of

these extremes, but slightly leaning towards speed
These people are likely customers who currently buy
their espresso from automatic machine users

Target Customer Market

Customers are also segregated based on the level of quality and speed they
desire
Professional, quality-focused customers exclusively use traditional machines

Customers who are willing to sacrifice some perceived quality for efficiency will
opt for the automatic machine

These customers have very skilled workers who are capable of operating a traditional
machine
They are willing to spend more time creating one espresso in order to ensure the
highest quality
There is a high element of human quality control

These customers prefer to have high turnover and serve consumers very quickly
They generally have lower skilled labor who are not fully capable of or experienced in
using a traditional espresso machine

We will target current automatic machine users who are looking for a bit more
quality and reliability

They have slightly skilled labor who are capable of handling some of the more basic
tasks involved with the traditional machine

Goals and Objective

Our task is to create a hybrid espresso machine combining the

pros of a traditional machine and an automatic machine, while
limited the cons
Our goal is to find a machine capable of serving espresso in a very
efficient manner with a higher level of quality
There is an opportunity to capitalize on an innovation gap by
creating the only hybrid machine on the market, which allows for
both speed and quality
We will aim to attract customers who want both speed and quality
espresso

Our strategy

L
Firm

New To
H

Strategic Fit

New To Market

concurrent engineering
Marketing, R&D, Sales, Engineering, GM
All key functions should be involved from the very
beginning, from the design through the launch of the
product
Knowledge sharing is critical to the success of this
innovation process

Share consumer insights with all functions to help them

understand the market and the need
Link lead users with appropriate internal functions

The GM should serve to oversee the interaction between

each function and the overall progress of the project

Traditional v.s automatic

Define Innovation Type

Our innovation process is an Incremental

Our innovation type is Technical

Outline Guidelines
The GM should create a memo at the beginning of the
project to outline the guidelines for the innovation
Level of innovation

We are focused on an incremental innovation

Time of entry

Product launch within 1 year from initialization

Identify risks

Competitor entry, difficult to persuade buyer change, product

quality doesnt live up to expectations

Strategic fit within the company portfolio

Customer involvement in new product development

Customer involvement create significant sources of competitive advantage:
Productivity gains through increased efficiency and closer fit to consumer needs offering
higher commercial potential
Improved effectiveness (e.g., through an enhancement of a product value, innovativeness
and learning capabilities, and a better fit with consumer needs)
Cost minimization
Employees input can be substituted with consumers input in the
product/service development
Costless acquisition of consumer ideas which decrease the need for inputs
from traditional market research and employees
Reduced risk of product failure and inventory holding costs
Faster speed-to-market
Post-launch gains through continuous product improvements and exploration
of additional usages
These outcomes may directly influence organizational performance, increasing the efficiency
of operations, product/service turnover, employee satisfaction and ultimately, revenues and
profitability

Consumer Involvement
We want to work directly with
consumers to get insights on their
preferences and willingness to sacrifice
some speed for better quality
Share results with our B2B customers
to encourage them to purchase the
hybrid machine

Customer involvement in new product

development
Consumer labs

Participants observation

Focus group
In-depth personal interviews
Questionnaire

Empathic Design Techniques

Observation

Customer involvement in new product

development
Method: Consumer labs

When we use it
When our focus of analysis is What consumer wants and our level of
analysis is Group consumers
Why we use it
To invite consumers in our Cimbali lab to interact with our marketing
and R&D team and better express their needs.
To ask them specific questions to define how do they expect a
professional espresso machine to solve their problems
To know their opinion on what elements we can eliminate, replace or
duplicate to better solve their needs
To know better their priorities and whats most important when they
make the buying decision
To know their opinion on the strengths and weaknesses of our product
vs competitors

Customer involvement in new product

development

Method: Participant observation

When we use it
When our focus of analysis is What consumers think and
our level of analysis is Group consumers

Why we use it
To experience customers observations on how our product
should change
To understand better the logic they follow
To evaluate more closely the main reasons behind their
statement
To assess their clarity in terms of needs and why they
suggested that particular solution

Customer involvement in new product

development

Method: Questionnaire
When we use it
When our focus of analysis is What consumers want and
our level of analysis is Individuals

Why we use it
To understand better individual needs of our customer
To know what is the individual problem the customer want
to solve
To asses why this individual customer perceive our machine
as not very efficient
To evaluate his expectations

Customer involvement in new product

development
Method: In-depth personal
interviews
Empathic Design Techniques
Observations
When we use it
When our focus of analysis is What consumers think
and our level of analysis is Individuals
Why we use it
To understand better individual needs of our customer
To know what is the individual problem the customer
want to solve
To asses why this individual customer perceive our

Customer involvement in new product

Empathic Design Techniques development

Why we use it?

To gain additional information by observing people in bars, restaurants, cafes, autogrills
It will enable us to gain additional information in terms of:
Triggers of use of our professional machines
How do our customers interact with environment
What is the user customization
What are the intangible attributes of our machines
Define any other unarticulated need of customers (problems they did not know to have)
What is the process
Observation- A group of engineers and R&D specialists will observe individuals interaction with the
machines
Capturing data- Take notes on the process and pictures
Brainstorming for solutions- The group of experts based on their knowledge will translate the
observation into visual representation
Prototype possible solutions- The group by consensus will suggest some solutions and share with
the rest of the perople not involved in process

Customer involvement in new product

development

What is the purpose of the insight we get from this

technique
It will help us to listen to customers voice and reduce the risk
by relating the solution to their needs

What are the activities of the insight we get from this

technique
Asses a qualitative market analysis to evaluate their reactions
in terms of financial feasibility
What is the role of the insight we get from this technique
To support marketing and R&D team with ideas and opinions
on how to designe the product

Customer involvement in new product

development

Six steps of inside activator

methdology to facilitate the process
generating insights from customerss
observations.
Six stpes in session3 p12
platforms

Work with Lead Users

To identify new product design,
ideas, and/or new technologies
Possible lead user groups:
innovative baristas, massage
therapists, Fact Check!
How to involve them

Simulation of Lead User

Seminar
Project
Trends/Nee Preliminary
Planning
(4-6weeks)

ds (56weeks)

- Kick off simulation

- Info Search

Activities- Meetings

- Identify needed
expertise
- Select potential LU

Concepts
(5-6weeks)
- Additional Search for
LU
- Preliminary Concepts

Final
Concepts
(5-6weeks)
- Refinement of
preliminary concepts

Focus on types of
markets and customer
needs of interest

Selection of a specific
need-related trend

New Lead Users

New Concepts

- Traditional Machines
produce better
quality, but require
more skilled barista
- Automatic machines
cost more and have
less quality, but does
not require skilled
barista

Product should
increase efficiency
(speed/automation)
but maintain quality of
beverage

Understanding needs

Exploring all potential

concepts

Outcome

Core Idea

Lead User Simulation

Concepts generated:

Leaning milk jug for automated steaming, milk pouring

(before and after) should be kept manual to maintain
freshness of milk and provide visual appeal
Maintain aroma and freshness of beans with container
Wi-fi capabilities: to help with queuing drink orders and
recipe instructions, to increase efficiency

Lead Users: coffee bean farmer, grinder

manufacturer, barista, bartender, baker,
brewer/distiller, milk producer, aroma scientist, taste
therapist, packaging material experts

This lead user seminar was simulated between ourselves as we could not cond

QFD

Knowledge management

Creativity Template
Consumers

Barista

Ordering
Paying
Steam knob

machine

Foaming
milk

Grinding
beans

Coffee Brewing Buttons

Coffee Spout
Brewing group

Filter holder

Temper
powder

Pouring
foam & milk

Milk jug

Refrigerator
Cleaners

Cups &
Saucers

Our concepts
Ordering
Paying

Barista
Grinding
beans

Consumers

Consumers

Temper
powder

Pouring

Take away

Foaming
milk

Auto

Touch
screen

temp and
pressure
parameters

LBS

auto

angled milk
jug base

Data
mining

Innovation Process

Feasibility
Capability
Test
Launch

References

Hull, Frank M. (2004), Innovation Strategy and the Impact of a Composite

Model of Service Product Development on Performance,Journal of Service
Research, 7 (2), 167-180
Payne, Adrian F., Kaj Storbacka, and Pennie Frow (2008), Managing the Cocreation of Value, Journal of the Academy of Marketing Science, 36 (1), 83-96
Prahalad, C. K. and Venkat Ramaswamy (2000), Co-opting Customer
Competence, Harvard Business Review, 78 (JanuaryFebruary), 79-87
Bowers, Michael R., Charles L. Martin, and Alan Luker (1990), Trading places:
Employees as Customers, Customers as Employees, Journal of Services
Marketing, 4 (2), 55-69
Lovelock, Christopher H. and Robert F. Young (1979), Look to Consumers to
Increase Productivity, Harvard Business Review, 57 (May-June), 168-178
Ostrom, Amy L., Mary Jo Bitner, Stephen W. Brown, Kevin A. Burkhard, Michael
Goul, Vicki Smith-Daniels, Haluk Demirkan, and Elliot Rabinovich (2010),
Moving Forward and Making a Difference: Research Priorities for the Science of
Service, Journal of Service Research, 13 (1), 4-36.

References

Mills, Peter K., Richard B. Chase, and Newton Margulies (1983), Motivating the
lient/Employee System as a Service Production Strategy, The Academy of
Management Review, 8 (2), 301-310
Cook, Scott (2008), The Contribution Revolution, Harvard Business Review, 86
(October), 60-69
Ogawa, Susumu and Frank T. Piller (2006), Reducing the Risks of New Product
Development, Sloan Management Review, 47 (Winter), 65-72
Sawhney, Mohanbir, Gianmario Verona, and Emanuela Prandelli (2005),
Collaborating to Compete: The Internet as a Platform for Customer Engagement in
Product Innovation, Journal of Interactive Marketing, 19 (Autumn), 4-17
Grewal, Rajdeep, Gary Lilien, and Girish Mallapragada (2006), Location, Location,
Location: How Network Embeddedness Affects Project Success in Open source
Systems, Management Science, 52 (7), 1043-1056
Xie, Chunyan, Richard P. Bagozzi, and Sigurd V. Troye (2008), Trying to Prosume:
Toward a Theory of Consumers as Cocreators of Value, Journal of the Academy of
Marketing Science, 36 (1), 109-122.

References
http://www.npd-solutions.com/interviews.html
http://hbr.org/1997/11/spark-innovation-throughempathic-design/ar/1
http://www.iasdr2009.org/ap/Papers/Orally%20Presented
%20Papers/Design%20Method/Empathic%20Design%20%20Understanding%20User%20Experience%20Through%
20Schema%20Changes.pdf
http://www.ijdesign.org/ojs/index.php/IJDesign/article/vie
w/1008/403