Steffen Saemann – Tchibo

Tchibo, a prominent coffee and lifestyle retailer, has successfully implemented its full business model in Slovakia and Czechia, establishing itself as a market leader in both coffee and a leading brand in non-food retail. Known for its adaptable approach, Tchibo operates dedicated retail stores, an extensive webshop, and a network of depots in CZ as well as in Slovakia.

In this interview, Steffen Saemann, Marketing Director Tchibo in Slovakia and Czechia, shares insights into the brand’s growth strategies, the three realities of promotion, the importance of leveraging consumer insights, and the potential of AI in future campaigns, offering a comprehensive look into Tchibo’s ongoing evolution in Slovakia and Czechia. He is also co-leading the Evidence Based Marketing Academy (EBMA) to help marketeers to get a clear understanding of marketing’s contribution to business growth.

Expanding Tchibo’s Brand Footprint in Slovakia and Czech Republic

The key KPIs for measuring brand growth are rooted in the retailer’s perspective and focus primarily on sales and profitability. Tchibo’s growth in Slovakia and Czechia has been anchored by implementing the approach in its home market Germany as the only countries outside DACH. This includes an extensive network of retail stores, depots, and online platforms as well as constantly building distribution for its Coffee House of brand in the free trade, ensuring customers in these regions have broad access to Tchibo’s coffee and non-food categories.

To reach the sales and profitability KPIs set for each market, the brand needs to consistently grow and expand in terms of distribution. “Physical availability is very, very important because it forms the foundation for penetration. The more stores we have, the better distribution coverage we reach the more customers we can acquire. Distribution is key for all our products; we grow through more selling points and the quality of those selling points,” Steffen highlights. Brand KPIs can only be considered when the brand is available.

“The more stores we have, the better distribution coverage we reach, the more customers we can acquire. Distribution is key for all our products; we grow through more selling points and the quality of those selling points.”

The key brand market asset that Steffen specifically looks at as Marketing Director is the 3 pillars of mental availability. “Our brand has to come to mind immediately when someone thinks about fulfilling a need in the category,” he says. Most people are not in the market at the same time, he mentions a statistic saying that 95% of people don’t need a specific product at the moment. This means that the brand needs to be available with an attractive offer for the 5% of people who do while being available or ready to be called from people’s memory who might need a product in the future.

“Brand communication essentially builds the precondition for future revenues for the company by creating mental structures for the brand in the category part of the brain so that when the consumer has the need, the specific brand associations are retrieved and the brand becomes part of the consideration set. This means that brands are memory structures.” There are two types of availability, mental and physical. To gauge brand memory associations, brands need to measure mental availability to ensure the brand stays relevant during shopping list preparation. Physical availability refers to the brand being easily available and standing out enough in-store to land in the shopping cart.

The three realities of promotions

Steffen looks at promotions from three angles: the market reality, the customer reality, and the brand reality. The market reality in the Czech Republic and Slovakia is that the promotion level is one of the highest in Europe. For coffee, Steffen mentions that it is over 80%, meaning that hardly any coffee is sold outside of promotions.

Alongside market reality, there is also customer reality. Many retailers prefer numerous promotions, as these improve their image with their customers. This implies that if a brand wants to be listed or remain listed, it must run a set number of promotions as per the contract.

Lastly, the brand reality, according to the Ehrenberg-Bass Institute, says that the brand value will be diminished if a brand does too many promotions, and therefore it shouldn’t do more than necessary as outlined in the contract.

The key to having impactful promotions and communication campaigns in-store lies in the brand’s strength and collaboration with sales teams. Steffen explains, “Studies have shown that brand communication impacts the long-term growth of the brand AND supports promotions effectiveness, but promotions alone do not support the long-term success of the brand. Thus, we use this model to drive brand communication while sales teams actively visit stores. This way, we maximise the impact of our communication on sales. We might run the same amount of promotions as our competitors, but our brands perform better due to their established equity.“

“We might run the same amount of promotions as our competitors, but our brands perform better due to their established equity.“

Leveraging Data for Marketing Success: The Role of MMM and Consumer Insights

Steffen emphasises the importance of knowing customer behaviour and measuring performance for effective decision-making.  Operating in a region where most sales occur during promotions, Tchibo must balance short-term promotional efforts with long-term brand building. To establish how much to invest in short-term sales and long-term brand building, Tchibo used marketing mix modelling (MMM) and consumer insights. Recent MMM analyses have shown that a 60/40 split between long-term and short-term brand-building is effective. This careful balance between long-term and short-term brand building is what has made Tchibo so successful in both markets.

The Future of Marketing: Personalisation, AI, and the Power of Communication

As Tchibo plans its future marketing initiatives, personalisation and AI emerge as central themes. AI technologies offer the promise of streamlined processes, yet Steffen underscores that the human element remains crucial: “AI can assist with efficiency, but only people can create the kind of emotionally resonant advertising that captures attention. AI cannot imagine things – and that is what makes creative craft a craft” Personalisation will enable Tchibo to deepen its customer connections, by tailoring content to individual preferences and creating a more engaging brand experience.

“Effective communication is what builds salience a brand’s presence in consumers’ minds, and turns into a purchase when people are ready to buy sometimes in the future“ reflecting on the importance of maintaining consistent messaging across Tchibo’s touchpoints. From high-reach media like television to targeted social media campaigns, Tchibo’s communication strategy aims to reinforce the brand at every step of the customer journey, ensuring that it remains a preferred choice when purchasing decisions arise. “There’s no such thing as wear-out for good communication,” Steffen says, highlighting the brand Jihlavanka which has used the same campaign for six years and the same positioning for 30 years with consistent brand assets and messaging.

‘’There’s no such thing as wear-out for good communication.”