KEURIG AT HOME CASE ANALYSIS NehaS
KEURIG AT HOME CASE ANALYSIS
Main Problem:
Keurig Inc.’s main concern is how to obtain the position they want in the at-home coffee market segment without losing their share of the office coffee segment (OCS) and while maintaining their gourmet coffee quality. They have less than six months to launch the product, and very limited budget for production costs and expenses, and for changing the curent portion packs. There are two strong competitors in the away from home market, Filterfish, and Flavia. There are some other competitors in the at-home market. In my opinion, this is marketing-mix problem and the end goal is to maximize the at-home segment and protect the established OCS business.
Strategic Situation Facing The Management:
The 2 cup strategy (Keurig-cups & K-cups) might solve problems such as KADs revenue erosion, thefts of K-cups, increased control over prices; however, it will delay Keurig’s entry to the market.
Also, roasters will need 2types of inventories, which will increase production and inventory costs.
2different cups as a point of differentiation will actually cause confusion and dissatisfaction among customers resulting from using the wrong cup. Pricing at $199 will cause immediate large losses and $299 is a premium price as per research. Direct marketing is expected to cause channel conflict. There is a concern that it will drive sales away from KADs and jeopardize their established relationships with accounts. The company plans promotions such as incentivizing
KADs to support the marketing efforts on the new brewer (KADs referral program), internet direct-marketing campaign, public relationship campaign. While this may add value by the active participation of KADs who already have a good insight of the OCS market, Keurig will still have to find ways to build brand awareness in the at-home segment. Also, this is a demonstration-driven product and Keurig needs to find avenues to demonstrate the product usage and convenience to the customers in
Main Problem:
Keurig Inc.’s main concern is how to obtain the position they want in the at-home coffee market segment without losing their share of the office coffee segment (OCS) and while maintaining their gourmet coffee quality. They have less than six months to launch the product, and very limited budget for production costs and expenses, and for changing the curent portion packs. There are two strong competitors in the away from home market, Filterfish, and Flavia. There are some other competitors in the at-home market. In my opinion, this is marketing-mix problem and the end goal is to maximize the at-home segment and protect the established OCS business.
Strategic Situation Facing The Management:
The 2 cup strategy (Keurig-cups & K-cups) might solve problems such as KADs revenue erosion, thefts of K-cups, increased control over prices; however, it will delay Keurig’s entry to the market.
Also, roasters will need 2types of inventories, which will increase production and inventory costs.
2different cups as a point of differentiation will actually cause confusion and dissatisfaction among customers resulting from using the wrong cup. Pricing at $199 will cause immediate large losses and $299 is a premium price as per research. Direct marketing is expected to cause channel conflict. There is a concern that it will drive sales away from KADs and jeopardize their established relationships with accounts. The company plans promotions such as incentivizing
KADs to support the marketing efforts on the new brewer (KADs referral program), internet direct-marketing campaign, public relationship campaign. While this may add value by the active participation of KADs who already have a good insight of the OCS market, Keurig will still have to find ways to build brand awareness in the at-home segment. Also, this is a demonstration-driven product and Keurig needs to find avenues to demonstrate the product usage and convenience to the customers in