KEURIG AT HOME CASE ANALYSIS NehaS

1733 Words Mar 17th, 2015 7 Pages
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
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A) Brewer – Skimming strategy
Premium launching at $299 to cover costs incurred in R&D. Competitive positioning based onspeed, convenience/ cleanliness of preparation, ease of usage and taste consistency. The profit generated will help in developing a new basic model with lower cost, priced at $129 to cater to customers who are willing to buy the brewer at a lower price. Thus, they can profit by covering high manufacturing costs initially and bracing up for the price war against competitors by introducing the basic model.
B) Cups – Penetration strategy @ $0.50 per K-cup
44% of intercept customers are willing to pay $0.55 for a K-cup, 30% of interested customers were willing to pay $0.50 or more for a K-cup. By pricing the K-cup for $0.50,which is similar to Kcups in the OCS market, KADs will not lose revenue from their segment. Premium flavor cups for the at-home segment be priced at $0.60 per cup.
III) PLACE / DISTRIBUTION STRATEGY
Blend of direct marketing through Internet and traditional retail channel.
A) Short term plan: Direct marketing through website is apt for selling to the 12000customers who are waiting for the brewer for the home market. It is also convenient at targeting Keurig-aware customers. This can be executed by taking advantage of both Keurig’s and the roaster’s websites.
Also, create an online shopping experience similar to Amazon. This trims down distribution costs and also

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