Keurig Case Analysis

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I have reviewed your current marketing situation. Market research shows the at-home gourmet coffee as being a $3.9 billion market within the at-home coffee market of $6.9 billion. There are a few choices in which Keurig could make in order to enter the at-home brewing market. There is a debate on whether to use the one-cup model, currently being used with the away-from-home market, or switch to the two-cup model mentioned. There is some hesitation on the price of B100 at-home brewer should be. Competitors have shown they plan to release brewers that are considerably cheaper than Keurig. In addition the brewer price there has been discussion and research done in order to determine the price of portion packs. There is an array of information needed in order to determine whether to continue with the one-cup model or switch to the two-cup model. A concern has risen with office managers and the theft of portion packs if the at-home brewers were to have the same K-cup and the use of the two-cup model would eliminate this fear. There are a few downsides to implementing the two-cup model. With this proposed change customers have the potential to use portion pack in the wrong brewer resulting in frustration and dissatisfaction. GMCR, who prefers the one-cup model, would have to double the double the production of portion packs manufactured and warehoused. Along with GMCR other roasters would have to double their production as well. In addition to GMCR’s concern about the two-cup model there is a concern that KADs would underprice the Keurig and roasters because they have don’t have an investment in the brewers. In order to design the new Keurig-Cup would cost around $400,000. Roasters would need new packaging lines in order to produce both the K-Cup and the Keurig-Cup which would be just under $60,000 per line. With the five roasters currently with them having only one

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