Submitted by: Submitted by Eljefeechukzy
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Words: 1628
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Category: Business and Industry
Date Submitted: 09/08/2014 09:35 AM
Chukwuma Azubuine
Keurig at Home Case Study
Introduction
Keurig Inc. is a company that was founded mainly from investments by venture capitalists. Keurig specializes in the production of coffee brewing machines, but it also successfully created and patented a type of special cup called the K-Cup, which it licensed out to different coffee houses. These partner coffee makers produce coffee beans of different varieties and qualities in K-Cups which are brewed by Keurig machines. The ownership of the company was restructured significantly to raise more capital to support the creation of new and emerging product lines. This report seeks to analyze the recent dilemma facing the company's president and CEO, Nick Lazaris on what decisions to take regarding the at-home coffee market, with Keurig hoping to recreate its earlier success with the office coffee market in the household (at-home) market.
Industry Overview
From exhibit 2, we see that the coffee market is generally broken into two separate divisions, which are the mass market coffee, and the gourmet coffee market. The gourmet coffee market has seen a continuous upward movement in sales over a five year period ending in 2000 while the mass coffee market has seen fluctuations in sales amount within the same period but has yielded considerably higher revenue. This could be result of the price variation between both coffee types. Another pertinent market division is the away-from-home (office) market, and the at-home (household) market. While Keurig had been hugely successful in the office market and was seeking to replicate that success in the household market, Nick Lazaris was faced with very important questions on market and product strategies which threatened to make or mar the company and its future.
Product Lines
The B2000 was a coffee brewing machine launched by Keurig in 1998. The target market of the product was the office consumers, and Keurig also...