Keurig Case Study

Keurig Case Study

1. How would you characterize the at-home coffee market AND brewer market?

a. Describe products.

b. Describe market segments.

c. Describe competitors.

d. Describe channels.

The at home brewing market represents a large opportunity for Keurig, however it will also cause a large decrease in sales for the OCS market. In 2000, there were approximately 175 million Americans that drank coffee with about 60% using previously ground coffee, 105 million and another 10% using freshly ground coffee from whole beans, 17.5 million. Additionally there are about 18 million coffee makers purchased annually in the United States totaling about $450 million in retail sales. The main product that would be sold in the At-Home market would be the B100 brewing system costing about $199 per brewer. Additionally, the B100 was design specifically for the At-Home market with changes made to the slot when the Keurig-cup would be placed allowing for a differentiation between the OCS model and the At-Home model. Also, Keurig-cups would be sold to consumers for a price between $0.40 and $0.50 per Keurig-cup to make an 8 ounce cup of coffee. This would make the Keurig B100 At-Home brewer the most expensive product on the market when compared to the major competitors also attempting to enter the At-Home brewing market segment. First would be Salton with a brewer costing the consumer about $49 and $0.25 per pod through the subsidiary Melitta. Second would be Sara Lee with a brewer costing $70 and $0.40 per pod. Third would be Proctor and Gamble offering their product at a similar price point as Melitta and Sara Lee. Keurigs product would be sold through two main channels upon launch. First would be through an ecommerce site, Keurig.com, where consumers could purchase the product directly from Keurig and the second would be through the KAD distributors. There is however one downfall to sales through the KAD distributors. Keurig...