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Marketing Analysis: A Case Study of Keurig Company

Kellie Parenda

Louisiana State University in Shreveport

MBA 706: Marketing Strategy

Professor Si Chen

June 5, 2022
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Keurig is a coffee brewing company well known for its single-cup system. The company

was among the first to invent the single-cup system, which has gained popularity with office

coffee drinkers. The single-cup system offered its customers great variety, convenience, and

freshness. As a result, Keurig has positioned itself as a market leader as it was the first to bridge

this niche in the coffee market.

The company has applied a variety of marketing strategies to maintain its market

position. Marketing strategies are vital for the success of any business as it creates consumer

awareness of the aspects of the product that make it stand out. A company can employ various

marketing strategies to ensure it reaches its target market and attracts new customers. It has

employed the extensive use of niche marketing by focusing on office clients more than at home

clients. They believed that if the product succeeded in the office market, it would most likely

succeed in the at-home market. As a result, their tailored their products to meet the specification

of their office customers. This enabled them to maintain their market position as most companies

had not tailored their products to meet this market segment's needs in the way they have done it.

Additionally, it applied product differentiation as a marketing strategy. The company tailored its

products to meet the specific requirements of office coffee drinkers. They began by offering

them a wide variety of coffees to choose from by partnering with different roasters who gave

them the right to package the different coffee flavors as their own. Thus, allowing customers

access to various products they didn't have before. They also developed the K- cup, which was

the first innovation. The cup was designed such that it could only fit in Keurig brewers. It also

provided the customers with the convenience of working and accessing hot coffee at the office.

This enabled them to position themselves in the industry as they were introducing a new and

needed product.
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The other marketing strategy they employed was product pricing. Pricing is very integral

in business as it determines the profits of a business. They set an affordable market price for both

office managers and employees in this case. The pricing strategy worked as the product was the

first of its kind, and thus there were no brands to offer comparison or counter prices. This

enabled the company to record higher sales volumes in a shorter period than other companies

that were the first market entrants like it.

Keurig also applied the online marketing strategy in its operations. This strategy

extensively relies on the use of the internet to create awareness of the product's availability. In

Keurig's case, they used their online platform to advertise their products to them at-home market

segment. They resorted to this type of advertising as they were promoting to their current

customers. Thus, it would be easier to access them as they used the same online system to

purchase the brewers used in the office.

The key issues that presented themselves, in this case, were strategic issues that had a

huge influence on the company's strategic decision. The problems bring to light how the

company's partnership relationships influence its operations. If not effectively addressed, these

issues will have negative impacts on the business partnerships and its current market segment.

Losing either their current market segment or either of their partners will be detrimental to the

success of their business. The issues will also affect the business's competitive advantage, which

has been its success. Thus, addressing these issues will be very integral for the sustainability and

success of the company.

Outsourcing and forming partnerships have been the main business model for the

company. However, they are the major contributors to the issues affecting the company. If it

honors GCMRC's request to continue with the single-cup approach in the new market, it will
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jeopardize its control over pricing. This is detrimental to the business as the KAD distributors

may run them out of business by underpricing their products. This will result in a decrease in

sales volume and loss of their current market segment hold to other companies. Thus, the

company should consider re-evaluating its outsourcing and partnership relations.

The company's pricing decision with respect to the new product is an issue that needs to be

addressed efficiently. Managers should consider pricing as it directly affects business profit

margin and presents a lot of challenges. Pricing also has a direct impact on consumer purchasing

(Ali, and Anwar 1). This is showcased in the case study as the manager seems to have a problem

with the pricing costs of the product if they choose to outsource. Hence the manager should

consider making the most suitable price decision for the company's benefit.

An efficient marketing plan is a necessity for the profitability of any business. In Keurig's

case, we see the manager is concerned over whether they applied the right marketing plan for

their product launch. The wrong marketing strategy would result in the poor performance of their

new product. However, the company seems to be moving in the right direction as they have a

marketing plan. Thus, the potential of marketing to be a destructive issue, in this case, is

unlikely.

I would propose doing extensive market research among the few solutions before settling

on a specific marketing plan. Marketing research provides managers with vital information that

will enable them to make strategic decisions for the good of the company (Ayuba 149). Thus,

managers can use data from the research to make decisions such as the right product to avail, the

best market to serve, make or by etc. In Keurig’s case this is the answer to all the issue currently

crippling them. This is because it seems decisions were made based on a few responses which

made it difficult to make the strategic decisions. By conducting an extensive marketing research,
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they will be able to analyze the different components of the marketing mix and use them to their

added advantage.

I would recommend the company to put in more resources to developing a marketing

research team. The team should consist of a member from all departments. This will give them

access to a diverse decision-making table who will analyze different factors in respect to there

are of expertise. This in return will make not only hasten decision making but will also make it

more effective. The management should also be willing to consider the inputs of this team. This

will be in the best interest of the company as it will lead to more customer satisfaction. The

market potential of the single serve coffee market seems to be fully utilized. This is because the

company seems to have exhausted the market segment. The market in this particular case is

limited to coffee drinker who are mostly office going people or adults who work at home thus I

would recommend that the brand expand its operations and take up other products to secure the

continuous growth of its company.

To maintain its market position in the industry I would recommend that they carry out

product diversification. This will involve reengineering their brewers with better and more

improved facilities through the use of technology. This will enable them to stay ahead of their

competitors as they seem to have a lot of competitive advantaging factors on their side such as

customer preference. As a result, offering more diversified products will enable them to reach

meet the market needs and can also give them access to newer markets.
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References

Ali, Bayad, and Kofand Anwar. Research Gate, 2021,

https://www.researchgate.net/publication/351245898_Marketing_Strategy_Pricing_strate

gies_and_its_influence_on_consumer_purchasing_decision,

Ayuba, Bello. The Role Of Marketing Research On The Performance Of Business

Organizations. Research Gate, 2015,

https://www.researchgate.net/publication/344177049_The_Role_of_Marketing_Research

_on_the_Performance_of_Business_Organizations,

Mind Tools. (2021).The Marketing Mix and the 4Ps of Marketing.

https://www.mindtools.com/pages/article/newSTR_94.htm