Analysis of Keurig coffee makers and pods
- Customer (Who specifically is helped?)
- Busy individuals and households who want a single, fresh cup of coffee without the effort or waste of brewing a full pot. Keurig also serves small to medium-sized offices seeking a simple, mess-free coffee solution for employees and guests.
- Pain (What is the frustration for the customer?)
- Traditional coffee brewing is time-consuming and often results in wasted coffee, while the alternatives are unappealing; instant coffee tastes inferior and daily coffee shop trips are expensive. This leaves the customer without a quick, affordable way to make a single cup of good-quality coffee at home.
- Solution (How does the product remove the frustration?)
- Keurig's pod-based system brews a consistent cup of coffee in under a minute, directly solving the convenience problem. It occupies a strategic middle ground by delivering a taste superior to instant coffee at a per-cup cost far lower than a café.
- Offer (Pricing, warranties, terms)
- Keurig sells the brewing machines at 60$ to encourage widespread adoption. The company's main profit is generated from the continuous, high-margin sale of proprietary K-Cup pods required for the machine to function (25$ per 30 pods).
- Channel (How do customers discover and purchase the offer?)
- Customers purchase Keurig brewers through major big-box retailers, department stores, and online marketplaces. The essential K-Cup pods are sold ubiquitously through these same channels and in nearly all grocery stores, ensuring they are always convenient to repurchase.
Exercises for the reader
- Can you think of a totally different way to efficiently help this market?
- Can you think of a different market where an analogous strategy would work?
- What is the underlying need that the customer has beyond the immediate problem?
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