machines with 17 percent of machines returned thrown out or given away John

Machines with 17 percent of machines returned thrown

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machines, with 17 percent of machines returned, thrown out, or given away. John Block, director for the NPD Group, said, “Manufacturers and retailers have a great opportunity to improve their position in the marketplace by listening to consumer feedback, and integrating all three attributes that customers want most into their product offering: a reliable pod machine, easy-to-find refills, and a variety of coffee flavors.
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A Multichannel Strategy for the Away-from-Home (AFH) Market Keurig initially focused on the AFH commercial segment of office users. Increasing demand and brand awareness enabled Keurig to pursue a multichannel strategy, providing widespread exposure to consumer trial. Starbucks and other specialty coffee purveyors laid the groundwork for launching into the AFH office coffee service (OCS) market by educating consumers about gourmet coffee and moving coffee beyond a commodity. Starbucks may be responsible for a paradigm shift regarding the price elasticity for coffee. The paradigm that applied to price elasticity affecting consumer purchases of Robusta coffee by the can shifted with the proliferation of fresh-ground Arabica beans served in a coffeehouse, often for $2 or more per cup. This paradigm shift enabled Keurig to offer a single-cup brewing system into offices, capitalizing on consumer demand to replicate their coffeehouse quality java in the office. There were approximately 2.6 million coffee brewers in offices nationwide serviced by a network of approximately 1,700 distributors. Of those offices, GMCR estimated that 12 percent had single-cup brewers, and about half of those were Keurig brewers.8 While Keurig brewers were estimated to be in 30 percent of offices in New England, national penetration
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in the office channel was only about 6 percent. Keurig continued working with its network of Keurig Authorized Distributors (KADs) to execute office acquisition plans, conduct lead generation, demonstrations, and sampling programs to build Keurig’s office coffee business. In addition to Keurig’s traditional distributor network, customers such as Office Depot and Staples were helping Keurig grow through their business-to-business solutions for both large and small office applications. Another AFH single-serve opportunity Keurig identified was the hotel market. There were approximately five million coffeemakers in hotel rooms across North America. Keurig believed that 40 percent of these rooms catered to travelers who would appreciate the benefits of single-serve brewing. The Keurig team went through a rigorous process to develop new brewer concepts for the market. The development of a new “hotel in-room” brewer was one example (see Exhibit 8). Exhibit 8: Keurig “Hotel In-Room” Brewer Single-Cup Brewer System Competition
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Consumers had many options of single-cup brewing systems to choose from in North America and internationally.
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  • Spring '16
  • Harry Purcell

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