Keurig at Home Managing a New Product Launch Case Solution

1. What kind of channel conflict the new product will bring to the existing office market? Is it serious? Why Keurig is so concern of such a potential channel conflict? 

Keurig already has a well-established product, that is, their OCS, the offer a single cup brewing system in offices. The company is capitalizing on the desires of people to have a great cup of coffee, same as a coffeehouse in their offices. In 2002, through the OCS market, the company generated a revenue of $3.46 billion. Also, the company observed that the product has gained acceptance by the distributors. After the success forms the OCS market, the company is planning to expand its business by introducing a product to reach out to the at-home market. The company has done enough research on the product, and the data collected through surveys suggested that at home market has a lot of potentials and entering into this channel could be very lucrative for the company. Yes, the new product will bring some serious challenges to the existing channel. Before launching their new product, which is targeting the home consumer market, they need to take care of their already well-established office market. The company has some concerns that its new at-home product can impact its existing channels in a bad way. The office managers may feel that the employees will start taking their K cups at home, and the new product could potentially take the sales away from the KADs. 

Another concern is the pricing of the brewer, the home brewer, which is B100, can also be used in offices. The office brewer costs greater than $300; the price of a home brewer is estimated to be $199, $249 or $299. Though the pricing is yet to be decided but still if the same machine can be used in the offices, then why would the office managers will prefer buying an office coffee brewing machine at a higher price. So, the new brewing machine can serve as a potential competitor for the existing channel. Due to this, the KDAs can get demotivated and can impact the sales of an at-home product. Keurig's goal is to come up with a controlled distribution strategy. The new product has the potential to damage the marketing efforts of the KADs, and this could result in the destruction of Keurig's revenue and their installed base from their core segment which is OCS. Also, the company is concerned that will lose control over prices. 

After analyzing the potential challenges, the new product can create in the already existing challenge that the company's goal is to focus on its distribution portion backs and brewing machine to ensure they maximize the launch of the at-home product while also protecting the OCS channel. The company has thought of differentiating the two products by introducing both different channels but the decision has yet to be finalized as the biggest investor of the company has some valid concerns regarding offering two different cups for both channels.