Keiurig Case Analysis

A passage I found on Keurig’s company website says the following about their KOLD product. “We view our initial KOLD system launch as a pioneering innovation. We learned from consumer feedback that while the KOLD system delivered great tasting cold beverages, our initial execution of KOLD did not fully deliver on their expectations, particularly around size, speed, and value. Because of this, we are discontinuing the first generation of our Keurig KOLD system. While we work to incorporate our learnings into future beverage systems, we are offering a refund to consumers who purchased a KOLD system”. Essentially, their system had flaws that consumers were quick to react towards. Their target market for this system consists of anyone who has interest

in cold beverages. Examples include: adults, teenagers, and some seniors. When looking at Keurig’s total product offer it states everything that consumers evaluate when deciding to buy. Including getting good quality at a fair price.

Keurig has a wide variety of brewers they offer for sale to the consumer, including single serve, multiple serve, fully programmable, and premium features. However, none of them are equipped with the function to brew cold drinks. Hence, this KOLD system allowed a unique selling point and competitiveness into the brewing industry. Their product line all have the same function which is to brew coffee, but the KOLD brews cold drinks. The product design itself looked promising, with a huge water reservoir, sleek and modern design, as well as no CO2 canister needed or messy syrup bottles. All you need to do is put your pod in and let the machine do all the work. The product was also very user friendly, with big buttons and contents that described how to use it. Though, with that comes the price, and the pods are expensive to buy. To compare, a pack of 12 cans is about $5 at a grocery store, and 4 Keurig pods are $5. Each pod produces 235 ML, but one single can from the store gets the consumer 355 ML. Not only is the consumer getting little product, but they are also getting 8 cans less. The value simply is not there, but due to the fact this was the only product of its kind they could charge whatever they wanted and sell

units. The initial unit price for this system was about $350, and definitely has a futuristic appeal as well as attraction towards it. If the product had been optimised to work efficiently I believe it would have stuck around and gained more attention, which brings in more revenue. Due to some internal design flaws it did not stick around and thus forced Keurig to remove it from store shelves and sell it online. Slowly, it was discontinued and Keurig gave customers a full refund for any units purchased. Nevertheless, for Keurig to release this again, they need to remove design flaws and possibly reduce the price of pods to make more consumers interested in buying.
Given how Keurig was unsuccessful in keeping their product on the market, would it make sense to have a trial run be tested to see how consumers react to their new changes? Also is this the fault of the design team or management? Explain why.
Sources:
http://money.cnn.com/2016/06/07/news/companies/keurig-kold-refunds/
http://www.keurig.ca/