Free Custom «Marketing Analysis: Keurig K45 Elite Brewing System» Essay Sample
Table of Contents
Marketing analysis of the following consumer product will be conducted in this research paper - Keurig K45 Elite Brewing System. This analysis will cover the following areas: analysis of marketing strategy and marketing mix applied to the product; SWOT analysis of the product’s marketing strategy; analysis of promotion mix and branding strategy as well as analysis of consumer behavior. The main issue to be answered in the research is whether existing marketing strategy is effective in the modern business conditions. The reason is that the product under consideration is new and technological. Technologies are developing fast nowadays. Therefore, marketing strategy and marketing mix should be flexible enough in order to meet new requirements of the customers. Finally, respective recommendations how to improve the marketing strategy and marketing mix will be provided in this paper. The recommendations will be based on the whole previous analysis and final SWOT analysis of the company’s marketing strategy.
Background Information about the Product
The Keurig K45 Elite Brewing System is an ellitte coffee machine. The machine is able to brew a cup of tea or coffee, hot cocoa or even iced beverage. The machine is able to perform this function in less than a minute. The machine provides a customer with three possible cup sizes and a lot of samplers. Among these samplers the following ones may be pointed out: milk chocolate hot cocoa, breakfast blend, Italian roast, and chai latte, etc. Consequently, the machine proposes about 400 different varieties for a customer.
The company and the product are characterized with a positive brand and perception among customers. The biggest advantages of Keurig and its products are combination of high quality and available prices. Therefore, the company has been demonstrating positive financial results for the last years. However, there is always a place for improvement, and this issue will be considered in this paper.
Marketing Strategy & Mix
First, the analysis of marketing strategy and marketing mix applied to the product must be performed. Marketing strategy should show the way of reaching the stated goals, using different marketing approaches and techniques. A formal definition of the term “marketing strategy” is the following. In simple words, marketing strategy shows the way from the current positions on the market to the desired ones using marketing instruments. Considering the issue of marketing instruments, it usually means the so-called marketing mix. Its essence will be explained below.
The respective mission of the chosen marketing strategy is to promote and differentiate the product, to make the customers familiar with it for the purpose of increasing its sales. This marketing mission should contribute to the achievement of the overall strategic mission in the company, such as increasing the company’s share on the market and making it one of the leaders.
This mission is the overall one. It should be attained via realization of the tactical objectives which should be as follows:
Creation and launching of an effective advertisement campaign in all the possible media;
Effective positioning and differentiating of the product among the other similar ones;
Making the customers familiar with the product, its features and characteristics;
Explaining all the competitive advantages of the product to the customers;
Creation of some positive associations with the product in the customers’ consciousness;
Making the customers also familiar with the company and its other brands;
Creation and maintenance of a positive image of the company. For example, in this context, it is very important to be socially and environmentally responsible under the modern circumstances.
Marketing mix is a set of marketing instruments that are used to launch a product on a market, place it and promote. Usually, marketing mix is associated with the so-called 4Ps: product, price, place, and promotion. The task of a marketing specialist is to choose the most optimal combination of these elements.
Therefore, the first element of marketing mix is a product. The product under consideration is targeted on the so-called middle class. Such conclusion can be made on the basis of two reasons. First, the product is expensive enough and considered to be a kind of a luxury good. People with high income tend to make coffee using traditional techniques, but not machines. Second, people from middle class value their time. It is a great advantage for them to make a cup coffee for less than a minute. The motto of the product can be claimed as getting pleasure while saving valuable time. In addition, it is important to mention that the product is technological and innovative. Despite the fact that it is not a brand new and innovative computer, it is still a representative of a new generation of the so-called ‘smart’ technologies. Therefore, the target audience of the product will be mainly young people.
The following element is a price. There are a lot of pricing strategies. Among them it is possible to reveal the following ones – premium pricing, penetration pricing, economy pricing, price skimming, optional product pricing and captive product pricing. Taking into account the fact that this type of product is not new, it is believed that thecompany will not be able to set up a high price. This fact will not let the company win the competition since there are a lot similar and even the same products. Therefore, the most appropriate strategy would be penetration pricing. The company has decided to establish a low price at the very beginning in order to attract the customers. Today it is possible to increase the price.
The third element of the marketing mix is place. Placement relates to the development and usage of particular distribution channels. It has been already mentioned that the target audience of the product under consideration is young people. In addition, these people belong to the middle class of the society. Such type of people value their time. Consequently, they desire to obtain the highest efficiency from buying the product for the less time spent. Therefore, they prefer buying via Internet.
The biggest emphasis should be made on the placement via Internet. Nowadays, more people desire to purchase things online. It helps them to save much time as well as money. The companies also get significant benefits due to optimization of storage and administrative costs. Therefore, it would be a great option for a company to develop its own online platform. It should be something more than a simple official website. It must be a platform, where the customers can communicate with the company, watch their products and buy them. This organization should invite special outsourcing firm to develop its design and use experience of other similar projects from the different industries. The last element of the marketing mix will be analyzed in a separate section below.
Finally, the role of promotion should be also mentioned. In simple words, promotion is advertising campaign of a product. First, a target audience should be chosen. It has been already mentioned that the target audience is mostly young people. It is worth noting that, the advertising campaign had had a massive character at the very beginning. Nowadays it should address the most interested customers. Consequently, the best marketing instrument in such conditions will be direct marketing.
Nowadays, the company mainly relies on traditional distribution channels. It sells the products to the retailers. They, in turn, propose all the products to customers. Such approach brings 80% of sales to the company. It is a good business model. However, the world is changing. Moreover, the customers express new requirements to distribution of the products. They desire to save time and money. Consequently, such services may be provided for them via Internet.
The company should also consider the specialized exhibitions. Advertising and promotional campaign must have aggressive character in order to attract customers and justify initial high production costs. As stated above, the Internet should become the main platform for advertisement. Development of the Internet, growth of new technologies will offer significant opportunities to the company.
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An integral element of promotion mix is branding. The main function of branding is creation of positive perception of the product and the company among the customers. Brand can be considered as the overall name of the company and its products. Therefore, it is very important to introduce it in a positive manner. It has been proven that there is a corresponding correlation between the positive brand and financial results of a company.
Brand is one of the integral and the most important elements of marketing mix. In fact, it is a part of the mentioned promotion mix. In other words, brand is a name of the company and the product on the market. The customers perceive and evaluate a product, according to its brand. Moreover, it may be characterized with excellent technical characteristics, but the negative brand will scare the potential customers. Therefore, the main task of the company is to create a positive brand and associations of the consumers about the product. Finally, such positive attitude to the company and the product ensure better sales and improve the financial results.
Your brand strategy is how, what, where, when and to whom you plan on communicating and delivering on your brand messages. Where you advertise is part of your brand strategy. Your distribution channels are also part of your brand strategy. And what you communicate visually and verbally are part of your brand strategy, too (The Basics of Branding).
Branding can be applied to both the company and the product. The company under consideration is Keurig. This organization has been always characterized with a positive image among the customers. The customers perceive the company as a manufacturer that provides high quality of the products for appropriate prices. Therefore, there is no need to change something seriously in the company’s brand.
It has been mentioned that the target audience of the organization is young people from middle class. It would be an effective step to expand this target audience. It may be one of new functions of branding. The brand should become more available for the people of the different age and income categories.
The main elements of marketing strategy and marketing mix have been considered above, which are promotion, pricing strategy, branding and other components of marketing mix. These are the objective elements of marketing strategy. All these elements depend on the company, its goals and qualifications. However, there is also a subjective component in any marketing strategy. This component is people on whom all the elements of marketing mix are targeted. The companny may plan whatever it wants, but the final result will depend on the customers’ reaction to them. This reaction is represented through the so-called consumer behavior.
One official definition of consumer behavior is "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society” (Perner).
Considering the issue of the consumer behavior in the case under consideration, the following factors should be accounted. First, it has been already mentioned that the target audience tends to buy coffee machines via Internet. It saves time and money for these customers. Therefore, the company should pay significant attention to the placement of the products on the Internet.
Second, the industry is characterized with a high degree of competition. A customer is proposed a broad range of coffee machines from the different manufacturers. Therefore, the ‘switch-between-brands’ behavior is typical for this industry. The company should conduct aggressive marketing campaign in order to keep high level of the customers’ loyalty.
Finally, the customers pay much attention not only to the technical characteristics of the product, but also to its brand and look. The product should not only be technically developed, but also attractive. People invite guests to show them their coffee machine and taste a cup of coffee. Thus, they want their coffee machine to be really attractive.
Having analyzed all the elements of the company’s marketing strategy and mix, it is important to conduct SWOT analysis of the whole marketing strategy. It will provide the reader with opportunity to evaluate efficiency of marketing strategy in general. SWOT analysis of the company’s current marketing strategy and marketing mix is provided in the table below.
· Positive image on the market;
· Good financial conditions of the company that allow to conduct broad marketing campaign;
· Broad assortment of products;
· Effective pricing strategy.
· Attracting of broader target audience;
· Better pricing strategy that will increase the company’s financial results;
· Expansion of assortment of the proposed products.
· Reliance on traditional placement and distribution channels;
· Not aggressive advertisement campaign.
· High pace of development of the industry;
· Growing degree of competition;
· Growing expenditures on marketing campaigns.
Considering the results of the company’s marketing strategy according to SWOT analysis, it is possible to state the following. The current position of the company on the market is quite strong. The company is characterized with a positive image and brand. It means that the current marketing strategy of the organization is effective. However, it can be also noted that there are a lot of challenges to the company. Therefore, significant improvements should be implemented to the current strategy. Some of these improvements will be considered in the conclusion and recommendations section of this research.
Conclusion and Recommendations
After analysis of the company’s marketing strategy and marketing mix, it is possible to make some conclusions and recommendations concerning the issue how to improve the company’s marketing policy. These possible improvements are the following:
Expansion of distribution channels with reliance on the Internet. In the nearest future, the Internet should become the most important sales channel for the company under consideration. Development of online platform will require a lot of resources, but the final benefits are going to be higher than the initial costs;
Expansion of the target audience of the company’s business, conducting more aggressive marketing campaign. The target audience must be expanded mainly via invitation of elder people and people from the other income categories;
Higher attention not only to branding of a product, but also to branding of the company in general. Due to the high degree of competition, the company must differentiate itself. The current motto as “the highest quality for less money” is appropriate. However, it should be addressed to potential customers in a more aggressive manner;
Finally, improvements should be made in the overall marketing strategy and marketing mix. It should become more flexible in order to answer the challenges of the constantly changing external business environment. The strategy should be discussed each year, and the needed changes must be implemented.
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