Group 6 Case 2 Keurig At Home 
Keurig at Home: Managing a New Product Launch
Question 1
Keurig should launch the Keurig-Cup in the at-home market and continue to use the K-Cup in the commercial market. The reasons of separating these two series are listed as follows:
a. Protect the benefits of KAD and Roasters.
Keurig should insist on their plan to launch the new Keurig-Cup even if the GMCR holds the opposite view since it can protect the profits of KAD and roasters when new products are introduced to the market. If Keurig differentiates the at-home market from office market, the previous office brewer users could not go to the direct commercial channel to purchase K-Cups at a lower price (if the at-home used Cups is cheaper). It won’t cause the customer loss of OCS market and the price war between these two segments. It is worthwhile to increase the workload on production as it benefits can be guaranteed.
b. Control the channel and price to maximize the profits.
When the Keurig announces the Keurig-Cup designed for the at-home customers, it will form a new distribution channel, which will not be severe affected by the existed market. The company has its own power to control this channel and the price of products. It could response to the market demand and product cost variation more flexibly. That means the company could gain more profits in this new distribution channel. Meanwhile, it will cover the previous R&D costs (although it is sunk cost) on the new system quickly.
c. Attract the OCS market users to consume more in new market.
As the K-Cup and Keurig-Cup could not replace each other, the differentiation will increase the chances of managers’ participation in in-office promotions of the Keurig at-home system. This difference would also prevent theft of K-Cups provided for office consumption. In other words, this attempt could push the deep users to purchase Cups for the brewer both in-office and at-home separately, which will increase the total sales volume as a whole.
d. Important
Question 1
Keurig should launch the Keurig-Cup in the at-home market and continue to use the K-Cup in the commercial market. The reasons of separating these two series are listed as follows:
a. Protect the benefits of KAD and Roasters.
Keurig should insist on their plan to launch the new Keurig-Cup even if the GMCR holds the opposite view since it can protect the profits of KAD and roasters when new products are introduced to the market. If Keurig differentiates the at-home market from office market, the previous office brewer users could not go to the direct commercial channel to purchase K-Cups at a lower price (if the at-home used Cups is cheaper). It won’t cause the customer loss of OCS market and the price war between these two segments. It is worthwhile to increase the workload on production as it benefits can be guaranteed.
b. Control the channel and price to maximize the profits.
When the Keurig announces the Keurig-Cup designed for the at-home customers, it will form a new distribution channel, which will not be severe affected by the existed market. The company has its own power to control this channel and the price of products. It could response to the market demand and product cost variation more flexibly. That means the company could gain more profits in this new distribution channel. Meanwhile, it will cover the previous R&D costs (although it is sunk cost) on the new system quickly.
c. Attract the OCS market users to consume more in new market.
As the K-Cup and Keurig-Cup could not replace each other, the differentiation will increase the chances of managers’ participation in in-office promotions of the Keurig at-home system. This difference would also prevent theft of K-Cups provided for office consumption. In other words, this attempt could push the deep users to purchase Cups for the brewer both in-office and at-home separately, which will increase the total sales volume as a whole.
d. Important