The advertising and promotion strategies of Keurig rely on integrating marketing communications between the company and potential customers. The company has long abandoned the traditional channels of advertising and communication, such as radio, TV, and paperback advertisements, instead preferring to connect with its potential audience using the Internet (Kotler, Keller, Sivaramakrishnan, & Cunningham, 2013).
There are several reasons for such an unorthodox decision. While standard television and radio communications reach out to a great number of people, the advertisements using those channels are not targeted. They help build up brand recognition but do very little in terms of increasing sales. Keurig realizes that their product is a situational purchase, unlike household consumables, food, and beverages, which are frequently seen in TV advertisements. Customers search and compare coffee machines using the Internet and are more open to targeted ads. Therefore, the primary forms of communication between the company and its customers are done through social media and e-mail.
The company utilizes Facebook, Instagram, and Twitter to inform the population of its new products, contests, and promotions (Kotler et al., 2013). E-mails are used to gather feedback and to urge customers to introduce their friends to Keurig, acquiring extra market share and growth. Billboards are also used as a method of mass communication, but they are used sparingly and are usually placed at the entrances of large house appliances markets and electronics shops. The primary objectives for Keurig’s an advertising and promotion campaigns are as follows (Anderson, 2017):
- Brand recognition and exposure;
- Product recognition;
- Targeted advertising;
- Increase in sales
- Formation of a loyal customer base.
The company enables the communication between individuals using social media platforms and live communication to introduce more people to their quality products.
Existing Marketing Strategy
Keurig currently pursues several marketing strategies to sell its products. They are as follows (Treadway, 2015):
- Internet marketing. The company purchases customer data from large search engines and social media services to utilize targeted ads and promote the product to large volumes of potentially-interested customers.
- Word-of-mouth. As evidenced by the “bring a friend” campaign pursued by Keurig, the company urges its customers to introduce their friends to Keurig products to spread the word and get additional benefits.
- Relationship marketing. The company organizes fan-groups on Facebook, Twitter, and Instagram to create a sense of community and strengthen its customer base.
- Transactional marketing. This type of marketing involves providing additional benefits to retailers and customers while maintaining a competitive price. Keurig utilizes transactional marketing as one of its primary strategies, as the products provided by the company are typically sold in bundles, which include coffee mugs, coffee packs, and other coffee-related accessories.
- Cause marketing. The company is aware of the effects of its business on the environment. As such, it participates in the Fair Trade Certified program, which ensures that the materials and coffee used in their products are received from environmentally-friendly sources, which seek to reduce their greenhouse emissions and engage in safe waste utilization.
Keurig’s marketing strategy helped the company grow from being a small company to a moderately-large and recognized brand with growing sales, showing a modicum of efficiency. However, the weakness of such an approach is its diversity. Keurig’s marketing budget has to be split between five different approaches, meaning that there is a lack of focus on any single one of them. The company should limit their efforts to 2-3 strategies rather than waste money and effort on less productive endeavors (Stephens, 2016).
Anderson, E. T. (2017). Keurig at home: Managing a new product launch. Kellogg School of Management Cases, 1-19.
Kotler, P., Keller, K. M., Sivaramakrishnan, S., & Cunningham, P. H. (2013). Marketing management (14th ed.). Don Mills, Canada: Pearson.
Stephens, D. L. (2016). Essentials of Consumer Behavior. New York, NY: Routledge.
Treadway, R. B. (2015). Keurig Green Mountain 2015: Dynamic capabilities and sustainable strategic positioning. American Journal of Management, 15(3), 43.