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Keurig Coffee Makers: Why Y’s buy household appliances

June 3, 2009

Remember the introductions of Flintstone’s vitamins and dinosaur shaped toothbrushes? Those were commodity products with a twist, marked up 20% for the “cool factor”.

That Gen Y grew up on these items might be the most important lesson marketing-oriented companies looking to sell brands to Gen Y. Because now, that “cool hunting” that we did when Mom was pushing the shopping cart is built into our purchasing habits. And we’re still paying a premium for “cool” even when it’s our credit cards footing the bill.

On the checklist of things you buy along the transition to mature, responsible adulthood, a coffee maker is pretty high on that list.

Well, I’ve knocked out that must have. (Next on the list, College Alumni Polo Shirt…) I just purchased my very own Keurig (Coffee Maker) at Target, and I couldn’t be happier.

In college, coffee was dispensed by Starbucks. Coffee was about community, about a place to meet your friends and study. And for 5 bucks a pop, it was more about fashion than function. Now, coffee is a commodity and a caffeine delivery vehicle.

So, you would think that I would buy the cheapest brewer available. Something like my toaster, which I may have spent 9 dollars on. But I didn’t. Instead, I bought a Keurig that cost 4 times as much as the cheaper models at Target. Why?

In the Starbucks Culture, at least for the young, upwardly mobile Gen Y’ers that this blog represents, Coffee is a merit badge earned at “Adult Scouts”. I get weekly reports on which of the products I’m responsible for appeal to “badge cravers”, and our Starbucks Coffee Drinks are always at the top of those reports.

But this doesn’t just apply to coffee. The lesson here is for the companies looking to avoid their products becoming merely another clearance rack special. For my demographic, we don’t WANT to purchase most things as a commodity, even in this economy. The Keurig costs a lot. But I bought it anyway.

Why?

1) Function: It’s not all about sizzle. Individual portion control is more important to me than almost anything else. I live alone. The most usage my coffee maker will ever see is two cups if I invite someone in for “coffee” and I have to follow up on my promise.

The fact remains that no matter how cool your product is, it has to live up to it’s promise of function. There’s a reason I buy GNC Vitamins instead of Flintstones Vitamins now.

2) Form: Of course, coffee is still a commodity. But you can turn a commodity into something special with packaging and positioning. So many of the Gen Y purchase decisions are based around a social value of the purchase. Crystal Geyser water is what you bring on a hike, when you just need to be hydrated. Smart Water or Ethos is what you carry to a meeting, when you need to look like a professional. Smart Water’s packaging and branding all add up to one thing: Cool! Which translates into Buy!

And that’s a theory that applies to so many commodity products. There’s Method Soaps, which now offers a full-line of enviroment-friendly cleaning products packaged to appeal to Gen Y despite throwing themselves into an arena dominated by Consumer Goods Giants P and G and Unilever. And they’re winning. Method is one of the fastest-growing companies in the private sector. And with minimal advertising and selling expenses.

The Method website puts it perfectly: They deliver cleaning products you don’t have to hide under your sink. You can proudly display your Method Dish Soap because it vaguely reminds you of a sweet-smelling lava lamp. And it still cleans your dishes.

The examples are endless. Kitchen mixers that come in colors besides black and white. Water bottles to go with space-age packaging for 10 times the price. And the opportunities are endless. In any market where price competition has become the primary method for earning new customers, create a new brand with “cool” as it’s position.

Now if you’ll excuse me, I’m going to try to sell Mr. Procter or Mr. Gamble on the idea of a Toothpaste packaged in an Ansel Adam’s photograph.

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