What marketing approaches could Green Mountain adopt in order to expand its customer base?
More than two decades ago, Robert Stiller visited a coffee shop in Waitsfield, Vermont, where he drank a cup that was so good he bought the coffee shop. Stiller, an entrepreneur, had recently sold another business and settled in Vermont because he was an avid skier. When he walked into the coffee shop—where the coffee was roasted on site—he smelled the sweet aroma of success. “ I liked the idea that the product would be consumed, because if you do a great job, people will keep coming back,” Stiller recalls. “ I felt if you provide the best quality and service in whatever you pursue, you’re going to do well.” Within a few years, he’d bought a second coffee shop and founded Green Mountain Coffee Roasters, which—in addition to operating as retail shops—began wholesaling fresh-roasted coffee to restaurants and other outlets. When consumers complained of difficulty in going directly to the two Green Mountain Coffee shops and began to clamor for their favorite joe at home, the firm’s mail-order business was born. Today, consumers can find all the flavors of Green Mountain Coffee in a variety of places—from restaurants and inns to doctors’ offices and the Internet.
But just selling coffee isn’t enough. Within two decades, the marketing environment had become amazingly complex. Competition from other firms like Starbucks is fierce, regulations govern international trade with coffee growers, economic factors affect how much consumers are willing to pay for premium coffee, and cultural factors may determine consumer preferences. Stiller and his executives must continually collect information about the marketing environment to provide the high- quality products that consumers want.
In addition, Green Mountain is well known for its ethical business practices and its commitment to social responsibility. Not long after Green Mountain was founded, a group of employees formed an environmental committee that became the foundation for the firm’s social responsibility projects. Th e committee began with initiatives to turn off lights and turn down the heat in the company’s offices to save energy. They then redesigned some of the firm’s shipping boxes to reduce weight—which also reduced costs. Next they came up with the idea for Rain Forest Nut coffee, the sale of which helped develop public awareness of the depletion of rain forests in South America and raised money for the Rainforest Alliance and Conservation International. (Historically, rain forests have been cleared by coffee farmers to produce additional spaces for growing more coffee.) Consumers loved the taste of Rain Forest Nut coffee, as well as the philosophy behind it, and sales took off .
As Green Mountain got more and more involved with rain forest conservation, the firm developed alliances with coffee farmers, who agreed to specific conservation and quality criteria in return for guaranteed business. For example, to preserve the environment, the coffee is grown in the shade—this preserves habitats for certain birds and helps reduce global warming. Currently, Green Mountain is the world’s largest supplier of double-certified coffee—products that meet qualifications for being organic as well as those of the Fair Trade initiative. Fair Trade certification signifies that coffee growers have been paid a fair price for their product, which means they can feed and clothe their families, send their children to school instead of requiring them to work in the fields, and use more environmentally sound farming practices.
Green Mountain donates 5 percent of its pretax earnings to nonprofit organizations and causes. The firm also creates alliances with these organizations or other companies for certain community projects. With the National Wildlife Federation, Green Mountain recently introduced two new shade-grown, Fair Trade coffees called National Wildlife Blend and National Wildlife Blend Decaf. Together, the two organizations are promoting the coffees as wells as the link between the shaded coffee environments and the health of migratory birds that live there. Green Mountain is also an active supporter of Coffee Kids, an organization that works to improve the quality of life for children and families in the coffee growing communities. Some of the Coffee Kids programs have included education, healthcare, hurricane relief, and funding for small businesses.
All of the good business ethics and social responsibility projects in the world wouldn’t amount to a hill of coffee beans if Green Mountain wasn’t a great place to work. Green Mountain has been ranked by Forbes magazine as one of the “ 200 Best Small Companies in America” four years in a row, and Business Ethics recently ranked Green Mountain fifth overall in its list of “ 100 Best Corporate Citizens.” Company culture embraces teamwork, personal growth, and fun. And Green Mountain pays its employees for time they spend volunteering for various social responsibility programs. Ethics and social responsibility are an integral part of Green Mountain’s overall marketing strategy, which seeks to promote the highest quality products in a way that preserves the natural environment and enhances the well- being of people in need around the world. “ We have distinguished ourselves with our focus both on superior execution and being a responsible corporate citizen,” says Robert Stiller, “ and now we can leverage these positions to competitive advantage.”
Questions
1. What marketing approaches could Green Mountain adopt in order to expand its customer base?
2. How do international and domestic events affect Green Mountain’s marketing strategy and sales?
3. How successful would Green Mountain be in South America?
