Would you want to pay more for your coffee?
by chee leng-Oncoffeemakers
Mc Cafe makes more coffee money because it is priced correctly...
Transcend coffee wants to charge their customers more for their coffee. Transcend also believe that their customers is willing to pay more for their coffee happily.
Is that possible?
McDonald's, Starbucks, and many others are trying to priced down their coffee. In fact, one of the main reason that people are loyal to MC Cafe
(yes, in a survey, it is proven that consumers are most loyal to McDonald's coffee) is its low pricing.
The angle that Transcend is moving into is good. By charging a higher price, the farmers will be rewarded too. I think that is also the angle of fair trade coffee.
It has been marketed for more than a few years. Instant coffee, are still the best sellers. They are priced lower.
Given a choice, I am sure everyone wants to do their part and help the farmers, but when it comes to grocery shopping, price always matters.
Transcend might be able to do it because of their brand and the demographic that they are targeting, but I am not too sure about their expansion rate?
Starbucks, MC Cafe, Tim Horton and many other are expanding. Nescafe is still growing. Price or low price opens out market share.
And once you have the market share and even mind share (positioning), it will be much easier to make money and even make an impact (i.e. Starbucks program with the coffee farmers). My $0.02
Personally, while taste is key in Transcend Coffee USP, it might not be sustainable.
Ultimately, the price will matter to the consumer. I am sure Transcend will have a group of core loyal fans that look forward to an interesting taste experience.
But, that is unlikely to sustain the business or allow it to grow. They need a better story to grow their business.
Story such as an unique experience, i.e. whole day breakfast, special food, special extraction method. Basically, what the indie cafe is doing.
When consumers are paying a higher price for their coffee, they want the experience to match the price that they are paying.
Thus, personally I think while taste is important and the social mission is good, it is not enough to justify customers to pay a higher amount for their coffee.
At least, not to many customers.
That is my $0.02, what is your thought on this?