Kopi Luwak
by tierneyrocky ~ March 10th, 2011. Filed under: Uncategorized.
Kopi Luwak advertises its premium coffee with a cat and the tag line: “Good to the last dropping!” The value the company communicates to consumers is that it offers the most exotic and rare roast, as it comes from the Indonesian island of Sumatr (…well, to be even more precise, from a cat’s bum).
Although we already mentioned this shocking business plan in class, I found it so unappealing that it made me reconsider the thought-process of consumers that fall for prestige pricing.
The luwak, who is in fact not a cat but a mammal, eats red cherries of the coffee tree, which while in the stomach undergo chemical treatments and fermentations. Eventually the still-intact beans exit the digestive system and are collected from the forest floor, cleaned, then roasted and ground just like any other coffee. Because of the strange method of collecting, the average total annual production is only around 500 pounds of beans, and most regular cafes do not sell it.
Because of its rarity, the price is quite extravagent; around $300 or more for one pound. In other words, you are paying for the experience of enjoying such an unusual and rare delicacy. This brings up the non-intuitive idea of prestige pricing, where goods are often intentionally difficult to get a hold of, creating an allure that only the best can have it. But just like how Louis Vuitton hand bags had to deal with copy-cats, Kopi Luwak has faced similar issues due to vendors who sell diluted, or simply fake, versions of its unique coffee.
So how come people are willing to pay these high prices for goods that really cannot be told apart? Is it just about status? Think about our blind Coke taste tests of in class, where many of us made incorrect guesses about which drink was the original Coca Cola versus the cheap no-name brand. But perhaps that it is the beauty of brand management in marketing. Creating a psychological build up in the consumer’s mind to make them believe they want what you offer. Apparently, whether or not they really want to eat cat droppings is irrelevant…
Source: http://urbanlegends.about.com/od/fooddrink/a/kopi_luak.htm