Got a Creative Sweet Tooth? Hope You've Got a Fat Wallet.

Background

A recent Businessweek article dives into Nestlé's newest foray into the chocolate and candy industry, customized luxury brand/high-end chocolate. A company that is known for delivering quality candy products at a relatively low price, Nestlé has now decided to expand its line of Maison Cailler Chocolates in order to build on the growing success of the Nespresso luxury, at-home coffee market. Below is my take on the perks and pitfalls of Nestlé's new customizable chocolate line.

Perk: Customization

In C.K Prahalad and M.S Krishnan's "Note on the New Age of Innovation," the concept of a unique customer experience is deemed almost mandatory for success and creation of value. They introduce this idea through the n=1 concept, which states that firms must focus on one customer experience at a time. Nestlé is doing this by providing an online interface through which customers can buy luxury chocolate tailored to personal tastes (note: this customization is only available in Liechtenstein and Switzerland at the moment). For instance, a person can fill a piece of 85% cocoa dark chocolate with peppercorn and vanilla or a piece of 10% cocoa milk chocolate with amaretto cream. Each customer has an experience tailored to their wants, and so they won't end up with a half eaten box of chocolates that only has the undesirable dark chocolate, coconut-filled pieces left.

Perk: Brand Association

This is a Nestlé product. This company's CVP revolves around creating and delivering high quality food, beverage, and nutritional products worldwide, ranging from low to high costs. When people think Nestlé, they think quality, and that same idea will pop into consumers' minds when they see the Nestlé logo on this product. Also, Nestlé has had previous success in the luxury goods market, as mentioned earlier, and they will be able to create a new strategy for success with that experience.

Perk: Moderate to High Compatibility

Compatibility is defined as how consistent a product is with existing habits and values. Chocolate rates pretty high with existing habits. As a society, we regularly indulge in chocolate. Between Valentines Day, anniversaries, and piñatas, chocolate is a staple of our lives. The new Nestlé chocolates are just a new spin on the snack/dessert we love so much. The only reason I have not rated this product as a perfect on compatibility is because the world is not used to customizable chocolate. We just walk into a store and buy what's there. This customizable option makes Nestlé's product slightly different from the existing view we have on chocolate, therefore taking it down a few notches on the compatibility rating.

Perk/Pitfall: Moderate Complexity

This is entirely attributed to the customization process. Yes, the user interface may be simple to use, which is a perk. Yes, buyers can make a product easily, but can they make a great tasting product that they will enjoy if they don't know what combinations of cocoa and fillings to use? The complexity of mixing the right ingredients will be high, but use of the interface will have a low complexity, therefore I list this factor as both a perk and pitfall.

Pitfall: Low Trialability

Right now only two countries have access to the Nestlé Maison Cailler customizable chocolates. Since the other hundreds of countries around the world have no access, the product rates low on trialability, or how possible it is to test the product and get a sense of ownership. Also, the price ($28.30 per 16 pieces) can turn away many potential buyers when there are cheaper options available.

Pitfall: Low Observability

With low trialability comes low observability. If buyers can't really try the product out due to price or location, then other potential buyers can't really see if the product is delicious and worth the money, which is a hindrance for any future sales.

Pitfall: Low Relative Advantage

There are a lot of companies that sell chocolate. It's true that most don't sell customizable chocolate, since it's more of a niche market, but the market for standard chocolate is monstrous. This product really only appeals to those who want their own personal "brand" of chocolate and can afford the price tag. It really offers nothing else that stands out. There are plenty of niche competitors in the customizable chocolate industry, who might be able to make it cheaper and can distribute to a wider client base at the moment. Until Nestlé can up its distribution range, the product has very little relative advantage over those niche competitors.

In the end, I see these Nestlé Maison Cailler customizable chocolates as nothing more than a quick flash in the pan gimmick for Nestlé. They live off of low-priced Kit-Kat's and Crunch Bars. As a consumer of chocolate, I don't see the point in paying a premium $28.30 plus shipping to get my candy fix when I can walk to a convenience store and get a very good Crunch bar for $1. Where do you guys stand? Agree? Disagree?