Title: 10 Closing Company Case
Course: Principles of Marketing > Section: Chapter 10

Closing Company Case

Maintaining a Competitive Edge with New Offerings—Ember

Every morning, millions of Americans wake up and prepare a cup of coffee. But as they sit down to drink it, the deluge of interruptions begins. Once the interruptions begin, that delicious dark roast often goes cold. Within the United States there are approximately 150 million coffee drinkers.^53 Throughout the day, people pour a cup of coffee, a cup of tea, or a variety of other hot drinks, only to be distracted and come back to a cold beverage. Many hot beverage drinkers have transitioned to the insulated travel mug where the drink stays hot for a while, but it too eventually gets cold.

Back in 2009, Clay Alexander was eating his breakfast. By the time he took his last bite, his scrambled eggs were cold. Alexander began experimenting with dinner plates that could stay hot and keep food at the same temperature throughout the meal. Then, one day as he was drinking coffee, he realized that using the same the technology with a coffee mug would be a transformative experience. In playing with the technology, he developed the Ember mug. (Watch this video for more information on the Ember mug development story.)

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Alexander’s first version of the Ember mug looked like something from Weird Science. The prototype mug was not sleek or stylish and definitely was not easy to clean. But as he carried his early version of the Ember mug to work and around town, curious commuters began to ask questions. Alexander was raising awareness and piquing the interest of potential new consumers. Through his interactions, he knew that there was definitely interest in a product that could keep beverages at a constant temperature for a long period of time.

This new innovation was a juncture of cutting-edge digital technology and the low-tech coffee mug. Using technology to warm the cup and keep a hot beverage at a constant temperature, Ember transformed the common mug. The Ember mug was able to keep hot beverages at a constant temperature for hours.

Creating the new product required hours of development. Building the product meant developing, testing, creating more prototypes, more testing, and running a business analysis. The new product was great. There was nothing like it on the market. But would customers buy it? A new entrant in the market often comes with a high price tag. All the hours, months, and years of development are coupled with the high cost of creating brand awareness.

The biggest question with the Ember mug was, How would the customer respond? Innovators are the first to purchase new market entry products, and they typically look for and buy new products before the rest of the market. And for this product, that market would probably include the coffee connoisseur and die-hard coffee drinkers. As with any new product, the biggest obstacle would be creating awareness and connecting with consumers about the benefits of the Ember mug.

Alexander knew that consumers were already attached to their smartphones, so he incorporated the Ember technology into something they already used. Consumers could control the temperature of their Ember mug beverages through the Ember app on their smart phones. With dozens of settings to create and keep the perfect temperature, Ember technology was easy and very customizable.

Getting the product to market meant getting it right and easily educating the consumer on the benefits of the Ember mug. The Ember mug incorporates smart LEDs to indicate when the mug has the beverage at the perfect temperature. Using a built-in battery, the Ember mug can work all day if placed on its charging coaster or upward of two hours without the coaster after being fully charged. The Ember mug also comes with auto-sleep technology to know when to turn off as well as built-in temperature controls for the variable preferences of consumers.

Figure 10.11 Product innovation focused on keeping coffee warm for long periods of time. (credit: “coffepour.jpg” by Eric McGregor/flickr, CC BY 2.0)

Initially the Ember was only available for sale on the company’s website; however, as brand awareness increased and consumer demand picked up, the Ember could be purchased through both online and in-store retailers. The mug can now be purchased at Amazon, Best Buy, Costco, Starbucks, and several other locations.^54

Ember has been featured in leading publications such as Forbes, Fast Company, and People as well as broadcast and digital media including Today. With many positive reviews, excellent public relations, and organic word of mouth from customers, the Ember mug saw positive growth. Since the introduction of the original 10-ounce mug, Ember added a 14-ounce version as well as a travel mug and plenty of added charging options.

Case Questions

1 .

How did the Ember mug redefine the coffee-drinking experience?

2 .

What was the first step Alexander needed to do in developing the Ember mug?

3 .

What three things helped drive sales of the Ember mug?

4 .

How would you describe the first customers of the Ember mug?