Pricing Concept Paper: Starbucks Coffee

Pricing Concept Paper: Starbucks Coffee

Business 2210 Marketing Tactics

Table of Contents

Product Overview 3

Pricing Concepts 3

Pricing Strategies and Tactics 5

References 8

Product Overview

Starbucks is the leader in the coffee market. The specific product I have chosen is Starbucks whole bean breakfast blend medium roast coffee. Starbucks coffee offers a combination of high quality and authority. Starbucks sets the price of their coffee based on high quality and a moderate cost. Quality is a key factor for this company because people are only going to pay the higher prices if they are insured better quality coffee. Differentiation within this product is also a key factor that distinguishes Starbucks coffee from other brands of coffee. Starbucks spends lots of money and energy ensuring that their product stands out from the competition. Starbucks makes sure that they are the first to introduce the newest advancements to its customers. Starbucks coffee positions itself as an authority on coffee, allowing the company to charge premium prices. Therefore, when Starbucks introduced new products at higher prices, consumers are willing to pay extra without even having much knowledge of the product because they associate the Starbucks name with high quality. Starbucks coffee can be purchased at any store location. Starbucks is the largest coffeehouse company in the world, operating in 50 countries with 17,009 stores as of January 2011 (Starbucks Coffee Company). Starbucks coffee can be purchased online through their website www.starbucksstrore.com. Starbucks coffee is currently available in many major grocery stores nationally as well as a number of club stores and mass merchandisers (Starbucks Corporation).

Pricing Concepts

Starbucks whole bean breakfast blend medium roast coffee is widely available for consumer purchase. Starbucks in-store and online store sells the coffee at C$15.95 for 16 ounces. Interestingly, Starbucks coffee distributed outside...