Pricing Concept Starbucks Essay

Submitted By samantha_delaney
Words: 1693
Pages: 7
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Table of Contents
Product Overview 3
Pricing Concepts 3
Pricing Strategies and Tactics 5
References 8

Product Overview Starbucks has both an extensive product line depth and a product line breadth. The company, being the leader in the coffee market, also carries many peripheral products and services such as tea, coffee equipment, coffee and tea subscriptions and more. Within these product categories there are a wide assortment of flavours, colors, and uses in order to serve essentially any consumer need in the market. Specifically, this paper will explore the pricing concepts for a package of Starbuck’s House Blend Whole Bean (SHBWB) coffee. This product is the first blend the company has ever created back in 1971 when Starbucks was established. Starbucks sets the price points of its coffee based on the company’s commitment to the providing coffee-lovers with the highest quality products possible. Going beyond the tangible product, Starbucks is a leader in the Fair-Trade movement, being the largest purchaser of fair-trade certified coffee in North America thus the company prides itself on delivering the highest quality product in a socially responsible manner. Also, the Starbucks is a leader in using its consumer’s input for research and innovation, often using online forms asking their customer base what they want to see and how much they are willing to pay. Due to the company successfully proving that its brand can provide a high quality product, when products are introduced in the market, consumers are willing to pay the premium prices attached to them because of the image surrounding the products. created a loyal following of consumers who appreciate gourmet-coffee from a socially responsible company. as differienation is a key aspect while pricing their products. Consumers will pay higher prices for products which they feel are premium and better than others in the market.

SHBWB coffee has a wide distribution.

The product can be found for sale at Starbucks retail and online stores, grocery stores and

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 of Starbucks stores/online is sold in smaller quantities. The average size for distribution in grocery and mass
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