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Starbucks' pricing strategy is distinct from other brands in that it uses price hikes to differentiate its brand and reinforce its premium perception. Unlike more affordable chains, Starbucks targets customers who are not particularly price-sensitive. Therefore, even a slight increase in price can have a significant positive impact on the company's margins without affecting demand. This strategy may not be the same for other premium brands, as their pricing strategies can vary based on their target market, product offering, and brand positioning.
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Instead of trying to compete with more affordable chains, such as Dunkin, Starbucks uses price hikes to distinct its brand from others and reinforce the premium perception of it. Considering Starbucks' most loyal customers are not price sensitive, Starbucks coffee drinks remain in demand and a slight increase in price actually has a huge positive impact on the company's margins without affecting the demand.
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Take the most advantageous pricing approach to increase profitability of your organization. Use our Pricing Strategies presentation to outline factors...
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