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Starbucks uses a premium pricing strategy to distinguish its brand from competitors. Instead of competing with more affordable chains, Starbucks increases its prices to reinforce the premium perception of its brand. This strategy works because Starbucks' most loyal customers are not price sensitive. Therefore, even a slight increase in price can have a significant positive impact on the company's margins without affecting demand.
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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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