What are the practical applications of Starbucks' pricing strateg

Starbucks' pricing strategy has several practical applications in the coffee industry. Firstly, it helps to distinguish the brand from its competitors. By setting higher prices, Starbucks reinforces its premium brand image. Secondly, it capitalizes on the fact that its most loyal customers are not price-sensitive. This means that even slight increases in price can significantly boost the company's profit margins without affecting demand. Lastly, this strategy can be used to maintain demand and profitability even in the face of market changes.

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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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Pricing Strategies

Take the most advantageous pricing approach to increase profitability of your organization. Use our Pricing Strategies presentation to outline factors...

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