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Starbucks' most loyal customers are not price sensitive because they perceive Starbucks as a premium brand. The company has positioned itself as a luxury coffee chain, offering high-quality products and a unique customer experience. This perception of quality and exclusivity allows Starbucks to charge higher prices without losing its loyal customer base. These customers are willing to pay more for what they believe is a superior product and experience.
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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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