Starbucks: Marketing Principles

The pricing strategy that I chose is marketing objectives. Our company will deliver on this strategy to this stand by competing with our competitor’s stand. Our competitor, Jimmy, manages the Lemonade Stand “Liquid Yellow” charges $1.50 for one cup of lemonade. However, they use artificial ingredients, such as artificial flavoring and coloring, white sugar, etc. My company decided that we want to have a price that is higher than Jim’s price. We decided that we want to charge $2.00 for a cup of lemonade. We decided to charge this price because unlike Jim’s stand, we use all natural ingredients, which cost more than artificial ingredients and are healthier for you than artificial ingredients are. That is my company’s pricing strategy.

In terms of theory, pricing strategies can be defined as businesses choosing one method to appeal to customers to purchase goods and achieve marketing mix according to the assessment of consumer demand and cost analysis (BDS Forum, 2009). For a company, pricing strategies can be made difficultly. If prices of goods are too higher, they may lose market share. If the price is two lower, the company cannot get bigger profit (Bized, 2006). Therefore, before developing a pricing strategy, the company has to consider much more factors. Such as pricing objectives which rely on production cost, barriers to entry, rate of product diffusion and so on, pricing methods including cost-plus pricing, target return pricing, value-based pricing and psychological pricing as well as other factors to make the best price for the firm and the consumer (Net MBA, 2009). Three points of views of pricing strategies can be discussed in the following in this report. Firstly, pricing strategies should

Starbucks (Starbucks) is a publicly held company that sells gourmet coffees, as well as, a sandwich and desert menu. They operate in the United States, as well as, international countries. Starbucks has delicious coffees that are very popular with the public and has a growing popularity. By comparing Starbuck's financial information with the financial information of one of their biggest competitor's, Dunkin Donuts (Dunkin Donuts), it will show the actual competitive edge of Starbucks.

Commonly prices are based on the marketing needs of the business. There are often temporary price strategies used to achieve a particular short-term target, called tactical pricing. Promotional pricing is designed to

Therefore, Chatime using psychological pricing strategy which is set those ending with nines or other odd numbers on all beverages to stimulate consumer demand and sometimes these are referred to as “just below” prices as they are often “just below” an even price such as RM1.99 vs RM2.00. For example, Chatime instead of charge RM6 for a milk tea beverage you might charge RM5.99 per beverage. Some consumers associate the price closer to RM5 than RM6 even though it is only one cent less and they may subconsciously be partially ignored. The theory that drives this is that lower pricing such as this institutes greater demand than if consumers were perfectly rational. Psychological pricing is one cause of price points to get more customers and the psychological pricing method helps Chatime build an impression of the brand without making significant changes to the product. Simply revising the pricing structure can make the product seem like the best on the market compare with other competitors or elevate the Chatime’s milk tea to the top of the available options. Although the price of Chatime’s milk tea is lower than competitors, customers are those who important of quality and price attributes will buy the products too. It is because customers are relatively insensitive to the product price. Customers willing to pay more for own

Starbucks employs the product, promotion, place and price method of marketing. They place great emphasis on their products and have established themselves

Premium pricing: in a situation where the product is introduced to a marker and has and is unique, the pricing may be a bit higher in the beginning. The apple iPad is a good example of the premium pricing. It is a first of its sort that was flat, thin, and had a big screen that was touch.

Psychological pricing is used when prices are set to a certain level where the consumer perceives the price to be fair. The most common strategy is odd-pricing using figures that end in 5, 7 or 9. It is believed that consumers tend to round down a price of Rs.9.95 to Rs.9, rather than Rs.10.

Pricing Strategies: takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs amongst others.

Promotional strategy can be described as the function of notifying, persuading, and influencing the decisions of a customer regarding a particular product and/or service. Notably, certain promotional strategies are geared towards creating primary demand or desire for a general product category. The most common objectives of the use of promotional strategies across organizations include creating the primary demand for a product, expanding markets, maintaining the current market position, and presenting a corporate view on a public matter. The other important aspect in the marketing mix is developing an appropriate pricing strategy for the product and/or service. The main objective a suitable pricing strategy is to ensure that the product and/or service are provided at reasonable prices while the

Like its major competitors, Starbucks ' marketing strategy has relied heavily on establishing a strong brand identity and promoting brand loyalty sufficient enough to induce customers to pay a reasonable premium for its products. Starbucks has a competitive advantage over its competitors because in the past few years they have introduced a ‘Starbucks Evening’ menu, which includes

Pricing decisions are strategic and critical to the success of your company. The prices you charge for your products affect demand, thus causing a ripple effect across your company 's output, revenues, costs, and income. With a sound pricing strategy, your company is in a better

Starbucks is and has always been a coffee shop. Some of its main competitors include McDonald’s and Dunkin Donuts, who started as a fast food restaurant and donut shop respectively. Because Starbucks helped introduce “gourmet” coffee and espresso to the popular culture, they continue to function as an educator of the public in coffee culture. This helps paint Starbucks as a leader and innovator in their market, giving them yet another advantage over their competitors.

Making decisions are hard enough already, adding a tough decision to decide on which pricing strategy to choose from brings a great deal of stress to a company and the individuals that has to make the decision. Pricing consist of technique, strategy, planning and eventually success of the item and its number of sales. After carefully reading the background information, I realized that there’s more to pricing than just making a profit. Factors come into play from many different angles. Competitors effect the way companies price their product, the strategic planning of the organization itself effects prices. Weather a company lower its product manufacturing costs or use either a lower or higher material to produce the product effects the price customers are willing to pay. There are multiple pricing strategies that companies use to decide the price of their product, strategies such as; good-value pricing, value-added pricing, and value-based pricing to name a few. Companies have certain cost in which they have to cover when trying to price an item. The three major categories for costs of a company is fixed cost; price that do not vary with production or sales, variable costs; costs that vary directly with the production of the product, and there’s total cost; the sum of the fixed and variable cost for any given level of production (Pearson). Overall, making a decision on how much to charge for certain products requires many factors. Based on my knowledge and understanding on

Today’s highly competitive business world forces companies to create different tactics and relatively rely on multiple pricing strategies to conduct business.