Question

many would argue that starbucks coffee is expensive and yet customers get "value" for their money.how do you think starbucks has been a ble to transfer this business model and value proposition to international markets?

Answer 1

Answer:

Starbucks claims the price increase is due to rising labor and non coffee commodity costs, but with significantly lower coffee costs already improving their profit margins, it seems unlikely this justification is the true reason for the hike in prices. In addition to it, the price hike was applied to less than a third of their beverages and only target certain regions. Implementing such a specific and minor price increase when the bottom line is already in great shape might seem like a greedy tactic, but the Starbucks approach to pricing is one we can all use to improve our margins. Starbucks is a master of employing value based pricing to maximize profits, and they use research and customer analysis to formulate targeted price increases that capture the greatest amount consumers are willing to pay without driving them off. Rather than trying to compete with cheaper chains lin Dunkin, Starbucks uses price hikes to seperate itself from the pack and reinforce the premium image of their brand and products. In addition, only certain regions are targeted for each price increase, and prices vary across the U.S. depending on the current markets in those areas.

The unique selling proposition concept helps Starbucks differentiate their products and services and gain competitive advantage over competition. Starbucks is known for their good customer service and in-store experience, for customers can either spend some time in the shop and benefit from the friendly and cozy environment and Wi-Fi, or they can rapidly purchase their beverage and continue on their way. In both cases the customer is meant to take away a unique experience. This unique selling concept is especially important in a fast moving world where thechnology is becoming more personalised and where social interactions are decreasing; the customers can find some human contact in their everyday lives in a Starbucks store.

As a multinational brand that aspires to be a recognised global leader, Starbucks' marketing strategy requires a dress of standardisation. To start with, the company hardly advertises in the traditional sense viia TV, radio and print adverts, "instead relying on thier ubiquitous cafes to do the talking" In addition to this, the company has developed and perfected their social media marketing strategy, using Facebook, Twitter, Instagram, Pinterest, and other platforms for competitions and promotional offers for their customers. It can be argued that Starbucks' success in the social media sphere is also highly dependent on the anti-Starbucks movement, as this generates increased coverage of the brand name, allowing the company to counteract the accusantions and promote their ethical behavious even more. The involvement of consumers in product development and range (ie. new drink flavours) as well as the encouragements to share personal experiences are now an integral part of Starbucks' international marketing strategy.