Economic and financial markets Case Study Example | Topics and Well Written Essays - 2000 words

Economic and financial markets - Case Study ExampleIn 1992 Starbucks became a public limited company (www.mhhe.com) through an IPO. The java is supplied mainly through its own and franchised coffee-shop chains as well as through supermarkets. Starbucks main competitors in the speciality coffee-shop business are Costa white chocolate, Barista and Coffee Bean. Though its mainstay remains its coffee brewing business, Starbucks also offers other hot and cold drinks, hot and cold sandwiches, ice cream, pastries and snacks. Many people submit bought its mugs and tumblers to express their appreciation for the Starbucks brand. A more deep created Starbucks Entertainment Division and its Hear Music label also offers books, music and films. Clearly Starbucks has expanded from honourable a coffee label to a much larger enterprise (www.starbucks.com). Comments on Starbucks Pricing schema In the given assignment, we are asked to comment on the pricing strategy of Starbucks chain. We are to ld that at a local Starbucks, customers are offered a variety of alternatives with the following price list Freshly brewed coffee ?1.55 coffee bar Latte ?1.99 Capuccino ?1.99 Vanilla Latte ?2.29 Caramel Machiato ?2.65 Cafe Americano ?1.70 Expresso ?1.35 Cafe mocha ?2.25 White Cafe mocha coffee ?2.65 The above prices are for the tall size of the above beverages. ... tte, Cappuccino and Cafe Americano come in the price digress ?1.70 to ?1.99, and the last or uppermost tier is for its fancier offerings much(prenominal) as Vanilla Latte, Cafe Mocha and White Cafe Mocha, costing mingled with ?2.25 and ?2.65 respectively. It is also possible that the people ordering these beverages form assorted classes of customers for Starbucks. Quite possibly the cost of making these beverages and the additional labour and ingredients that are put in have also affected the final price charged by Starbucks. So we can see that in that location are three tiers of prices possibly indicating low, med ium and high class customer preferences. Anyway as uttermost as a cup of coffee goes, there is not much overall variation between the lowest price of ?1.35 and the highest price of ?2.65 a cup at Starbucks- indeed it is very reasonable and such a price difference will readily be accepted by a consumer (Kotler, 1990). merchandise pricing theory advises us that when setting the price of a product, we should take into account the price duck soup of demand for a product (McConnell & Brue, 2005). However one must regard a cup of coffee as a basic necessity especially in the winter season, so its price ginger nut is relatively low. Its only real substitute is tea, but even that loses favour in the winter season. For verify coffee fanatics, no other beverage will do. Starbucks pricing strategy will most potential also be impacted by the price charged by its competitors, whether it is entering into a refreshed marketplace and is willing to offer price discounts in the beginning period , or whether it wants to place itself at the high end of the market and charge higher prices, focusing only on a select sort of high end customers having purchasing power. Obviously it is aided in this by its international