By now you have heard about Starbucks shifting the pricing
of its drinks. (“By now” currently means immediately or within 12 hours. So it
no longer is only bad news that travels fast; every piece of information zooms
around the globe more speedily than a fly evades a swatter. Amazing.)
Anyway, as you know, some drinks will cost less; some will
be more expensive. The marketing aspect that was most interesting to me was the
comment by Kenneth Davids, editor of Coffee Review. His insight was that
Starbucks was safe raising the prices of their specialty drinks because they
are where the company best differentiates itself. Meaning that for the “normal”
coffee choices, the basic beverages you can purchase anywhere—McDonalds, your
local coffee shop, Dunkin’—prices will remain the same, or even be lowered.
By limiting the price increases to what makes Starbucks
unique and superior they are more likely to keep customers who were, and are,
willing to pay more for unusual and personalized treats.
So, faithful reader, what is it that differentiates you?
Price, colors, service, location, variety…? Those are the things you can
capitalize on that are more price elastic than your commodity offerings. And it
seems logical that the more you can create differences and communicate them,
the better off your bottom line will be.
What do you think?
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