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    The Price of Coffee in China

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    Roselle Malabanan
    Starbucks charges $4.50 for a Grande latte in China due to supply and demand factors and to compete with other coffee shops. While pricing lower could lead to no competition and deflation, pricing higher could attract new competitors and inevitably lower prices. Purchasing cheaper Chinese coffee beans in the future could allow Starbucks to lower its prices and adjust its pricing strategy based on competitors.

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    The Price of Coffee in China

    Uploaded by

    Roselle Malabanan
    15 views2 pages
    Starbucks charges $4.50 for a Grande latte in China due to supply and demand factors and to compete with other coffee shops. While pricing lower could lead to no competition and deflation, pricing higher could attract new competitors and inevitably lower prices. Purchasing cheaper Chinese coffee beans in the future could allow Starbucks to lower its prices and adjust its pricing strategy based on competitors.

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    The-Price-of-Coffee-in-China

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    Starbucks charges $4.50 for a Grande latte in China due to supply and demand factors and to compete with other coffee shops. While pricing lower could lead to no competition and deflation, pricing higher could attract new competitors and inevitably lower prices. Purchasing cheaper Chinese coffee beans in the future could allow Starbucks to lower its prices and adjust its pricing strategy based on competitors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    15 views2 pages

    The Price of Coffee in China

    Uploaded by

    Roselle Malabanan
    Starbucks charges $4.50 for a Grande latte in China due to supply and demand factors and to compete with other coffee shops. While pricing lower could lead to no competition and deflation, pricing higher could attract new competitors and inevitably lower prices. Purchasing cheaper Chinese coffee beans in the future could allow Starbucks to lower its prices and adjust its pricing strategy based on competitors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    The Price of Coffee in China

    1. What are the possible pricing Grande latte at $4.50?

    The possible reason for a Grande latte being $4.50 in China is because
    of the pricing structure where sometimes it will be based on supply and
    demand. The case means that in order to compete with other coffee shops in
    China, Starbucks offered a highest price in Beijing branch compared to the
    price of Grande latte in New York, knowing that China is considered as a
    country of tea drinkers. With this, in order to maintain a high quality,
    Starbucks must focus on competition.

    2. What are the possible arguments for pricing lower? For pricing higher?

    Starbucks have a strategy of prices are set on the idea that if the
    consumer feels like they are getting a good deal for their money, they would
    be more likely to pay a higher cost.

    Arguments for pricing lower can include no competition and can cause
    deflation. Sales are below expected calculations, other competitors lower
    their prices and Starbucks will lose money. While raising a price can attract
    new competitors into the market, and the price inevitably falls due to
    increased supply. A higher price is having effectiveness on income as well
    because as higher the cost, the buying power has been reduced.

    3. Could purchasing Chinese coffee beans in the future affect Starbuck's


    pricing strategy?
    Yes. Starbucks used competitor's prices as a reference point. Since
    China attempted to increase their coffee bean production and they're
    planning to decrease the cost of coffee, the Starbucks will attempt to lower
    their price that would affect their pricing strategy because Starbucks was
    most focus on competitor's prices.

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