At the end of August this year Starbucks announced that the prices will be raised for "complex beverages" like frapuccino, and lowered for the simpler beverages like plain cup of coffee.
The prices changed on average between 10-30 cents. "This is as a part of our comprehensive approach to providing the value while balancing our business responsibilities" said spokeswoman Valerie O'Neil.
Raising prices in the middle of a big downturn it's not such a crazy idea says J. Miguel Villas-Boas, marketing professor. Even though seams paradoxical, it is a strategy premium company often take.
This is the first time Starbucks decreases prices. The price of the most popular beverages -12 - ounce lattes and brewed coffee decreases 5-15 cents.
Starbucks' strategy of reducing prices of the regular drinks, shows how the company is approaching price sensitive costumers. For those who buy frapuccinos and other "fancy" drinks, the raising of few cents might not be an issue. While for the costumers who purchase plain coffee and lattes, the decreasing of prices could be an important stimulus.
Another reason of decreasing prices for the simpler drinks can be the company's intention to encourage the selling of simpler beverages, that requires less time to make. This way the costumers will spend less time in line, and the baristas will be able to provide a faster service.
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