Start Your Day with a Starbucks Experience! - Essay Sample

Paper Type:  Essay
Pages:  5
Wordcount:  1316 Words
Date:  2023-01-12


Starbucks Company essential benefit is the experience the Company gives to its customers the means to kick start the day with a cup of coffee, as well as excellent customer service. Besides also everyone finds a niche as they enjoy their favorite drinks, it could be from the tangible products offered like tea, cold drinks (juice, milk or water) and coffee as they read a book or listen to music. Starbucks ensures the experiences is universal despite instances of culture or language barriers, but still create a positive experience for customers regularly come back. On the other hand, for core product, Starbucks offers refreshments with the actual product being coffee. Alongside the core product, Starbucks also provides essential services with the presence of a relieving atmosphere, decorations, and Wi-Fi connection. Consequently, for the enhanced product at Starbucks is on the levels, as the products are of various kinds of blends, with excellent taste, and of top-notch quality. Starbucks ambiance is, with incredible lighting and great music.

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Starbucks makes use of the different components of its product to create a customer experience and also maintain its brand. First, by ensuring at all times, the core product is available. The coffee drink is the core product and most customers when they opt to go to Starbucks it would be for one reason to get access to the sweet aroma of a cup of coffee. However, to create a great customer experience, the core product offered comes alongside with additional services and features. Starbucks, to support its core business and maintain the brand, have immensely invested in the core product. The other different component Starbucks uses to create excellent customer experience is the augmented products. In other words referring to the addition of services, attributes, and benefits as a means to be different from competitors (Christopher, 2016). The one additional service given is the accessibility of Wi-Fi, and that way mainly attract young customers. Starbucks has maintained its brand and also given the customer an excellent experience by having other supplementary services like the Starbucks card that clients use to purchase coffee without removing cash. Apart from that also customers get reward points from consumptions. Today millions of cards circulate, and the Company got to hit 1 billion US dollar from sales that use cards, that way, it has succeeded in maintaining the brand. The card service strengthens customers' loyalty as they become card-carrying clients, and there is a possibility one would pass by a store that competes with Starbucks.

Penetration pricing is a marketing approach used to attract customers to a new service or product (Marn, Roegner & Zawada, 2003). Businesses present low prices for the new service or product when it is in the initial offering. From this approach of lowering costs it, in turn, makes a customer know there is a new product in the market. It is a marketing strategy that increases sales volume and market share but if appropriately used. For instance, in a first campaign and businesses that introduce the low prices, then curiosity prompts customers to choose the brand initially. Penetration pricing might be appropriate in a scenario like a grocery store chain that sell organic foods, and since the demand for organic foods is high then by offering various selections of natural foods at low prices, it boosts profit margins and increases the stores' wallet share. As of price skimming, it is a marketing strategy opposite to penetration pricing, as skimming sells products with relatively high margins at high prices. It is an approach appropriate in scenarios of luxury or innovative products since it is where early adopters have the will to pay high costs and because they have sensitivity in low pricing. The essence of the price skimming by producers is to maximize on profits and with time prices go down to levels that can be compared to rates in the market, thus take over the rest of the market.

Competitive pricing selects strategic points of prices to take advantage of service or product in the market that which is relative to competitors. It is a method of pricing used in most cases by businesses that sell the same type of products and when prices reach a level of equilibrium whereby the product has for a long time been in the market, and still there are product substitutes (Kienzler & Kowalkowski, 2017). A scenario where the competitive pricing might be appropriate is in instances when a firm cannot anticipate price changes from its competitors. An example of such a situation was when Amazon estimated price changes and also their competitors, Walmart announced a price matching program. The approach gave Walmart customers a chance to get products at low prices without risking clients not to take their business solely to Amazon for reasons linked to pricing. As of value pricing, the method involves setting prices based on the perceived value of the product or service by the customers. From the methodology of value pricing, it is companies offering highly valuable services and features that can use it, unlike companies that only have sales on commoditized goods. A scenario where value pricing model applies is in markets where owning an item upgrades customer's self-image or ensures ease in unparalleled life encounters. An example of businesses where it most uses it is the fashion sector.

In executing a value pricing strategy, it is generally viewed as being more difficult than others because companies frequently confuse the value of a product with the cost of customers. They find it cumbersome to talk to their customers of how they can get benefit from their solutions. Alternatively, in applying the strategy, it becomes difficult because companies fail to speak the sales language and therefore, changing the status quo becomes even more difficult (Nagle & Muller, 2017). Most companies opt to make calculations on costs, thus make assumptions that a precise approach would be cost-plus pricing other than the value pricing model that bases its approach on evaluated customer value. Effective promotion is related to successful value pricing because, from both strategies, prices tend to be lowered for some time, and the product is put to sale. It increases demand from customers who are price sensitive. Besides, also, the utilization of the two strategies ensures features, benefits, and quality of goods is retained. Both models do not cut on quality as much as they are using the approaches since in cutting on quality customers know a low-value product even if it is in a promotion. The value pricing maintains customers loyalty since they are assured of products of value at reduced prices, similarly is the case in effective promotion that uses the promotional pricing of "buy one get one free." in this case customers buy more products perhaps as was not their intention and at low prices thus encouraging loyalty even in the future.


Conclusively, as a marketing manager at Starbucks, the essential benefit, core product, and enhanced product are the different components of products offered at Starbucks. The elements serve to create an excellent customer experience and help maintain its brand. In marketing, there are various strategies of pricing; the penetration pricing, price skimming, competitor-based pricing, and value pricing. The essay has discussed all the four pricing models providing and explaining a scenario where each might appropriately apply. However, executing a value pricing strategy is often seen as more difficult than the others for some reasons as stated. Ultimately, it is also a discussion of how effective promotion is related to successful value pricing.


Christopher, M. (2016). Marketing: an introductory text. Macmillan International Higher Education.

Kienzler, M., & Kowalkowski, C. (2017). Pricing strategy: A review of 22 years of marketing research. Journal of Business Research, 78, 101-110.

Marn, M. V., Roegner, E. V., & Zawada, C. C. (2003). Pricing new products. McKinsey Quarterly, (3), 40-49.

Nagle, T. T., & Muller, G. (2017). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.

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Start Your Day with a Starbucks Experience! - Essay Sample. (2023, Jan 12). Retrieved from

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