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Starbucks $7 Coffee

 http://money.cnn.com/video/news/2012/12/…

This Video explains how even the CEO of Starbucks was shocked when he found out how wiling people were to buy a cup of coffee for $7 when they could buy a $1 cup that would be very similar. This shows the elasticity of the brand what people will do when they trust a company. This directly reflects how people who invest in the stock market will think based on what they are willing to and not willing to invest in.

3 Comments »

  1. bernsteb Said,

    December 10, 2012 @ 3:35 am

    This video is interesting because it exemplifies the mind of the american consumer which is to trust name brands stronger than their own eye. When somebody walks into Starbucks and sees a 7 dollar cup of coffee, they believe it is actually worth that without question just be a highly regarded company like Starbucks set the price. Brand names like Starbucks allow for products that are normally elastic to become more inelastic in price.

  2. williamf Said,

    December 11, 2012 @ 9:30 am

    I think this also says a lot about the market Starbucks is in. The fact that they can charge that much for a coffee says something about the coffee market itself as well as Starbucks’ position in that market. Being able to charge that much and actually seeing profitable results attests to their success in the market. The question then becomes how long will this price last? Will competitors attempt to charge this much?

  3. ryan Said,

    December 12, 2012 @ 7:26 pm

    I found this video to be very interesting because it shows how americans are willing to spend $7 for a brand name coffee when they can have almost the same exact coffee for $1. People also believe that the price of coffee is what stores charge and therefore are more willing to pay for it because of that.

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