Monday 22 September 2014

Coffee marketing: Convenience vs status

Who prices a single cup of coffee at £11? Actually, the price is 1,998 yen, and the marketer is Starbucks in Japan. The coffee is made from special Geisha beans (really!) that are grown in Panama. Starbucks was able to buy a quantity of these specialty beans and is offering the coffee in its Tokyo-area restaurants.

Starbucks has tweeted about these specialty beans in the past. It is also promoting the expansion of installations of its special high-end brewing system, Clover, used for the expensive 'reserve' coffees it serves in selected stores.

The pricing strategy for Geisha coffee is in stark contrast to the popularity of 100-yen coffee available at the ubiquitous convenience stores all around the cities. In fact, there is a price war brewing among convenience stores that want to attract coffee buyers.

Convenience and low price are two key motivations for purchase--but status can be just as powerful in many situations, as this example of product pricing illustrates.