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The most brilliantly deceptive idea I've ever seen

July 28, 2009
posted by Lauren | View Comments

starbucksI love Starbucks. I am not afraid to admit it. I am happy to sell out to the man when the man is a delicious frappuccino treat.  But I also agree with everyone in America who thinks that Starbucks is ridiculously overpriced.

And you know what? I think Starbucks finally got the message.  I noticed recently that they made a change!  But instead of dropping prices, they just made people perceive lower prices so they’d buy larger sizes.  Brilliant.

Even more amazing?  They raised prices in the process!  And they’re selling more grande and venti drinks than ever (read: more profitable).

So how’d they do it? Let me walk you through my realization:

When I walked into my local Starbucks on Sunday night, I ordered my drink but then noticed something different.  The menu.  The drinks were the same…but some of the pricing was in red.  Strange.  Wait – the pricing wasn’t just red.  It was…weird.  For example:

Latte
Tall – $2.80
Grande – +.55
Venti – +.85

Then the genius struck me.  Simply listing how much more the larger sizes are is an amazing idea.  People can’t do fast math! They don’t think about paying almost $4 for a large latte.  It’s only $2.80!  And what is an extra 85 cents really?  I can find that in my couch cushions.

I brought up this sneaky pricing to my barista who confirmed my suspicions.

“Yeah – we’re selling more grande and venti drinks than ever because people just think, ‘55 cents? I have an extra 55 cents!’ What they can’t tell by a quick glance is that we have actually increased all of our prices.”

What a stealthy way to hide it.  The prices are higher, but seem lower.  In a tough economy, finding an extra 50 cents is way easier than finding an extra $4.  And much easier to justify spending.

So kudos, Starbucks. For fooling the consumer and charging more for coffee than should legally be allowed.   I should probably be more upset with you than I am, but I think this was a fairly ingenious solution.  As long as you keep making delicious drinks, I’ll keep giving you half of my paycheck.

-Lauren

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This entry was posted on Tuesday, July 28th, 2009 at 5:30 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

  • willow

    I never understand all of the Starbucks hate (except for the fact that they burn their beans and their coffee tastes sorta gross). A “latte” is not coffee, it’s a coffee drink. The Starbucks price for coffee is only *slightly* more expensive than other places, and their prices for coffee drinks are pretty comparable.

    Changing the pricing structure probably *is* a move towards taking advantage of the math impaired, but I just can’t build up that much sympathy for folks who have to pay $3.65+tax for 20 ounces, when they could easily switch to regular coffee for under $2.

  • Barbara

    Or *gasp* buy a pound of coffee and make it… (deep breath) AT HOME. Save the waste of paper cups, not to mention the 300 calories and 60 grams of sugar. And a pound of fair trade coffee (the expensive, socially conscious kind) costs around $10-12, and makes about 45 8 oz cups of coffee. Now, time for some quick math… that averages about .23 per cup. That’s a lot of savings. Just saying.

  • Marianne

    Booooooooo. Wait till you visit and have Coffee Bean.

  • willow

    .23/cup not including the price of the coffee maker. ;) Of course, it would be much cheaper to get a job where they have a coffee machine in the office.

  • Rich

    Or ya can just do it my way – I hate coffee and it costs nothing that way!! haha!

  • Tom Todaro

    Starbucks stores are dropping like flies. We were surprised the last store in our town closed recently. Sure, the marketing is slick (flood neighborhoods with stores, dick with pricing/portion), but Starbucks is the hare to the tortoise, and seems to be flaming out right now.

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