Starbucks economics

I explore why Starbucks hides a cheaper, high-quality coffee option to maintain price discrimination. It demonstrates how firms with significant market power deliberately make their lower-priced products less appealing to maximize total profit.

Wed, 11 Jan 2006 • My best links

Starbucks economics. Why Starbucks has a better, cheaper coffee that it keeps a secret.

Comments

Dhar 11 Jan 2006 10:28 am: This was so damn interesting!
ritzkini 12 Jan 2006 6:14 am: “The more market power firms have, the less attractive they make the cheaper products.” I can think of N Marketeers in India doing this !
Madhu 13 Jan 2006 11:10 am: Interesting to compare this with the Bottom of the Pyramid concept of CKP.