Question

• why do you think starbucks was able to convince so many people that a 400% markup on a cup of coffee that costs 50 cents to make was a brilliant idea?

Answer 1

In short, Starbucks's success can be attributed to its marketing, the environment of its establishments, and its social popularity. Starbucks has managed to present itself as an honest, morally decent, and trendy coffee house that appeals primarily to a millennial audience. Regarding their locations, Starbucks franchises offer an upscale, urban feel that is not offered by many other coffee chains. Another reason is Starbucks embracing social progress and pop culture in their advertising and business design and practices. Finally, the ingredients used in Starbucks coffee are often marketed as premium and upscale, which falls into the advertising used to convince consumers that their product is worth more, even though that objectively, their product is comparable to products that cost significantly less. In short, it is not so much the product that is being paid for, but the name and social stigma/popularity around it, and this is why people do not hesitate to pay more for Starbucks's product.