You are a small business person who plans to open a premium coffee shop, much li

Question

You are a small business person who plans to open a premium coffee shop, much like Starbucks. Your value proposition is premuim blend coffee from small farmers around the globe, a fun, informal environment for college students and others who might enjoy televisions, a funky atmosphere (paintings on the walls, workers wearing tee-shirts and shorts, cement floors, and used furniture for seating. Considering your unique brand position, the market, competition, and your goal of achieving brand awareness and market penetration, how would you arive at prices for your coffee? Provide prices for your small, medium and large sizes and provide rationale.

Explanation / Answer

While planning to create a business proposition or an organization, there should be proper and effective analysis of the market so that the business organization should plan accordingly so that they can possess a competitive advantage over others competing in the market. The business that is planned to be set up here is a coffee outlet which will be like the Starbucks but they will serve coffee cultivated from small farmers around the globe and the environment will informal targeting the college students primarily and there will be available facilities like the television and funky atmosphere which will possess paintings on the wall, cement floors and used furniture as well.

The organization is focusing to create a unique brand value and propostion for themselves and they need to be very much unique because the level of competition is very high in this context and the irganiotions need to be unique in their approach as well. At present the organization needs to plan regarding the price of the coffee and initially the organization can promote and introduce a low cost for the promotion of the product so that the product receives the trigger and gradually the price needs to be increased accordingly for the betterment and profitability of the business. The price overall needs to be a bit on the lower side because as the target audience mostly are college students, hence this low price will attract this age group of customers. If the business is very much successful then price can be raised and the students may be offered a discount. I believe that this pricing strategy will actually help the organization and make it better in the industry.

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