Pricing Methods

How Starbucks Maximizes their Profit Margins

How they get us to buy more of their product & how we could take some notes.

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I want you to look at the three different products on Starbucks’ menu. Notice their sizes & prices among each three. Which one looks like you’re getting the better deal? In every single product, it’s the Venti. It’s bigger than the other sizes by several ounces yet you’re only paying a few cents more.

This value based & product versioning strategy sets the price of the top profiting product FIRST, then files in the smaller versions closely behind in pricing. They’ve made it a no-brainer…. buy the biggest one for not that much more. ⁣

Here are THREE tips on how you can use this strategy to bring up your bottom line:⁣

1. Start with what you want to sell FIRST. Want to sell that big beautiful album every time? Set it’s price just above your other smaller albums. It will be an easy choice to choose the bigger one for not a huge price increase.⁣

2. Offer all inclusive session options? Price the one you really want to sell a few hundred above the options below it. The bigger difference in the version of the offer, but small price increase will have them going for the one you’ve strategically set up every time. ⁣

3. Want to increase your profit margins without scaring your clients off? Increase your profit margins on items surrounding your star products. It will motivate your clients to select those start products because they look like such a great deal. ⁣

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