Delivering Value in Premium Coffee
Starbucks became a dominant seller of coffee not by lowering their prices, but by increasing the value of the coffee experience.
Business Plan on a Napkin
Yesterday I had lunch with Joseph Leddy of Obtiva. As we brainstormed about some of our projects in the open source community, Leddy shared an early version of the Starbucks business plan:
Customers Pay for Value
The business plan on a napkin is a tech industry cliche. I don’t know if Starbucks really started that way. But it’s clear that nobody tricks Starbucks customers into paying more for coffee. Somewhere in that price differential, customers feel they are getting something extra. Customers will pay for value.