ANALYZING ELASTICITY OF DEMAND: STARBUCKS COFFEE

Starbucks is an American corporation that provides prepared coffee in many forms, most of which involve espresso. The company's products, however, are more than just coffee. Starbucks is a cultural icon that purports to sell coffee primarily, but some observers believe that coffee is simply a stalking horse and that following the stalking horse is the marketing of a cultural phenomenon (Jung, 2002). Jung (2002) contends that the company is marketing the "Starbucks experience" (p. 1). The "Starbucks experience" is a surrogate living room where customers the company attempts to instill what Starbucks executives refer to as a "club mentality" (Jung, 2002, p. 1). Starbucks executives say that customers want the company to "surprise and delight them" in this club atmosphere (Jung, 2002, p. 1). Cynics contend that Starbucks uses the Starbucks experience to persuade customers to pay $3 for a 50 cent cup of coffee.

Prices for the prepared coffee-based products sold at Starbucks retail stores are high in relation to a cup of coffee prepared at home, in the of

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Approximate Word count = 749
Approximate Pages = 3 (250 words per page)