THE MASTER OF MARKETING AND 4 AWAITING TRAPS ON THE MENU OF STARBUCKS
Although the prices and products would be adjusted accordingly to the regions and purposes, all menus of Starbucks are obliged to 4 principles that the biggest coffee brand has summed up after 50 years of business.
- The middle is always the best
You may not notice but the products in the middle are always preferred by customers:
- If there are 4 vacant toilets, 60 percent would choose the 2nd in the middle.
- In supermarkets, the products placed in the shelves in the middle always observe higher sales by at least 8 percent.
- Even for decision makers, 55 percent of the correct answers would fall into the ones in the middle in a multiple choice tests.
Why do people like the middle position so much? That is a mental stereotype that Starbucks has recognized. It takes 0.05 seconds for an information to be recorded in our subconscious, in which, however, 0.03 – 0.04 seconds is for the information in the middle.
The more you observe something, the more you are drawn to it, and the more you are interested in it, you will continue to observe.
Most customers are instantly fascinated by the products in the middle, and when they are “pressured” by the staffs and the people behind them, they would quickly choose the first product that they set their eyes on.
Even for customers who have had ideas of the drinks they want in their mind, their subconscious will mostly be affected by the products in the middle.
For those reasons, Starbucks would generally advertise the products with high sales, new products, or seasonal products right in the middle of the menu.
- From “Short” to “Grande”
The “Compromise” phenomenon is a typical trait that occurs when customers does not want to choose neither the most expensive nor the cheapest items.
According to a survey, upon being given the chance to choose between 2 camera products, the numbers of people choosing the first product and the second product are pretty much the same. But when the third camera is included, over 50 percent of users would choose the product in the middle.
To take advantage of the subconscious, the product that the seller want to increase its sales is usually priced between the cheaper and more expensive products, which are priced at reasonable level.
Going back to Starbucks, until the 1990s, Starbucks usually had 3 sizes: Short, Tall and Grande, and it was no surprise that the Tall size was the most popular choice.
Acknowledging this tendency, Starbucks intentionally hid the “Short” size on the menu and added 2 bigger sizes: Venti and Trenta. Grande instantly became the most “reasonable” choice in the eyes of the customers.
However, positioning is not everything. As customers usually look for the price in the middle first, Starbucks would usually take advantage of this opportunity to implement the strategy of an “anchor price” to direct customers to the products that they want to sell.
In theory, 3 products with 3 different price levels would share 33 percent of sales each.
But at Starbucks, although the advertised prices of a Tall size and a Grande size do not change, that of Venti size would be reduced to reflect the difference between Tall versus Grande, and Grande versus Venti.
Generally, the price of a Tall size becomes expensive and unreasonable in the eyes of the customers, making the choices of Grande and Venti more popular than ever.
- The disappearance of the USD symbol
In any country, the menu of Starbucks would not include the currency signs next to the prices of the products. It may sound ridiculous but a currency sign will make customers think about money, and the more they think about money, the less they would want to spend.
The above “trap” originated from a rather famous research of the Cornell University. In this research, customers are shown a same product priced at USD 20, but is presented in 3 different ways: $20.00, 20, and “twenty”.
Although they are the same, but the sales of the product without the dollar sign was higher by up to 8.1 percent.
According to a psychology expert: “As $ is a sign of expenses, it not only brings negative vibes but also reminds customers that they are about to spend some money”.
And so, when customers spot the appearance of a currency sign, they would instantly change their mind about their following actions. Most of them would prioritize saving up rather than purchasing more quality or higher quantity of a product.
- 95 is better than 99?
With regards to pricing again, products at Starbucks usually have their prices ended with “95” rather than “99”.
This is an element that surprises many experts and customers as the number “9” is highly appreciated in retails:
- The products of which prices end with “.99” usually observe higher sales, by 48 percent in some cases.
- The price “.99” also keep customers from managing their budgets, leading them to spend more.
However, as the number “9” has been used so frequently, products of which prices ended with “9” are perceived by customers as “cheap”. That’s why Starbucks has decided to use the number “5” to highlight their class.
Starbucks usually positions itself as “high-end” in the coffee industry. The consumers at Starbucks do not have to save a few pennies, but rather spend more to have a quality cup of coffee.
Although decreasing the price from USD 2.99 to USD 2.95 can cost Starbucks 1.33 percent of its sales, that is an insignificant expense to consolidate the image of Starbucks in the eyes of customers.