Recently,Starbucks is reported to charge higher prices for coffee in China than it does in other countries.Some people think Starbucks are kind of selling its brand rather than selling coffee,they also feel it unfair to be treated differently compared with customers in other countries.But another group of people are convinced that the higher price somehow reflects the high tax and logistic cost in the China market,which I think is true since the same thing happened to Apple,Nestle and other foreign brands,they had to suffer the high cost of logistics,thus they are forced to price higher.
However,as for the essential reason that Starbucks sets a higher price in China,I think it takes advantage of Chinese customers’ impressions on foreign brands: foreign brands are always better than those domestic ones,this has been mentioned by Fiona in her blog.For example,many Chinese think it’s a luxury to eat Haagen-Dazs ice-cream,therefore,they also think consuming foreign-brand products differentiates people,these products can somehow raise people’s social status or reflect wealth because they charge higher.But in North America,these brands are ordinary ones which everybody can afford.That is to say,there is something wrong with the positioning of Starbucks,it exaggerates its brand power in China to some extent.
References:
- BBC News: “Starbucks under fire in China over its coffee pricing policies” Oct.21 2013 http://www.bbc.co.uk/news/business-24619544
- ChinaIRN: “Reasons why Starbucks charges higher price in China” Oct.8 2013 http://www.chinairn.com/news/20131008/083745512.html
- Yuanfeng Zhang’s blog:“Haagen-Dazs, luxury in China?” Oct.7 2013 (embedded&commented)
- Image: http://www.brandchannel.com/home/post/2009/11/25/Will-China-Embrace-Starbucks-Growth.aspx