Starbucks has long been a symbol of western luxurious life in China, and many cities in China currently do not have any Starbucks stores since Starbucks went into Chinese market fairly late. Because of the different reputation of the company itself in China, Starbucks uses price discrimination strategy because definitely Chinese people value Starbucks more than North Americans.
I agree with Doris that, in short run, this strategy can help Starbucks maintain its high position in Chinese market. However, in long run, as Tim Hortons is thinking about expanding their business into other countries, the price discrimination strategy may actually make Starbucks less competitive. My suggestion is that Starbucks can keep offering higher price coffee in China, however, they may think about lowering their price once the market gets more competitive and saturated. Also, the company needs to come up with some unique products only provided to Chinese consumers in order to keep their high position in the consumers’ minds.
