A man carries a Starbucks logo sign after a corporate event at a hotel in Shanghai April 19, 2012. CREDIT: REUTERS/CARLOS BARRIA

In Qiushan’s blog about Starbucks overpricing in China, she talks how this phenomenon is being criticized in China. Starbucks, being the world’s leading coffee chain, CCTV (China Central Television) stated after comparing coffee pricing around the world, they found out the pricing in China is higher than other market price. For example, Starbucks sells a medium sized latte in China for one third more than the ones in other countries. It soon drew criticism from the public, consumers felt they are treated unfairly and the coffees are way overpricing. While some of the customers still have an optimistic view, “even the price is higher, but its still affordable”, other consumers think that due to the massive market in China, even the price is slightly higher, Starbucks will still obtain its market demand.

From my point of view, value proposition is the key to generate profits and keep the existing customer base. However, Starbucks is not doing what consumers have expected, they should immediately take action in price adjustment and reconsider their value proposition.