Value Proposition (VIII). Progression of Economic Value (Part B)
When I said the value proposition of Starbucks Coffee Shops is more than coffee, what I am saying is Starbucks value proposition is more than coffee… and it is true!!!
During the summer of 1996, the reason why I bought a caramel macchiato at the Starbucks Store Astor Place, on my way to NYU classes, was because Starbucks Coffee Shop was located outside the metro station where I had to go out of the subway. Probably if the store is not located there, I wouldn´t walk another extra 100 meters or 200 meters for buying it. Also, I was buying a caramel macchiato not because I wanted to stay in the shop, I was running to my classes, so I was a client for “take away coffee”. But what is more important, I bought that Caramel Macchiato at Starbucks because they sold to me something I called “More than Coffee”.
Otherwise, why would I pay around $2.50 in the year 1996 for such a drink? (in dollars value of today the tall caramel macchiato in NYC is around $4.00). I did not go to Starbucks to buy a simple “coffee of the day”. I went to buy a “caramel macchiato”. I was not buying a simple cup of coffee.
Let me summarize it:
- From the point of view of ingredients only, I was buying:
Fresh Coffee Espresso PLUS my preferred Milk PLUS Foam Milk PLUS Vanilla Syrup PLUS Caramel Sauce.
2. From the point of view of convenience, I was able to go out the subway, and stop at the store, and in less than 5 minutes, I was ready to leave the Starbucks store with my caramel macchiato in my hands.
3. From the point of view of the experience, I was able to grab it and take it to my NYU class, and I was learning and listening to my professors, and drinking coffee for two hours… I loved it!!!
Can you understand why Starbucks sells an “experience to nurture and inspire the human spirit” and not just coffee?
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