cafemakers
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- Nov 3, 2004
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Re: shots
You mean "above starbucks" right?
Muddycup said:
You mean "above starbucks" right?
How many shots of espresso for different sized drinks?
- Thread starter BaklaJava
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cafemakers
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- Nov 3, 2004
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Although this price strategy may be working for you at your shops - likely in coordination will a well run business in many other regards - I'm afraid that as a general rule I must disagree with this approach.
From my experience in working with coffee shops and their customers all around the US, I find that the consumer perception of "cheaper than Starbucks" implies "not as good as" rather than "better value." Setting prices below competition with a mediocre product may in fact be a deterrent for new customers; they expect less.
In this micro-luxury market, I find that loyal consumers are not looking to save a few pennies, they are looking for convenience and consistently good quality. The caveat, of course, is that you must provide a product that is consistently better tasting than the big-named competitor in an atmosphere of comparable cleanliness and convenience.
The "value" crowd is more likely to go to 7/11 for their $.99 32oz hazelnut cafe latte. I recommend that shops will do better financially by attracting the "quality" crowd rather than the bargain shoppers.
From my experience in working with coffee shops and their customers all around the US, I find that the consumer perception of "cheaper than Starbucks" implies "not as good as" rather than "better value." Setting prices below competition with a mediocre product may in fact be a deterrent for new customers; they expect less.
In this micro-luxury market, I find that loyal consumers are not looking to save a few pennies, they are looking for convenience and consistently good quality. The caveat, of course, is that you must provide a product that is consistently better tasting than the big-named competitor in an atmosphere of comparable cleanliness and convenience.
The "value" crowd is more likely to go to 7/11 for their $.99 32oz hazelnut cafe latte. I recommend that shops will do better financially by attracting the "quality" crowd rather than the bargain shoppers.
price
well not knowing my business model it is hard for you to rate what we do, but we do provide a more superior product than starbucks, at a perceived "better value point" as well as being packaged in class act enviroment. (when you look at the photos on our web site we are a place that most people would prefer over a starbucks.
I agree with you in general and we analyzed every aspect of what we do and it works
Unfortunitly there are those out there who run coffee houses that miss at least one of these factors.
our newest location was placed 1/2 block form dunkin donuts and there business dropped 60% the first month we were open.
well not knowing my business model it is hard for you to rate what we do, but we do provide a more superior product than starbucks, at a perceived "better value point" as well as being packaged in class act enviroment. (when you look at the photos on our web site we are a place that most people would prefer over a starbucks.
I agree with you in general and we analyzed every aspect of what we do and it works
Unfortunitly there are those out there who run coffee houses that miss at least one of these factors.
our newest location was placed 1/2 block form dunkin donuts and there business dropped 60% the first month we were open.
- Aug 14, 2003
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I still do not understand how you get $1.50 for a shot of espresso...and a dollar for an extra shot...I understand you are in this business to make money(anyone who says they do it for only the love of it is either a liar or crazy) But you might sell more if you reduced your price...I mean right now you are are bringing in around $97 on a pound of espresso...you know what I take that back...charge as much as you can get away with....congratualtions....wish we could do that here in the south 
pricing
our pricing is alittle strange but it works:
Three reasons:
1. build a cafe that is nicer and more comfortable than there own home and they will be willing to pay more for a drink just to have their coffee there instead of standing in the deli down the street.
2. build an ala cart type menu i.e. latte 16oz two shots $2.75
add .50 " " carmel $3.25
white choc/carmel latte $3.75
3. alway make sure that you have a minimum charge per customer if you charge .50 per shot then as a customer I would buy a double shot and add milk for $1.00. this way if they get a double espresso it is 1.50 minimum charge and a $1 for another shot $2.50. At that point you can sell them a latte or cap.
customers are smart, they will figure out a way around your pricing if you not careful, remember my busiest store is 1/2 block from a dunkin donuts and yes they are cheaper and I won't take all there business away, but I took all those that rather spend time in our shop rather than stand in dunkin donunts.
Jim
our pricing is alittle strange but it works:
Three reasons:
1. build a cafe that is nicer and more comfortable than there own home and they will be willing to pay more for a drink just to have their coffee there instead of standing in the deli down the street.
2. build an ala cart type menu i.e. latte 16oz two shots $2.75
add .50 " " carmel $3.25
white choc/carmel latte $3.75
3. alway make sure that you have a minimum charge per customer if you charge .50 per shot then as a customer I would buy a double shot and add milk for $1.00. this way if they get a double espresso it is 1.50 minimum charge and a $1 for another shot $2.50. At that point you can sell them a latte or cap.
customers are smart, they will figure out a way around your pricing if you not careful, remember my busiest store is 1/2 block from a dunkin donuts and yes they are cheaper and I won't take all there business away, but I took all those that rather spend time in our shop rather than stand in dunkin donunts.
Jim
ElPugDiablo
New member
- Jul 16, 2004
- 991
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Re: pricing
I think Muddycup has a point here. People do pay more for atmosphere. If you go to a dive vs. a posh bar, you could easily see a price difference of a dollar more for the same Bud. I remember reading somewhere Starbucks aim is to make Starbucks the third place for people to be at, first and second places being their home and work place. Essentially what they are talking about is creating an atmosphere so people will go there, and pay more.
CCafe said:
I think Muddycup has a point here. People do pay more for atmosphere. If you go to a dive vs. a posh bar, you could easily see a price difference of a dollar more for the same Bud. I remember reading somewhere Starbucks aim is to make Starbucks the third place for people to be at, first and second places being their home and work place. Essentially what they are talking about is creating an atmosphere so people will go there, and pay more.
cafemakers
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- Nov 3, 2004
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That's fine, but if he's 1) providing a superior atmosphere and 2) a superior product and 3) presumably similar convenience and cleanliness, why is he charging less? Isn't this strategy leaving money on the table?
cafemakers
Member
- Nov 3, 2004
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Tear down? No. Just help; thought you would appreciate some advice.
How was my comment a put down? I have personally seen stores close for going all out or posh as some put it. You really need to know your market before you go and dump tons of cash in to a mediocre site! I was saying you need to be careful.
As for you have 4 stores good for you, I'm happy for your success. But remember some of the biggest business have crashed and burned due to that type of attitude.
As for the rest of my posts I try to be as helpful as possible. I even take calls when asked!
As for you have 4 stores good for you, I'm happy for your success. But remember some of the biggest business have crashed and burned due to that type of attitude.
As for the rest of my posts I try to be as helpful as possible. I even take calls when asked!
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