by: Roger Dooley
As described many times here at Neuromarketing, paying for a product activates the brain's pain center, particularly if the price seems too high to the person making the buying decision. Starbucks is the company that taught us that $5 for a cup of coffee (or at least for a skinny mocha peppermint latte with an extra shot ) isn't too much too pay.
Simply cutting prices might endanger Starbucks' premium image and the perceived quality of the product - after all, we know that expensive wine tastes better, so it's not a big leap to assume that high priced, premium brand coffee might taste better than the same product coffee served in a discount environment.
So what is Starbucks doing? First, they are actually raising prices on their broad line of coffee beverages. But, in Seattle, they are also testing a small cup of brewed coffee that will sell for a dollar but include free refills. I think the free refill concept is interesting from a neuromarketing standpoint, as it seems to change the percieved value of the purchase and, presumably, cut buying pain. Instead of the purchase price reflecting a single cup, now it offers (more or less) infinite possibilities. It's likely that the volume of refills they pour won't be gigantic, and hanging around the store a bit longer might encourage customers to make food or other purchases.
I like this strategy, both as a neuromarketer and coffee addict. Most of the coffee shops I frequent already let me top up/warm up my coffee, and they are already priced lower than Starbucks. (They also offer free WiFi and better-tasting coffee, but that's another story.) As much as I seem to write about Starbucks, I'm not all that frequent of a customer. If they roll out this policy nationwide, they might see a bit more of me.
Original Post: http://www.neurosciencemarketing.com/blog/articles/starbucks-refills.htm
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