Starbucks directly lowered product prices for the first time in 25 years since entering China, a move that attracted widespread attention. However, simple price reductions are not a panacea, and may not even be used as a short-term pain reliever. This article will delve into the logic, potential risks, and possible alternatives behind Starbucks’ price reduction strategy. From attracting new users and winning back swingers to solidifying loyal users, every step of price reduction is challenging.
From June 10, consumers who walk into Starbucks stores in China will see a historic scene: dozens of non-coffee drink price tags in the three major series of Frappuccino, iced tea, and tea latte have been collectively replaced, and the average price of large cups has been reduced by 5 yuan. This is the 25 years since Starbucks entered ChinaFor the first time, the price of the product was directly lowered, breaking the “curve price reduction” model that relied only on coupons and platform subsidies in the past.
▲Image source: The Paper’s Mathematics Class
In fact, former Starbucks CEO Laxman Narasimhan once sent coupons frequently to drive user consumption, but this strategy failed to effectively improve performance. It was proposed when Starbucks’ new CEO Brian Niccol took office in September 2024: Starbucks needs to return to its original intention, reshape its brand value, and improve customer experience to meet market challenges.
Ten months later, in the face of tight consumption and increasingly fierce competition in the Chinese market, Starbucks has finally made up its mind – “price reduction”, and its strategic purpose is self-evident:Increase afternoon tea sales and sinking market penetration.
butBrand Ape believes that this “price reduction” is not an “antidote”, and it cannot even be used as a “painkiller”.
1. The triple door of “price reduction”: vulnerability under soul torture
Soul torture: Are you the type to buy the cheapest wine on the menu?Still isThe kind of person who buys the most expensive liquor on the menu?
Please note thatNeither of these questions dealt with the flavor or value of the wine itself, just its price!
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In the process of a product from scratch, it is not easy to do a good job in the role of product manager, in addition to the well-known writing requirements, writing requirements, writing requirements, there are many things to do. The product manager is not what you think, but will only ask you for trouble, make a request:
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In the same way, few people really prefer cheap coffee. If so, then “they” are not your real target users! Starbucks’ attempts to attract users and boost sales with “price cuts” may not work.
1. Attract “new users”? – Fragile and unloyal traffic
Users or price-sensitive consumers who tried Starbucks for the first time due to the 5 yuan price reduction have extremely low loyalty. Their logic of choice is”Instant cost performanceInstead of brand identity. When Luckin’s “9.9 yuan” and Cudi’s “9.9 yuan” continue to bomb, or Mixue Bingcheng provides a thirst-quenching solution at a lower price, the appeal of Starbucks’ 5 yuan discount will collapse in an instant.
Core questions: This “price reduction” failed to provideUnique value。 It only briefly lowers the threshold for experiencing Starbucks, but it fails to give users oneReasons to continue choosing Starbucks over lower-priced alternatives。
2. Recover “swing users”? —— It is difficult to treat the symptoms and the root cause
The reasons for the loss of “swing users” (i.e., former Starbucks customers) are complex: downgraded consumption, increased choice (Luckin, Manner, boutique cafes), and decreased freshness of Starbucks products/experiences. The price reduction may bring a “return visit”, but if Starbucks’ core product (coffee) does not have quality, innovation, or overall experienceSubstantial improvementThis kind of return visit is difficult to translate into stable repurchase.
Core questions:Price reductions fail to address the root cause of user churn. It is like a shot in the arm, stimulating a heartbeat once, but it cannot cure the lesion causing the arrhythmia. What users need is:“Reasons why it’s worth paying a little more”, not just “a little cheaper”. If Starbucks can’t prove that its value goes beyond the price itself, swing users will eventually continue to sway.
3. Consolidate “loyal users”? — It may be counterproductive
For the core user group that binds Starbucks consumption with “sense of identity”, “petty bourgeois sentiment” and “third space”, the impact of price reduction only for non-coffee drinks may be limited, but the “price sensitive” signal and potential risk of brand tonality dilution are real.
If the scope of price reductions expands or the frequency increases in the future, some loyal users who pursue a sense of “superiority” and “circle recognition” may turn to more niche boutique cafes that can better highlight their taste due to the weakening of the brand aura.
There is an inherent tension between the price reduction strategy and Starbucks’ long-established brand image and emotional connection. It can erode one of the brand’s core assets – psychological premium.
The most terrible possible outcomes:“The sense of superiority and identity built on Starbucks will no longer exist”。
The ultimate question –Any “price reduction” needs to face the soul torture:Who is it for? What does it do? How did the status change? What will users tell others?
2. What is “price”? How to “reduce prices” elegantly and effectively?
Marketing changes your pricing, and pricing changes your marketing!
——”This is Marketing”
If you understand the three key concepts of “price”, you will know how to “reduce price” elegantly and effectively:
1. “Price” is a story!
The price is the growth of the enterpriseDriving forceBecause price defines what we stand for, who we design for, and the story we tell. It should be equivalent to positioning, unless you plan to change the positioning and crowd.
Starbucks’ past prices tell a story of “quality, space, and identity.” Although this partial price reduction is for non-core coffee products, it is a vague signal——What kind of new story does it want to tell? Is it more people-friendly? Is it to expand diverse experiences? Or is it more closely aligned with market demand?Whichever story is chosen, it will have a profound impact on the brand’s positioning.
2. The art of “price reduction”: find “positive value”.
From a user perspective, users not only seek “value for money” but also desire fun and unique experiences during the shopping process.
Therefore, the starting point of any price reduction or promotion should be“Provide users with a valuable and positive shopping experience”。 However, simple price reductions are often difficult to directly equate to “more valuable experiences”.
Under the strong siege of local brands such as Luckin, Starbucks’ price reduction can easily be interpreted as “passive response” or “lack of confidence”. This interpretation will undoubtedly weaken consumer trust and make the public and users question whether their long-standing values are still valid.
3. “Cheap” is another way to say “afraid”.
If you can’t present a service or product in a novel and unique way, “price reduction” will become the last resort of marketersRefuge.As a matter of factLowering prices not only does not increase trust, but weakens it.
Therefore, the essence of price is that it is a narrative of brand value, not a simple lifesaver.
If irreplaceability cannot be built through product innovation and experience upgrades, then simple price reduction will eventually erode the “psychological premium” on which the brand lives – this approach is tantamount to drinking poison to quench thirst.
3. Discussion on Starbucks’ way to break the game: return to the original intention!
How do we exceed the expectations of our partners and customers? How do you aim to present the highest quality coffee in the world? How do you keep customers coming back to Starbucks and recommend it to their friends? The key to these problems is not competition, but the brand itself.
– Schultz
In the face of consumption tightening and intensified competition, is there any other way to go besides direct price reduction? Bubble Mart, Bawang Chaji, Fat Donglai and Sam that do not roll up the “price”It may be inspiring：
- Overlord Chaji: Return to the essence of tea, so that users can drink a cup of refreshing and non-greasy, original leaf tea aroma.
- Bubble Mart: Provide young people with unique, irreplaceable experiences and emotional value.
- Fat from the east: Be sincere, be kind
- Costco and Sam’s“We guarantee the best quality by charging a membership fee – carefully selected and offered the lowest price. ”
With this, the brand ape proposes three “returns”:
1. Enhanced quality: significantly improve product strength and perceived quality
The first thing customers buy is delicious. Delicious is the basic premise of any food, and continuous creation of delicious products is the direction of efforts, not cheap. No matter how sluggish the economy is, consumers’ motivation to buy products will not stay at “cheap price”
——Toshifumi Suzuki
Obviously, a very important reason for Starbucks’ decline is:The quality of its 30 yuan coffee is almost the same as that of its 15 yuan competitors.
Therefore, instead of choosing to “reduce prices” to break the situation, it is better to upgrade quality from the following five aspects:
- Same price, upgraded quality: Provide value that matches the price of 30 yuan, even exceed consumer expectations, and let consumers clearly perceive “30 yuan coffee”The real value of
- Strengthen transparency and education: Through in-store displays, mini programs, and barista communication, convey the origin of coffee beans, processing methods, and roasting stories, and improve consumer appreciation.Build a sense of trust in “understanding coffee”(I forgot about it while walking).
- Product innovation rather than following: Develop coffee drinks that are in line with Chinese tastes, especially avoid following competing products. A friend of the brand ape (former Starbucks employee) once complained: “It’s really hard to understand why unpalatable new products are always on the market.”
- Product co-creation: invite all kinds of talents, celebrities, and bloggers to co-create coffee.Just imagine，Li Ziqi with oriental ancient charm and Dong Yuhui’s exclusive coffee full of “small compositions” are listed, what kind of scene will it be.
- Non-coffee drinks “valued”: For products such as frappuccinos that have been reduced in price, simultaneously emphasize the upgrading of raw materials (such as better tea base), process uniqueness or health attributes to avoid becoming “low-priced sweet water”.
With the “Mingqian Longjing” version, a bottle of 8 yuan is hard to find, and even fried to 15.9 yuan, which fully confirms the user’s recognition of high-quality products.
And here comes the first return of Starbucks: quality, quality and quality!
2. Deepen the value of “super members” and create identity barriers and exclusive experiences
Drawing on Costco and Sam’s “membership fee” logic, tell“For members only”The price of the story.
At this time, even if you give Venus members 9.9 yuan to “open up” Luckin, it can become a proper “new story” –It does not affect the brand image, but can also attract “swing users” to continue to “grow upward”.
More importantly, let the members of “Silver Star, Jade Star, and Gold Star” enjoy“Exclusive” (not “low-price”) benefits, so as to build a high-value ecosystem – for membersExperiences and sense of identity that cannot be purchased directly with money:
- Product privileges: Exclusive drinks/food for members (not only discounts), priority/free customization (such as premium syrup, special milk), exclusive purchase of limited co-branded products.
- Space privilege: Member-only seats/areas, online seat reservations, conference room use, customized cultural spaces, etc.
- Event privileges: Regular coffee tastings, hand-brew courses, artist collaboration activities, and new store opening experiences.
- Personalized service: AI-powered recommendations, birthday/anniversary benefits, and exclusive barista services.
Starbucks’ second return: tell a story aboutThe story of “belonging, exclusivity, and a unique lifestyle community”, making membership itself a label worthy of showing off and recognition.
In addition, specific offers (similar to KFC’s “Mad Four”) are offered to super users (super communicators, content creators, and influencers) as a “dessert” to maintain relationships and deepen emotions.
3. User experience of “Third Space” 2.0!
“User experience” is not one thing, but a combination of many things. But sometimes, the smallest things can have the biggest impact, and we unknowingly give up on the focus on user experience, so we need to correct ourselves first.
——Starbucks founder, Howard Schultz, returned to Starbucks for the first time
Starbucks must be soberly aware that its core moat is the “third space”. This advantage has not only not been upgraded, but has regressed, and even occasional explorations (such as green spaces, office spaces) have been abandoned due to failure.
Brand Ape believes that any exploration, innovation and failure of Starbucks on this road should be without scruples.
1) Scenario-based experience: help users “progress”
Whether advocated by Professor Christensen“User Mission – Helping People Progress”； Or what is said in “Experience Economy” that “the business that creates the highest economic value is a kind of.”“Helping individuals grow or expand their possibilities”experience”, all reminding us that future marketing should start from simple advertising competition, price war, traffic competition,Turn to help people discover themselves and pursue progress.
From this perspective, Starbucks’ “third space” undoubtedly contains more potential.
- Feature Breakdown:Clearly distinguish between “pretending” office areas, in-depth social areas, learning areas, leisure and relaxation areas, etc., and optimize the configuration of tables and chairs, lighting, and sockets, rather than the same old design, or even sacrifice comfort.
- Theme and localization: combine urban market culture, community characteristics or seasonal themes to create the uniqueness and check-in attraction of “one store, one scene”.
- “Community Center”: Active planningActivities such as small salons, reading clubs, art exhibitions, and handicraft workshops make stores a connection point for community cultural life, not just a place to consume.
2) Digital empowerment experience: from personalization of experience to personalized delivery of experience
In the infinite media environment, every moment is personalized, so even if the needs of the same scene and different moments are completely different, understanding this can truly provide a “one person, a thousand faces” experience.
- Seamless integration: Optimize the APP/mini program to achieve more accurate in-store pick-up, seat reservation, event registration, and community interaction. Leverage data to provide highly personalized in-store experience recommendations for members.
- Scene extension: Explore the combination with online content (music, podcasts, light knowledge) to provide exclusive content or experiences that can only be unlocked when you arrive at the store.
- Service Temperature and Consistency: Under the pressure of cost reduction and efficiency increase,Ensure that the core “human touch” service does not shrink。 Continue to invest in barista training to improve professional ability and communication temperature,Make “partner connection” the key to experience differentiation.
When Starbucks redefines the value of the “third space” –Occupy the user’s share of “effective time”:(1) Clarify the definition and redistribution of effective time units (2) Activate new meaning time and explore new category opportunities, and its “third space” will be upgraded to “effective time occupation can be upgraded toEffective time occupancy capacity“, until it becomes a new logic for reshaping digital business.
This is Starbucks’ third return: a value reconstruction about the “third space”!
4. Summary and inspiration: price reduction is tactics, and value restructuring is strategy
Starbucks’ price reduction for non-coffee drinks, as a tactical action, may stimulate some afternoon tea sales and test the sinking market in the short term. But in the view of the brand ape, this does not really solve Starbucks’ decline in the Chinese market, and may even erode the foundation of the brand and the emotional connection between loyal users.
The real breakthrough lies in returning to the “original intention” advocated by Schultz and new CEO Brian Niccol – but this requires going beyond the slogan and completely reconstructing the brand value:
- Use quality upgrades to consolidate hard-core reasons: By significantly improving coffee quality and product innovation, we respond to consumers’ doubts about “quality and price match”.
- Tell a new story with the “super member” system: Build a highly sticky user pool with “exclusive identity and exclusive experience” as the cornerstone.
- Deepen emotional connection with “Third Space 2.0”: With the evolution space that integrates diverse scenes, local culture, community depth and digital convenience, it creates an exclusive Starbucks irreproducible lifestyle belonging.
As Bubble Mart confirms: when a brand anchors unique emotional and experiential value, price is no longer the primary competitive dimension.
If Starbucks wants to revive, it must prove that it sells far from a drink, but an emotion, identity or an irreplaceable life experience. In this fierce competition in China’s coffee market, price reduction is by no means a solution, and only continuous value innovation and deep emotional resonance can build a real moat.
