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Current Market Conditions

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I am working on a project that will consist of about 110-125 words per question. I need to analyzing the current market conditions of "Starbucks" (selected Business)Please address the following topics in your analysis: (all information is about Starbucks only)
1. Prices
2. Technology
3 Price elasticity of demand
With one reference per question

1. Competition can take many forms. Price competition includes collusion, price discrimination, price leadership, loss leaders, and game theory (thinking about what the other "players" will do in response to your "move"). Non-price competition includes product differentiation and advertising.

a). List a few products that are marketed using price and non-price competition.

b). Identify an advantage of each strategy and under what conditions you might use each.

2. How do market prices differ between perfectly and imperfectly competitive markets?

a). How do the cost structures and ability of a firm to differentiate its product from a competitor's product help to determine market structure?

b). Provide a real world example of each of the following market structures:

· Perfect competition
· Monopoly
· Monopolistic competition
· Oligopoly

Thank you for your help.

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Solution Preview

The response addresses the queries posted in 1101 words with references.

// A company's marketing strategies differ, depending upon the marketing structure, product line, level of competition and many other factors. In this paper, we will analyze the various strategies adopted in the area of price and non-price competition, as well as, highlight various market structures. We will also try to outline Starbucks performance in these areas. //

Starbucks and Price and Non- Price Competition

Feeling the heat from fast food restaurants like Mc Donald's and Dunkin' Donuts into the coffee market, with their cheap cups of coffee with little over $1, the Seattle based Starbucks was forced to enter the price war. It has introduced bottomless cup of coffee priced at $1 (Starbucks Attacks Competition with the $1 Bottomless Coffee, 2008). Starbucks has also tried to increase its revenue by resorting to price rise, which has kept its income stable.

Starbucks has also fallen back on non-price competitive strategies like product differentiation and advertising. For example; in the economic downturn, pleasure like coffee from king of gourmet is the first thing consumers forgo when, cash-strapped (Burrow, 2008). Thus, Starbucks diversified its product line by offering instant coffee, which is considered cheap and inferior.

// A firm has many pricing strategies in hand to choose from, in order to gain market competitiveness like price collusion, price discrimination, price leadership, price loss and game theory. In this part of the paper, we will briefly highlight each type. //

Pricing Strategies

In collusion, two or more producers come together to fix the price at a certain limit. It can be a success only when, the companies have strong market base to influence price setting mechanism (Burrow, 2008). Collusion guarantees fixed sum of revenue, though, it is considered illegal.

Charging different price from different set of consumers for the same good is called "price discrimination". It allows firms to increase revenue. For ...

Solution Summary

The response addresses the queries posted in 1101 words with references.