In response to economic downturn Starbucks lainced a new lin

In response to economic downturn, Starbucks lainced a new line of instant coffee called VIA Ready Brew. The company also developed a breakfast value meal that costs less than $4. Do you agree with these decisions?

Solution

Starbucks is considered to be a premium brand which serves customer which value premium offerings. IF Starbucks decides to launch instant coffee and a low cost breakfast under its existing line then it may lose the exclusivity image that customers look for while visiting a Starbucks. The customers who payfor starbucks will still be able to pay the premium starbucks enjoys because they are usually the upper class of the society with significant means. Thus this may prove to be a wrong decision and lead to destruction of the brand image they have been able to create.