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Soft Latte Demand At Starbucks

Decent Essays

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Flavored Latte Demand at Starbucks
Patten University
Managerial Economics
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Starbucks is one of the largest known coffee distributors within the United States. Their mission statement is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”. Their objective is to be one of the most well known and respected brands around the world. With 21,366 stores around the world, operating in 65 countries, they are a major company that has influence on the economy in the United States and around the world (Starbucks 2015).
Starbucks sells a variety of products, with the majority of its products revolving around different drinks, specifically coffee. They sell plain black coffee, along with many variations of what people call coffee; from flavored lattes, and frozen frappuccinos, to herbal teas and smoothies. Many people visit Starbucks on a daily basis to get there caffeine fix to get them through their busy days.
Two of the main determinants for demand include the income of their customers, and the changing habits of their customers. Flavored lattes are a normal good – as income rises, so does the demand for the product. But the reverse is also true – as income decreases, so does the demand for the product. As income increases for their customers, they can expect for their customers to stay loyal and continue to drink their coffee. But as income decreases, they can expect for their customers to come in less frequently as with a higher income.

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