Starbucks Coffee Demand to the Public
Further, Starbucks announced plans in late-September 2004 to raise prices in its retail outlets by an average of 11 cents per cup ("Starbucks to Raise Prices by 11 Cents A Cup", 2004). The company obviously does not expect the price increase to have an adverse impact on the sales of its products. Starbucks tends to view the price elasticity of the demand for its products as elastic, but a low level of elasticity. If the company's products were inelastic, it would place the products within the context of a necessity a good that people will find a way to obtain regardless of price because they (literally) cannot live without the product.

Starbucks coffees are not in the necessity category. The selling of Starbucks prepared coffee products as a lifestyle product, however, allows consumers to place a higher value on the utility of Starbucks prepared coffees than they assign to a cup of coffee available at a vending machine or even a cup of coffee prepared at home or in the office. As a lifestyle product and a product that consumers perceive as a

 
 
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