Académique Documents
Professionnel Documents
Culture Documents
• Industry Information
• Conclusion
Why?
• US $40 billion dollars spent on coffee every
year
Key External Drivers: world price of coffee, demand from grocery wholesale, per capita
coffee consumption, world price of crude oil
Market Share:
• HHI of =1907.5
Hot Coffee
2.5
2 Manndible
Starbucks
CTB
Price
Trillium
1.5
Olin Café
Mcdonalds
Dunkin Donuts
1
0.5
12 oz 16 oz 20 oz
Coffee Pricing
(Overview continued)
Latte
4.5
4
Manndible
Starbucks
3.5
Price
CTB
Campus
3 Mcdonalds
Dunkin Donuts
2.5
2
12 oz 16 oz 20 oz
Specific Strategies
Premium Pricing
• Keeping the price of the product relatively high in
order to encourage favorable perceptions among
buyers, based solely on price
$4.00
$3.50
$3.00
Prices
Starbucks
$2.50
McDonalds
$2.00
$1.50
$1.00
Coffee Iced Coffee Latte Mocha
Drinks
Cost-Plus Pricing
• The retailer works out all costs associated
with the product and adds the amount of Costs Associated with
profit they need to make. Selling a Cup of Coffee:
0.16
0.14
2.5 0.12
0.1
Price
Price
0.08 Price/oz
2 0.06
0.04
0.02
1.5 0
12 oz 16 oz 20 oz
Linear Pricing
2.6
2.4
2.2
Manndible
2 Starbucks
Price
CTB
1.8 Trillium
Olin Café
1.6
Dunkin Donuts
1.4
1.2
1
12 oz 16 oz 20 oz
2nd Degree Price
Discrimination
• Bundling: breakfast deals
• Manndibucks- prepaid
• “Unlimited” mugs
Price Bundling
• Companies often bundle items
together to achieve maximum
consumer surplus.
• Dunkin Donuts coffee complements
their bakery products and breakfast
sandwiches.
• Although these can be bought
separately, buying them together as a
value meal is cheaper.
• Manndible offers a breakfast bundle
of Coffee and a Bagel with Cream
Cheese
Complementary Pricing
• Charging a very low price for an
item compared to its competitors,
while raising price on other items.
Coffee Mocha
2.6 4.6
2.4 4.4
2.2
4.2
2
4
Price
Price
1.8 Gimme Gimme
Manndible 3.8 Manndible
1.6
3.6
1.4
1.2 3.4
1 3.2
12 oz 16 oz 20 oz 12 oz 16 oz 20 oz
Conclusion
Analysis & Recommendations
• Investment Recommendations:
• Large opportunity for national and international expansion
• Non-coffee sales
• Homebrew
• Company Recommendations
• Specialty coffee
• Coffee bean sales
• Social responsibility & community relations
• Customer service
• Product innovation
National vs. Local