The Chinese Media vs. Starbucks: Pricing Discrimination or Smart Pricing Strategy?

In the U.S. and many other nations, it is likely unheard of for a company to be accused of unfair pricing because their prices are higher than those set by their competitors.  Such issues are almost always limited to situations where a company is accused of setting the price too low rather than too high.  In fact, setting the price high is considered an acceptable and expected strategy when a marketer seeks to differentiate a high-end product.  In most cases, the higher price is part of a segmentation strategy that also involves selling a premium product or services to a generally high income market segment.

So for some, this story may seem curious.  Here is one of the leading retailers in the world being accused by the largest country in the world of setting its coffee prices too high.  As a point of fact, it is not the country?s government that is charging this but the government-run media that is making this claim.  

Of course, looking a little deeper, this may actually have nothing to do with Starbucks’ segmentation strategy.  Rather, as noted in the story, this may be more about a country trying to protect its own companies.  Either way, it is a development that could get interesting.

Image by taylorandayumi