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I am planning to open a cofee shop. What the premium price means?
Answer:
Premium Pricing generally means charging more for a perceived higher quality product or service.
for example, let's say the actual cost of a cup of coffee is 25cents. We figure the cost of water, heating the water, the paper cup and your time and effort.
The local gas station marks this cup of coffee up to say $1 for the convenience of having the cup there and ready for you to grab and go.
Dunkin donuts charges $1.50 because they feel their coffee tastes better than one at a gas station. That's a premium price.
Starbucks might charge $3.00 for the same cup of coffee because there's more cache for using frantaliono to order it. Again, premium pricing. (of course this company also might have higher cost-of-goods if its beans are more expensive becasue they're green and sustainable.)
for example, let's say the actual cost of a cup of coffee is 25cents. We figure the cost of water, heating the water, the paper cup and your time and effort.
The local gas station marks this cup of coffee up to say $1 for the convenience of having the cup there and ready for you to grab and go.
Dunkin donuts charges $1.50 because they feel their coffee tastes better than one at a gas station. That's a premium price.
Starbucks might charge $3.00 for the same cup of coffee because there's more cache for using frantaliono to order it. Again, premium pricing. (of course this company also might have higher cost-of-goods if its beans are more expensive becasue they're green and sustainable.)
First answer by Pauloesco.
Last edit by Pauloesco.
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