#LaunchAcademy: Setting the right price

From a statistical point of view, you a) either already had your morning cup of coffee, or b) you’re having it right now while reading this post (we’re flattered, by the way, if your day begins with our blog). And while on the subject, did you know that on average, Germans drink 150 liters of coffee per year, surpassing beer, wine or mineral water?

Be that as it may, let’s talk price. How much are you willing to pay for your cup of coffee?

Well, a German scientist has come up with a rather unconventional approach of determining the “right” price. Based in the small southern town of Aspach, neurobiologist Kai-Markus Müller arrived with certainty and empirically backed up evidence to the conclusion that, coffee, and in particular – Starbucks coffee, was largely underpriced. According to the brain researcher (incidentally – a former sales professional), classic marketing research is scientifically unreliable: we can’t just trust people when they tell us how much they’re willing to pay for a product – that would be too simple.

And so, Müller decided to kick it up a notch: with the help of electroencephalography (or EGG – long live the acronyms!), he sought certain “neuronal mechanisms” in the human brain. He showed his subjects the same cup of Starbucks coffee several times but with different prices, while an EGG plotted their brain activity.

Alexander / 15. Oktober 2031

Alexander / Neuro Pricing / Source: Der Spiegel

Contrary to what you may think, despite being the world’s largest coffeehouse company with some 20,891 stores worldwide, it turns out that all those years, Starbucks has been doing business in complete oblivion of its true potential, missing out on millions in profits. Müller’s study concluded that his subjects were willing to pay between €2.10 and €2.40 for a cup of coffee – significantly more than the current €1.80 it sells for. So in case you felt there wasn’t enough science in your daily life, you still have something to look forward to: neuro pricing – the determination of the “right” price based on brain testing in a lab!

So brace yourselves coffee lovers, for the days of drinking cheap coffee are over!
You might want to go: “well, thanks for ruining it for everyone else, Herr Müller!” but you can’t argue with science, can you?

From a statistical point of view, you a) either already had your morning cup of coffee, or b) you’re having it right now while reading this post (we’re flattered, by the way, if your day begins with our blog). And while on the subject, did you know that on average, Germans drink 150 liters of coffee per year, surpassing beer, wine or mineral water?

Be that as it may, let’s talk price. How much are you willing to pay for your cup of coffee?

Well, a German scientist has come up with a rather unconventional approach of determining the “right” price. Based in the small southern town of Aspach, neurobiologist Kai-Markus Müller arrived with certainty and empirically backed up evidence to the conclusion that, coffee, and in particular – Starbucks coffee, was largely underpriced. According to the brain researcher (incidentally – a former sales professional), classic marketing research is scientifically unreliable: we can’t just trust people when they tell us how much they’re willing to pay for a product – that would be too simple.

And so, Müller decided to kick it up a notch: with the help of electroencephalography (or EGG – long live the acronyms!), he sought certain “neuronal mechanisms” in the human brain. He showed his subjects the same cup of Starbucks coffee several times but with different prices, while an EGG plotted their brain activity.

Starbucks coffee price and brain activity // Der Spiegel

Starbucks coffee price and brain activity // Der Spiegel

Contrary to what you may think, despite being the world’s largest coffeehouse company with some 20,891 stores worldwide, it turns out that all those years, Starbucks has been doing business in complete oblivion of its true potential, missing out on millions in profits. Müller’s study concluded that his subjects were willing to pay between €2.10 and €2.40 for a cup of coffee – significantly more than the current €1.80 it sells for. So in case you felt there wasn’t enough science in your daily life, you still have something to look forward to: neuro pricing – the determination of the “right” price based on brain testing in a lab!

So brace yourselves coffee lovers, for the days of drinking cheap coffee are over!

You might want to go: “well, thanks for ruining it for everyone else, Herr Müller!” but you can’t argue with science, can you?