Comments on: SAS Economists Podcast #5 – What does the Caramel Frappuchino mean to Starbucks? http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/ for students and teachers of Economics Wed, 23 May 2012 04:39:58 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Patrick S http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/comment-page-1/#comment-8931 Patrick S Sat, 07 Nov 2009 05:02:24 +0000 http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/#comment-8931 Due to the fact that this blog tells us about the new Statbucks that just recently oppened across the street from Shanghai American School, which made students fall in love with it, it could be said that studets would be inelastic to the change in price, or less sensitive. So, if Starbucks wanted to increase their total revenue, they should increase the price of frappuchinos by a bit, which will make the quantity demanded of this good increase by much more. Also, since tastes and prefferences are included (caramel flavour), demand for this good will increase. So, since it is a new shop and it attracted several people, a little change in price would not make a big difference, creating a greater total revenue to this firm. Due to the fact that this blog tells us about the new Statbucks that just recently oppened across the street from Shanghai American School, which made students fall in love with it, it could be said that studets would be inelastic to the change in price, or less sensitive. So, if Starbucks wanted to increase their total revenue, they should increase the price of frappuchinos by a bit, which will make the quantity demanded of this good increase by much more. Also, since tastes and prefferences are included (caramel flavour), demand for this good will increase. So, since it is a new shop and it attracted several people, a little change in price would not make a big difference, creating a greater total revenue to this firm.

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]]> By: ed tang http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/comment-page-1/#comment-3202 ed tang Wed, 07 Nov 2007 08:53:25 +0000 http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/#comment-3202 its surprising how one product can have such a great effect on the total revenue. But as angeline said, when they increase the price of one product, they increase the price of the other products as well. I think the reason is to keep the number of consumers buying the prouduct at a higher price. For example, if the price of the caramel frappucino was increased alone, consumers would buy the other products like vanilla or chocolate. But if they increased all frappucinos, then consumers would go back to buying the caramel frappucino its surprising how one product can have such a great effect on the total revenue. But as angeline said, when they increase the price of one product, they increase the price of the other products as well. I think the reason is to keep the number of consumers buying the prouduct at a higher price. For example, if the price of the caramel frappucino was increased alone, consumers would buy the other products like vanilla or chocolate. But if they increased all frappucinos, then consumers would go back to buying the caramel frappucino

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]]> By: Tim C http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/comment-page-1/#comment-3192 Tim C Mon, 05 Nov 2007 21:50:21 +0000 http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/#comment-3192 Really Funny stuff guys. I wouldnt go as far as to say that the frap IS what makes starbucks. it's certainly a factor but you have to count in other drinks. I was also a bit suprised that some people were willing to pay up to $40 for a frap, but given the wealth of the students here at SAS, it certainly is a possibility. All in all, great work guys! I'm still laughing at drew's random shouting haha. Really Funny stuff guys. I wouldnt go as far as to say that the frap IS what makes starbucks. it's certainly a factor but you have to count in other drinks. I was also a bit suprised that some people were willing to pay up to $40 for a frap, but given the wealth of the students here at SAS, it certainly is a possibility. All in all, great work guys! I'm still laughing at drew's random shouting haha.

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]]> By: Angeline Chen http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/comment-page-1/#comment-3184 Angeline Chen Sat, 03 Nov 2007 20:38:09 +0000 http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/#comment-3184 HAHAHA that truly was...mmm... but yeah, caramel frappuchino are definately the reason why I go! It's pretty interesting how one product can have so much affect on their TR, but when they change the price of caramel frappuchino's, I've noticed they change the prices of the rest of their beverages as well. Is this to hopefully encourage more people to buy other drinks as well? So that if people stop wanting caramel frappuchinos, for example they get sick of them, then they will have a backup? Hmm... According to the law of demand, as prices increase, Qd decreases and as prices decrease Qd increases. Noticed in the graph and chart provided, as they decreased the prices of caramel frappuchinos by 2 quai, their TR had increased by up to 200 quai which means that the product is elastic. Costumers are more responsive to a change in price, obviously adjusting their consumption of a product as prices decrease or increase. If costs of production increase, then Starbucks will have to increase their prices in order to maintain profit however if costs of production decrease and they keep prices the same, they will attract more costumers while also making more profit. HAHAHA that truly was…mmm…

but yeah, caramel frappuchino are definately the reason why I go!

It's pretty interesting how one product can have so much affect on their TR, but when they change the price of caramel frappuchino's, I've noticed they change the prices of the rest of their beverages as well. Is this to hopefully encourage more people to buy other drinks as well? So that if people stop wanting caramel frappuchinos, for example they get sick of them, then they will have a backup? Hmm…

According to the law of demand, as prices increase, Qd decreases and as prices decrease Qd increases. Noticed in the graph and chart provided, as they decreased the prices of caramel frappuchinos by 2 quai, their TR had increased by up to 200 quai which means that the product is elastic. Costumers are more responsive to a change in price, obviously adjusting their consumption of a product as prices decrease or increase. If costs of production increase, then Starbucks will have to increase their prices in order to maintain profit however if costs of production decrease and they keep prices the same, they will attract more costumers while also making more profit.

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]]> By: Cassy Chang http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/comment-page-1/#comment-3157 Cassy Chang Mon, 29 Oct 2007 19:33:27 +0000 http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/#comment-3157 this is the idea of one of the questions asked in class: would one person's personal demand affect the market? no. so the fact that customers favor the caramel frap is why it is important to star bucks. this is the idea of one of the questions asked in class: would one person's personal demand affect the market? no. so the fact that customers favor the caramel frap is why it is important to star bucks.

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]]> By: Bryan Bock http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/comment-page-1/#comment-3152 Bryan Bock Mon, 29 Oct 2007 17:37:41 +0000 http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/#comment-3152 This experiment is really interesting, as it shows how important Caramel Frappuchino is to Starbucks. To hear that Starbucks rely so much on just one product is unbelievable. I never thought that one product could make such a big difference in a company's economy. However, i do agree that Caramel Frappuchino is indeed very popular among Starbuck's daily customers. I hope to be able to hear more from the DCE about this topic. This experiment is really interesting, as it shows how important Caramel Frappuchino is to Starbucks. To hear that Starbucks rely so much on just one product is unbelievable. I never thought that one product could make such a big difference in a company's economy. However, i do agree that Caramel Frappuchino is indeed very popular among Starbuck's daily customers. I hope to be able to hear more from the DCE about this topic.

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]]> By: Michael Daily http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/comment-page-1/#comment-3138 Michael Daily Mon, 29 Oct 2007 00:45:58 +0000 http://welkerswikinomics.com/blog/2007/10/26/sas-economists-podcast-5-what-does-the-caramel-frappuchino-mean-to-starbucks/#comment-3138 Wow, inspiring podcast. Seriously, great vibe. Especially with Drew shouting random things really loud. But anyways, it's interesting to see how much a company can depend on one product. I was a little skeptical at first that the caramel frap would be that important to Starbucks, but I guess it is at least for Zhudi Town. It's kind of interesting that one product can have such a huge effect on a business's total revenue. Wow, inspiring podcast. Seriously, great vibe. Especially with Drew shouting random things really loud. But anyways, it's interesting to see how much a company can depend on one product. I was a little skeptical at first that the caramel frap would be that important to Starbucks, but I guess it is at least for Zhudi Town. It's kind of interesting that one product can have such a huge effect on a business's total revenue.

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