Oct 20 2007

SAS Economists Podcast #2: Determinants of demand for Starbucks vs. The Coffee Bean

By Claire Moon and So Yeon Yoon

For our second installment of the SAS Economists Podcast, Claire and So Yeon survey 55 students to discover what determines where they prefer to get their coffee fix in the Shanghai neighborhood of Gubei. They discover through their research that consumers base their decisions on a variety of reasons, and that price, while important, is not the only factor that determines which particular products consumers will purchase. Location, tastes, size of the market, and various other factors all play a role in consumer’s decisions between two alternatives in a competitive market like that for coffee in Gubei, a trendy neighborhood with no shortage of coffee outlets.

Click below to hear this excellent and enlightening investigation into consumer behavior and the determinants of demand for coffee in modern Shanghai!


About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

7 responses so far

7 Responses to “SAS Economists Podcast #2: Determinants of demand for Starbucks vs. The Coffee Bean”

  1. yunqimokon 21 Oct 2007 at 8:16 pm

    Wonderful jazz music. It definitely goes well with the ambiance of coffee shops. So determinants of supply really are in effect here, that is..tastes and preferences, other related goods (substitutes), income, and the rest. However, the only difference is that the price of the object doesn't really jsut affect the quantity demanded…starbucks is cheaper but that doesn't mean that consumers will buy 2 caramel frappucinos instead of 1!

  2. Tim Chuon 25 Oct 2007 at 10:54 pm

    Great analysis! I found it quite intresting that some people didnt even know what Coffee Bean was. I guess that's the price companies pay for coming to China late. Coffee Bean is pretty well known in the states but here in China, because Starbucks was here a few years earlier, people dont even know that Coffee Bean exsists. As for the price, it didnt seem that different between the two shops so i doubt that's a major reason why more people go to starbucks.

  3. mina.songon 28 Oct 2007 at 2:40 pm

    other than the price, the reason I go to starbucks rather than coffee bean even though coffee bean is cloer to my home than starbucks is that I don't have to buy in starbucks becaue starbucks have more choices of muffins and small things. Coffee bean has meals like spagetti, and salads. I think its another reason.^^

  4. Mond Guon 28 Oct 2007 at 5:44 pm

    Awesome podcast! I doubt a couple of kuai will affect a person's decision on purchasing a cup of good high quality when it already costs 30+kuai. It all comes down to tastes and preferences, starbucks has already established itself as a brand in China, whereas Coffee Bean still remains as a quite unfamiliar and unknown brand to most customers in China. Personally, I have never even heard of coffee bean before.

  5. jenniferchoion 29 Oct 2007 at 11:31 pm

    Wow, amazing editing skills and sound effects/music guys! And I definitely agree to what Mond said; a person's decision on purchasing a cup of high quality will not be affected much by a few extra kuai. The reason why i prefer Starbuck to Coffee Bean is simply that i'm more used to it. So, I think Starbucks being established in China some years before Coffee Bean landing in China certainly did help Starbucks to secure more customers than the Coffee Bean.

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    SAS Economists Podcast #2: Determinants of demand for Starbucks vs. The Coffee Bean | Economics in Plain English

  7. day tradingon 22 Jun 2014 at 11:13 am

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    SAS Economists Podcast #2: Determinants of demand for Starbucks vs. The Coffee Bean | Economics in Plain English