When you go to Starbucks and order a mocha, it costs quite a bit more than a regular cup of coffee sold in that same store. Why is there such a price difference? Do the extra ingredients cost significantly more? Is a mocha much more labor intensive to make?
Discussing this question in our Economics class, the answer turned out to be none of the above. There is just a segment of the market that really likes mocha and is willing to pay more for it. So a good question to ask yourself is: How do I identify the “mocha” in our business? What product or service can we offer that consumers would be willing to pay more for?..