As many of you have probably already read, Starbucks outlets will begin offering $2 grande iced drinks after 2 p.m. to customers who show a receipt from an earlier purchase that same day. For some reason, this promotion has not been named “See you Latte-r”, but that’s their oversight. I think I read about this type of marketing strategy in a book that was required reading for me in college entitled “Pandering For Dummies.” It is basically like heroin dealers offering a “buy one, get the next bag of equal or lesser value at half price while supplies last” on black tar, knowing full well that short term sacrifices will pay off long term through this thing Dr. Drew calls dependency when he counsels people that used to be familiar to us on VH1.

It’s not rocket science, but it’s brilliant, especially because it throws a large middle finger at the law of diminishing returns, and I’m all about disrespecting economic theories with hand signs the way Dave Matthews disregards the concepts of successful music composition. You should be buying Starbucks shares right about now, and here’s why: Starbucks doesn’t have to do this forever, they only have to do it for a few months because the people who choose to take advantage of this will soon not only be reliant on coffee in the morning, but also in the afternoon. Starbucks sells a few drinks at a lower price for a little while until their current customer base increasingly buys two drinks per day instead of one, then they just end this promotion and start charging their regular prices again for that afternoon drink.

It won’t matter though because of this thing called inelastic demand which applies particularly to addictive substances like caffeine (and Sour Trolls), and voila, they increase sales because now people require Starbucks twice a day instead of maybe only once. It’s like the way interest compounds in your savings account or 401K, except that it’s people and coffee. Here’s Joe consumer:”Only $2? Why, that’s much less than normal, I simply can’t afford not to buy the afternoon drink at such discounted prices even though my income is declining due to market forces beyond my control and my weight hasn’t been normal since I spent 3 months in England and couldn’t find anything worth eating but Guiness.” The truly smart consumer will purchase a beverage in the morning, return in the afternoon to purchase an iced coffee drink, and will immediately freeze it so that they have it for the next day, negating the trip they may have taken the following morning and likely resulting in some savings, however I don’t think that’s how this will play out because those iced vanilla lattes are too damn delightful to not enjoy immediately.

If I were Peet’s Coffee, I would seek to counter this promotion by offering to accept these morning Starbucks receipts as coupons for $2 medium (that’s English for “grande”) iced drinks at my stores, and then recycling the receipts to be used as toilet paper in the establishment’s restrooms. And we all know those would get used cause Peet’s coffee, though delicious, is like diesel in your system, I tell you what. That would be funny and environmentally friendly, thereby giving Peet’s the upper-hand.