In 2016, Howard Shultz announced that he would step down as CEO of Starbucks to establish luxury coffee shops that would charge as much as $12 for a cup of coffee.  Although some analysts questioned whether many consumers would be willing to pay such high prices for coffee, Erich Joachimsthaler, an executive at a brand-strategy consulting firm, believes the projects could be successful.
Joachimsthaler compared the market for coffee to the market for beer, which has experienced competition from small craft breweries. “They [established companies such as Coors and Anheuser-Busch InBev] never protected themselves from the high end…. I think Starbucks sees that the middle is slowing down.”
a. Briefly explain what Joachimsthaler means by the “high end” and “the middle is slowing down.” What relevance do his observations have for the success of Schultz’s project?
b. Briefly explain whether Schultz establishing luxury coffee shops illustrates: 

• Product differentiation
• Marketing
• Brand management