Question 1:
Opening a new restaurant required many decisions. Pricing strategy is one of the vital ones that could make or break the restaurant. I would recommend the combination of value pricing and competitive pricing for the new restaurant. Value pricing strategy is to use the price to communicate the restaurant’s position, reflect the bundle benefits offered while competitive pricing gives the restaurant a competitive edge among the existing restaurants in the neighborhood. Ideally, the restaurant’s pricing should be high enough to place itself into the fine dinning categories in customers’ minds, but also competitive enough to attract customers from competitors. The decision for choosing these strategies is based on the following reasons.
First of all, Center City Philadelphia is an up rising neighborhood that is home of many young professionals. This location offers the ideal market segment for the restaurant – the customers who are willing to spend extra bulks for better experience. Value pricing, in this situation, can be seen as prestige pricing. Prestige pricing plays on customer’s psychology principles of attaching quality with high price. Pricing the menu high, along with the innovative and modern look will easily put the restaurant into a good position.
The key point of having value pricing is the actual value going along with the product. The restaurant has to make sure the food and service live up to the customer expectation. They should make sure the ingredients are fresh and the foods are flavorful. Having their supply delivered from local farms is a good strategy for quality ingredients with reasonable price. That is also a socially conscious effort by supporting local businesses and farms and building a long...
... middle of paper ...
...arefully allocate our money and make sure we make a sustainable plan to expand but not affecting our current services. Other factor to consider is competition from other providers in the market. We need to be up to date, sensitive competitors’ move and flexible to adjust and deal with any changes. It’s better to be proactive than be reactive after the fact. Company customer base and loyalty is also a factor to be considered. Customers in cable industry are not too attached to the service provider but they tend to avoid the inconvenience of switching carrier. We need to put customer satisfaction our priority and make it effortless for them to switch over our company. Government rules and regulations are things we also need to be mindful of. Change in regulation can have either positive or negative impact on the company, and we stay alert to make any move accordingly.
Their ability to encourage healthy eating, decrease service wait time and increase customer appreciation is the reason their sales has increase year after year. Once a small one-unit operation in Denver has now grown to a billion-dollar corporation. Chipotle food maximizes on quality and customers understand that quality comes with a price. For such a very limited menu, Chipotle cost more than most of their competitors operating in the same sector but it’s not unreasonable.
A couple of Squares has a limited capacity for which to produce their products and smaller companies tend to have larger fixed costs than bigger companies. Therefore, A Couple of Squares must maximize profits in order to ensure that they will stay in business. A profit-oriented pricing objective is also useful because of A Couple of Squares’ increased sales goals. A Couple of Squares increased their sales goals due to recent financial troubles. Maximizing profits is the easiest way to meet these sales goals due to the fact that A Couple of Squares has limited production capacity. The last key consideration favors a profit-oriented pricing objective because A Couple of Squares offers a specialty product. A specialty product often has limited competition, therefore can be priced on customer value. Pricing at customer value will maximize profits as well as customer satisfaction. A Couple of Squares’ lack of production capacity, increased sales goals, and specialty product favor a profit-oriented pricing
As we learned from Chapter 12, price must be carefully determined and match with firm’s product, distribution, and communication strategies. (Hutt & Speh, 2012, p. 300) Therefore, there should be a strong market perspective in pricing. In order to build an effective pricing policy, marketers should focus on the value a customer places on a product or service. One of the most effective ways to do so is differentiating through value creation.
The restaurant business is a challenging industry and if a company has a strategy that works for them as well as their employees, it should stay the course and tweak as needed.
Growing from a small provider of a few thousand, the company has grown to be a massive conglomerate encompassing far greater than simply cable services. Now owning NBC Universal, Comcast exerts great power within the market, employing a variety of strategies to expand itself and remain profitable. When it attempted to merge with Time Warner cable, several strongly opposed when considering the massive power it already possessed. In addition, growing sentiment against cable providers has resulted in the reduction of subscribers. Despite this, Comcast is in a high period of expansion within the business cycle. However, it should remain cautious of the changing environment of how consumers obtain television
McDonald's also focuses on the perception of value within it line of products and therefore takes care to price its menu items accordingly. Different products are priced differently depending on which target audience those items appeal to most. An extensive value menu is an essential part of any fast-food menu in recent years. The prices and products within the value menu can prove to be areas that will make or break a fast-food companies' year depending on the competitions value menus.
Comcast Cable’s intent during the next five years is to continue increasing their market share by providing superior customer service to their existing customers and any potential customers. They will continue building their customer base through increasing residential and business service accounts. Comcast will continue
Customers buy when they feel it is necessary giving them the upper hand on the industry. Bargaining power of suppliers: In the quick- service restaurant, the suppliers vary. They really do not rely distributors as large restaurants do. Threat of new substitutes: The restaurant industry is segmented into many parts: full service restaurants ($120 billion); quick- service restaurants ($110 billion); away-from-home managed institutions, examples: food services for schools and hospitals ($21 billion); and other food industries ($106 billion). (Marshall Jones, 1999). Rivalry among competi...
The intent of this paper is to perform an analysis of the cable industry's external environment. The first sections of the document will discuss environmental scanning and define the telecommunication niche that is currently occupied by cable operators such as Comcast. The next section will identify the macroeconomic variables that currently impact cable operators and will compare two variables to two corresponding industry variables. The final section of the paper will identify some of the challenges and opportunities facing the industry. An external analysis of the industry will provide a clear picture of the environment as well as any opportunities and threats faced by Comcast. By understanding the environment, opportunities and threats a company has the ability to create strategies to support its business goals. The primary process by which Comcast will gain an understanding of its external environment is environmental scanning.
A very important factor in the marketing mix is the price. Since a service is not physical, its value must be carefully thought out. The price is sometimes the first thing which tourists look at. Depending on the type of service, perceptions of value differ. The price can act as an indicator of quality. A low price may seem as an attempt to cheat the customer in some way. People expect quality to cost and are willing to pay a higher price for it. That is why the service provider must be aware of how much people would pay for his service and why.
Price is the values entirety that consumers trade for the advantages of having or utilizing the product or services. Different places and cultural have different spending culture. Therefore the price has to be relevant according to the product offer because it can reflect the image of a
The goods and services provided by each seller are differentiated by cuisine, skill, ingredients used and more. Each seller sets their prices according to their production costs with little regard for other competitors. There is high access to information, such as prices, menus and reviews, but limited by the fact that the value can only be determined after the experience.
...ded once they see that the sales will be increasing and tips will be larger. Good staff will increase good public relations which will result in better business. Marketing a restaurant is the most important part in running a restaurant. If a restaurant is not marketed, no one will know about the restaurant causing it to lose money to operate forcing it to close down. Prices on the menu should always be appealing to the restaurant target market and set towards the products on the menu. It is essential that a restaurant develops its staff to the fullest, for a strong staff creates better sales and the public is pleased .
The above listed article gives great advice and ideas when it comes to pricing products with new upcoming businesses. When it comes down to it, it’s a given that customers compare prices and want to get a good deal no matter how much they desire a product. Of course a business owner needs to make a profit, and as the article says, the pricing must be figured in such a way that profit margins are at a high enough level to stay in business and grow. The article pin points creative service businesses such as web designers and its agencies. It can be difficult to come up with the right price structure. Basically these service companies need to price out their worth, as the article says. Competition needs to be taken in consideration when deciding