1. How would you evaluate the new competitor's pricing strategy? 2. What steps would you advise Dominic to take to counter this competitor? 3. Describe three specific strategies restaurants can use to communicate "quality, rather than low price" to their potential customers.
1. How would you evaluate the new competitor's pricing strategy? 2. What steps would you advise Dominic to take to counter this competitor? 3. Describe three specific strategies restaurants can use to communicate "quality, rather than low price" to their potential customers.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Concept explainers
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
Question
Transcribed Image Text:1. How would you evaluate the new competitor's pricing strategy?
2. What steps would you advise Dominic to take to counter this competitor?
3. Describe three specific strategies restaurants can use to communicate
"quality, rather than low price" to their potential customers.
Transcribed Image Text:12. One criticism of both the product cost percentage and CM methods used
for determining menu prices is that both are based primarily on the cost
of food (or beverages) and ignore the cost of labor. In many foodservice
operations, however, the cost of labor equals or even exceeds the cost of
food and beverages. Do you foresee the cost of labor playing an increasing
role in the calculation of menu prices? Explain your answer.
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