Based on this...You are the marketing expert for a consulting firm hired to deve

Question

Based on this...You are the marketing expert for a consulting firm hired to develop a marketing plan for a new tourist restaurant in Florida based on a magical fantasy-type theme (think Hogwarts from Harry Potter). The restaurant is similar to other themed restaurants, such as Medieval Times or Capone's found in Orlando, FL, and other tourist destinations, and features a themed menu and entertainment.

PRICING The restaurant clients have asked your consulting firm to help them establish a pricing strategy. Describe three pricing strategy options that the restaurant owners might consider. Describe each and under what circumstances they would use them. Select the strategy that you would recommend and justify your selection. Support your answer with critical reasoning, and describe what outcome you might expect from the selection. (Marketing course)

Explanation / Answer

According to me - Pricing is a task that needs to be periodically revisited to respond to changes in the industry, fluctuating market prices and the mood of customers. Setting prices involves considering many factors, including the cost of food, cost of labor, what the competition is doing and what your target customers are willing to pay.

Before deciding stratgies any entity has to consider the following factors into account:-

Different types of strategies are:-

1. Bundle Pricing:- The organisation bundles a group of products at a reduced price. Common methods are buy one and get one free promotions or BOGOFs as they are now known. Within the UK some firms are now moving into the realms of buy one get two free.

For example this strategy is very popular with supermarkets who often offer BOGOF strategies. As our business is based on restaurant-type theme based, where different items regarding edibles and different sports, adventurous activity programmes run over we can go for Bundled pricing

2.Competition Pricing:- Setting a price in comparison with competitors. Really a firm has three options and these are to price lower, price the same or price higher than competitors. This is also one of the best pricing strategy

In this strategygenerally Some firms offer a price matching service to match what their competitors are offering. Other firms may take this further by refunding the customer more money than the difference between their product price and the lower price offered by the competitor firm

3. Psychological Pricing:- This is one of my best pricing strategy, here in this strategy the seller will consider the psychology of price and the positioning of price within the market place. As there are similar type of Theme Restaurants located in the same locations this strategy may give its hand to peak up the business than competitors.

Example;- The seller will therefore charge 99p instead £1 or $199 instead of $200. The reason why this methods work, is because buyers will still say they purchased their product under £200 pounds or dollars, even thought it was a pound or dollar away.

Conclusion-

As a marketing expert I suggest Psychological Pricing.

Reason for Suggesting-

All the above strategies what we came to know may have adverse affects when compared to Psychological Pricing strategy. For example in case of Bundle pricing levting cost combining all the different products may not attractcutomer as products with high thrill or high taste may not be included in Bundled pricing offer. Customers may not be satisfied with the Combo offer or in case if we can design the combo offer in such a way as having a Product that customers show high enthusiasm or anxiety and remaining are of normal and routine products,a customer that takes this combo offer has to go with other dissatisfied products for which he may not be ready.

Secondly if we go with Competition Pricing the three ways which ths method suggests like "to price lower, price the same or price higher than competitors" are ofcourse good ways to approach but they definitely will have adverse affects like if we lower the price we may suffer from losses, maintaining the same price- leads to maintaining the same type of products what Competiteor offers, and finally increasing the price may lead to downfall of Business.

There are also other types of Pricing mthods like

a) Skimming Pricing

b) Penetration Pricing

c) Product Line Pricing, Which may not suit the industry under my purview.

Final Justification:- Its strange in Psychological Pricing how consumers use price as an indicator of all sorts of factors, especially when they are in unfamiliar markets. Consumers might practice a decision avoidance approach when buying products in an unfamiliar setting. Lets say for example that you’re buying a lawnmower for the first time and know nothing about garden equipment. Would you automatically by the cheapest? Would you buy the most expensive? Or, would you go for a lawnmower somewhere in the middle? Price therefore may be an indication of quality or benefits. Entirely depends on the play we do with Customer and on their Psychology.

My final move is with Psychological Pricing strategy.

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