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FOODSERVICE YIELD MANAGEMENT MODULE 7 Value
Dr Hashim Fadzil Ariffin [email protected] © Hashim Fadzil Ariffin
LECTURE OUTLINE
THE ROLE OF VALUE IN PRICING THE RELATIONSHIP BETWEEN QUALITY AND PRICE THE RELATIONSHIP BETWEEN SERVICE AND PRICE THE LINK BETWEEN QUALITY, SERVICE AND PRICE
THE ROLE OF VALUE IN PRICING SELLER Selling price – Costs = Organizational profit
BUYER Perceived value – Selling price = Personal profit
The difference between what buyers expect and what they actually receive is the source of many conflicts between them
THE ROLE OF VALUE IN PRICING Lessons from eBay
How it works?
Why buyer dropping out?
Prices that are too low may leave business profits on the table, while prices that are too high excessively limit the number of potential buyers and, as a result, reduce business revenues
THE ROLE OF VALUE IN PRICING Buyer’s Multiview of Value
Spent On
Whose Money You
Someone Else
Yours
A
B
Someone Else’s
C
D
Q
S
P
THE RELATIONSHIP BETWEEN QUALITY AND PRICE
Figure 3.2 RM at Work 3.1
THE RELATIONSHIP BETWEEN SERVICE AND PRICE
I
V
CHARACTERISTICS OF SERVICE
P
I
PRICE
THE LINK BETWEEN QUALITY, SERVICE AND PRICE • In the hospitality industry, service quality is perceived by most guests as more critical to value than is product quality • Service is the most reason for complaints • Price might be different
THE LINK BETWEEN QUALITY, SERVICE AND PRICE
RM in Action 3.4: The Coffee Wars?
THE ART AND SCIENCE OF STRATEGIC PRICING
• Can be learnt
Page 83 and 88
© Hashim Fadzil Ariffin HTF661