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Marketing - Pricing Strategy - Essay Example

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Pricing Strategy Date Before settling on the form of business to pursue, businesses should determine the target market, mission, and the vision. Through doing this, the business gets to have clear roadmap and know the characteristics of their customers…
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Marketing - Pricing Strategy
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Marketing - Pricing Strategy

To ensure that the number of customers is controlled, the restaurant will charge high prices for their products while ensuring that the quality of food and other services provided are great. The statement of the restaurant should be to offer high quality food to the target market by ensuring emphasis on customized / personalized services. By adhering to the statement, the restaurant will aim at offering good food to the customers and at the same time be driven by the changes in the market (Milligan, 2012). This will ensure that the customers’ needs are met in a timely manner with customer considered king in the business operations. At the same time, offering of quality food and drinks will make the business operate within the legal requirements and cater for the interests of their stakeholders (Gupta, 2009). Because of this, the business will remain socially responsible and reduce costs that are associated with litigation charges. Most cases involving restaurants are based on tortuous actions or criminal proceedings if customers get injured or incur losses because of consuming food or having injuries in the restaurants. If the statement guiding the operations of the restaurant is maintenance of quality, the cases of such litigations will be minimized hence reducing costs. This statement would simultaneously cause customer satisfaction and loyalty. Every retailer in conducting business has the objective of maximizing returns ion the investment. Pricing is the only marketing mix element that generates cash to the business hence its importance. However, settling on the pricing strategy to use may not be an easy task to businesses. There are various pricing strategies including cost plus margin pricing, competitive pricing, psychological pricing, multiple pricing, discount pricing, and prestige pricing (Nagle Hogan & Zale, 2011). Any business that considers profit key however must thus consider the cost of production and ensure that the prices are above all the total costs and other overheads used in production. For the case of the upscale pricing, there is need for exclusion and uniqueness. The kinds of customers who are expected to be served in the restaurants are those of high class and will be interested in high quality services. They will thus be less sensitive to changes in the prices since they are also capable of paying even where charges are very high. Prestige pricing will therefore be the best pricing strategy to adopt in the restaurant (Nagle Hogan & Zale, 2011). Prestige pricing is one way that will ensure that the prices charged are above the costs and therefore make the business make huge profits to justify its operations and expansion of their services. In addition, the customers of upscale restaurant are those who need a feeling of being very important and non-ordinary. This makes them associate the high price with very high quality ad uniqueness. They will therefore be more comfortable with paying high prices than just the normal prices as a cost to the exclusive nature of their environment. In an upscale restaurant, highly qualified staffs who also expect to be paid highly normally prepare the food. The hotel attendants must be people with great skills and knowledge whose services are compensated very highly. In addition, the furniture, jewelers, and other beautification products to make the environment look prestigious make the customers overlook the ... Read More
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