Question

With the forced closing of the restaurants to eat in customer (keeping drive in/take out),many restaurants and fast food retailers are in a crisis mode. Which of the three pricing objectives do you feel these food retailer are using now. Profit sales status quo Please explain why you think that they are using the particular pricing objective and what are some of the things that they are doing to achieve the pricing objective

Answer 1

Answer) The food retailer are using Status quo pricing policy in this crisis mode because in this time of pandemic , everyone has less cash and most of the people are just surviving. So food retailers are not charing based on their costs or profits, they are charging on the basis of what the market rate is prevailing at their segment, so that they can have a steady base of customers and they atleast do break even ( no profit no loss) . This time is not for making exuberant profits by taking advantage of the crisis , but to charge prices which are set by market demand and supply. If they shall place pricing based on sales or profit, they may loose customers because maybe their profit and costs are something out of box who wont be accepted by the people, so its its be that at this crisis, market price should be set to have steady percentage of people coming .

The things that they should do to attain this pricing objective are

Have a survey of all the restaurants , and observe what the other restaurants are setting the price and set a price which is comparatively in that range because any major change in price will set a conflict. The higher the price, the customer wont come and lower the price , their will be a conflict with the other retailers and they will also reduce the price which will start a fight and eventually the restaurant will be in loss. Another things which can be done is Implementing cost control comparing the market price in mind. In this type of pricing, the cost is set basis the market price. We have a price in mind that the items will be sold , and so we should maintain costs confided in a way that it also give some profit.