ABNER D. DEQUITO PROF. MA.

CRISTINA MORFI
BSBA-EXECUTIVE CLASS III-2 Advertising

Academic Connections Chapter 4

1. Pricing is a major factor among competitors. Competitors help keep prices lower for consumers.
The government tracks mergers and acquisitions between companies that could result in reduced
competitions. Conduct research to learn about a merger in which the government intervened. Write
a one page report describing the merger and why it caused concern.
A
2. You own a pizza restaurant that has been in business for several years. It has reached the maturity
stage of the product life cycle, so sales are slowing as competitions increase. Outline a plan for
increasing sales. Describe what changes you will make to your marketing mix to boost sales.

Answer

1. Pricing

The three include, cost-plus strategy, where a prefixed profit margin is added over the total
cost of the product, demand pricing, under which the price is set by establishing the optimal relationship
between volume and price, and markup pricing, where a percentage is added (as profit) over the wholesale
price of the product. When it comes to competition based pricing strategy, the purchasing behavior of
customers is an important criterion. Some of the factors that companies take into account are costs,
competition, and price sensitivity. In order to ensure profitable sustenance of the business, managers
have to set the price such that it covers the production cost, company overheads costs, and also offers
suitable profits. In order to establish the right competitive price for your product, you need to take into
account the product life cycle and the stage your product is in. Competition is one factor that you can
ignore if your product is in the developmental stage. However, if it’s a part of the market, and fighting
with a relatively high number of substitutes and competitors, then considering the actions of your
competitors might be one factor driving your profit. You have three choices—price your product
lower, higher, or same as your competitor. The most common tactic is to set the price according to the
competitors, also known as competitive pricing strategy.
2. Pizza Restaurant

You can maximize revenues per receipt and increase it by 10% but that's not the core. The most
important, the one that will determine our long run success is to make sure that our customers
come back. We have to gain our customer trust. Of course our pizza or whatever we place in their plate
plays a major role.

Here are the ways to boost our sales:

Food ,Service, Environment

In more words, I would focus on the followings:

 Food quality: easy to say, not so obvious to find. Certainly the expected quality should be in line
with the profile of the place. But you have to think that a good meal can be tasty and well
presented, not necessarily using expensive products. Great chefs teach.
 Value for money: in all restaurants, you can assume some promotional proposals if a
menu is selected. It is the best way to guide the consumer through the decision process,
increase sales and optimize management. Even when you are offering wine, for example, you
should always give an option of house wine. Remember that” You can shear a sheep many times,
but you can only skin him once “.
 Differentiate offer: there are not only adult carnivores. You should always give a vegetarian
option, which is not just a just a green salad, and think about an offer for kids, either in portion or
in price. It is the best way to attract parents and guarantee at least three customers satisfying only
one.
 Music and video: the music must be selected accurately. You should check the track list and not
leave it to chance, avoiding radio with all its commercial breaks. You should never hinder
communication.
among customers. A public place is first and foremost a place of socialization. Same thing for television
and videos. Except particularly felt sports events, better to let the diners look at each other and
not being distracted by colorful wall projections.

manage expectations: each customer may have to queue outside. Ok, this is plausible. But once
he enters and takes a sit, he claims that orders are collected and dishes are delivered in a
reasonable time: that means 20 or 30 minutes maximum depending on the number of
customers and moment of the week. If this does not happen, it is always good to 1)
manage the impatience of the smallest 2) be forgiven, perhaps by offering a coffee after
meal.