Question

Why is it difficult to determine reference prices? Consider a new pizza restaurant opening near your campus. What challenges would the restaurant’s marketers encounter as they attempt to determine their customer’s reference prices? How could they find this information?

It is a marketing question

Answer 1

Determination of the reference prices is a very difficult task for any specific company operating in the market. Successful determination of these prices required proper research as well as better understanding of the market with actual understanding of the customers involved in the specific market segment. Determination of the difference price also requires analysis of the payment capacity of the customers in that specific segment of the market.

One of the biggest challenge for a new pizza restaurant opening near to my campus would be to compete with the bigger brands such as Dominos and Pizza Hut. These brands are already have a very strong market presence as well as they also have very competitive pricing policies which would be very harmful for new businesses to open nearby to any campus. There consistent delivery of the taste as well as extensively good customer care service is also one of the most important parts which should be considered in determining for the specific product. This would enable pizza restaurant to work according to the specific market segment and to determine the reference pricing accordingly.
Changing behaviour of the students as well as choices on the taste or different type of pizzas by the students is one of the main factors which affects the difference pricing very widely and reduces the overall chances of getting the correct pricing strategy.

Analysing the environment of different shops included nearby to the university as well as analysis of the pre existing pizza Chains is also very essential to provide a positive feedback for the organisation which would improve its overall market position. And would be more beneficial for determining the best reference pricing.