Final Period Individual Short Case Study in Pricing Management 2nd Semester, A.Y.

2011 2012

Situation: You are a marketing researcher for consumer goods. As a researcher, you tried to investigate two different products offered by Johnnys American Diner located at Tomas Morato, Quezon City. The two products include the Chicago Garden Dog and the New York Dirty Water Dog. Chicago Garden Dog is served with a Vienna beef wiener on a poppy-seed roll with sweet pickle relish, mustard, onions, tomato wedges, cucumber slices, sport peppers, and celery salt. The New York Dirty Water Dog is served with a natural-casing all beef frankfurter on a white-bread roll with sauerkraut, mustard, onions, and tomato relish. As a researcher, you want to investigate the pricing of a Chicago Garden Dog and a New York Dirty Water Dog. You collected the following rank order information regarding the perceived value of the different attributes of hot dogs, where 1 is most preferred and 8 is least preferred: Dog: Vienna Beef or Natural Casing (all beef frankfurter with Natural Casing) Toppings: Garden (poppy-seed roll sweet pickle relish, mustard, onions, tomato wedges, cucumber slices, sport peppers, and celery salt) or Dirty Water (white-bread roll, sauerkraut, mustard, onions, and tomato relish) Price: 100.00 or 140.00

Price Topping Garden Vienna Beef 100.00 Rank = 2 Hot Dog Garden Natural Casing 100.00 Rank = 1
(Ranking result based on your research)

Topping Garden Vienna Beef 140.00 Rank = 4 Garden Natural Casing 140.00 Rank = 3 Dirty Water Vienna Beef 100.00 Rank = 8 Dirty Water Natural Casing 140.00 Rank = 7

Dirty Water Vienna Beef 100.00 Rank = 6 Dirty Water Natural Casing 100.00 Rank = 5

Questions: 1. Score the hot dog offerings from 0 to 7, with 0 being the lowest-utility hot dog and 7 being the highest-utility hotdog. 2. Calculate the part-worth utility of each of the attributes at their different levels. 3. For each combination of hotdogs, toppings, and prices, what is the utility measured in utils? 4. Calculate the peso value per util. 5. What is the utility difference between Garden toppings and Dirty Water toppings in utils? 6. What is the utility difference between Vienna beef dogs and natural-casing dogs in utils? 7. If a nearby established competitor offers a Chicago Garden Dog at 120.00, what would be an appropriate price for: a. A natural-casing hot dog with Garden toppings? b. A natural-casing hot dog with Dirty Water toppings? c. A Vienna beef dog with Dirty Water toppings? 8. Justify each price in number 7 through technical explanation. Maximum of 3 sentences. Note: 10 points each for every correct answer. Follow proper format of tables and computations.

****************************** Other Instructions: 1. Deadline: February 28, 2012, Tuesday, until 7 pm only. 2. Submit a hard copy on an 8.5 x 11 clear white coupon bond. Follow the template provided on page 3 onwards. 3. Use only blue or black ballpoint pen. Pencil or erasable inks not allowed. Use your own handwriting. 4. Observe the maximum and minimum (if required) word-length requirement as indicated. 5. Practice intellectual honesty at all times. 6. Proper construction of sentences will be observed (if necessary) 7. Please staple your answers together with the first page. Do not include these instructions and the given case problem in the paper to be submitted. Do not use folder or envelop. 8. Late submission within 24 hours from the date of the deadline will be penalized with 30 points deduction. Another 30 points deduction if submitted late beyond 24 hours from the date of the deadline. No paper will be accepted beyond March 1, 2012, 7 pm, and will have a grade of 5.0 on the said case assignment. 9. Deduction of 30 points will be the penalty for those who will not follow the instructions. 10. Please write clearly, otherwise your answers will not be considered. 11. Total possible points to be earned: 90

University of Santo Tomas College of Commerce and Business Administration nd 2 Semester, A.Y. 2011-2012 Pricing Management Case on Customer Perception-Driven Pricing

Name: _______________________________________________ Section: ________ Score: ____________ Date Submitted: ____________________

1. Hot dog scores:

Price Topping Garden Vienna Beef 100.00 Score = Hot Dog Garden Natural Casing 100.00 Score = Dirty Water Vienna Beef 100.00 Score = Dirty Water Natural Casing 100.00 Score = Garden Vienna Beef 140.00 Score = Garden Natural Casing 140.00 Score = Topping Dirty Water Vienna Beef 100.00 Score = Dirty Water Natural Casing 140.00 Score =

2. Hot dog part-worth utility:

Attribute

Level

Average Score

Part Worth Utility

3. Hot dog utilities: Product Utility (Utils) Utility Ranking

4. Peso value per util: (show your computation)

5. Utility difference between Garden toppings and Dirty Water toppings in utils: (show your computation)

6. Utility difference between Vienna beef dogs and natural-casing dogs in utils: (show your computation)

7. Pricing for each product offered: (show your computations) a. Natural-casing hot dog with Garden toppings:

Explanation:

b. Natural-casing hot dog with Dirty Water toppings:

Explanation:

c. Vienna beef dog with Dirty Water toppings:

Explanation: