PRICING STRATEGY FOR PINCH OF SPICE(CANTEEN)

-DISHA DIVECHA (2014144)

-EDEN JACQUES (2014145)
-GHANISHTHA AGARWAL (2014147)
-HARJAS BAKSHI (2014148)
PRATHAMESH PATIL (2014159)
PUSHKARAJ KULKARNI (2014163)
SHONIT NARALKAR (2014172)
VASUDHA PARMAR (2014183)
ASSUMPTIONS
Canteens are the only source of food on campus.
Pastry Palace and Kailash Juice Centre dont exist.
POINT OF DIFFERENCE
We will serve healthy food (in addition to other food) and target health conscious
customers. Serve Oats, Subway type sandwiches, juice, salads, choice of brown bread,
boiled eggs and chicken.
Takeaway Counter Target students who come to pick up food in between 2 classes. Eg.
Ready made rolls, sandwiches, quiche, cutlets, patties, croissants etc.
Food Delivery Delivery of food to the rooms. Fixed Charge of Rs 100 per month. A La
Carte Menu to cater to food delivery to rooms.
Loyalty Programme Rs. 200 = 1 Point. Points can be used to buy products the next
month.

SWOT ANALYSIS








Strengths
Healthy food
Variety
Hygeine
Quick service(Takeaways)




Weaknesses
Procurement
Logistics
Location
No expansion of area
Threats
Competition
Outside Competition
Substitutes


Opportunities
More Variety
Increased turnout on weekends
Increased turnout at breakfast


SWOT
STEPS TO BE FOLLOWED:
Selecting the Pricing Objective
Determining The Demand
Estimating Costs
Analyzing competitors cost , prices, and offers
Selecting a pricing method
Selecting a final price


MENU OFFERED
4P ANALYSIS
Product:
Products for sale in a college mess should meet the basic requirements. The products that we propose to include in our menu include
the following (in addition to existing menu options):
Place:
Improving the canteen environment & Giving it a new look.
Maintain hygiene.
A well-positioned menu board which speeds up the serving process.

Promotion:
Promote the canteen as a positive part of the college community.
Put the canteen menu and other relevant information on the college intranet and/or internet sites.
Offers / menus of the day
Price:
Pricing strategy will be based on Target return pricing, which will give us fair idea what our target will be.
We will avoid price wars by not following going rate pricing.

SELECTING THE PRICING OBJECTIVE

Our core objective is to maximize the market share. Since there will
7-8 competitors, maximizing market share is a primary objective.

Survival will be our short term objective as there is stiff competition.


DETERMINING THE DEMAND


Total number of target consumers is given - 450
Pricing will depend on the following factors:
Surveys
Statistical analysis





ESTIMATING COSTS
Fixed cost
Transportation Vehicle 50,000
Equipment Costs (Oven, Stove, Utensils etc) 2,00,000
Monthly Rent 55,000
Water bill per month 6,500
Labour Costs (Including cooks, managers) 80,000
Total 3,91,500
Variable Cost
Raw Material 3,00,000
Fuel cost per month (Petrol Expense, LPG Cylinders ) 40,000
Electricity ( Cost per month ) 10,000
Repair and Maintenance Expense 5,000
Total 3,55,000
COST SUMMARY
Total Cost Expenditure 7,46,500
Revenue generated 8,29,250
Profit
82,750

Profit Percentage 10%
ANALYZING COMPETITORS COST , PRICES, AND OFFERS
Units sold Amount Revenue
Breakfast 200 25 5000
Lunch 250 55 13,750
Dinner 250 55 13,750
Evening snacks 250 35 8,750
Midnight snacks 150 35 5,250
Earnings per day 46,500
Monthly Revenue 13,95,000

Existing Canteen Pricing Strategy
Units sold Selling Price Revenue
Breakfast 125 35 4375
Lunch 125 65 8125
Dinner 125
65
8125
Evening snacks 125 35 4375
Midnight snacks 50 35 1750
Earnings per Day 26750
Monthly Revenue 829250
Profit 82,750
Proposed Plan

SELECTING A PRICING METHOD
Target Return Pricing = unit cost + (desired return X invested capital )/
unit sales
Going Rate Pricing Pricing is based on prices of competitors. Keep
prices in the same range.
SELECTING THE FINAL PRICE
We will chose the approach of Target Return Pricing
Avoid price wars


FINDINGS

42%
40%
18%
0
Healthy Food
Yes No Maybe
63%
37%
0
0
Food delivery to Rooms
Yes No
FINDINGS

79%
21%
0 0
Willing to pay extra for quality food
Yes No
77%
17%
6%
0
Quick Meals Counter
Yes No Maybe
Thank You