Case study Pasta Shack

1. What was the effect of price change on total revenues during the early-bird time period?
a. There was an effect on prices. With the early bird $8.95 * 58 = 519.1 in total
sales which is down from a total $547.5, ($10.95 * 50) before the special. So, the total
loss is $28.4 ($547.5 - $519.1).
2. Using the concepts present in the chapter, how would you explain this change?
a. I would explain this change as a poor use of yield management. The discounted
price is too low, thus hurting the business.
3. Is the new strategy successful? Explain you answer.
a. I would say no. The price is to lower and the demand to me is still too high
during the main dinner time.
4. What could be the initial decline in sales?
a. The initial decline is sales could just be a shift in the market. Or it could be a shift
in what the guest are seeing as value. This could be linked to the selling point.
5. Are there any additional costs associated with the new strategy?

m
er as
a. There are no additional based costs. However, there is an increase in cost could

co
come late as world spreads about the early bird special, with the need for more staffing

eH w
during 4 to 6pm.
6. How could you increase the profitability associated with the early-bird strategy?

o.
a.
rs e
I would do one of two things to increase the profitability associated with the
ou urc
early-bird strategy. One is to raise the price a little bit. The other is to better market the
special to bring in more people
o
aC s
vi y re
ed d
ar stu
is
Th
sh

This study source was downloaded by 100000818763922 from CourseHero.com on 10-27-2021 09:12:54 GMT -05:00

https://www.coursehero.com/file/61677482/Case-study-Pasta-Shackrtf/
Powered by TCPDF (www.tcpdf.org)