Case Study How Much Meals Are Worth, Restaurants Tell Customers - Management Assignment Help

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Case Study
You Decide How Much Meals Are Worth, Restaurants Tell Customers
It sounds like a recipe for financial ruin: A restaurant that allows customers to pay what they think their meal is worth. Yet the business tactic is proving a success and “pay what- you-like” restaurants are spreading across Britain.

The idea was spawned by Michael Vasos, the owner of Just around the Corner, a French bistro in north London, where customers often spend two hours drinking fine wine and gorge themselves on salmon stuffed with crab. Afterwards, they must work out their own bill and most, surprisingly, leave a fair or generous amount. Mr. Vasos’s success is such that three other pay-what-you-like restaurants—Mju in Knightsbridge, central London, Lanes in east London, and Sweet Melinda’s in Edinburgh—have copied the idea. “If you give very good service and very good food, people leave a lot in tips,” said Mr. Vasos. “So I thought why not just leave the whole bill to customers and they can pay what they think its worth. “As long as we gave a good show, I knew it would do well and we’ve been very successful from the beginning.” Mr. Vasos has stakes in four other restaurants, all with fixed-price menus. They, do not, however, take as much money as Just around the Corner. “The other restaurants take about 60 percent profit a week; this one takes between 65 to 70 percent each week,” he said.

Just around the Corner’s most generous customers were four Americans from the United States government who came in on Christmas Eve. “They had quite a few bottles of wine, champagne and ate three-course meals. They paid £600 and asked the waitress if it was enough. In a fixed-price restaurant they would have probably paid around £250. This is why the restaurant does better, as people are more generous,” he said. Mr. Vasos also has a foolproof way of ensuring that patrons do not underpay. “When people pay a silly amount, I give them their money back and make them feel very small so they realize that if they want to come back, they should really pay more.” He was amazed that pay-what- you-like restaurants were only just catching on as he has been running his business for 18 years. “I’m delighted that other restaurants have now taken the idea on board as it shows customers that others, not just me, can succeed,” he said. Margaret Coutts, with her son, David, and his girlfriend, Danielle Kronenberg, celebrated her 66th birthday with free-flowing champagne and a three-course meal, including lamb Wellington and supreme of chicken with tarragon and juniper berries.

Case Study Questions
(20)
1. Design a PR strategy for the venture and what could be the best sources of generating investment amount (justify with logic)? (10)
a. Marking rubic
i. Selecting right target audience for investment (3 marks)
ii. Resource Requirement (3 marks)
iii. Activities required for identifying the market and bringing
in investment (4 marks)

2. Develop a grand open event plan by giving detail reasoning and justification of your strategy. (10)

a. Marking rubic
i. Grand Open Event
ii. Event calendar (2 marks)
iii. Event activities (2 marks)
iv. Resource requirements (2 marks)
v. Sequence of activities in event (2 marks)
vi. Quality of response (2 marks)

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