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KMID : 0665420060210030254
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Korean Journal of Food Culture
2006 Volume.21 No. 3 p.254 ~ p.261
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A Case Study on Price Elasticity Measurement and Identification of Factors Affecting Price Elasticity of a Family Restaurant
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Lee Bong-Shik
Yang Il-Sun
Shin Seo-Young
Choi Mi-Kyung
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Abstract
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The purposes of this study were to measure price elasticities of menu items of a family restaurant, identify differences of price elasticity between subgroups, and provide a comprehensive understanding on price elasticity. 3 menu items of a salad buffet family restaurant in Seoul were selected for analyses, and a questionnaire was developed through literature review and modified after pilot test. The questionnaires for main survey were distributed to 250 customers on their visit to the restaurant, and a total of 139 questionnaires were used for analyses (55.6%). Statistical analyses were conducted using SPSS Win (12.0) for descriptive analyses, t-test, ANOVA, and the main results of this study were as follows. The demands were expected very elastic to the changes in prices of all 3 menu items, and there were significant differences between groups of different company types. In addition, the changes in use were less affected by the changes in menu price when customers were satisfied with each menu item. On the basis of these results, it was concluded that price increases of menu items should be companied by quality improvement of products and services, and differentiated marketing strategy for each segments of customers would be helpful to profitability of the restaurant. Overall, measurement of price elasticity could help to predict customer behaviors on price changes, and give much useful information for managers and marketers of foodservice organizations in development of price strategies.
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KEYWORD
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price elasticity, change in use, price strategy, family restaurant
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