Running head: MODULE 4 HOMEWORK ASSIGNMENT
MODULE 4 HOMEWORK ASSIGNMENT
King of the South
Allied American University
This paper was prepared for MKT 120, MODULE 4 HOMEWORK ASSIGNMENT taught by PROFESSOR K
PART I: Read Pay What It’s Worth.
Would this concept work in an upscale restaurant? Why or why not?
I must admit that upon reading the article, “The Customer Experience: Pay What It’s Worth,” my jaw dropped to the floor. I read it again and still had a hard time processing it. On the one hand, it appears that Terra Bite Lounge’s pricing objectives are definitely not aimed to maximize profits and yet again, as the article clearly states, this business model generates…show more content…
With services however, you’ll perform a task for your clients in exchange for money. So if you perform tasks for your clients at their convenience, and do it better than the next guy, and faster, then there’s no reason why your clients wouldn’t feel compelled to compensate you generously, wouldn’t you agree?
Could this model be applied to other types of businesses? Give an example?
Personally, I wouldn’t recommend it except for in service and non-profit businesses. As already discussed above, if you implement this model where products are involved, you run a serious risk of going at a loss because if you do not regain your revenue, specifically the revenue that pays for the production of the products. In a non-profit setting however, once your profits are consistent with the level of risks an organization is willing to take, then all is good. When it comes to service business, then things get a little tricky because I don’t see why any service business would want to settle for satisfactory profits rather than maximize them, but, even if they don’t maximize their profits because of implementing this model, they really don’t stand to lose that much.
Do you think this model can continue to work as our economy gets stronger (is it a model that can be successful long-term)?
Highly unlikely. I say this because since we are just recovering from a recession, most people’s mentality is still stuck