Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are general manager for a small regional chain of pizza restaurants. In the first few years of business, the reputation of the food was

You are general manager for a small regional chain of pizza restaurants. In the first few years of business, the reputation of the food was marginal, but the prices were relatively low. In the past 2 years there has been a change of ownership and direction. The chain now prides itself on high quality food and service (and higher prices). To make this transition successful and attract new customers, the chain had to bolster its image. To do so, they created a food and service guarantee. It reads. "...if you are unsatisfied with our food or services in any way, let us know and we will refund your money and give you 50% off your next visit..." This guarantee was necessary in order to reassure past customers and attract new ones. Once the guarantee was implemented, sales have increased substantially.

There have been a few problems, however. Payouts under the guarantee have been growing exponentially over the last year. There are customers abusing the guarantee by complaining (receiving a refund and coupons). There was even a recent post on social media that read, "Yeah, just head over to Sam and Ella's and eat like a pig and then say you didn't like it (or that the waiter was rude) and get it for free...then go the next day for half off". Clearly, there are a growing few that are ruining it for everyone else. We still must maintain a guarantee, but somehow weed out the abusers (low value customers) while not punishing our loyal (high value customers) customers. How could this be accomplished in your opinion?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jan Williams, Susan Haka

17th Edition

126000645X, 9781260006452

More Books

Students also viewed these Economics questions