Thursday, October 30, 2008

Old Town's Feedback On Multi-tier Pricing

After many days and weeks, probably months, finally OldTown reply our mail.

It do got me wondering why it took so long. Having a hard time trying to construct a proper acceptable essay? My apology for being harsh. However, it feels good that they feedback our concern, it might be a little late, but it make us reader content.

Here's their response...

Greetings from OldTown!

First of all, thank you for your e-mail describing your concerns regarding the multi-tier pricing issue.

For years, OldTown restaurant chains had adopted the chains cautiously approach - a multi-tier menu pricing plan to broaden consumer appeal by having different pricing for different customers and groups of customers at different locations. The big gap in the shop rentals and labour cost in different regions and locations (i.e. compare rentals at rural area and urban area) has prompted OldTown to apply multi-tier menu pricing in order to make our restaurant an affordable choice for all levers of consumers despite of its geographic locations.

What is multi-tier menu pricing? You saw it first in fast food industry. Multi-tier menu pricing strategy is not an offbeat strategy to propel customer traffic in not only F&B industry but also other industries such as automobiles, retails and so on in Malaysia. It is growing in popularity. OldTown has to go to multi-tier menu pricing to assign customer groups with differentiated pricing which is affordable by different income groups. Thus, the menu price has been set slightly lower at rural areas compared with urban areas based on our customer acceptance survey on menu price.

OldTown is always offers quality meals at an affordable price. The driving force behind our efforts is the continue support of customers to enjoy the food and dining environment in OldTown restaurant. We are caring and sensitive to local spending power and continually striving to offer customers more-attractively-priced meals with a pleasant dining environment.

If I may be of further assistance to you, please contact me at 016 5260011.

Your continued support means a great deal to us.

Thank you
One question, aint all McDonalds, CoffeeBean, SecretRecipe branches in Penang having the same prices as well? Talking about labor and rental cost just doesnt make sense especially when there are existing living example. My bottomline is, as a franchises under the same geographical area, the prices of goods should be the same.

But still, the fact that they acknowledge the discrepancy and reply to us is enough to satisfy me.


@dam said...

hahaha...good one...probably they are a smaller franchise and not an international add on, probably is a Chinese one!!!...

thus, everything must kira till cukup cukup!!!

maybe their earnings are not so good after all thus needing this price discrepancies...or again, Chinese la!!! wanna untung cukup cukup la!!!

guess their company polict is not one of those where they emphasize 'customer first'...hahaha

confessions of a medical student said...

wow! old town actually replied to you?

H e n r i c k said...

Lol.. just as expected and as I told you before, it is due to their rental differences in different places.

We can't blame, international is another thing, imagine OldTown is just our local brand which just starting to get popularity, while for the rest of the brands, McD, Starbucks, Coffee Bean, they have a huge backup from their back.

Where's old town? Their foods prices if compared to the above mentioned brands, they are way cheaper yet they have to bare the same amount of rental as the other brands does...

Dann said...

Adam: Makes sense. Chinese are the usual businessman that wanna untung cukup cukup!!! LOL. Maybe its human nature when it comes to profit. Cant be help cant it?

ShinYin: Yup, they actually did, and it took 2-3 months trying to build and decorate a proper feedback... =x

Henrick: Guess this is one of the reasons to distinguish the internationals and the locals. The level of standard. Indirectly stating where we are when comparisons are being made.

Understood that different people might have different perception, however bringing up rental and labor cost, geographical differences, aint gonna help. If they are targeting to bring themselves to that level of professionalism, this is the first move they have to apply.

If marketing are good, then there shouldnt be a problem for a standard price of goods. Does this post another of their issue faced? But still, my stand point, they should impose standardization instead of the multi-tier pricing (what a term).

Anonymous said...

Just to let you know that McDonalds DOES have 2-tier pricing. Their airport pricing is different (i.e. more expensive) than their other shops. I think KFC is the same - read the fine print at the bottom of some of their price sheets.

See here:
and click over the disclaimer. In fact the price differences are in Genting, KLIA, LCCT, East Malaysia & Langkawi! You can buy the same food there, but cannot get the doscounted prices.