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The Analysis of Customers' Price Sensitivity to Americano in Korean Coffeehouses Using Price Sensitivity Measurement

  • Journal of Tourism Sciences
  • Abbr : JTS
  • 2012, 36(7), pp.277-295
  • Publisher : The Tourism Sciences Society Of Korea
  • Research Area : Social Science > Tourism

Sukbin Cha 1 Kim Hong Bin 2

1순천향대학교
2세종대학교

Accredited

ABSTRACT

Setting the correct price for hospitality products is a crucial management task that has a major influence on a firm's profitability. In general, there has been a lack of academic interest in the area of pricing in the hospitality industry. This study was conducted to develop pricing strategy based on understanding about customer perceived value of an Americano (long espresso) in Korean coffeehouses. The technique known as PSM (Price Sensitivity Measurement) was used for analysis of price sensitivity for Americano coffees. PSM questionnaires for on-site survey were collected from 519 customers on their visit to the four coffee brands (Starbucks, Coffeebean, Angel-in-us, and Caffeebene). The results showed that the present prices of Americano for four brands were within the range of acceptable price and that the price sensitivity of Americano at Starbucks was the highest followed by Coffeebean, Angel-in-us, and Caffeebene. Among the four brands, Starbucks revealed the lowest cumulative rate of indifferent price, the widest price stress, the narrowest acceptable price range, and the biggest stress factor. This study concluded with the implications of the research findings and future research areas.

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