13 SBUs OF WOW PRIME Core Value People

13 SBUs OF WOW PRIME

Core Value • People: The more extensive people, the bigger the company. • Group Culture: Group culture is the root of a company, and a company can be more successful with strong root.

Brand Value • Restaurants Management Expert: “Through our management system, we provide customers’ the ultimate experiential enjoyment. ” • Excellent Brands Developer: “ 1993, we built 11 successful brands. Through constant innovation, we bring customers diversified dining experiences. ” • Profitable Business Model Creator: “We have 20% increase in annual sales revenue and the profit is reflected the result that we continued commitment to our customers’ satisfaction. ”

PRICING STRATEGY

<Relationships between some SBUs> STEAK JAPANESE

WANG Ingredient Champaign ✔ Salad ✔ TASTY 陶板屋 原燒 ✔ ✔ ✔ Appetizer ✔ Antipasto ✔ ✔ ✔ ✔ Soup ✔ ✔ Bread ✔ ✔ Rice Main ✔ Plum Soup ✔ Sawa ✔ ✔ Vinegar ✔ Dessert ✔ ✔ Soft Drink ✔ ✔ Price (10% Fee Excluded) NT$1350 NT$518 NT$628 A La Carte (Not Main) NT$150 NT$110 NT$100

Segmentation between WANG STEAK, TASTY, 陶板屋 and 原燒： WANG High price level of steak TASTY Medium price level of steak and the West taste 陶板屋 Medium price level of steak and the Eastern taste 原燒 Medium price level of steak and the Japanese Barbeque taste

Target between WANG STEAK, TASTY, 陶板屋 and 原燒： WANG Consumer with quite high budget constraint TASTY Consumer with medium budget constraint and 陶板屋 Consumer with medium budget constraint 原燒 Consumer with medium budget constraint and enjoy cooking for him or herself

Positioning between WANG STEAK, TASTY, 陶板屋 and 原燒： WANG Exquisite food and high quality of serving TASTY Variety of food and rich flavor 陶板屋 Japanese flavor and creative cooking 原燒 Japanese barbeque and table service

• Why to launch two restaurants in the same price and supply same items? FULLFILL DIFFERENT PREFERENCE!!! Taiwanese always seeking for something new in food. And it is very inexpensive in having such good service and steak. Therefore, there are a numerous potential customer. Besides, the two restaurants provide different cuisine. Customers can choose one of them to fit their need. And the company can serve more customers.

IKKI Segmentation Medium price level of Japanese cuisine Target Customer who likes to have a whole set of Japanese food, since Japanese cuisine are usually ordered a la carte Positioning Based on Japanese concept, European technique. Having a series of new Japanese cuisine in a meal

<Pricing> Whole set Ingredient Price(a la carte) Soup NT$110 Salad NT$110 Steamed dish ✖ Rice NT$110 Sea Food ✖ Iced Shake NT$70 Main NT$220 (Teriaki Chicken, Pork and Beef only) Dessert NT$110 Soft Drink NT$90 NT$698 (Fee Excluded)

<70% Pricing> • Pricing at the 70% of the customer’s expecting price • Based on the customers • Make it well worth its value

Famonn Coffee • Different with others, Famonn Coffee provides customers order coffee, cake and bread a la carte. • Main Competition: 85°C, Starbucks

COFFEE(SIZE: L) NT$60~90 NT$70~120 NT$38~60 NT$65~105 CAKE(ONE PIECE) NT$95~155 NT$75~90

• Why FAMONN got the deficit five years in a row since it was launched？ Since that the coffee shop is a perfect competitive industry. FAMONN doesn’t show its differentiation with other competitions. Second, FAMONN is not as well-known as other departments. And last, the crowd in Taiwan doesn’t have the habit to have afternoon tea. It is much normal to take-out, which is not how FAMOMM operates.

• FAMONN is going to raise the revenue by operating more stores around Taiwan? Ø Increase the reputation Ø Depends on quantity？ 1. Increasing the quantity will make the average cost decreases, BUT 2. While the operating cost increases, price stands still. In the short run, before the average cost goes down, FAMONN should figure out something to cost-down. So that the quantity will be doubt to be not as well as usual. 3. Operating a new branch implies the wage cost, rent cost and so on. It is not sure that the quantity will work.

Teppanyaki ---Hot 7 vs. 夏慕尼 • Bundling of sales(free to accept or not): (1) Hot７: If consumer ordered a set of the meal cost NT 290 (+10% of service fees); otherwise it’ll cost each dishes of NT 60, and the total is much more than NT 290, so consumer will choose to order the set of the meal to get much more buyer surplus than they thought.

(2)夏慕尼： If consumer ordered a set of the meal cost NT 1030 (+10% of service fees); otherwise it’ll cost each dishes of NT 130, and the total is much more than NT 1030, so consumer will choose to order the set of the meal to get much more buyer surplus than they thought.

• STP between hot 7 and 夏慕尼：

Hotpot ---聚 vs. 石二鍋 • Bundling of sales (enforce to accept): (1)聚 北海道昆布鍋： Consumer should order a set of the meal cost NT 359 (+10% of service fees), or they won’t have other choices to have in this restaurant. (2)石二鍋： Consumer should order a set of the meal cost NT 218 (without service fees), or they won’t have other choices to have in this restaurant.

• Why they can enforce consumer to accept? ELASTICITY!!!!! When people eating hotpot, they won’t only eat the soup, they would like to have meat or vegetables, and they need to. So consumers have the smaller elasticity about the ingredients. Seller have bigger elasticity to decide the price.

• STP between these two hotpot restaurants：

Vegetarian food ---舒果 • Differentiation Strategy: Vegetarian food restaurants in Taiwan cook in Chinese favor in large part. 舒果 segments itself to serve Milan Food, which is from Italy. It success to have the big part of the market in the vegetarian food restaurant. It provides set of meal in vegetarian is also a different way from its competitors.

Italian food ---Ita 義塔 • Promoting Strategy: (1)Member System: If a consumer becomes Ita’s member, he’ll have many other coupons. For example, he can get different kinds of present every year, get 50% discount on his birthday, or go to Vieshow theater to watch a movie in different discount on different days and so on.

(2)Price Reduction: If a consumer buy the coupon tickets of Ita, he’ll get 4% of discount if he buy more than 20 tickets at one time. TR=P*Q, when P↓, Q will↑ ∆TR/∆P < ∆TR/∆Q, so P ↓ Q ↑, P*Q ↑ Profit=P*Q-TC, when P*Q ↑, TC constant total profit will ↑

Pork ribs ---品田牧場 • Peak loading pricing strategy: (1)Situation analysis: It provides two kinds of price level of the set meal, one costs NT 258 and the other costs NT 318. The NT 258 one is only offered at the lunch time on Monday to Friday. And the NT 318 one is offered at anytime, no matter on the weekend or at the dinner time.

(2)Why is it peak loading pricing strategy? 1. Lunch time on Monday to Friday: Consumer is less, the seller need to expense the excess capability to avoid wasting. 2. Dinner time or on the weekend: Consumer is much more, the seeker need to disperse overloading amounts of people to keep the capability in the best use.

INFORMATION ASSYMETRIC

Moral Hazard Problem of Wowprime • Moral hazard occurs when one party takes more risks because someone else bears the burden of those risks. • One of the moral hazard events of Wowprime: The problem of cooking oil made from recycled restaurant waste of Famonn Coffee in 2014.

Recycled Pig Oil Case of Famonn Coffee • During the food safety crisis in 2014, Famonn Coffee was detected that they had used the recycled pig oil from the Chang-guann Company to make their tomato vegetable soup. • At first, Wowprime declared that they didn’t use the contaminated pig oil. However, the government discovered Famonn Coffee used three kinds of recycled pig oil after their second check.

Subsequent Handling • Since Wowprime didn’t reveal the reality, the government would penalize Wowprime for 3 million dollars at most according to the Food Safety Law. • Wowprime admitted they had used the questionable oil, but they had already replaced it since it had misgivings. To compensate customers, Wowprime announced that customers could get a large -size drinks for free if they took their receipt to the stores.

Solutions to Moral Hazard Problem • Reveal the origin of their ingredients to the public To gain customers’ trust, Wowprime should declare the origin of their ingredients to the public. As a result, customers can have their meals without suspicion. • Establish good enterprise image Enterprise image is the first thing that customers know of a big company. Therefore, a good enterprise image can gain customers’ faith and create a successful enterprise.

Conclusions • In terms of the pricing strategy, same kind of food from different restaurants of Wowprime might have different prices, so that they can attract different level of customers. Besides, their meals are provided by a set, making the meals full of diversification. • Wowprime often holds different activities to raise their prestige. Also, the unique style of each restaurant makes people remember it in their mind since their first sight.

Suggestions • Wowprime takes account customers’ opinion seriously. Each restaurant provides feedback format to customers when they finish their meal. However, Wowprime should consider adding more ways to acquire customers’ feedback, for example, an online comment system, etc. • Beside trying to retain the original customers, Wowprime should also think how to gain other people’s favor, so Wowprime can become more and more popular among all customers.