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Review of Marketing Science


CiteScore 2018: 0.12

SCImago Journal Rank (SJR) 2018: 0.114
Source Normalized Impact per Paper (SNIP) 2018: 0.070

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1546-5616
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Kish: Where Customers Pay As They Wish

Ju-Young Kim / Martin Natter / Martin Spann
Published Online: 2010-07-15 | DOI: https://doi.org/10.2202/1546-5616.1118

New restaurants often do not manage to succeed within a reasonable amount of time. Exotic restaurants especially face the problem that price promotions may not attract new customers because prospective customers might associate very low prices for unfamiliar food with a high functional risk. This paper describes how Pay-What-You-Want (PWYW), a new pricing mechanism, was successfully implemented at Kish, a moderately priced Persian restaurant in downtown Frankfurt. After the initial testing phase, which had the characteristics of a promotional offer, the restaurant decided to permanently offer its buffet lunch under PWYW conditions. We report the long-term effects of this decision as well as a simulation demonstrating that profitability is mainly based on 'trading up' the continuous inflow of new customers to the more profitable dining offer where prices are fixed.

Keywords: Pay-What-You-Want; pricing

About the article

Published Online: 2010-07-15


Citation Information: Review of Marketing Science, Volume 8, Issue 2, ISSN (Online) 1546-5616, DOI: https://doi.org/10.2202/1546-5616.1118.

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