Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

METHODOLOGY 
In this study, Price-Sensitivity Measurements were applied to a 200 seat buffet restaurant in Kowloon, 
Hong Kong. The restaurant had been losing money and customers; as a result, management wanted to investigate 
whether the operation could afford to cut prices in order to attract new customers. The restaurant was situated in a 
hotel in Kowloon, and served breakfast, lunch and dinner. Lunch and dinner were served buffet style. Since 
management felt that the operations’ loss was attributed mainly to the dinner meal period, the study was conducted 
for the dinner buffet. The regular price for a dinner buffet was HK $128, and the price for occasional discounts was 
HK $99. When management discounted the buffet price occasionally, the restaurant was busy, yet it did not realize 
any profits.
The study attempted to answer the following five research questions: 
(1)
Is there a point at which the dinner buffet price is considered to be cheap? 
(2)
Is there a point at which the dinner buffet price is considered to be expensive? 
(3)
Is there a point at which the dinner buffet price is considered to be too cheap and quality is questioned? 
(4)
Is there a point at which, no matter what the quality, the dinner buffet price is too expensive and purchase is 
beyond 
consideration? 
(5)
Is there a point at which it will be feasible to sell the dinner buffet at a discount in order to attract additional 
business? 
We incorporated the research questions and demographic questions in the questionnaire (Figure 1), which 
was handed out to dinner buffet customers over a one month period. The study applied a simple random design by 
asking every second customer to answer the questionnaire. Customers who answered received a choice of a free 
alcoholic beverage as an incentive. Since it was crucial that the sample of respondents was representative of the 
target market of the restaurant and familiar with the buffet dining product, qualifying questions were ask to 
determine whether customers had purchased a dinner buffet at least once before and whether they had frequented the 
restaurant at least once in the past. The study was conducted only on days when no discounts were applied. 
Respondents were able to choose between a Chinese or English version of the survey. The researchers, management, 
and a graduate student from the Chinese University of Hong Kong, assisted respondents in filling out the 
questionnaires appropriately.