20.12.2021
High prices for products in the branches of catering
establishments in AUCA campus
Dana Abuziarova & Aitegin Salamat Uulu
AMERICAN UNIVERSITY OF CENTRAL ASIA
i
Table of Content
1.0.
INTRODUCTION................................................................................................... 1
1.1.
STATEMENT OF THE PROBLEM................................................................................ 1
1.2.
RESEARCH QUESTIONS AND OBJECTIVES ............................................................... 1
2.0 LITERATURE REVIEW ........................................................................................... 3
2.1 LITERATURE ................................................................................................................ 3
3.0.
DATA, METHODOLOGY .................................................................................... 8
3.1.
DATA DESCRIPTION ................................................................................................ 9
3.2.
METHODOLOGY ................................................................................................... 10
3.2.1 Research Goals and Objectives ....................................................................... 10
3.2.2 Object, methods and target group of the study ................................................ 10
3.2.3 Research methods: ........................................................................................... 10
3.2.4 Research tools.................................................................................................. 11
CONCLUSION ................................................................................................................ 14
REFERENCES ................................................................................................................. 16
1
1.0.Introduction
1.1.Statement of the Problem
Problem of high price index for food and consumer`s preferences have been highly
attracting the people’s attention (Kudryatceva, 2021). Since the last two years there has been
a rise in food prices in Kyrgyzstan (Nurmatov, 2021). We, as students, were not excluded
from this challenge. The problem of food prices is very subjective and it is influenced
primarily by the perception of prices in a positive and negative light (Lichtenstein, Ridgway,
& Netemeyer, 1993; Volckner, Ruhle, & Spann, 2012). According to Wheatley & Chiu
(1977), one of the main problems in people's perception of prices and product quality is
people's incomes. This statement is very relevant for AUCA, as students from completely
different families with different incomes study here. Where, in most cases this question
depends on the differences between certain layers of students: from the rural and urban; and
students from foreign and local.
Since, student’s intention to consume food and beverages is based on necessity (JoonWuk Kwun, Ellyn, & Cho, 2013) and they need to buy them in university’s food service or
cafeterias within the university. To sum up, the student’s willingness to pay for food and
beverages is not the same (Zhou, et al., 2010; Smith, Ali, & White-McNeil, 2020) where
different students and different consumers can make different judgements of price perception
in the university`s cafeterias.
1.2.Research Questions and Objectives
Based on the theories put forward and studied by the above mentioned researchers, it
is worth noting that the consistently high prices for some groups of students in catering
establishments on the territory of AUCA are influenced by such factors as the ratio of price
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and quality of products (Thu Ha & Gizaw, 2014; Judd, 2000), the catering establishments
itself and the demographic characteristics of each student (Wheatley & Chiu, 1977).
Product prices are subject to many economic and social factors, control over which
cannot be exercised by the territory of the university, in which the branches of certain catering
establishments are located. It is important for us to determine the need and opportunity (or
lack thereof) to find any compromise pricing policy to meet the demand for products from
absolutely all students with different material status. The formulation of the following
research questions based on above mentioned studies are:
RQ1: What should be an affordable price in the cafeterias on the AUCA campus to sustain
the demand of each level of student?
RQ2: Is it possible and necessary for the university to control and make decisions regarding
the pricing policy for products sold on its territory in order to satisfy the demand of absolutely
every student?
RO1: To determine if the adjusted pricing of foodservice in AUCA campus has an impact on
overall satisfaction of students.
RO2: To identify the necessity to control pricing policies of the catering service providers.
H1: Average cost or proper pricing level of food and beverage options in AUCA cafeterias
have a significant impact on all students’ overall satisfaction.
H2: Finding a compromise price, adjusting the pricing policy for absolutely every layer of
students is possible, but not necessary both for the university and for the branches of catering
establishments located on its territory.
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2.0 Literature review
2.1 Literature
High prices for products in AUCA cafeterias are a consequence not only of the
rapid rise in prices for already expensive products, but also of completely different price
consciousness among students of different groups (Lichtenstein, Ridgway, & Netemeyer,
1993). People perceive prices differently and this directly depends on the priorities of the
person and his ability to pay the increased price. It is a mistake to believe that the high
cost of a product in one hundred percent of cases leads to a decrease in purchase
opportunities and to consider only this negative effect of prices on purchasing power. The
negative impact is accompanied by several factors, one of the main is the degree to which
customers focus their full attention on paying as little as possible (Lichtenstein, Ridgway,
& Netemeyer, 1993; Suri & Monroe, 2003). This is due to many reasons, one of the
decisive ones within the walls of AUCA is the student's income. Students can be
conditionally divided into two groups: from wealthy families, who focus more on pricequality ratio, "prestige" and their own desires, and students from average test families,
who are the group with the main focus on low prices and less focus on quality, taste of the
product and your preferences. There is also a positive influence of prices on the
perception of them by different groups of the population, and this positive influence is
mainly characteristic of the first group of students, because for such a group of the
population, the high price of products is one of the main indicators of the quality and taste
of food (Wheatley & Chiu, 1977; Ryu & Han, 2010; Bagwell & Riordan, 1991). For this
reason, many students who can afford more expensive lunches tend to choose Rice Ball at
Flask, for example, over the canteen cutlet and mashed potatoes, which is a more
nutritious option, significantly overpaying but having a more interesting and flavorful
flavor. This is due to the two roles that pricing implies: the informational effect of price,
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which is based on the principle “price is an indicator of quality” (Bagwell & Riordan,
1991; Judd, 2000) and sacrifice effect, which is based on the principle of “price is a
sacrifice” (Volckner, Ruhle, & Spann, 2012). For different groups of students, and the
population in general, one of these effects can prevail and overlap the second, which
leads to a certain perception and, as a rule, a decision about whether to buy or not
(Granger, Granger, & Granger, 1961). Students from less wealthy families, for the most
part, perceive the cost as a certain sacrifice in order to get a certain product, therefore the
effect of sacrifice overlaps the effect of information, and, as a result, increased prices in
coffee shops, provided there are cheaper analogues, lead to a decision not to buy
(Bornemann & Homburg, 2011).
The study about student’s intention to consume food and beverages and their price
relationship to quality is an equally important factor. Since students spend most of their
time on weekdays at the educational institution, the university is obliged to carry out a
full-fledged organization of meals at the university and their availability for each student
(Joon-Wuk Kwun, Ellyn, & Cho, 2013; Andaleeb & Caskey, 2007). Literature review of
Joon-Wuk Kwun, Ellyn, & Cho (2013) shows that for students is necessary to eat in
university because as already noted, students spend most of their time at the university,
therefore, for many, student canteens and cafe-buffets are the main dining places.
Besides, other investigation identifies in order to get know the food price attitudes, it is
worth to study the student’s preferences, their willingness to pay and estimates of price
sensitivity (Zhou, et al., 2010; Andaleeb & Caskey, 2007). "As expectation for dining
experience of students grow, an increasing number of college and university foodservice
facilities are receiving additional attention as not only a profit center but also as an
essential component of students’ campus life and satisfaction" (Joon-Wuk Kwun, Ellyn,
& Cho, 2013).
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Moreover, a student's food expenses are almost the most important one. Other
study states, “it was critical to know how the students perceived the elements of service
and operations attributes such as quality of food, ambience, price, food and beverage
options” (Smith, Ali, & White-McNeil, 2020). From this perspective, price plays a crucial
role in student’s perception toward food and beverages in university cafeterias (Garg,
2014).
It is also worth considering the significant changes in the cost of products over the
past few years as a result of the pandemic. The main consequences were an increase in
product prices and, as a result, meals at AUCA became more expensive. On the subject of
high price index for food it must be concerned about high prices for products overall. It is
noteworthy that this topic was put forward by Kudryavtseva (2021) in her article. Author
mentioned the increased food prices and identified a number of daily food products that
have risen sharply since the beginning of 2021 (Kudryatceva, 2021). According to the
National Statistical Committee (2021), prices for products have increased by 7.3% since
the beginning of the year. Similarly, food and beverage prices are raised by 11%, alcohol
and cigarettes raised by 7.7 percent etc. (National Statistical Committee of the Kyrgyz
Republic, 2021). The purpose of taking this resource was that we assume the high prices
in AUCA cafeterias are associated with a sharp increase in food prices in Kyrgyzstan.
Maybe not only AUCA students but also other citizens of the Kyrgyz Republic
face the problem of rising prices? It is obvious that most of the problems in the economy
associated with high prices not only in Kyrgyzstan but throughout the world are
associated with the coronavirus pandemic. Prices began to rise in early 2020 (Nurmatov,
2021). In addition, the reasons for this dilemma can be flagged from different angles.
Food, fuel and goods of daily demand come from Russia and Kazakhstan (Nurmatov,
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2021). This means that the categories of these goods came in smaller quantities, now
there is a shortage of them in the country, consequently high prices must be existed. Due
to the lack of goods of daily demand, the issue of increased price in AUCA cafeterias
may be raised.
Here we will talk about how the increase in prices affects the demand within the
walls of the university for different groups of students. Food is primarily a need, and it is
generally accepted that the demand for food is quite inelastic (Mhurchu, et al., 2013).
However, this judgment was supplemented by several studies and also included the
division of the population into groups based on many reasons, the main of which is
income (Mhurchu, et al., 2013; Andreyeva, W. Long, & D. Brownell, 2010).
Accordingly, the increased price for the products especially for food leads to a
negative impact in low income families (Greenberg, 2016). It is easy to guess, the greater
the share of food costs, the less a person can afford to spend on health, recreation,
education, and entertainment. Correspondingly, it was significant to investigate about
Kyrgyz people`s food expenses. According to Shabalin (2017), there was data that is
Kyrgyz people have to spend most of their income on food - 53%. When compared with
other countries, the indicators of Kyrgyzstan are comparable to some post-Soviet, as well
as African countries (Shabalin, 2017). Correspondingly, "sudden increases in food prices
to relatively high levels are bad for people in poor countries, where many families spend
half or more of their income on food" (Greenberg, 2016, p. 2). Indeed, high price index
for daily demand products like food can have a negative impact and can make a social
dilemma (Zhang, Jones, Ruhm, & Andrews, 2013). Considering the fact that in AUCA
there are many students from different origins, that are students in whose family 4-5 or
more members are living, it might play a critical role especially toward family’s budget.
A very large part of AUCA students are students from the regions of Kyrgyzstan who
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study at the university on a budgetary basis. Such students often do not have the
opportunity to buy lunches at a price higher than the average due to the rather low and
unstable earnings, which means that high prices and their increase will have a special
impact on this particular group of students.
Hence, another question arises that affects the perception of prices by university
students - this is a demographic issue related to the average income level in the country
(Green , et al., 2013). Kyrgyzstan is a country, the majority of whose population is made
up of the population in the regions and the rural population, and the main way of income
for this part of the population is agriculture. Accordingly, the average income in the
republic is low and amounts to about 19 thousand soms per month. (Asanova &
Shatmanov, 2015). The demand for products in low-income countries is more responsive
to any change in the prices of these very products (Green , et al., 2013). Thus, demand
elasticity is high enough for the majority of AUCA students who come from the regions.
Also, if we consider the difference in the perception of prices by students from the
capital and students from the regions, then Adaptation-Level Theory, described in the
work of Kent B. Monroe (1973) Buyers' Subjective Perceptions of Price, operates. This
theory is based on the fact that buyers do not simply focus on the price being high, but
compare it to a certain standard price to which they once adapted (Monroe, 1973).
Students from Bishkek, who constitute a significant part of all AUCA students, are
accustomed to the prices of products in Bishkek, and, therefore, the average cost of lunch
within the walls of the university is in most cases standard for them. Their perception of
value due to a slight concentration on the price itself is due more to product quality and
taste preferences (NIEDRICH, SHARMA, & WEDELL, 2001). However, prices for
products in regions and rural areas are very different from prices for the same products in
the capital of Kyrgyzstan. Therefore, students who did not grow up in Bishkek have a
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different idea of the "standard price". Often, for such students, the standard price is lower
than that which they face in catering establishments at AUCA, because they already have
a “target price” that they are willing to pay for lunch, for example, in a university
cafeteria. (Monroe, 1973). The perception of prices by buyers depends directly on what
value prevails in the market. Each person, based on experience or the simplest statistics,
has an understanding of the average price (Monroe, 1973; Suri & Monroe, 2003), and
students from the regions compare the value of the products with the most prevalent value
of the same products that they purchased outside Bishkek.
However, demographic characteristics are only one aspect of the "standard price"
theory. The degree of elasticity of demand and the perception of the difference between
the usual and actual prices largely depend on the availability of substitutes, which can be
either higher or lower in cost, the need for this particular product, the budget that a person
is able to spend per day or month on food within the walls of university (Green , et al.,
2013). For example, food in the AUCA canteen usually has no cheaper and nutritious
counterparts nearby, because food in university cafeterias is even more expensive, and
Kichenette is the most inexpensive place on campus where a student can buy a full dinner
at a cost slightly higher than the average for Bishkek.
If we take a deeper look at the issue of the standard price, then in perception, any price
for any product can be divided into three main categories: highest market price, average
market price, and lowest market price. This is Expected reference price theory (Li &
Mattila, 2007). If we use this theory to study the perception of prices by AUCA students,
then solving this problem will turn out to be much more complex, time and energyintensive.
3.0.
Data, methodology
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3.1.
Data description
For our research we intend to use qualitative data, since the main task is to
determine the degree of satisfaction with the cost of products within the walls of AUCA
for different groups of students.
The direct approach will allow us to find a sufficient amount of evidences for our
hypothesis and come to a conclusion about the need to take any action regarding the
pricing policy in the AUCA building.
For the research we will use primary data to obtain the information and justify our
hypothesis. As an instrument Google survey will be conducted in order to get the most
actual information from students in AUCA.
Data entry and processing will be carried out using the statistical software SPSS
(Statistical Package for the Social Sciences), specially designed for the processing and
analysis of quantitative data. This stage will consist of several components:
-
data encoding;
-
creation of a matrix for data entry;
-
input of questionnaires into the program and data control;
-
data cleaning and discarding;
-
data processing based on special procedures of the SPSS program.
The practical significance of the study lies in the fact that its results can be applied in:
analyzing the concept of the average cost of food in catering establishments at AUCA;
analysis of the perception of this value by different groups of students; analysis of student
income and expenses based on financial situation and demographic factors; analysis of
the ratio of satisfied and dissatisfied students with food prices on the AUCA campus;
analysis of the need to improve pricing policy on the AUCA campus; when determining
the need - a mechanism for the formation of a competent pricing policy based on the
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collected data and the development of programs to revise the pricing policy.
3.2.
Methodology
3.2.1
Research Goals and Objectives
1) Conducting a study to assess student satisfaction with the quality and cost of food
provided in catering establishments in AUCA.
2) Development of recommendations on the need to revise the pricing policy in the
catering establishments of the AUCA campus
Research includes the following tasks:
1. Assessment of income’s levels of different groups of students and their average
food costs;
2. Assessment of the level of price-quality ratio of products in AUCA cafeterias
through the eyes of students with different income levels;
3. Assessment of the degree of correspondence of the actual price to the needs and
expectations of students;
4. Evaluation of trainees' opinions on the difference in the cost of products in
different catering establishments (Kitchenette, Sierra, Flask, Coffeemania).
3.2.2
Object, methods and target group of the study
The object of the research are students of American University of Central Asia.
Subject of the research is student satisfaction with price of the food and beverages in
cafeterias of the university.
3.2.3
Research methods:
Questionnaire survey. The questionnaire methodology provides for a
questionnaire survey for AUCA students using the developed questionnaires in Google
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Form. This method allows us to cover the largest number of students, and also makes it
possible to assess the degree of their satisfaction.
The actual number of students at AUCA is 1200. The planned sample size will be
about 500 respondents, since about half of all students are present on campus during
hybrid education, therefore the sample is representative in terms of the parameters
presented.
3.2.4
Research tools
For the study, a questionnaire of 10 questions was developed to determine the degree
of student satisfaction. The student survey will be conducted anonymously. The
questionnaire will include the following questions:

In which course the student is studying?
o NGA
o Freshman
o Sophomore
o Junior
o Senior
The rapid rise in prices due to the pandemic began in the first half of 2020. Current
students of NGA, freshmen and sophomores did not experience a period of relatively low
prices in catering establishments in AUCA prior to a general increase in the price of lunch
at the university, and accordingly, the perception of prices by these groups of students is
likely to be different from the perception of prices by senior students who felt the rapid
rise in the cost of products at AUCA.

Where is the student from?
o Urban
o Rural
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o Abroad
We looked at the fact that the perception of the cost of food is highly demographic.
Students from different regions have a different concept of the "standard price" (Monroe,
1973) with which they are used to compare the cost of products.

Average monthly income:
o Up to 130 $
o Up to 350 $
o Up to 600 $
o Up to $ 800
o From 800 $ and above
Our research is based on the fact that income is one of the main drivers of changes in the
elasticity of demand (Lichtenstein, Ridgway, & Netemeyer, 1993). Low- (up to 130$) to
middle-income (up to 350$) students and are most susceptible to rapid changes in food
prices. Perhaps, students with upper middle income are least affected by these changes

Estimated student consumption per week:
o Up to 12 $
o Up to 35 $
o Up to $ 60
o From $ 60 and above
The families of students from the regions can also have different incomes, as well as
families from Bishkek and abroad. To determine the approximate willingness to pay,
information on average spending is needed.

How often do you eat at AUCA:
o Several times a day
o Once a day
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o 2-3 times a week
o Several times a month
This question already partially reveals student satisfaction with prices and student
demand for food on the AUCA campus.

If a student spends every day at AUCA, does he find cheaper analogs of lunches
outside the university (in stores, delivery, meals from home, etc.)?
o Yes, I go to the store
o Yes, I order delivery
o Yes, I bring lunch from home
o Sometimes at AUCA, sometimes outside of AUCA
o No, I always eat only at AUCA
The availability of cheaper food alternatives outside of AUCA influences student demand
and perception of prices.

Satisfaction with food prices at AUCA:
o Satisfied
o Neutral
o Dissatisfied
Our task is to determine the percentage of students from different regions and with
different monthly incomes who are dissatisfied with the prices on the AUCA campus in
order to understand the need to revise the pricing policy at the university.

How much students are willing to give the maximum for a full meal on the AUCA
campus?
o Up to 1.5 $
o Up to 2 $
o Up to 3 $
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o From $ 3 and above
In the event that most of the students are not satisfied with the prices of products on the
AUCA campus, the degree of students' willingness to give a certain amount will become
the basis for the process of revising the pricing policy.

Do students have any additional comments and suggestions regarding the pricing
policy within the walls of the university (max 100 words).
The question is intended to enable students to speak openly about their satisfaction or
dissatisfaction with prices at AUCA.
Conclusion
Pricing policy on the AUCA campus is a major student satisfaction issue that
requires in-depth analysis. The perception of the cost of products depends not only on the
negative impact of the rapid increase in cost, but also on many factors that are based on
both the negative and positive effects of high prices: price-quality ratio, the concept of
"standard price" and the value of purchased products.
One cannot come to conclusions about the need to revise the pricing policy based
solely on the negative effect of higher prices. It is worth remembering that the elasticity
of demand and its changes depend on the characteristics of each individual group of
students, respectively, the perception of prices and their increases will always differ and
never come to a compromise. The most correct solution would be to conduct a deep
research and understand which group of students (satisfied or unsatisfied with prices,
students from middle and poor families and students from wealthy families, students from
the city or regions) prevails and, based on the research results, determine the need and
degree of opportunity for the university work on a pricing policy to meet the demand of
the prevailing group of students and, at the same time, adhere to the terms of agreements
concluded between the university and the main institutions for the right to establish
15
branches in the AUCA building and the university's obligations to these institutions.
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