Form 4L

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Price differentials of moon cakes before and
after Mid-Autumn Festival in Hong Kong
Sandy Cheng (2)
Minnie Choi (7)
Madelene Ho (11)
Joyce Lam (17)
Introduction
Nowadays, there are different varieties of
mooncakes, such as traditional mooncakes, ice-skinned
mooncakes and ice-cream mooncakes etc. Many people
would like to purchase mooncakes to celebrate the MidAutumn Festival. But how many of them have ever think
about the price differential before and after the MidAutumn Festival? Will giant companies and small
companies have similar strategy in dealing with a large
surplus of different kinds of mooncakes? In this project,
our group is going to look into details of these problems
and the corresponding viewpoints of different sectors of
the society.
Comparison of mooncake
prices before and after
the mid-autumn festival
美心雙黃白蓮蓉月餅
Original price $263
After the festival$263
Credit Card
Discount $ 163
美心冰皮2人世界脆脆系列
Original Price$26
HSBC Discount $100/5
After Mid-Autumn Festival
$10/1
恆香雙黃白蓮蓉月
Original Price $278
Sogo Discount $139
大班冰皮月餅
Original Price(Upper Part)
Hang Seng Bank Discount (Lower Part)
榮華月餅七星迎月
Original Price $368
Sogo Discount $242.5
榮華雙黃白蓮蓉月餅
Original Price $278
Sogo Discount $183
恆香迷你七星伴五黃月
Original Price $528
2/10 Sogo Discount $198
After Mid-Autumn Festival
After comparing the price difference of
mooncakes before and after the Mid-Autumn
Festival, we found a phenomenon that small
companies will reduce their prices while big
companies will usually remain their prices
unchanged or just a slightly reduction or just
in specific products. Usually, the big
companies will also offer discount by using
certain credit cards or special sales in certain
place, in order to attract customers.
SO WHY THERE IS THIS
PHENOMENON?
POSSIBLE REASONS
Large companies do not reduce their prices even after
the Mid-autumn Festival may because:
1) To maintain their market domination power and increase their
revenue. If they have price reduction, people may buy the
mooncakes after the festival which may reduce their revenue.
2) To maintain their high-class image. People always buy
mooncakes for gift in the festival. If the prices of the mooncakes
go down, people’ s preference in buying their products as gifts
may reduce too.
POSSIBLE REASONS
3) People prefer buying their brand since they maybe
old brands, which have already developed good images
and people are used to buy their brand.
4) The cost of mooncakes are very low. Though they
cannot sell all the cakes, they need not to reduce the
prices since they gain much more they lose. Hence, it is
not necessary to have price reduction which may cost
lost as explained above.
WHY SOME BIG
COMPANIES WILL REDUCE
THEIR PRICES IN CERTAIN
PRODUCTS?
POSSIBLE REASONS
1) It is a new product. They reduce prices to attract
people to try it, in order to build people’s preference
in them.
2) The cost of the specific products are relatively high.
They need to sell as much as they can in order to
gain the greatest extent.
CASE STUDY: MAXIM
We have chosen Maxim to be our case study. We
found that Maxim did not reduce it price in the classic
mooncakes after the Mid-autumn festival but reduce
the price of the ice-skinned mooncakes. They do this
because they already have a high preference from
people in their classic mooncakes since Maxim is
always the highest sales in the years. Instead of having
price reduction, they throw away the left over.
CASE STUDY: MAXIM
However, their ice-skinned
mooncakes are new products, and it
is not as popular as other brands
like Tai Pan. Therefore, they need to
reduce it price to attract people to
buy it, increasing their revenue in it
and build up people’s confidence
and preference in their new products.
CASE STUDY: MAXIM
People may confused that why we said that Maxim did not
reduce their price after the Mid-autumn Festival since it
has given out credit card discount. Indeed, visa card is the
most common credit card, many of Hong Kong citizens get
at least one of it. People are almost buying the mooncakes
in the discounted price. However, after the festival there is
no further price reduction. Therefore Maxim is just only
making an illusion, setting a high price but give great
discount, misleading people to feel that it is cheap and
valuable. In fact, most of the big companies are using this
pricing strategy to attract customers.
WHAT ARE THE
DIFFERENT POINT OF
VIEWS OF DIFFERENT
SECTORS?
FROM CONSUMERS’ VIEW
As a citizen, I wouldn’t appreciate the way that large
company did. They will throw away the left over to
enhance their reputation. It is totally a waste of resources
and not environmental friendly. They can donate it or give
discount instead. The price is setting too high, for the poor
they will not have the chance to enjoy this festival. For
Chinese, they care for the mid-autumn festival; people that
are taking Comprehensive Social Security Assistance may
not have enough money to eat a moon-cake with better
quality. The company should have social responsibility to
help poorer instead of just thinking how to maximize their
profit.
FROM COMPANIES’ VIEW
In the company point of view, they may think that
they are right. The aim of a company is to get as
much profit as they can. Large companies already
have the reputation so that they don’t need to get
into the competition of discount. They will still get
certain amount of costumers. In order to ensure
they will have the maximum amount of money,
they will not give out discounts. By using this
pricing strategy, they can earn as much as they can,
since it is their responsibility to give more
dividends to their shareholders.
HOW CAN LARGE
COMPANIES IMPROVE?
SUGGESTIONS FOR THE
LARGE COMPANIES
1) Reuse the raw materials. Maybe they can try to see
whether they can use the ingredients of the left over
mooncakes to make other products.
2) They can give the mooncakes to the poor. For
example, they can give to the orphanages, the
homeless or those who take Comprehensive Social
Security Assistance
SUGGESTIONS FOR THE
LARGE COMPANIES
3) They should have a better estimation of the market
equilibrium of mooncakes in order to reduce surplus.
4) They can give discount to increase the sales, trying
to sell all the mooncakes but not just only consider
how to maximize their profit.
Conclusion
In conclusion, large companies do not reduce their mooncakes’s price
as much as small companies do.
Our group think that it is different pricing strategy of companies to
behave like this. However, large companies also have social responsibility
in helping the poor other than just thinking how to maximize their profit as
well as maintaining their market domination power and high-class image.
We think that large company should improve in their pricing strategy,
we would like to see improvement which can benefits the society as well
as being environmentally friendly.
Appendix
Leaflet:
- Maxim
- Sogo
- 恆香
- 榮華
- 大班
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