I am strolling back home, lost in game-balancing calculations, when the delicious aroma of fresh doughnuts draws me out of my daydream.
Well, there’s no harm in checking out the source of the scent, I think to myself as I begin to look around. I see the aroma’s source, a solitary kiosk tucked away at the street’s corner, and walk up to it.
But the displayed price instantly stops me in my tracks.
I am familiar with the cost of doughnuts, but this seemed much higher. I wondered if the vendor, being the only doughnut seller in the area, was trying to exploit the limited supply.
And my thoughts immediately jump to how pricing works in Business Heroes.
Some customers are more sensitive to the price of burgers than others. Students, Parents, and Staffs, for instance, have lower disposable incomes compared to the other segments. For them, affordability/price is a big part of the buying decision.
Other factors that influence buying decisions in the game are:
– Time of day
– How appealing the Stand looks
– The food and service quality of the Stand
– Brand popularity of the business
These customers will shy away from your stand if they consider your burger to be too expensive.
How do they decide what’s expensive and what’s not?
They compare the cost of your burger to the cost of alternatives, such as a homemade burger, and decide based on which option offers the best value for their money.
If the cost of buying all the ingredients plus the time and effort to make the burger themselves is significantly less than the burger price, they will likely consider it expensive.
But as the difference between the burger’s price and the cost of the homemade option reduces, it will seem more affordable to them, and their likelihood of buying the burger will be higher.
To show you how it works, let’s take a closer look at how pricing affects the buying behaviour of the Students segment.
The formula we used:
This results in a graph that shows how the probability of Students buying a burger drops as the percentage difference between the burger price and homemade cost increases:
You can see that Students are very price sensitive as their purchase probability begins to drop at a very low percentage price difference between buying the burger or making it at home.
The graph is different for each customer segment. Some customers like Fit-ones and Managers have a high purchase probability even at a price difference above 200%!
This is because their buying decision is based more on stand appeal, food and service quality, brand name recognition, etc., than on price.
It’s essential to consider your target market’s price sensitivity when setting your menu price to ensure you are maximizing sales.
As I turn away from the Kiosk, it occurs to me that people who do not consider themselves price-sensitive (such as myself) could exhibit price-sensitive behaviour when they suspect monopolistic behaviour.
Hmm. That could be an excellent mechanic to add to the game.
Then again, it might make the game WAY too complex.
But we’d only be able to tell once we try it.
And that’s a wrap for today, Cheers 🥂
Don’t forget to Wishlist the game if you haven’t: https://store.steampowered.com/app/1429080/Business_Heroes_Food_Truck_Simulation/
Live Long and Prosper 👋,
Kunal & the team