David Ortega is the lead researcher for an upscale restaurant group hoping to add another chain that would compete directly with the upscale Smith and Wollensky restaurants (http://www.smithandwollensky.com).The average check for a customer at Smith and Wollensky is approximately $80 to $90.1 Whenever a new venture of this type is planned, one has to wonder whether there are enough customers willing to pay premium prices given the large number of lesser priced alternatives. In fact, Smith and Wollensky is considering opening a lesser priced “Grill” that would be positioned so that the average customer check would be about half that of the original.What is it that people are willing to pay for and what sacrifices can be made to deliver a satisfying if not luxurious experience? How can he create a unique experience at a lower price? These are the questions facing David Ortega.

RESEARCH APPROACH

After considering how to study the issue, David decides a qualitative research approach will be useful. He hopes to develop a deep understanding of how the fine dining experience offers value—and perhaps

some insights into what intangibles create value for consumers in general.After considering the different options, he decides on a phenomenological approach.The primary tool of investigation is conversational interviewing. David plans to enter into casual conversations with businesspeople in the lounge of the downtown Ritz Carlton. He begins the conversation by commenting on the wine he is sipping—something like,“It isn’t bad, but it’s hard to believe they get $14 for a glass of this stuff.”

RESULTS

Two weeks later, David has conducted “conversations” with five consumers. He found them very willing and free to talk about the things they indulge in. He develops a field log of notes from the consumers’

comments. The notes are recorded verbatim.2 The following field notes are highlighted:

 

David decides to use a word count to try to identify the main themes. Hopefully, these themes can help clarify the business problem. Perhaps if the information can’t answer the questions above, it will point him in the right direction.Whatever the case, David feels the project has helped him better understand  the total value proposition offered by restaurants, wines, hotels, and other products

Questions:

1. Comment on the research approach. Do you feel it was an appropriate choice?

2. David did not inform these respondents that he was doing marketing research during these conversations. Why do you think he withheld this information and was it appropriate to do so?

Transcribed Image Text:

Respondent Date/Time Text Joe, wm, 55, attorney 12/5/08 – 10:15 PM Well, wine doesn't have to be expensive to be good. Beyond some basic price point... maybe $14 a bottle. ..I find a lot of good wines. But, the wine has to fit the situation. It has to add something. A fake Rolex will tell time; but a real Rolex tells you about you. I don't mind paying for something that's unique-even though it might not be my cup of tea. Chateau Masur is like that. It's from Lebanon It isn't always elegant or delicious, but it is always real. You always know it comes from some place very unique and is made under the most trying circumstances. Sally, ht, 45, medical sales 12/7/08 -5:45 PM We pay too much for a lot of stuff though. I like things to be genuine. When you ask for crab you get crab-not Krab with a "K." It's made of fish you know! ... I love old neighborhood Italian restaurants. They aren't always expensive. But, they have character, I think that it is very easy to spoil. I might not want a checkered red and white table cloth at home, but the italian restaurant has to have one, I have to smell the garlic from the parking lot. And, that cheap Chianti, the kind with the basket cradle-it had better be from Italyit tastes so0o good there. You know, you could pay more, but a nice dinner there with a couple of friends is worth a lot. Respondent Date/Time Text Joe, wm, 55, attorney 12/5/08 – 10:15 PM Well, wine doesn't have to be expensive to be good. Beyond some basic price point... maybe $14 a bottle. ..I find a lot of good wines. But, the wine has to fit the situation. It has to add something. A fake Rolex will tell time; but a real Rolex tells you about you. I don't mind paying for something that's unique-even though it might not be my cup of tea. Chateau Masur is like that. It's from Lebanon It isn't always elegant or delicious, but it is always real. You always know it comes from some place very unique and is made under the most trying circumstances. Sally, ht, 45, medical sales 12/7/08 -5:45 PM We pay too much for a lot of stuff though. I like things to be genuine. When you ask for crab you get crab-not Krab with a "K." It's made of fish you know! ... I love old neighborhood Italian restaurants. They aren't always expensive. But, they have character, I think that it is very easy to spoil. I might not want a checkered red and white table cloth at home, but the italian restaurant has to have one, I have to smell the garlic from the parking lot. And, that cheap Chianti, the kind with the basket cradle-it had better be from Italyit tastes so0o good there. You know, you could pay more, but a nice dinner there with a couple of friends is worth a lot.

Answer rating: 100% (QA)

1 There is a difference between high value experience and luxury experience and people pay for diffe... View the full answer