**Expanded Pricing Strategy**
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### **Hybrid Pricing Model**
**1. Volume-Driven Tier (250–350 ETB)**
- **Objective**: Capture price-sensitive customers and drive foot traffic.
- **Example**:
- **Margherita Pizza (250 ETB)**:
- **Cost Breakdown**:
- Ingredients: 120 ETB (local tomato sauce, *teff* crust, Ethiopian mozzarella).
- Labor/Overhead: 80 ETB.
- Margin: 50 ETB (20%).
- **Competitive Edge**: Priced 25% below Kaldis Coffee’s frozen pizza (250 ETB) but with superior quality.
- **Upsell Tactics**:
- “Add a Drink for +50 ETB” (vs. 100 ETB standalone).
- Highlight combo savings on digital menus (e.g., “Save 100 ETB with Family Pack”).
**2. Premium Tier (500–600 ETB)**
- **Objective**: Target expats, tourists, and high-income locals seeking indulgence.
- **Example**:
- **Truffle Mushroom Pizza (600 ETB)**:
- **Cost Breakdown**:
- Ingredients: 240 ETB (imported truffle oil, wild mushrooms, goat cheese).
- Labor/Overhead: 120 ETB.
- Margin: 240 ETB (40%).
- **Perceived Value**: Positioned as “Date Night” or “Treat Yourself” option, paired with wine (300 ETB/glass).
**3. Combo Deals**
- **Family Pack (1,000 ETB)**:
- Includes 2 pizzas (500 ETB value) + 4 drinks (400 ETB value) = 900 ETB standalone.
- **Psychology**: Perceived savings of 300 ETB (1,000 vs. 1,300 ETB) drives family purchases.
- **Weekend Special**: “Island Feast” (1 pizza + 2 smoothies + dessert for 600 ETB).
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### **Localized Adjustments**
1. **10% Student Discount (Weekdays)**:
- **Mechanics**: Valid Mon–Thu with student ID; excludes premium pizzas.
- **Impact**:
- Attracts 20% of weekday traffic (est. 50 students/day @ 225 ETB Margherita).
- Drives ancillary sales (e.g., 30% buy drinks).
- **Margin Protection**: Even at 225 ETB, Margherita retains 15% margin (vs. 20% standard).
2. **Dynamic Pricing for Tourists**:
- **Hotel Partnerships**: QR code coupons in hotel rooms for 15% off (offset by tourist markup on premium items).
- **Currency Flexibility**: Accept USD at 1:56 ETB rate (locked for 3 months).
3. **Corporate Catering Discounts**:
- **Volume-Based**: 5% off orders over 10,000 ETB; 10% off over 50,000 ETB.
- **Bundling**: “Meeting Package” (10 mini pizzas + 10 coffees for 3,500 ETB vs. 4,000 ETB à la carte).
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### **Psychological Pricing Tactics**
- **Charm Pricing**: 249 ETB instead of 250 ETB for Margherita.
- **Anchor Pricing**: Display premium 600 ETB pizza first on menus to make 350 ETB combos seem affordable.
- **Decoy Pricing**: Offer a 550 ETB pizza (e.g., “Spicy Veggie”) to push 600 ETB truffle pizza as “better value.”
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### **Competitive Price Benchmarking**
| **Product** | **Boaz Price (ETB)** | **Zebra Café (ETB)** | **Kaldis (ETB)** |
|---------------------------|----------------------|----------------------|------------------|
| Margherita Pizza | 250 | 200 | 250 |
| Specialty Pizza | 600 | N/A | N/A |
| Combo Meal | 350 | 300 (pizza + soda) | 400 (pizza + coffee) |
| Tropical Smoothie | 150 | N/A | 120 (basic juice) |
**Key Insight**: Boaz’s combo meals undercut Kaldis by 12.5%, while premium tiers have no direct competition.
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### **Risk Mitigation**
- **Price Wars**: If Zebra drops Margherita to 180 ETB, counter with “Double Cheese Tuesdays” (300 ETB for 2 Margheritas).
- **Input Cost Fluctuations**: Lock 70% ingredient costs via 6-month supplier contracts (e.g., Awash Milk).
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### **Financial Impact**
| **Metric** | **Volume Tier** | **Premium Tier** | **Combos** |
|---------------------------|-----------------|------------------|-----------------|
| % of Sales | 50% | 30% | 20% |
| Avg. Margin | 20% | 40% | 30% |
| Customer Acquisition Cost | 150 ETB | 300 ETB | 200 ETB |
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**Strategic Rationale**:
This hybrid model balances **volume-driven penetration** with **high-margin premium offerings**, while localized discounts and combos build loyalty. By anchoring affordability (250 ETB) and luxury (600 ETB), Boaz appeals to Ethiopia’s bifurcated market—youthful budget diners and expat/tourist splurgers—ensuring resilience against economic shifts. 🏷️📊