Pricing Strategy

1 Pricing Strategy The pricing strategy entails setting prices to achieve an equilibrium in the marginal costs and revenue. Thus, the sales volume of a particular product is directly influenced by its pricing strategy. The development of an appropriate pricing strategy is hindered by the level of competition in the industry. Hence, business rivals may reduce their prices to achieve a competitive advantage. Chuck E. Cheese's pricing strategy allows parents and their children to play as many games as possible at the same price.

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2 The prices charged are low given that the company has maintained them since its inception in 1977 and are, thus, affordable to most people. As such, customers tend to have preferences for games offered at Chuck E. Cheese at the expense of its industry competitors.

Thus, the company registers long queues of customers, with most of them spending a lot of time on the games due to the low pricing.

Similarly, Chuck E. Cheese also believes that its food quality is more favorable than what its competitors offer, thus providing customers with superior value for their money. The organization’s competitive strengths lie in its established and well-recognized brand and the relative quality of the foods and services it offers its guests (Chuck E. Cheese, 2020). Chuck E. Cheese's competitive strengths are also found in the location and attractiveness of its stores, as well as the quality and variety of entertainment it provides. Leveraging such competitive strengths, the organization can command slightly higher prices over its industry rivals to help it keep providing high-quality products and services to the customers.

3 References Chuck E. Cheese (2020). How all you can play works. Retrieved from https://www.chuckecheese.com/plan-your-visit/all-you-can-play/ Nagle, T. T., & Muller, G. (2018). The strategy and tactics of pricing. Routledge.