Pricing Strategy:

Pricing strategy of Knock Knock is Customer Value-Based Pricing, particularly Value Added Pricing. That is, Knock Knock attaches value added features and services in order to differentiate their offers from competitors. There are many features that makes Knock Knock different from competitors. For instance, the play area is designed specially to enhance a healthy environment for kids, use of plastic materials is at lowest possible level, instead, organic materials are used. Even the floor is designed in a way that minimizes the possibility of injuries if kids ever fall. Materials that are used in service (plates, forks, place mats…) are also specially selected and can be customized according to party owner’s selections. Entertaintment and service team are also selected in a manner that supports Knock Knock’s vision of high quality. Knock Knock supports higher prices than competitors by introducing such differentiations instead of cutting prices to meet competition. Moreover, organizations are introduced as packages; each organization’s content can be customized by customers. (content of menu, entertaintment features etc.) Prices of packages differ according to their content.


Internal Factors Affecting Price:

As mentioned above, Knock Knock positions itself as a brand that makes offerings superior to its competitors with relatively higher prices. Knock Knock’s value proposition is More for More, in a nutshell. As a consequence, Knock Knock’s prior market objective is to obtain and keep product quality leadership. Therefore, pricing decisions are made in a way that supports this perspective rather than cutting prices down to match competitors’ prices.


External Factors Affecting Price:

Knock Knock is involved in Oligopolistic Competition in the market. Although company policy doesn’t support cutting down prices to catch competitors, Knock Knock is still sensitive to competitors’ pricing policies because almost all customers negotiate in a tough manner by setting competitor prices as a benchmark.


Price-Demand Relationship is inelastic for Knock Knock since its service is considered as unique, high quality and luxury. Moreover, most of the customers perceive throwing parties at Knock Knock as a part of their prestige.


Product Mix Pricing Strategy of Knock Knock is Product Line Pricing. That is, cost of different organizations in Knock Knock’s product line differs according to customer evaluations of different features and cost differences of different organizations.


by Müge Taşelmas



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