Microeconomic Analysis of

Fresh ‘N’ Fillin

Group 8
Under the guidance of Prof. Abhradeep Maiti
Akshay Pandey | Braveen Varma | Prateek Paul | Prateek Jadhav | Shaleen Chaudhary | Suman Nally Raj | Tushar Madaan
 Introduction

• Franchisee model based restaurant chain in world of Fresh n Healthy food & beverages
• Kashipur outlet, a dream project of Mr. Kapil Sharma, started operations in 2017
• First fast food restaurant in the city, serving variety of fast food at affordable price
• Famous place to hang out among youth and student of the city
 Industry Analysis
•Fast food outlets are take-away. People eat there more than five
times a week and often, one or more of those five times is at a
fast food restaurant Nearly from its inception, fast food has been
designed to be eaten "on the go", often does not require traditional
cutlery.

• The segments we are focusing on here is the middle-class segment,

the Nearby localities who have fast food craving and the Students
from colleges and schools. Due to the shop’s uniqueness of being one
of its kind restaurant in and around the area it can easily attract
customers.
Major Players
Major Competitors MARKET SHARE
Others, 7.71

The Pizza Bite, Fresh 'N' Fillin,

18.82 33.57

Devil's Burger,
13.34

Grill Inn, 26.56

Industry Concentration Ratios
Four Firm Concentration Ratio (FFCR)
Firm Market Share
Fresh ‘N’ Fillin 0.3357
Grill Inn 0.2656
The Pizza Bite 0.1882
Devils Burger 0.1334
C4 = 0.3357 + 0.2656 + 0.1882 + 0.1334
= 0.9229

Firm (Market Share)^2

Herfindahl - Hirschman Index (HHI) Fresh ‘N’ Fillin 0.112694
Grill Inn 0.070543
HHI = 10,000 * 0.242395
The Pizza Bite 0.035419
= 2423.95
Devils Burger 0.017795
Others 0.005944
It is moderately concentrated market
Total 0.242395
 Demand Equation
• Linear Demand Function(RE) does not follow conventional demand
equation

• Qxd= α0+ αxPx + αyPy + αMM+ αHH

• Where:
• Qxd = Quantity Demanded
• Px= Price per unit, which is increasing with time
• Py= Price of substitutes. In this case, other lower priced substitutes
are not affecting the total demand
• M= Disposable income of consumers. Higher the income, higher is
the demand.
• H= Other variables affecting demand
Factors affecting Demand and Supply
•Changing income distribution
•Changes in income and spending patterns
•Population
•Government Regulations
•Taxes
•Seasonality
•Fitness consciousness
Advertisement Effects
• Fresh ‘n’ Fillin
spends around
35000 per month on
advertisement.
• This roughly
translates to 14% of
their revenue.
• After advertisement
demand increased to
40 from 35 items.
Type of Market: Cournot Oligopoly
Dominoes, Fresh n Fillin,
Few resturants serving many
Grill Inn, Devil's Burger
customers

Resturants producing differentiated and homogeneous products

Players believe that their opponents with keep their outputs constant if it
changes its output i.e. Players believe that their output decisions will not affect
the output decisions of rival firms

Barriers to entry and exit

 Pricing Strategy
General Profit-maximizing price condition is MR=MC
Advantages of using pricing strategies
1. Yield greater profits than MR=MC rule
2. Convert consumer surplus to producer surplus

Fresh n’ fillin strategies:-

1) Second-degree Price discrimination

Cost of one Pizza > Average Cost Of 2 Pizza > Average Cost Of 3 Pizza
(for special occasions)
2) Third-degree Price discrimination

20% discount to students and different pricing at different location

 Pricing Strategy(cont..)

3) Two-part Pricing

FNF loyalty card is offered in fresh n’ fillin at a fixed price and it offers
discount to consumers who have the card.
4) Block Pricing

6 momos per plate - consumer either have to buy six or nothing.

5) Commodity Pricing

Fesh n’ fillin has several combos available – Italian Brunch

(Pizza+Garlic+soft drink), Snack n’ talk(Burger+fries+ icy coffee)
 Infinitely Repeated Games

Firm

Consumers Strategy Low Quality Product High Quality Product

Don’t Buy 0,0 0,-10

Buy -10,10 1,1

Nash Equilibrium for Nash Equilibrium for

One Shot game Infinitely Repeated game
 Recommendations

• Better advertising techniques to attract more youth through digital

marketing, pamphlet distributions so that they can operate in
economies of scale.
• Bundling in the form of combos so that consumer feels more value
at a cheaper price.
Customer Reviews
Thank You!

Questions?