Diminishing Demand for FineApps’ Canteen Food: Indifference or Incidental?
On January 20th 2015, Rajeshwar Goyal (Rajeshwar), HR and Administration Head of FineApps Pvt. Ltd. (FineApps), while having breakfast in the office canteen, was deliberating on the canteen-related problems that had been plaguing the company since a couple of months. Nine months ago FineApps had offered a perk, free oriental cuisine (lunch), for all the employees, which had elated the employees. However, within a short time employees seemed no longer interested in the canteen food. While consuming canteen food was a matter of personal choice, Rajeshwar wondered on the reasons behind the disinterest and the solution to the problem as
every month, FineApps paid a huge sum to the vendor providing canteen services.
FineApps Pvt. Ltd.
FineApps Pvt. Ltd. (FineApps), a Pune-based mobile app development company, was founded in April 2012 by two friends – Amit Khanna (Amit) and Prateek Mittal (Prateek). Amit was the CEO and Prateek was the COO of FineApps, which began its operations with 10 employees (including the two Co-Founders). As time progressed, FineApps grew by leaps and bounds, adding more and more employees to keep up with the increasing business requirements..................
Free Oriental Cuisine
In April 2014, on FineApps’ 2nd anniversary, employees were gifted a new office canteen serving oriental cuisine for lunch to all the employees for free. By then, the employee strength had risen to 120 and the Founder-Owners thought it appropriate to replace the small cafeteria with a large canteen. This was an attempt to reward the employees for their hard work over the past two years................
Rajeshwar’s Dilemma: Diminishing Trend of Food Consumption from Office Canteen
By January 2015, after nearly 9 months of the opening of the canteen, a large number of employees had reverted to home food. It was noticed that canteen food was being consumed mainly by new joinees (who were predominantly single) and other unmarried employees. This became an intriguing issue for Rajeshwar, as most of the informal conversations centered around food consumption from office canteen..............
Deliberations on Food Consumption from Office Canteen
During the meeting, the departmental heads raised their concerns which were discussed by all the members present. When it was Rajeshwar’s turn to voice his concerns, he apprised every one of the diminishing trend of food consumption at the office canteen.........
Assignment Questions
I. Using the case facts, illustrate the manifestation/operation of the following concepts: (a) Utility, (b) the difference between Cardinal Utility and Ordinal Utility, (c) Consumer Surplus, and (d) The Law of Diminishing Marginal Utility. Why are these concepts important for understanding the consumer behavior of a rational consumer?
II. How do you think an understanding and appreciation of the concepts of (a) Paradox of Value and (b) Economics of Addiction, would be helpful in understanding the consumer behavior of a rational consumer? How would the case facts help in understanding the purport of these two concepts?
III..................
Exhibits
Exhibit I: Increasing Trend of Canteen Food Consumption
Exhibit II: Organizational Structure: FineApps Pvt. Ltd.
Exhibit III: Food Consumption Pattern (2014-2015)
Exhibit IV: Consumption of Canteen Food – Satisfaction Gained