Terra Bite Lounge: Pay What You Want Cafe

Authors: Cotte, June; Trudel, Remi
Source: Richard Ivey School of Business
Year: 2009
Company Name: Terra Bite Lounge
Number of pages: 4

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Abstract:

In April 2009, the founder and owner of Terra Bite Lounge was considering opening another location. The Terra Bite Lounge was a Kirkland, Washington café with no prices and voluntary payment. The owner believed that Terra Bite was a demonstration of a high level of honesty and trust, between himself and the customer. There were several considerations to evaluate in deciding to open a new location. Where should the new location be? The current location was in an affluent suburb but the owner believed that several types of neighbourhoods would be receptive. What types of consumer characteristics would best be suited towards this model of trusting that payment would be made? Is there anything that could be added to the current model to make Terra Bite more successful? He was careful to consider those changes or additions that were consistent with the current social trust component of the original Terra Bite model.