Wednesday, November 9, 2016

Week 6 EOC: Setting Menu Prices

With setting menu prices, there is more to the process rather than finding your ideal food cost percentage and calling a price good. The dishes worth is what sets the dishes price. In order to draw customers in, prices must stay competitive within the area and industry to keep customer flow steady. "if an owner plans to open a quick-service restaurant (QSR) featuring hamburgers, he or she should explain whether the proposed restaurant’s pricing structure will place it in the lower, middle, or higher range of its competitors’ pricing structures." (pg. 100) 
Prices within a restaurant must remain at a number that will satisfy guests rather than scaring them away. Too low of prices can scare guests away because they fear it may not be 'of quality'. However, the prices cannot be too high for guests fear they are paying 'high price for low quality'. 
The issue with advertising items at a low price to the public, is that once at that price, it must remain the same in order for customers to return to the establishment. If advertising a dish for $9.99 at a promotional price, they may bring in new customers, but do not have the ability to raise the price without upsetting cliental, unless they plan to alter the dish in a way to make it seem more filling or special. "a plan developer might highlight that his or her establishment will feature healthy and nutritious menu items in a fast-casual setting, or that it will offer fine dining in an atmosphere that takes advantage of a spectacular ocean view." (pg. 101)
With that, planning a restaurant should take into consideration where their restaurant will be located and should establish their target market. These components can have a large effect on what their customer base will be. "guest profile is a marketing tool that helps managers focus on the specific characteristics of guests they hope to attract to their operations." (pg. 6)

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