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Menu pricing guide for new and existing estaurants

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ErichViray

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MENU PRICING
PRICING METHODS Subjective Pricing Objective Pricing
SUBJECTIVE PRICING METHODS LARGELY BASED ON ASSUMPTIONS. BASED ON RESULTS OF OTHER ESTABLISHMENTS. BASED ON PERSONAL EXPERIENCE. COMMON IN THE FOOD SERVICE INDUSTRY. USUALLY DONE BY PEOPLE WHO HAVE VERY LITTLE KNOWLEDGE OF PRODUCT COST OR PROFIT REQUIREMENTS. UNFAMILIARITY WITH OBJECTIVE METHODS. INEFFECTIVE METHOD OF HANDLING PRICING.
SUBJECTIVE PRICING METHODS The reasonable price method. The highest price method. The loss leader price method. The Intuitive price method.
THE REASONABLE PRICE METHOD An estimated value/ Price of the dish set by the manager of the establishment which he feels is reasonable. This price is based on feeling and sentiment rather than an analysis of the content. However, in many cases the price is right because it has been thought from the guest's perspective.
THE HIGHEST PRICE METHOD Usually, the manager appoints a panel of colleagues. Confers with the panel and includes his own opinion. Sets the highest price as concluded by all. A margin of error is also set in, so all contingencies are taken into consideration.
THE LOSS LEADER METHOD THE PRICE IS BASED ON A SALES PRINCIPLE OF PROMOTION OF (RIS) RAPID INCREASE OF SALE. AN UNUSUALLY LOW PRICE IS SET FOR AN ITEM OR ITEMS. THE MANAGER ASSUMES THAT THE LOW PRICE WILL ATTRACT CUSTOMERS AND WILL ALSO BUY OTHER ITEMS. THE METHOD IS ALSO INTERPRETED AS SCHEMES.
THE INTUITIVE PRICE METHOD The method is based on guesswork and trail and error rather than a calculated approach. The method is based on a pricing plan and if one does not work the other plan is tried. The method grossly differs from others because it is based on Hunches and guess work.
OBJECTIVE PRICING METHODS Mainly based on 3 cost procedures: Creating updated Standard Recipes. Pre-costing with current costs. Using standard recipes despite changes in staff and curtail deviation. Transferring and interpreting budget plans into selling prices. They are based on approved operating budgets.
OBJECTIVE PRICING METHODS Simple Mark- up(Multiplier) pricing methods. Ingredient mark- up method. Prime ingredient mark-up method. Mark up with accompaniment cost. Contribution Margin pricing method. Ratio Pricing method. Simple prime cost method. Specific prime cost method.

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Menu pricing guide for new and existing estaurants

  • 3. SUBJECTIVE PRICING METHODS LARGELY BASED ON ASSUMPTIONS. BASED ON RESULTS OF OTHER ESTABLISHMENTS. BASED ON PERSONAL EXPERIENCE. COMMON IN THE FOOD SERVICE INDUSTRY. USUALLY DONE BY PEOPLE WHO HAVE VERY LITTLE KNOWLEDGE OF PRODUCT COST OR PROFIT REQUIREMENTS. UNFAMILIARITY WITH OBJECTIVE METHODS. INEFFECTIVE METHOD OF HANDLING PRICING.
  • 4. SUBJECTIVE PRICING METHODS The reasonable price method. The highest price method. The loss leader price method. The Intuitive price method.
  • 5. THE REASONABLE PRICE METHOD An estimated value/ Price of the dish set by the manager of the establishment which he feels is reasonable. This price is based on feeling and sentiment rather than an analysis of the content. However, in many cases the price is right because it has been thought from the guest's perspective.
  • 6. THE HIGHEST PRICE METHOD Usually, the manager appoints a panel of colleagues. Confers with the panel and includes his own opinion. Sets the highest price as concluded by all. A margin of error is also set in, so all contingencies are taken into consideration.
  • 7. THE LOSS LEADER METHOD THE PRICE IS BASED ON A SALES PRINCIPLE OF PROMOTION OF (RIS) RAPID INCREASE OF SALE. AN UNUSUALLY LOW PRICE IS SET FOR AN ITEM OR ITEMS. THE MANAGER ASSUMES THAT THE LOW PRICE WILL ATTRACT CUSTOMERS AND WILL ALSO BUY OTHER ITEMS. THE METHOD IS ALSO INTERPRETED AS SCHEMES.
  • 8. THE INTUITIVE PRICE METHOD The method is based on guesswork and trail and error rather than a calculated approach. The method is based on a pricing plan and if one does not work the other plan is tried. The method grossly differs from others because it is based on Hunches and guess work.
  • 9. OBJECTIVE PRICING METHODS Mainly based on 3 cost procedures: Creating updated Standard Recipes. Pre-costing with current costs. Using standard recipes despite changes in staff and curtail deviation. Transferring and interpreting budget plans into selling prices. They are based on approved operating budgets.
  • 10. OBJECTIVE PRICING METHODS Simple Mark- up(Multiplier) pricing methods. Ingredient mark- up method. Prime ingredient mark-up method. Mark up with accompaniment cost. Contribution Margin pricing method. Ratio Pricing method. Simple prime cost method. Specific prime cost method.