Value Pricing For A Restaurant

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Question 1: Opening a new restaurant required many decisions. Pricing strategy is one of the vital ones that could make or break the restaurant. I would recommend the combination of value pricing and competitive pricing for the new restaurant. Value pricing strategy is to use the price to communicate the restaurant’s position, reflect the bundle benefits offered while competitive pricing gives the restaurant a competitive edge among the existing restaurants in the neighborhood. Ideally, the restaurant’s pricing should be high enough to place itself into the fine dinning categories in customers’ minds, but also competitive enough to attract customers from competitors. The decision for choosing these strategies is based on the following reasons. First of all, Center City Philadelphia is an up rising neighborhood that is home of many young professionals. This location offers the ideal market segment for the restaurant – the customers who are willing to spend extra bulks for better experience. Value pricing, in this situation, can be seen as prestige pricing. Prestige pricing plays on customer’s psychology principles of attaching quality with high price. Pricing the menu high, along with the innovative and modern look will easily put the restaurant into a good position. The key point of having value pricing is the actual value going along with the product. The restaurant has to make sure the food and service live up to the customer expectation. They should make sure the ingredients are fresh and the foods are flavorful. Having their supply delivered from local farms is a good strategy for quality ingredients with reasonable price. That is also a socially conscious effort by supporting local businesses and farms and building a long... ... middle of paper ... ...arefully allocate our money and make sure we make a sustainable plan to expand but not affecting our current services. Other factor to consider is competition from other providers in the market. We need to be up to date, sensitive competitors’ move and flexible to adjust and deal with any changes. It’s better to be proactive than be reactive after the fact. Company customer base and loyalty is also a factor to be considered. Customers in cable industry are not too attached to the service provider but they tend to avoid the inconvenience of switching carrier. We need to put customer satisfaction our priority and make it effortless for them to switch over our company. Government rules and regulations are things we also need to be mindful of. Change in regulation can have either positive or negative impact on the company, and we stay alert to make any move accordingly.

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