Much of the information used to objectively price menus is readily available in

Question

Much of the information used to objectively price menus is readily available in the restaurants operating budget which is required for numerous other purposes in addition to menu pricing. Since this information is readily available, what are examples of reasons why restaurant managers would not want to use this information? How can objective pricing methods help to establish reasonable prices? How do restaurant managers factor value (from the guest's perspective) and profitability into menu pricing decisions?

Explanation / Answer

Restaurant managers would still not use the information available to objectively price menus because implementation requires formulation of proper initiation plan and evaluation criteria. The organization needs to identify strategy for implementation and continuously track the progress. The whole process is cumbersome and needs resources in terms of time and manpower to implement. Due to this reason, resaurant managers hesitate to do so.

Objective pricing methods can help to establish reasonable prices by tracking the current prices and customer feedback about it. Then based on the customer feedback and financials of the organization, such methods help to improve the pricing strategies of the organization and set revised prices which will help to maximize organizational profits and revenues.

Restaurant managers generally act based on the feedback provided by the customers and viability of implementation plan. After proper cost-benefit analysis of change required to be done, if they find that the change is profitable for the organization and also addresses customer concerns, then it gets implemented on pilot basis and seeing the progress, full implementation can be done.

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