Pricing strategies used in Restaurants to help them reach their target profit
Penaflor, Marivic (2023)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023060116855
https://urn.fi/URN:NBN:fi:amk-2023060116855
Tiivistelmä
This thesis aims to help restaurant owners find the most effective pricing strategy to reach their desired profit. In today's climate of rising food costs and inflation, implementing the proper menu pricing methods is crucial to maintaining profitability. Finding a balance be-tween sustainable costs and customer satisfaction is challenging for independent restaurant operators, but it is essential for success. Diverse strategies and approaches to improving profitability are being implemented. Pricing and revenue management (RM) techniques have become a popular field of research in restaurant management literature. One such strategy is an application of revenue management, aiming to maximize revenue by applying different pricing techniques, market segmentation, and inventory management of available capacity.
The thesis comprises a theoretical framework and practical research realized through expert interviews. The theoretical framework consists of restaurant revenue management and pricing management. The pricing techniques and strategies were discussed, as well as other essential elements that have to be taken into consideration when calculating the price, including careful analysis to determine that the increased revenues will increase profitability in both the short and long term.
Pricing food in the restaurant industry requires understanding food costs and is a complex task. When determining menu prices, there are several factors to consider, including labor and food costs. Effective pricing techniques can attract customers to specific products and services. Various strategies and approaches are being utilized to improve profitability, including pricing and revenue management. This area of research is becoming increasingly popular in restaurant management.
The conclusion offers recommendations for future research, lists other pricing strategies potentially suitable for different types of restaurants, and suggests impact evaluation before any pricing method is implemented.
The study found that utilizing pricing techniques allows a restaurant to truly understand its operating cost structure and the price perceptions of its guests, and the restaurant industry typically establishes prices by marking up a variable cost percentage and by intuition or by trial-and-error methods. Furthermore, it illustrates which method would be the best for restaurant managers/owners to use in pricing their menus.
The thesis comprises a theoretical framework and practical research realized through expert interviews. The theoretical framework consists of restaurant revenue management and pricing management. The pricing techniques and strategies were discussed, as well as other essential elements that have to be taken into consideration when calculating the price, including careful analysis to determine that the increased revenues will increase profitability in both the short and long term.
Pricing food in the restaurant industry requires understanding food costs and is a complex task. When determining menu prices, there are several factors to consider, including labor and food costs. Effective pricing techniques can attract customers to specific products and services. Various strategies and approaches are being utilized to improve profitability, including pricing and revenue management. This area of research is becoming increasingly popular in restaurant management.
The conclusion offers recommendations for future research, lists other pricing strategies potentially suitable for different types of restaurants, and suggests impact evaluation before any pricing method is implemented.
The study found that utilizing pricing techniques allows a restaurant to truly understand its operating cost structure and the price perceptions of its guests, and the restaurant industry typically establishes prices by marking up a variable cost percentage and by intuition or by trial-and-error methods. Furthermore, it illustrates which method would be the best for restaurant managers/owners to use in pricing their menus.