The price of positions in public catering establishments consists of many factors. Let's look at them:
1. Target mark-up on the dish.
The desired mark-up level in% is determined to cover all production costs and is added to the actual cost of the dish.
2. BCG - assortment analysis.
All positions are divided into “cash cows”, “outsiders”, etc. Depending on the role of the position - you can vary the margin. For example, “dairy cows” - dishes that are bought most often, you can increase the margin to a certain limit. “Outsiders” - dishes that bring little profit, are in irregular demand, respectively, they can be removed from the assortment.
3. Dishes - “beacons”.
Standard positions that should be in every restaurant. The price of such dishes should be within the market, that is, with an eye on competitors. These are names familiar to everyone like cappuccino coffee, Caesar salad, etc.
4. The strategy of price positioning.
If you want to go to the low price segment, you can reduce prices and make a profit by increasing the guest flow. For a high price segment, rely on improving service and the quality of your ingredients.
5. Shelf life
For dishes with a short shelf life, it is necessary to stimulate demand by reducing prices, for example. If the dish is not bought, you will receive losses.
With the factors that must be taken into account in their pricing, sorted out.
Next, we will deal with possible pricing models in the restaurant business:
1. Cost plus mark-up percentage
The model, common in the restaurant business, is usually used differentially, with an orientation on the cost of dishes and drinks, and also taking into account the complexity of manufacturing.
2. Break-even point
In this case, the business owner is trying to determine the minimum mark-up level, which will allow the institution to work for profit. However, this model is doubtful, since the margin may be too high or, conversely, low, based on market analysis.
3. Perceived price
This model is focused on the price expectations of your guest. Here it is important to know your target audience and to understand whether your proposal meets the capabilities of the client. In this case, it is important to set such an OPTIMAL price when you can maximize the margin and profit, minimize your write-offs, and the guest will be satisfied with the amount he will pay.
4. Competitive price
If you offer a dish that is comparable in quality and quantity with competitors ’analogues, then you need to focus on the prices that the market dictates. Bet more - they will go to competitors, bet less - you can miss out on possible profit (here you need to consider many factors, including the breakeven point).
An exception to this rule will be some exclusive positions and offers that only you have.
5. Quantity discounts
Promotional pricing model.
Often it is used in offers of the alcohol card. In fast foods, it is also used to encourage the guest to buy more.
6. Price increase due to product improvement
It would seem, what does this model have to do with catering? But remember: the base Caesar salad, and there is a choice: shrimp or grilled chicken breast. Other options, as an example, are omelet fillers, coffee syrups, etc.
7. Sale
You will not find such a word in the menu, but here is a “dish from the chef” or “offer of the day”. The essence is the same - stimulating demand for a position by reducing prices, which will increase the turnover of ingredients and revenue for the restaurant.
8. Psychological price
The use of psychological techniques in the pricing of positions. The use of the numbers 199 instead of 200. Five, seven, nine - the same thing. It seems that the price is discounted.
9. Price differences due to geography
Basically, this applies to regions. Take, for example, the price of berries in the winter in the USA. Even in the supermarket you can buy 500 grams of packaging of fresh strawberries for 5-7 dollars. In our wholesale, the same product will cost at least $ 15. Accordingly, pricing will depend on the cost of raw materials and seasonality in each particular region.
The choice of pricing model for the assortment of the restaurant depends on your goals.
It is important not only to choose one scheme from the proposed list, but also to learn how to vary them depending on positioning and market conditions.
Anyone who knows how to operate these models will be the winner in such a difficult restaurant business market.