Menu pricing is a major task in restaurant business. A restaurant always knows the issues in defining prices in hotel menu. It is a major challenge for restaurant owner to make perfectly priced menu because it has a great importance for restaurant business. Prices always effect a restaurant in long term.
You might discover clear prices for drinks and food that more or less fluctuate depending on which kind of restaurant is selected in the market.
How you can fix the prices in menu that will suit you and your customer too?
The menu pricing is an essential task for a restaurant owner. Pricing has to be done right from the beginning, as this will make business profitable. Calculate approximately the real cost of food item, from your supplier all the way to the dining. The restaurant may include delivery charges, cooking expenses and employee salary in addition to the wholesale price of the ingredients. Every item in the menu should be priced according to the purchasing cost of raw material plus processing cost plus labour cost plus energy cost plus rents etc.You may include your chefs in pricing activity. They can help you by giving the precise amount of raw material needed to make a particular dish
You can also use food cost percentage formula which shows the amount of expenses incurred in preparing a dish. Try to use quality products in preparing food items it will be expensive but reduce the wastage and loss. The restaurants which follow standard recipes and the amount of ingredients are measured and fixed, they save more money.
The main function is you have to understand what your customer wants or what he perceives about the service. The important factor is the psychology of your guest. It can be observed through questioning and observation. When you are making decision of how much to charge or what is the best price. We may say that, pricing is all about what your guest is ready to pay for your food or service. However the pricing definition may be improved through different authors. But the most basic is the value of a product or service based on experience, while many times we can say that the accurate price is a matter of perception. The restaurant staff must be aware of how their guest perceives their prices, and ways that they can influence their perception.
Pricing can be affected by:
- Type of a menu
- Labour involvement
- Portion size
- Availability of seasonal vegetables and fruits
- Speciality or commodity menu item
- Food cost percentage
- Restaurant location city status etc
- Market value of a restaurant
- Cost of wastage
- Competitors pricing strategy
- Meal timings (lunch or dinner)
- Categories and classification of food items
- Food appearance etc
Pricing is a sensitive function as it has great impact on customers perception so try to manage it in a proper way.