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Assignment 1 Pricing Strategy Essay

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Strategic Market Pricing and Smalls’ Premium Steakhouse
By: Andrew Smalls
Professor: Irene Zoppi
MKT 402, Pricing Strategies
February 1, 2015

Strategic Market Pricing and Smalls’ Premium Steakhouse
A Premium Dining Experience
If given the opportunity to open a restaurant, it would be an upscale restaurant catering people who the desire to have excellent food and a premium dining experience. I would name this establishment Smalls’ Premium Steakhouse. My name inspires the name of the restaurant and, of course; we would specialize in all sorts of steak from filet mignon to steak burgers. My focus would be on serving premium foods at premium prices. Our differentiation factor would be the quality of our unique service. We would …show more content…

Price setting will involve the cost of food, labor, how our direct competition is pricing, and what our guest are willing to pay. Thus, our target market needs to reflect this willingness to pay (Kooser, 2014). We want our patrons to perceive the prices as an indicator of the value they will receive. The customer service and amenities are part of our value pricing as well. Next step in my strategy is to create a price structure. We will have the typical items that you can purchase from the menu in the form of price per meal, or the patron can build their meal and pay a-la-cart. The object of this pricing is putting the control into the customer’s hands. They can pay for whatever they feel offers them the most value. For instance, it reduces waste and will save the consumer money to order a vegetable with their steak and leave off the potato. This price structure will resonant well across our healthy consumption segments. Ultimately, the success of our pricing strategy will depend on our customer’s willingness to pay for the perceived value (Nagle, Hogan, & Zale, 2011). Lastly, is to offer very little in the form of discounts with the exception of marketing items to repeat customers. Sending a ten percent off coupon to a patron that has not visited the restaurant in a period is a way of getting them back into the restaurant without compromising much in the way of value. A separate part of our price strategy would be a loyalty program that we would track

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