IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-0-230-29477-6_17.html
   My bibliography  Save this book chapter

Practical Pricing and the Restaurant Industry: Application of Revenue Management Principles to Pricing Menus and Services

In: Revenue Management

Author

Listed:
  • Sunmee Choi

Abstract

Pricing is an important strategic lever for a firm’s profitability. The bottom line impact of pricing is well demonstrated by the fact that a mere 1 percent increase in price can lead to 15–20 percent increase in the bottom line when no increase in cost and no decrease in demand can be assumed. For example, for a product the current price of which is $10.00 and profit margin is 5 percent ($0.50), when the price of this product increases 1 percent from $10.00 to $10.10, the price increase of $0.10 goes directly to the profit since no cost increase is assumed. This 1 percent increase in price results in an increase in profit by 20 percent ($0.10/$0.50).

Suggested Citation

  • Sunmee Choi, 2011. "Practical Pricing and the Restaurant Industry: Application of Revenue Management Principles to Pricing Menus and Services," Palgrave Macmillan Books, in: Ian Yeoman & Una McMahon-Beattie (ed.), Revenue Management, chapter 16, pages 221-233, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-29477-6_17
    DOI: 10.1057/9780230294776_17
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-0-230-29477-6_17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.