Using Price Perspective with Menu Engineering

Using Price Perspective with Menu Engineering

Enter the mind of the customer, and have a little tweak. It's time to get perspective working for your menu using Menu Engineering simply by being aware of the power of pricing.

Back in November we rounded up our first look at Menu Engineering, we included this short point about perspective:
Perspective is everything, if you include an expensive dish near the top of the menu everything else will look more cost efficient in comparison. Slightly more expensive items will suggest the food is of higher quality, one study gave people a £4 buffet and an £8 buffet... the latter was rated tastier despite containing exactly the same food! It's all about perspective.
Since then we've delved deeper into the topic and it's time to expand on perspective!

£ - ££ - £££ - ££££

Date night looms and you're on TripAdvisor picking a restaurant. You notice the rough pricing of each restaurant is depicted by an amount of £ symbols. What are your first impressions on the meaning of this, and moreso how you may act upon this information?

£ - Cheap, a bargain. Whilst this may appeal for money-saving reasons, most people would rule this out as a date option as they may not want to appear cheap themselves. 
££ - Reasonable. Might be worth considering, might be seen as average or perhaps below average as it's not quite half way on our price scale. 
£££ - Premium. As the price ascends we start thinking that these choices will be of good quality. Whether the food is excellent or not, we now have an expectation that these options are worth considering purely as higher price tricks us into thinking higher quality. 
££££ - Showstopper. With the price being the highest of the range, we assume this is the best of the best. Picking such a choice would be a bit of a power move for a date, as if money is no obstacle and only the best shall suffice. 

Whilst the above perceptions may not ring true, they certainly reflect the average expectation. 

Let's take another example, you're going to a dinner party and decide to bring a bottle of wine. Knowing your host likes a Rioja, you are faced with 4 bottles to choose from in the shop priced at £5, £9, £15, £25. What might be the first thoughts on these wines?

£5 - A bargain, but if it's so cheap then perhaps it isn't great. Also, if your host recognised it as a £5 bottle of wine, what would they think of you? Would the cheapness of the wine make you look like a cheap person? Would the low spend make you look non invested in the host? 
£9 - Middle of the road. This is atypical of a safe choice but an uninspired choice. It shows you haven't picked the cheapest wine, but the thought process has basically ended there. 
£15 - The assumption is that this wine is fairly decent, and with a higher price-tag we'd start thinking it's a good gift. Perhaps not a bottle that individuals would usually buy for themselves if many £5/9 choices are there. It's not over the top expensive either, so it shows just enough care without being over the top.
£25 - It's the most expensive, so we think it is probably the nicest. Showing up with this as a gift would perhaps make the dinner party think you're a wine connoisseur with taste for the finer things in life. The £9/15 bottles may have been sufficiently lovely, but this goes above to show a big effort. 

The point being made here, is that the immediate reaction made is that the higher the price the better the quality. This may be false as many affordable items usurp the expensive ones for quality,  but most minds are conditioned to link higher price to higher quality. We once heard an experiment took place and slyly exploited this thought process. By taking a plain white Primark t-shirt (a company known for the cheapest high street clothing), removing the labels and placing it in a high end fashion retailer (we'd heard Armani), the cost was upped from £2.50 to £40. Once it was bought, the customers were asked why they'd by something plain for that price when a £2.50 version existed round the corner at only 6.25% of the price. The customers would respond in the same style: 

"It's much higher quality"
"It'll last much longer"
"The cheap ones don't fit well"
"The material is more premium"

This purchase was made out of perception, seeing a product amongst expensive items in a well-regarded brand's range.  Perhaps some customers would see the £40 white t-shirt next to a patterned £50 t-shirt and decide that the extra £10 was worth the sale. Perhaps taking the £40 t-shirt and putting it on sale at £15 would see sales skyrocket as customers think they're getting an absolute bargain despite it being 6 times the original Primark value. 

Lovely musing - but how does it help our menus?

You'll probably have already arrived at the conclusions we're angling towards. Being aware of general perceptions can help you change a customers perspective on certain menu items, it's all about how you display and order things. 

It's tempting to order burgers from the lowest cost (and most basic) to the highest cost  - but what if you tweak this idea? 

Beef Burger - £5
Cheese Burger - £6
House Special Burger - £8 
Gourmet Chef Burger - £12

What would you be tempted for? The Gourmet Chef Burger is double the price of a cheese burger, is that really worth paying for a burger if the basic is priced at only £5? Does it make you think the Beef Burger is a bargain? 
Let's redesign this section with an aim to make the House Special burgers fly out the door. 

Gourmet Chef Burger - £14
House Special Burger - £9 
Cheese Burger - £8
Beef Burger - £7.50

So what's happened here? The cheaper priced burgers have been increased in price, and the Gourmet Chef Burger has been further increased. Still we're seeing a jump between the top and bottom price, but starting high we almost expect that to be the standard before being pleasantly surprised with a much more reasonable price point following. The House Special Burger isn't too much more expensive than the standard burgers, making it appealing, yet it's still a good saving compared to the top choice. We'd also add that much like premium clothing brand lovers, you'll get some folk that insist on the best - so they'll find a noticeably higher priced item appealing as a luxury treat. 

Top tip: We looked more about naming products, using burgers as examples, in this blog post:  Naming Menu Items To Increase Sales
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