Assignment 1 Pricing Strategy

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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 redesign the layout, so it is conducive to an upscale dining environment. It will have plenty of space between tables for the privacy of our guests and lots of walking room in the aisles and between tables. Our menu would consist of a ‘design-your-own’ section for the diet-conscious guest. This section will challenge the customers to customize their meals based on what they like. For instance, guest could order a meal focused on their diet specifications such as protein and simple carb. They would not pay the price of a full meal, but we would rate the value received for the market differentiation of this practice. In order to prevent lags in service time and loss of value, this section would be limited to foods in the restaurant. We are adding an eighteen percent gratuity to the bill for convenience of processing.The gratuity ensures our employees are consistent with their customer’s service and does not attempt to preempt services based on a perception customer who may not tip well. In addition, the guest do not have to worry about spending additional money on their meal and the staff can rest at night knowing they will be able to provide better for their families. Value Statement and Creating Value

A value proposition clearly and concisely describes the unique value of a company's products and services.The value created by my restaurant will come from the quality of food, the experience of dining in an upscale environment, and the feeling of having the staff cater to you. It is our core objectives, which will set us apart from our competition (Basu, 2014). Our value statement is, ‘real food, real chefs, and five-star service’. Every person cooking for us will have graduated from an approved cooking institution. Chefs will be graduates of a recognized cooking university. The chefs will be responsible for their section of the kitchen. They will hire and train all staff employed for their part of the kitchen. This type of leadership ensures that the quality will be excellent that comes from each section of the kitchen from the salads to the proteins, with the Chefs taking ownership of their sections successes and mistakes. We will establish ourselves in the industry as a leader in customer service. Upon arrival, a floor manager will take their coats and find out what type of seating they would prefer. Once seated, they will meet their server who would only have one other table. Keeping the quality consistent without stretching our servers too thinly and compromising quality is another part of our value communication. The guest would receive a complimentary glass of wine at their table of their choice and order their food. I believe that the customer service that we will provide will differentiate us from not only premium steakhouses, but also from other restaurants. Other amenities will be live jazz bands playing soft and soulful music at certain times during the week. Pricing Strategy

The first strategy is going to be to establish Smalls’ Steakhouse as a premium restaurant with our pricing and service. Our goal is not be the most expensive, however we will strive to be at the top of reference pricing for the local industry. The cost will be commensurate with the value...
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