Skip to main content

How bars and restaurants make you spend more money



The menu of a restaurant is not just a list of food and drinks, it serves as a clever marketing tool that guides its guests into ordering what the restaurant wants to sell and subsequently makes more money.

The expensive entrée on the top of the list
A high-priced entrée on the top of the list serves as an anchor point. The Restaurant does not intend to sell this entrée as it merely serves to create the impression that the subsequent entrees are not as expensive. This strategy tempts customers to order the second most expensive dish that could also be more profitable to the restaurant.

A descriptive menu increases sales
Research by Wansinkj et al (2001) found that the more vividly the dishes and drinks are described the more sales increase, up to 27%. Attributes like textures, flavours, the origin or quality all contribute to an increase in sales.

Offering meals in two sizes
Sometimes meals are offered in two sizes however the customer has no idea what the difference is. The customer is lured to the smaller portion because it is cheaper. The restaurant wants to sell the smaller portion because it is more profitable than the bigger portion.

The display of the price
Have you been in bars or restaurants where the price on the menu is either displayed without the $ sign or written out in words? That means that they are applying pricing psychology. Here are the 3 options in which price can be displayed on a menu:

Numerical with dollar a sign: $10
Numerical without a dollar sign or decimals: 10
Displayed in words: ten

Researchers from Cornell University found that not displaying the dollar sign or just writing the price out in letters makes us forget about the price; we no longer connect the number with money and subsequently end up spending more.

Next time you go out to a Restaurant or Bar have a look at their menu carefully and see if you can spot some clever marketing strategies that lure you in to spending more.

 www.octalonegotiation.com


#negotiationskills #restaurantmarketing #negotiation #behaviouraleconomics

Comments

Post a Comment

Popular posts from this blog

Top 5 negotiation tactics that are used by buyers

When a buyer and a seller negotiate over a deal it is in the interest of each party to get the best deal possible. Here are the four most common tactics buyers use in a negotiation in order to get to the best deal possible. The Russian Front This is a tactic whereby the buyer presents the seller with only two options.   One is so terrible; it feels like being sent to the Russian Front which makes you agree to the other options. Compared to the first option the second option does not look that bad now. Don’t make the other party put you under pressure, don’t accept either option. Ask for an alternative or come up with a counter proposal. Good guy bad guy In this tactic you have one person making very high demands. This person is also often cold an unapproachable. The aim is to intimidate the selling party. The good guy on the other hand has a more reasonable approach and shows a willingness to concede and come to a deal. The purpose of this tactic is to set the ...
Post a Comment
Read more

What is Black Friday and why it is not worth it if you are a great negotiator.

All last week was hyped up by ‘Black Friday’ Sales. But what is it and why do we have it in Australia and is it worth it? Black Friday originates from the US and is the Friday after Thanksgiving which is the fourth Friday in November. Thanksgiving is a public holiday in the US. In the 1950s people used the Friday as a sick day and went shopping to get a head start in their Christmas shopping. Eventually in the 1960s this day turned into another paid leave day or shall we say into a paid ‘shopping day’. It has become a made-up event to drive consumerism. Many believe the term ‘Black Friday’ is used for profit making; black numbers in the ledger books; but that is not entirely correct. While this is the meaning today it meant something totally different in the 50s and 60s.  According to Bonnie Taylor Blake, a researcher at the University of North California, the term originated in Philadelphia by the Philadelphia police as they saw the day as a terrible day. The city was...
2 comments
Read more

The most common negotiation mistakes people make and how to avoid them

Negotiation is uncomfortable, it put us under pressure, and it is something most of us want to get over and done with as soon as possible. A negotiator who is not trained well is not able to think clearly under pressure and might make mistakes such as talking too much and sharing information that should have not been shared. Here are the 5 most common negotiation mistakes that people make; it is important to be aware of these and think of strategies overcome these mistakes and become a better negotiator. 1                 Being unprepared We are all time poor and rush to get things done. It is therefore even more important to set priorities and make time to prepare. When preparing you uncover important information and gain control and power. It is vital to understand what is important to the other party, how they will approach the negotiation and how they might react to your demands and proposals. It...
Post a Comment
Read more