How to increase menu prices without alienating your customers

Abstract

Purpose

This paper analyzes the impact of menu descriptions on the selection of menu items. Furthermore, this paper examines the relationship between menu descriptions and the perceived value of the item.

Design/methodology/approach

This study uses the different components of prospect theory (e.g. anchoring effects and framing effects). An experimental research design using mock menus was used to investigate the impact of item presentation, item selections, and menu descriptions on consumer judgments of consumer choice and price value.

Findings

The results found that detailed menu descriptions negated the impact of the price increases on the menu items.

Practical implications

The implications of this study are valuable to restaurateurs because it shows that menu descriptions have the potential to increase revenue while also increasing the value perception. The study can also be applied to similar competing restaurants. Restaurants can be successful when magnifying the differences with detailed descriptions.

Originality/value

The implications of this study can aid restaurateurs that are either developing new menus or increasing their prices. Restaurateurs are encouraged to provide a more detailed menu description in order to increase the perceived value by the guest.

Citation

Shoemaker, S., Dawson, M. and Johnson, W. (2005), "How to increase menu prices without alienating your customers", International Journal of Contemporary Hospitality Management, Vol. 17 No. 7, pp. 553-568. https://doi.org/10.1108/09596110510620636