OnDemand WTP Pricing Research

Fast Food Brands Update Price Strategy to Pay for Higher Minimum Wage | QSR magazine

Finding the best approach

So how can leaders create effective price strategies for their brands?

A cost-based approach ties pricing strategy to items, but because customers don’t know the cost of ingredients, such complex and confusing pricing models force them to consider personal costs over the value of what companies are offering.

Anchoring a strategy to category pricing makes more sense in many cases, as customer focus then shifts from price to flavor (and overall enjoyment of the meal).

Hermann believes market-based pricing is a better plan, as this method involves looking at direct and indirect competitors in a category and aligning a brand’s position within the market’s price range. Thoughtful, simple pricing also usually yields significantly higher margin profit.

If you’re a price leader, your brand should command the highest price; if your brand is built on having the best prices, they should reflect that position.

Read complete article here:

Fast Food Brands Update Price Strategy to Pay for Higher Minimum Wage – QSR magazine.

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