And here’s another thing: by lowering your price, you could be making that meal less desirable to the consumer. Why? Because a lot of people associate cheap prices with poor quality. (Just think back to the last time you were looking for a nice bottle of wine and automatically rejected everything under $20.)
What Apple can teach you about value
Ever seen a stress ball, pen, bottle opener or free t-shirt with the Apple logo on it? Of course not. (If you have, I’m willing to bet $100 it was done without Apple’s permission.)
Apple’s business is all about innovation, and so their logo only goes on their products. It’s what makes an Apple product an Apple product.
And their products are all the proof we need to show consumers don’t buy what you make, but rather why you make it. Why else would people line up for hours (if not days) to get the latest Apple product when they could buy it a week later just by walking into the store?
But if they put their logo on a non-innovative product, it would lower the perceived value of every other product they make.
Price vs value
There’s a big difference between an item’s price and its value. Or at least there should be. The smaller the gap between an item’s perceived value and it’s selling price, the less likely that people will want to buy it.
So while it’s good to know what your menu items cost to make, don’t use that knowledge to set the price. Instead, base it on the item’s value to those in your target market.
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