The Art of Pricing

Chapter One

Chapter 1

Hidden Profits: Pricing for Profits and Growth

My friend David Straus has always been interested in cooking, not just as an avocation but as a career. He’s followed the tried-and-true career path of other successful chefs: attending culinary school and cooking at a variety of restaurants. Dave combined all of these experiences into a unique style of cooking and shares a trait that distinguishes the great from merely good chefs: he cooks to please his customers. So it wasn’t a surprise when he recently called to tell me that he was opening his own gourmet restaurant.

After catching up with each other, Dave shared a business problem that he was struggling with. “Rafi,” he said, “I don’t know what prices to set on my menu.” With a hint of exasperation, he went on to wonder aloud, “Should I price the prime strip steak with morel mushrooms at eighteen or thirty-one dollars? How will the thirteen-dollar difference affect the number of customers that patronize my restaurant?” His pricing decision was further complicated by conflicted feelings of “not wanting my restaurant filled with just a b ... read full excerpt from: The Art of Pricing ebook