The Impact of Prix Fixe Menu Price Formats on Guests’ Deal PerceptionCenter for Hospitality Research Publications
AbstractA web study of nearly 500 U.S.-based respondents compared three possible formats for presenting the service charges for a prix fixe meal, namely, as a percentage added to the meal price, as a dollar amount added to the meal price, and as an unknown amount obscured by inclusion in the full meal price. For those who received a single price only (with an unstated service charge), the respondents estimated a mean service charge just over 13 percent, which is reasonably close to inferring the commonly applied 15-percent service charge. The respondents thought that a 12-percent added charge was good value, but when the stated service charge was higher than the conventional 15 percent they viewed the meal as a bad deal compared to the meal with the unknown service charge included. Survey participants regarded the dollar-amount service charges similarly, but this format also may serve to obscure the service-charge calculation. The chief implication for restaurants is that even with a prix fixe menu, guests are making value calculations at all times, and the service charge is one of those value issues—one that seems to stick out in customers’ minds.
Citation InformationWang, S., & Lynn, M. (2010). The impact of prix fixe menu price formats on guests’ deal perception [Electronic article]. Cornell Hospitality Report, 10(15), 6-15.