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Article
The Impact of Prix Fixe Menu Price Formats on Guests’ Deal Perception
Center for Hospitality Research Publications
  • Shuo Wang, Ph.D.
  • Michael Lynn, Ph.D., Cornell University
Document Type
Article
Publication Date
11-1-2010
Abstract

A 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.

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© Cornell University. This report may not be reproduced or distributed without the express permission of the publisher
Citation Information
Wang, 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.