Pricing Strategy of Fast Food

The Pricing Strategies of Fast Foods vs. Restaurants

Dateesha L. Cavin

Webster University

Abstract

Fast food restaurants compared to sit-down restaurants are exceedingly popular because they prove to fit comfortably in our active, modern day lives. Today, many people eat fast food instead of cooking meals at home. The reason for this is that many of us are constantly busy with our daily responsibilities and we are continuously on the go. We believe that we have a limit of time, and fast food restaurants are at the maximum of convenience for everyone at any hour.   You can pretty much find a fast food restaurant at every corner of a street, and most of these establishments usually include a drive through. With this they were able to introduce a way to eat food without knives, forks or plates, and most meals can even be eaten while behind the steering wheel of a car. The purpose of this paper is to analyze the pricing strategies of Fast Foods and restaurants.

Pricing Strategies of McDonalds vs. Restaurants

1. Introduction of the fast food industry

The fast food has the history of more than 100 years. Because it has an early start, it has established a model of standards of technology, capital, brand, service, the company culture and the image design, which have distinctive features. Some authorities point that usually the price of the fast food is two and half or even three more expensive than it of its cost. The profit could reach 30% of the turnover and the market operating fees could reach 40%. (The total revenue% = 30% cost +30% profit + 40% market operating fees) In the global market, the fast food has a fierce competition with numerous companies.

There are two factors that may influence the pricing. The first is to find out the market target and try to increase the market share on the original basis. Second, credit is quite important in the pricing. The company should try their best to maintain and promote the company image. It mainly centers...