Marketing Mix (4P’s)
 Product
 Price
 Place & Time
 Promotion
 Politics (Cem Boyner)
→ Marketing Mix is a STRATEGY to be
applied to different CUSTOMER TARGETS,
TO DIFFERENT SEGMENTS
Maslow’s Hierarchy of Needs
Self
Actualization
Esteem
needs
Belongingness
needs
Safety
needs
Physiological
needs
Concept Development
Very Convenient
- 30 minutes
Very
Fast service
Less Convenient
+ 30 minutes
High street fast
Food store
Takeaway
service
Carveries
Pizza restaurants
Home delivery
Slow
service
Local ethnic
restaurants
Destination
restaurants
Idea-Screening Process
Does the ides meet customers’needs?
Is the group of customers with these needs large enough to
make the idea worthwhile
Does the food and beverage operator or potential operator
have the necessary resources available to deliver the idea?
Will the idea generate customer satisfaction?
Will the idea generate a benefit to the operation? 
Meal Experience Concept
Food and beverage
Level of service
Cleanliness
Hygiene
Price
Atmosphere 
Level of Service
If there are different type of service, service is mainly the
human interface, the personal interaction between the
product and the consumer
Service can deliver benefits to the customer such as feeling
valued and should therefore be part of the concept
There are 2 factors affecting service. 1. how timely
consistent and organised the service is 2. friendliness and
attitude of the staff.
Cleanliness
Tidy prenises, smart, clean and ironed uniforms and the use
of protective gloves have positive cleanliness perception
Holding equipment badly, fiddling with hair, bad smell,
poorly presented food, poor standards of personal hygiene
give a negative impression
Atmosphere
Sight: furniture, texture, colour, employee, shape, space
and customers
Acoustic: music, speech, material
Touch: Quality of air, quality of equipment with which
customers come into contact
Taste: Recipes, wines...
Smell: used by F&B operators to attract customers, such as
coffee, bread
+ Focal Point
to be continued…
Atmosphere
Policies for:
Customers dress requirement
Smoking/non-smoking
Mobile phone usage
Maximum group size
Accepting children
Guest behaviour 
Pricing
Cost plus
Prime costing methods
Backward pricing
Rate of return pricing
Profit per customer pricing
Elasticity pricing 
PRICING & DESIGNING THE MENU
Demand Oriented Price
Market Skimming (Selective Market Penetration): In the market
skimming approach to pricing, operators use a relatively high
price to attract a small segment of the market, who can and will
pay the higher prices, where the competition is probably to
undercut the prices set for similar products, and where the
customers perceive that the value given in the form of the
restaurant experience is greater than the prices charged.
Market Penetration: market penetration on the other hand,
involves setting prices as low as possible, while still contributing
to profits. In general, lower prices generates greater sales volume
and long term profitability. This philosophy works best when
demand is price elastic, that is, when changes in price result in a
greater change in demand. 
PRICING & DESIGNING THE MENU
Demand Oriented Price
Market Skimming (Selective Market Penetration): In the market
skimming approach to pricing, operators use a relatively high
price to attract a small segment of the market, who can and will
pay the higher prices, where the competition is probably to
undercut the prices set for similar products, and where the
customers perceive that the value given in the form of the
restaurant experience is greater than the prices charged.
Market Penetration: market penetration on the other hand,
involves setting prices as low as possible, while still contributing
to profits. In general, lower prices generates greater sales volume
and long term profitability. This philosophy works best when
demand is price elastic, that is, when changes in price result in a
greater change in demand. 
PRICING & DESIGNING THE MENU
Competition Pricing
Competitive pricing establishes prices according to those set
by the competition. Prices are typically slightly below or above
those of the competition.
It is not advisable to compete principally on the basis of price,
because price is a factor that can be easily be met by a strong
competitor.
It is also not advisable to offer the same product as the
competition but at a higher price. An increasing valueconscious and educated consuming public will by from the
competition. 
PRICING & DESIGNING THE MENU
Menu Price Rounding Strategy
When a restaurant sets menu prices by only applying a formula,
you see strange prices such as YTL7.32 or YTL 19.68
Value perception pricing dictates that for mid and expensive
items, the guest does not recognize price points other than $0.50.
When the guest subconscious “read” one cheap price, they only
see the 2 in YTL 2.95. As a general rule, menu items with price
points set as level of .25, .50, .75 and .95 seem to be friendly. In
other words, if you can charge YTL1.15 for a menu, you can
probably charge YTL1.25 without any resistance. Once a
restaurant operator just apply this simple pricing philosophy, the
profit will increase by at least 2-3%. 
PRICING & DESIGNING THE MENU
Page Positioning
There are two theories regarding the placement of items on a
menu: Menu Sequence & Focal Points.
Menu Sequence: Some believe that sequence of dishes on the
menu should follow the progression of a meal. Others believe
that focal points should be used on a menu. Customers’ eyes are
naturally drawn to specific points, focal points, when presented
with a menu. The restaurateur should place menu items that
he/she wants to push in the focal points of a menu.
Food & Drink
F&B items are a list of items to meet the guest need
How ? 