HTM 2030 Study Guide - Loss Leader

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 2030
• Professor: Connie Zavitz

Document Summary

First, you can use subjective methods where the manager selects the price but has little or no basis on which to justify that price. However, if you use this approach, you need to be aware of how your operation is similar or different from the competitors. Finally, you can use costs as the basis for setting the menu price. There are several subjective pricing methods of menu pricing. They include the reasonable price method, the highest price method, the loss leader method and guessing. In the reasonable cost method, the manager assumes they know what a guest is willing to pay and sets the price accordingly. With the highest price method, the manager sets the price at the highest price they think the guest is willing to pay. You could also call this method what the market will bear .