Menu Design Menu Pricing Psychology 1 — Questions and Answers
Question 1: What is 'charm pricing' in menu design?
- Using decorative typefaces for price displays
- Ending prices in .95 or .99 to make them feel lower than a round number (Correct answer)
- Highlighting prices with gold ink
- Placing prices only on the back page
Correct answer: Ending prices in .95 or .99 to make them feel lower than a round number
Charm pricing exploits the left-digit effect — diners perceive $9.99 as significantly less expensive than $10.00 because they process the leftmost digit first.
Question 2: What menu engineering term describes a menu item that is highly popular but has a low profit margin?
- Star
- Plow horse (Correct answer)
- Puzzle
- Dog
Correct answer: Plow horse
Plow horses are high-popularity, low-profitability items that drive traffic but contribute little to the restaurant's bottom line.
Question 3: The 'decoy effect' in menu pricing works by:
- Hiding the most expensive item in a footnote
- Placing an overpriced item next to the target item to make it appear as a bargain (Correct answer)
- Using identical prices across an entire section
- Removing currency symbols to reduce price awareness
Correct answer: Placing an overpriced item next to the target item to make it appear as a bargain
A decoy item priced significantly higher than the target makes the target seem reasonably priced by comparison, steering diners toward the restaurant's preferred order.
Question 4: Research from Cornell's Center for Hospitality Research found that removing dollar signs ($) from menu prices:
- Confused diners and reduced orders
- Led diners to spend more money (Correct answer)
- Had no measurable effect on spending
- Increased complaints about value
Correct answer: Led diners to spend more money
Cornell research showed that diners at tables with numeral-only prices (no $ symbol) spent significantly more than those shown prices with dollar signs, because the symbol triggers a pain-of-paying response.
Question 5: What is 'menu engineering' as defined by Kasavana and Smith (1982)?
- The technical process of printing and binding menus
- A method of analyzing menu items by popularity and profitability to optimize placement and design (Correct answer)
- The CAD system for laying out menu pages
- Engineering restaurant equipment to match the menu format
Correct answer: A method of analyzing menu items by popularity and profitability to optimize placement and design
Kasavana and Smith's menu engineering framework classifies items into Stars, Plow Horses, Puzzles, and Dogs based on their profitability and popularity to guide design and pricing decisions.
Question 6: Why do upscale restaurants often present prices without cents (e.g., '$32' rather than '$31.99')?
- Rounding is required by fine dining regulatory standards
- Round numbers signal confidence and premium positioning, avoiding the 'discount store' feel of .99 pricing (Correct answer)
- Cents are too small to read on menu paper stock
- Round prices are easier to calculate for split checks
Correct answer: Round numbers signal confidence and premium positioning, avoiding the 'discount store' feel of .99 pricing
Round prices communicate luxury and self-assurance, whereas .99 endings are associated with discount retail — fine dining avoids charm pricing to maintain a premium image.
Menu Design Menu Pricing Psychology 1
What is 'charm pricing' in menu design?