Pricing Strategy for a Restaurant Chain in Portugal, France, the UK and Germany
Situation and main goals: Our client, one of the largest fast food chains in the world, needed to determine the pricing strategy for its menus in Portugal, France, the UK and Germany. The simultaneous effect of various major factors in the buying decision (price, menu size, type of burger or sandwich, etc.) on the total profit of the individual had to be analyzed. The primary objective was to define the pricing strategy in each geographical zone in order to maximize profits without having to change the product’s characteristics.
Methodology: An online quantitative approach using advanced choice modelling software, i.e. Menu-Based Choice Conjoint Analysis, was employed. This technique proved extremely useful for studying mixed bundling, in which buyers could select pre-designed bundles of items as well as items à la carte. Hamilton worked on a simulator tool that allowed the client to simulate future scenarios and to obtain market shares and utilities.
- Creation of a supply-and-demand simulation tool with the aim of drawing up a pricing plan and product margins.
- Redesign of the products offered, prioritizing those products that combine good penetration with a higher margin.
- Optimization of a secondary line of products through the “bundle” analysis of different menus.
- Identification of the ideal price and product supply for the different target audiences.