The emphasis not being the lowest priced burger

Subsequently the stature of the revenue manager has grown. This is simply because companies increasingly recognize the impact on profits achieved by talented revenue managers.

Today revenue managers are involved in all key sales and marketing decisions. But that’s true in only two out of the three major revenue producing areas in most full-service hotels. There remains only one significant revenue generating department in which a widespread “revenue managers keep out: this means you” mindset clearly persists.

The cheeseburger mentality is so widespread because it is elegant in its simplicity. It can be summarized by the following guiding principle:
Cheeseburgers sell for more than hamburgers because they include cheese.

The use of this principle can be seen on the menu prices of almost every full-service hotel food outlet as well as free standing restaurants ranging from fine dining to quick service.

need to make a profit these days. If you don’t have a top line, you can control costs all you want, but you won’t make a profit.i.

The truth is that only after selling prices accurately reflect consumer perceptions of value can a business determine the costs it can incur while still generating needed profits.

The Five Guys Burgers and Fries restaurant chain is one that does not have the cheeseburger mentality. They apply customer-centric revenue management principles well. Their product is simple and of high quality. The burger is sold at a fixed price. The emphasis is not on being the lowest priced burger. It is on value delivered. The customer orders the burger and chooses whatever toppings they want added; …at no extra charge. The result in the customers’ mind is, “Free cheese …and anything else I want! What a great deal”. Five Guys gets it. The value delivered is primary; product cost is secondary.

It’s time the third revenue producing area in full service hotels discovers the importance and impact that customer-centric revenue management can have on food and beverage sales. Customer-centric revenue management is here to stay. It’s not a fantasy, it’s not a phase,…it’s reality. It’s essential to success. When revenue managers are allowed in hotel F&B meetings perhaps, they’ll be given a chance explain why.

1.This article takes the position that many in the foodservice industry equate better quality ingredients with required higher prices . That certainly makes sense with fine wines and prime steaks. Do you think it make sense with other food and beverage items that are less well known ? Explain your position.

2.Some food service operators take the position that if their customers only knew about the high-quality ingredients that were be using to prepare their menu items, then those customers would be glad to pay the higher prices higher-quality ingredients should command. Do you think it is a responsibility of restaurant operators to educate their customers about food and beverage quality? If so, how might they go about doing so?