Question 6: Franks All-American BarBeQue is planning to significantly expand its takeout business. Currently, customers come into the restaurant and order from the menu. With the new Darien facility and website, customers will be able to order online or fax an order to the restaurant. Frank and Robert have been arguing over how to structure the takeout portion of their operations. Frank wants to maintain the approach where customers order items from the menu. Robert believes that in todays world, it would be more convenient for customers to order complete prepackaged meals.

Father and son have argued about the nature of these meals.

Frank has suggested a limited number of standard meals that could be prepared during the day and sold in the evening when commuters are returning home. However, this might mean that excess inventory would be built upon unwanted items. Robert wants to offer a greater variety. These would include the main course, two side dishes, and a dessert. Because there could be a large number of combinations, most would have to be made after the receipt of an order. The rush to make these meals would drive up costs.

How would you go about pricing these two types of meals? (Hint: review pricing objectives and pricing strategies in the textbook).The question is not wanting you to determine prices (how could you with the limited information? ) but is about the methodology Frank and Robert can use to arrive at suitable prices that can be sustainable for the business (and meet one of the customers perceived pricing objectives.)