The Effect of Price Level and Price Type on Perceptions of a Restaurant

Consumers are often drawn to certain products and services by pricing techniques. Four versions of an Italian restaurant menu were created to test the impact of price level and price type on people’s perceptions of a restaurant. Two versions were inexpensive while two were more expensive. Within each condition, one was odd priced, with prices ending in.49 or.99, and the other was even priced, with prices ending in.50 or.00. Participants reviewed one menu and completed a survey, assessing the restaurant’s quality-image and value-image and their willingness to try it. In Experiment 1 there was no time limit, while in Experiment 2 participants were allowed only one minute to review the menu which was then taken away before they filled out the survey. In both studies, the analysis revealed that people believed higher priced restaurants offered higher quality but less value and that they were less likely to try them. Odd pricing had no effect on any of the dependent measures, highlighting the need for further investigation of the circumstances under which this technique impacts consumers