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I also believe in some places businesses don’t follow the “traditional pricing strategy”, like pricing some of their menu items a little over the cost, and still manage to make good money. Especially in a place like kyle’s I think thats the case.
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Give us more on the “traditional pricing strategy” you mention. The pricing strategies I have learned all involve establishing pricing to make COGS somewhere in therange you intend to use.

Plese give us more on this strategy; it may be what we are searching for in this philosophical discussion about price points and costs of doing business.
 
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How about this - the traditional “loss leader”.
For instance - one place advertises, HEAVILY here, $8.99 for large pizza any toppings. But you have to pick it up.
What happens is that customers shopping for pizza see the price point, and it seems like a bargain, and so that’s the place they call to order their pizza. But, gee - they want it delivered. It no longer qualifies for the price - but they place the $14.99+$1.75 order anyway.
Or they DO get the $8.99 bargain, but they add on wings and breadsticks at full price.
For every customer who actually picks up just the discounted pizza at or near cost, there are 5 or more other customers whose orders are at regular levels of profitability - though they were driven in by the low-cost “loss-leader” advertised price.

So you can go ahead and price a large cheese at $3.99 or whatever, and plan that enough people will actually want pepperoni (no special on that!) or more toppings that it won’t actually cost you too much overall margin.

Another idea - most people DO want pepperoni. Can you get a good deal on volume buying pepperoni, and instead of beating their PRICE, beat their OFFER:
$5.99 for a PEPPERONI pizza!!
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i wouldn’t give you advice on “traditional pricing strategy” because I know all of you guys know what it is. What I’m suggesting is the “forget traditional pricing strategy” principle. Anyway, what’s traditional in my place may not be traditional in yours. hekhekhek. 🙂
personally, I wouldn’t fuss that much about my cogs or blahblahs if i’m in a place where there’s no price war(i forgot the term you guys used). if that happens in my place I wouldn’t go in kyle’s direction. but at the same time i’m not going to criticize other people like kyle for example for opting for volume and not quality. Both actually work. It’s just a matter of principle. As much as possible we would like to serve good quality pizza. But crappy pizza works too. If you’re in it for pride of serving great pizzas then so be it, and if you’re in it for reviving your investment, why not serve cheap pizza with a lower quality? If that’s what the customer needs then that’s what they should be getting. Somewhere along the way that market is going to bounce back from quantity to quality.
Another thing, I didn’t post here so I would be proven wrong or prove any of you guys wrong. I think kyle needs more creative suggestions than just plain criticism (not that that’s what all you guys are doing). Don’t pay attention to me, just look at the problem. Anyway, it’s just MY opinion. 🙂
 
Kyle, I am familiar with your franchise, or previouse franchise as it may be and your situation. if you have an email address that you can shoot me or if you would like to shoot me an email we can chat. I to had a store with your numbers and I started mine two years ago this month. however, instead of going the cheap route, I beat my low priced 2.99 competition down with wits and effective marketing. your choice of going 2.99 seems to be a good choice, it sounds as if you have been battling it out but I think if you stick with it just a little while longer you can pull it out.

(by the way in the last 2 years my lower priced competition has gone out of business) if you ride it out you will beat them. Shoot me an email at Tom.Cimino at gmail dot com or leave your email here.
 
Wow! What did I stir up? A lot of great opinions. A lot of great advice. I really do appreciate it. Thanks for the demo stuff. At least I know that my instinct and gut about this demographic stuff is on target. I have decided on a supplier. Got a sign guy coming with a quote today I hope.

Getting things ready. We will open next week. Now if I can put this priing thing to bed I will be in better shape.

I have stepped back and looked at things and I can see an alternative I was kicking around with friends last night.

What if we have a $4.99 pizza, cheese and pep available every day for pick up. No substitutions, no additions. Grab N Go kind of thing. But ALSO have a regular cheese and pep pie at $7.24 ($5.99 cheese + 1 topping at $1.25) Grab N Go would simply have a bit less cheese and pep on it and would be pick up only. We could upsell the hell out of them for bread and pop. Then we can use a Grande/Sorrento blend and Pavone Pepperoni and Stanislaus or Bonta for Sauce.

Your thoughts would be appreciated.

PS. I would run a $2.99 Grand Opening Special for a week of two with regular pies, new custos only and they need to give me their name, address, phone and e-mail. That way I get good pie out, and good database info in.
 
why not give it away for free the first week. if it’s that good , then get 7.99 all the time when they come back… if it’s that good
 
I actually planned on giving away 50 pizzas a day for the first 10 days. New custos only and they would have to give me their name, address, phone & e-mail. A quick way to get 500 new folks in the Database.
 
How will you be giving these out? If mailing coupons for them, don’t expect to get them all back. Plan on about 35% if you are delivering them for free, less if you will make them pick them up.
 
Hey all a little update,

I met with my supplier guy. He put me in touch with two other guys. A Stanislaus rep (I have used Bonta int he past) and the Grande rep (I had used Sorrento W/M Mozz in the past) The Stanislaus guy let me try pizzaiola (sp?) sauce. It was OK, not great but ok. I am gonna try to mix up a batch of store made with some of the other stuff he left me. I tried the Grande cheese. P/S was Ok, nothing much better than I am used to, the W/M was great. Really liked it a lot. Then we tried the 50/50 Mozz/Prov blend and it blew me away! WOW is that stuff good! Like one of the best pies I have had in my career, good! So good in fact that I am completely rethinking my concept!

Maybe I go with a $5.99 price point and market “The difference a dollar makes” and talk about how for only one dollar more they get a great pizza instead of cardboard. Instead of being double the price as I was I am only a dollar more than LC and can be comeptitive. I know I am a bit scatterbrained about the whole thing, and I do still intend on doing a grand opening special at $2.99 for a week. What are your thoughts?

Thanks for all the input!
Kyle
 
as I struggle w/the LC model or a bit more “upscale” I would recommend you try the $2.99 but make it a 12" pie - thereby competing more w/Domino’s 3-4-$5 deal…remember tho - carry-out only…

side-bar - I’ve been trying to get Sorrento diced Mozz back in my market, as Sysco dropped it as their house brand yrs ago…haven’t tried the Grande 50/50 but might be interested…the US Foods guy is bringing in Saputo diced 4 me 2 try…

current “game plan” is to focus on “Bigger Pizza, Better Prices” concept - 16" any topping pizza for $9.99 (thin crust, NY style, 4 top max)) carry-out only…may do a 14" “PJ thicker style” for $7.99 (any topping-4 max)…

may do $5/$6 special “grab & go” for “happy hour(s)” and IF I get back into the delivery biz, charge $5 + 15% tip…
 
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