Informal Pricing Approach

there are several approaches to setting prices for setting prices for selling product, such as food, beverage, or room for hotel.

•What the competition charges

•Intuition : is based on what the manager feels the guest is                     willing to pay.

•Psychological pricing :

  Prices are established on the basis of what the   guest     expects to pay.

•Trial and error pricing approach.

  First, sets a product price, monitors guests   reaction, and then adjusts the price on these   reaction.

  The problem with this method are :

o Monitoring guests reaction may take longer than the manager would like to allow.

o Frequent changes in prices make confusion among guests.