Pay What you Want: A promising pricing tool

A recent study has shown that ‘pay what you want’ pricing increases consumers intent to purchase.

A study conducted by the American Marketing Association has shown that the pricing mechanism is a promising tool and may also improve the seller’s credibility.

‘‘Pay what you want’ may be preferred by consumers for the level of control offered and the novelty of the mechanism,’ says the study report.

In an economic downturn, restaurant owners are feeling the pinch. People are being discouraged on eating out, but the ‘pay what you want’ policy is set to change their mind.

Janice Raschko, owner of ‘One World’, a Western Australian café with the same pricing tool says, ‘Eating here [One World] is affordable. It costs a fraction of what you would find in other places.’

She believes the pricing mechanism is not just a business tactic but can help eliminate hunger in the community. Those who can’t pay for meals can volunteer in the restaurant.

Another café running under the same pricing scheme is known as ‘Lentil As Anything’, a rustic café in the Abbotsford Convent in St. Heliers Street.

Hannah Coleman, a volunteer at Lentil, says the restaurant is a way for the community to get together and have a healthy meal.

‘Our no prices policy is based around social inclusion…what we’re trying to do is take the focus off people’s financial situations,’ she says.

The restaurant focuses on multiculturalism and cooks vegetarian meals from around the globe.

‘We love the fact that people can come in and experience something from another culture’, Dahl says.

Ruby Garwood, a chef at the restaurant, shares her thoughts on the ‘no frills’ restaurant, ‘Food is about sitting down and sharing a meal with people and talking to one another and just, you know, getting back in touch with ourselves.’

Lentil’s ‘pay what you want’ policy and multicultural focus has paid off. The chain recently opened their fourth restaurant in Footscray.

Check out my interview with Lentil As Anything’s volunteer Hannah Coleman, cook and entertainer Osman and chef Ruby Garwood.

http://www.speedyshare.com/files/21733069/LENTIL_AS_ANYTHING_INERVIEW_2.wav

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By Teagan King

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~ by The Garlic Press on April 2, 2010.