Ruby Tuesday Pricing Factors

Pricing Factors

Ruby Tuesday Inc. provides an American style of casual dining with the Ruby Tuesday restaurants and a Mexican style with Lime Fresh Mexican Grill to most of the United States by providing many types of food for a fair price. When looking at the prices for both restaurants, almost all locations across the country serve the same food for the same price. There are some exceptions where the price of the food does change but this is a range of only a dollar up or down of the average price. When comparing the prices of the different locations in different states, economies of scale is a better judgment on if the pricing is consistent across all states. For instance, the state of Oregon’s has a high minimum wage $9.25 than the state

of Florida’s which is $8.05 (Minimum-Wage.org, 2015), verifying the cause of price change. As stated in the 2014 Annual Report, Ruby Tuesday Inc. follows all the regulations in both the federal and state laws and with minimum wages fluctuating between states, making the prices change as well (p.13).
The prices that Ruby Tuesday have are not just based on the economics of what is going on in each state is doing. In addition to State and Federal price adjustments, competitors of other casual dining restaurants such as Applebee’s, BJs and Red Robin are competing for prices. Since there are other alternatives in similar location such as malls, Ruby Tuesday Inc. needs to stay within the price range to attract customers in. However, other casual dining restaurants aren’t the only competitors. Fast food restaurants such as The Habit and McDonalds can become problematic when there’s financial hardship, causing customers to be on a tight budget. But that was in the past when the economy was down. Now it’s rising up and increasing customer to dine out more.
While some consumer trends are based off the economy there are others that can be introduced through what the population thinks is the best thing to do. In recent years people have started to become more aware of what they are eating and are willing to pay any amount to make sure it stays within what is considered healthy. According to 15 Top Diet Trends For 2015, “nutrition experts recommend fish and seafood, eggs, legumes and nuts, poultry and dairy as healthy, high-quality proteins, followed by soy”(para. 6). Ruby Tuesday uses these trend factors to create healthy menu items along with healthy prices. This includes having all the different types of “fresh” meals that they have on their menu, like those off the Featured Items on the Ruby Tuesday online menu, and making sure that they can be purchased for under $20 (Ruby Tuesday, 2015)
Psychological Pricing Techniques
When customers go to Ruby Tuesday, they want a good meal for a decent price. By using different techniques of offering deals on the food, they are able to get customers comfortable to purchase their products. One strategy that Ruby Tuesday Inc. uses is odd even pricing, which as the Basic Marketing textbook states that, “odd-even pricing is setting prices that end in certain numbers” (Perreault and Cannon, 2014, p. 466). This is shown on the Ruby Tuesday’s website menu item, the Pretzel Burgers for $10.99 (Ruby Tuesday, 2015). This idea makes it seem like customers are purchasing these items for $10 rather than the more than $11 after it has been paid for which helps the customers believe that they are getting a better deal on the food that they are purchasing at the restaurants.
Another form of psychological pricing that Ruby Tuesday Inc.

uses is price lining or as the Basic Marketing book puts it, “a few prices cover the field” (Perreault and Cannon, 2014, p.466. For example using the online menu for the Ruby Tuesday in Beaverton Oregon, the appetizers are all around one price while most of the main course items are more expensive but still all linger around similar prices to each other. This makes the customer feel as though they have many different options to choose from for the same price as everything else. Ruby Tuesday also uses a specific idea of “sharable appetizers,” which makes customers feel less sensitive about the price of the food because they will be sharing it with others (2015). This can also be seen with Ruby Tuesday and Lime Fresh Mexican Grill when they do their different catering events. For Ruby Tuesday, customers are allowed the ability to pick and pay for larger quantities of food from the menu provided on the website (2015). Lime Fresh does something similar, but they also have specific set items that are for parties that just want certain things, like their Burrito Platter

(2015).
The idea of getting a good deal is what the company is trying to go for with and what customers are searching for.

To make this search easy Ruby Tuesday has a way to sign up for the online connection plan, and by doing so the customers can stay connected with any deals that are going on. After signing up, customers will also be able to get a free birthday burger if they come to Ruby Tuesday on their birthday (Ruby Tuesday, 2015). This is a way to get people to feel like the company cares about their customers. Ruby Tuesday wants their customers feel like they are cared about and even providing the option to give gift cards. These gift cards, or e-gift cards are customizable with all types of options to make them feel like they are different, but what people don’t realize is that it still limits them to only be able to use the gift card at that restaurant.

Another tactic that the company uses is during the week customers are able to get endless use of the garden bar during lunch hours of 11 A.M to 3 P.M. for only $7.99 (Ruby Tuesday, 2015). This is a way for the company to try and attract more potential customers to come into the restaurants on weekdays during lunch hours by giving them access to a choice of healthy options to get when they are there. These also target specific demographics as well so that as many different types of people will be able to have the dining experience at Ruby Tuesday and purchase all the things that they

can.
Product Line Pricing
Cannibalizing is always a fear that companies have because of how it takes away the sales of certain products for others. With the menu of Ruby Tuesday, there are all types of different choices to pick from, whether if it’s for lunch or dinner. But with each of the different categories of the menu, they are all priced relatively the same and the products are so differentiated that there is always something for someone and they can get all get it at the same price. This could also be seen between Ruby Tuesday and the other company they own, Lime Fresh Mexican Grill, all the food is still priced around the same, but the food is different enough that anyone can choose whatever they feel is the best for them.