THE ANALYSIS AND EVALUATION ON THE

PRICING AND COSTING STRATEGIES

OF MAX’S RESTAURANT

In partial fulfillment of the course

Pricing and Costing
Bachelor of Science in Entrepreneurship

by:
Names of the Group Members
COPIA, RUBENSON MALVAR, MAEJOY T.
LOPEZ, JULIE ANN D. MORON, CHERRY M.
LORENZO, ROSE ANN G. RANES, ANGELICA H.

Submitted to:

Dr. LORNA C. CONDES

Subject Professor

May, 2023
 Table of Contents

Executive Summary
 
Chapter 1: The Company Analysis
• Background Information of the Company
• Brief Company History
• Philosophy
• Vision
• Mission
• Core Values
• Products/ Services
• Organizational Chart
• Strategic Situation Summary Using SWOT Analysis on
• Product
• Price
• Promotion
• Place of Distribution
• People
• Process
• Physical Evidence
• Pricing and Costing Strategies
• Materials
• Purchasing, Controlling and Costing Materials
• Storing and Issuing Materials
• Labor
• Controlling and Costing
• Monitoring and Evaluation
• Overhead
• Controlling and Costing
• Actual, Applied and Standards
• Pricing Decision Strategies Used
• Pricing Policies
• Pricing Responsibilities and Accountabilities
• Objectives for the Pricing and Costing Plans

Chapter 2: Strategic Pricing and Costing Plans

• Controlling and Costing
• Materials
• Labor
• Overhead
• Implementation of Strategic Pricing and Costing Plan/Output
• Key Performance Indicators (KPIs)
• Strategy Measures
• Strategy Programs and Activities
• Strategy Implementation
• Target Date of Implementation
 • Marketing Forecasts and Budget
 
• Strategic Pricing and Costing Control and Evaluation Tools
• Customer Satisfaction Survey on Pricing
• Tools in Monitoring, Controlling and Evaluating the Pricing and Costing Plans

Conclusions

Recommendations

References /Bibliographies
 Chapter 1:
The Company Analysis

Background Information of the Company

Brief Company history

Max’s Restaurant was first established in 1945, shortly after World War II,
by Maximo Gimenez, a Stanford-Educated Teacher. Gimenez befriended the
American occupation troops stationed in Quezon City, who regularly paid visits to
Maximo’s home for drinks: the troops later insisted that they pay for the food and
beverages being served, prompting Maximo to open a café where the service men
could be served meals. It opened its first restaurant at 21 South F Street (now Scout
Tuason), Barangay Laging Handa, Quezon City.

Gimenez decided to open a café which initially consisted of chicken, steak,

and drinks. He was joined by his wife Mercedes, sister-in-law Felipa Serrano
Sanvictores , his niece by Ruby who managed the kitchen and her husband Claro.
Ruby managed the kitchen and created a chicken recipe which proved to be
popular to the GIs stationed in the city and later to the public who have heard of
Ruby’s recipe.

Max’s Restaurant later expanded in Metro Manila, Luzon, and Cebu and to
the United States, Canada, Kuwait, and the United Arab Emirates, with plans of
opening branches in other countries.

The company that manages the Max’s Restaurant, Max’s Group, also
currently operates Pancake House, Dencio’s Kabisera, Teriyaki Boy, Sizzlin’
Steak, Le Coeur De France, Maple, Yellow Cab, Singkit, and The Chicken Rice
Shop.

Philosophy

Max’s Philosophy and We, at Max’s Restaurants are decided and committed
to the following philosophy:
“To consistently offer standard quality food, friendly, and efficient service,
in a clean, family atmosphere all at affordable prices.”
Vision
“To be leading Filipino Company with Brands most loved by 2025”

Max’s restaurant vision statement they want you to enjoy life. We live for
the moments that make us part of the stories that you tell your friends and families.
We are inspired to be creative and make every experience you have with us
special.

Mission
“We build loved brands.”

Max’s Restaurant mission statement with the goal of delighting its

customers, it continually searches for partners who shares their passion and vision
to consistently serve new customers in new territories fresh, genuine, quality food
and a great dining experience in different formats.

Core Values
“We do it with love, once customer at time. We do it right the first time We
do it better.”

Customer Service Excellence: We will meet every customer with the

highest-level service and quality.
Teamwork: A diverse, teamwork-based work environment will yield the best
possible experience for everyone, including employees and customers.
Communication: Open communication with customer as well as employees
is essential to the long team success of any business.
Products/Services
Menu Items Price (Php)
Max’s Whole Fried Chicken Php 575.00
Beef Kare-Kare Php 919.00
Chicken Pancit Canton Php 185.00
Sizzling Tofu Php 344.00
Crispy Pata Php 884.00
Sinigang na tiyan ng Bangus Php 515.00
Chicken Lumpiang Shanghai Php 265.00
Fresh Lumpiang Ubod Php 137.00
Max’s Fried Chicken
Max’s Half Fried Chicken Php 330.00
Max’s Whole Fried Chicken Php 575.00
Family Chicken Basket 8pcs Php 999.00
Condiments Trio (Max’s banana ketchup, Worcestershire sauce and Php 149.00
Hot Sauce)
Ruby’s Favorite
Tinapa Spring Roll Php 263.00
Pork Barbecue Php 241.00
Sizzling Tofu Php 344.00
Chicken Sisig Php 309.00
Sizzling Bulalo Php 635.00
Sweet and Sour Fish fillet Php 320.00
Boneless Bangus Php 400.00
Lechon Kawali Php 425.00
Chicken Chopsuey Php 320.00
Crispy Oxtail Kare-Kare Php 919.00
Vegetable Kare-Kare Php 452.00
Beef Kare-Kare Php 919.00
Crispy Pata Php 1,035.00
Sinigang na Tiyan ng Bangus Php 215.00
Sinigang na Hipon Php 560.00
Fried Pork Belly and Shrimp Sinigang Php 723.00
Nilagang Bulalo Php 805.00
Kalderetang Bulalo Php 805.00
Pinakbet Php 299.00
Seafood Binakol Php 677.00
 Solo Meals
Sweet and Sour Fish Fillet Rice Php 205.00
Tofu Rice Bowl Php 205.00
Shanghai Rice Bowl Php 185.00
Chicken Sisig Rice Bowl Php 205.00
Seafood Kare-Kare Rice Bowl Php 309.00
Group Sets
Fried Chicken Tray Php 2,199.00
Lumpiang Shanghai Tray Php 1,385.00
Pancit Canton Tray Php 1,099.00
Beef Kare-Kare Tray Php 3,189.00
Pancit Lumpia and Rice
Mini Fresh Lumpiang Ubod Php 148.00
Dessert and Breads
Ube Half Roll Php 284.00
Caramel Cake Php 416.00
Malagos Chocolate Cake Php 539.00
Mango Cookies Php 193.00
Cookies and Cream Cookies Php 193.00
Caramel Bar Box Php 242.00
Ensaymada Php 58.00
Pandesal Php 71.05
Bread Loaf Whole Php 114.00
Bread Loaf Half Php 63.00
Chicken Sisig Bun Php 63.00
Pork Adobo Bun Php 83.00
Chicken Asado Bun Php 61.00
Panderosa Php 88.00
Caramel Bar 10’s Php 150.00
Chocolate Cake Loaf Php 182.00
Cake Roll Slice Bundle (6 per pack) Php 251.00
Cream Cheese (6 pcs) Php 368.00
Wheat Bread Php 72.00
Malagos Caramel Bars Php 303.00
Mango Caramel Bars Php 358.00
Choco Roll Slice Php 42.00
Mocha Roll Slice Php 42.00
Ube Roll Slice Php 42.00
Pandan Roll Slice Php 42.00
 Ready to Cook Products
Ready to Cook Boneless Bangus Php 209.00
Ready to Cook Crispy Pata Php 594.00
Ready to Cook Chicken Burger Patty Php 209.00
Ready to Cook Lumpiang Shanghai Mix Php 220.00
Ready to Cook Lumpiang Ubod Mix Php 330.00
Ready to Cook Lechon Kawali Php 275.00
Ready to Cook Kare-Kare (Meat and Sauce) Php 539.00
Max’s Bagoong Php 110.00
Ready to Cook Sweet and Sour Sauce Php 44.00
Ready to Cook Leche Flan Php 176.00
Grilled Pork Belly Meal Kit Php 690.00
Pork Bicol Express Meal Kit Php 449.00
Pork Binagoongan Meal Kit Php 311.00

Strategic Situation Summary Using SWOT Analysis

Product

Strength Weakness Opportunities Threats

-Uses high quality -Products are -China’s culture in -Many substitutes
products as their limited to Filipino food is almost low-cost and
ingredients. dishes. related to the establishments.
Philippines.
-Foods offered are -Lack of product -Growth of fast-
related to Chinese innovation. -Political changes food chain.
Cuisines. in their flavor.
-Changing
-Locally adapted -Healthy lifestyle. customer taste.
food menus.
-Similar business
concept from the
other.
Price

Strength Weakness Opportunities Threats

-What you pay is -The prices of -High capital -External changes
what you get. products are requirements for (government and
expensive. new business. taxes).

-High investment -Labor union

to improve
products and
services.

Promotion
Strength Weakness Opportunities Threats
-Promos of the -Law brand -Well-known -Influence of
product. awareness in the restaurant in the foreign countries.
national market. Philippines.
-Advertisements
-Franchise
-Positive brand
image. -Expansion abroad

-They have Max’s -Local culture and

Party Package. tradition.

-Holidays and
occasions.
Place of Distribution

Strength Weakness Opportunities Threats

-The products of -Damaging -Convenient -Competitors
the restaurant packaging because nearby
delivered on the of transportation
physical store delivery. -Competitors that
through land offer delivery and
transportation. take-outs

-The other
services of the
company is they
have an option of
take-out and
delivery the
products by land
transportation.

People

Strength Weakness Opportunities Threats

-High quality -Language barrier -High possible -Higher number
guarantee/custome between the local target market of competitors
r satisfaction. and international because of their
country. food culture
-Large target adjustment.
market

-The employees
are well trained.
Process

Strength Weakness Opportunities Threats

-They are strict -Preparation time -The delivery of -Sanitary standard
when it comes to the product is on-
food preparation -Waste disposal time, and they
standard. have enough
employees to
organize

Physical Evidence

Strength Weakness Opportunities Threats

-The company has -They lack -They have a -The warehouse of
its own warehouse that capability to make Max’s is far from
manufacturing provides the a new product the other physical
company that supply in other because they have store which causes
sustained the places that they own the delay of
supply and have in physical manufacturing delivering the
demand of its stores. company. products.
customer.
Pricing and Costing Strategies
• Materials
Purchasing
According to Paul Cheah, compliance manager of the resto, they reassured
the Max’s restaurant’s suppliers that the poultry that are delivering to us are
regularly tested for influenza and there has been no incidence of infections.
Max’s Resto sources its local poultry product requirements only from
accredited and reputable suppliers in the Philippines that employ the safest food
practices in sourcing, manufacturing, preparation, and delivery.
Max’s Restaurant has the distributors of raw materials for the product
offered. The distributors of that raw materials must be determined by the resto that
these ensure effectiveness and safety and follow the health standards. The entity
has the distributors of beverages, and the raw materials for desserts, viand, chicken
meals, and bakery products. The end product of the Max’s Restaurant will be sold
and distributed to the customer itself.

Controlling
Material Related Transaction Policy (RPT) is made to ensure that material
RPT transactions are only undertaken on an arm’s length basis for the financial,
commercial, and economic benefit of Max’s group Inc. and the entire group where
the company belongs.
Using seasonal menus

Costing Materials
Max’s Restaurant pricing strategy is based on these costs: Direct costs.
These are the ingredients costs associated with the food item itself. This involves
the purchasing food, portion sizes, food waste from spilling, overcooking or
spoiling.
Overhead costs for items of materials such as décor, product presentation,
amenities, and marketing efforts. Although slightly less common, these can create
added value and validate higher menu item prices.
 • Labor
The unit will be run with two salaried management employees, a general
manager, and a manager and one hourly supervisor. One extra salaried manager
will be assigned to the unit for the restaurant opening sales. Four hourly and one
salary employees will be needed per shift. 

The restaurant will be open seven days a week from 6 a.m. to 11 a.m. as well
as every holiday. The company has shared with you that the first new concept
restaurant is being built downtown in a high traffic college town. Max’ s does not
want to hire someone off the street to run their new venture. They want someone
who understands their culture and has operated a successful restaurant.

Controlling and Costing

The Company has a compensation policy for employees that account for
corporate performance beyond short-term financial measures.

Pricing Decisions Strategies Used

Pricing Policies
Pricing Responsibilities and Accountabilities

Max’s Group Inc. goal of delighting its customers, it continually searches for
partners who share their passion and vision to consistently serve new customers in
new territories fresh, genuine, quality food, and a great dining experience in
different formats. Max’s Group’s vision, mission, and values bind its employees
together by providing a sense of purpose that enables each member of the
organization to wholeheartedly understand and fulfill its mission of building loved
brands.

According to our survey, cost-based is the pricing strategy of Max’s Group

Inc. that they’ve been using to price their products. The following are the 3 main
responsibility and accountability of a cost-based pricing to the company.

1. To ensure that the enterprise always generate profit.

2. To cover all the production and overhead cost
3. To help the companies to bid large projects.

Objectives for the Pricing and Costing Plans

Max's Restaurant relies to cost-based pricing as a pricing strategy to set

prices for their products. Cost-based pricing involves determining the cost of
producing or acquiring a product and then adding a markup to that cost to
determine the final price. The primary objective is to ensure that the price of a
product covers its production or acquisition costs as well as other associated cost
such as overheads, marketing expenses, and a desired profit margin. By doing so,
the company can ensure that it is not selling products at a loss and can generate
sufficient profits to sustain its operations. That’s why they use Template PNL
Tracker to check if the company is doing better regarding in the pricing and
costing plans and to ensure that it's effective.

Their objectives are a straightforward and relatively simple approach to

pricing that can help ensure that the company is setting prices that are both
reasonable for customers and profitable for the business.  Max's maintain
consistency in its pricing and avoid the risks associated with more complex pricing
strategies such as dynamic pricing or value-based pricing.
 
 Chapter 2:
Strategic Pricing and Costing Plans

Controlling and Costing

• Materials

Max’s Restaurant controls their materials using Material Related

Transaction Policy. The RTP helps to control their materials by ensuring that the
transactions that are undertake are solely for the entire group only. The business
also uses seasonal menus because it allows the business to control their materials.
It helps to minimize the materials needed to provide.

Costing of materials of Max's Restaurant relies on their direct cost and

overhead cost. Their expenses that directly and indirectly go into producing goods
or providing services will add to the costing to make higher menu items prices.

• Labor
The company controls their labor by basing on their template. 0If the sales
are low and the labor cost is high, they're reducing the number of hours of their
employees. They can also add the numbers of their rest days.

Labor cost vs. Sales is the template that Max's Restaurant uses to cost their
labor. Labor cost vs sales is an important metric that helps Max’s determine the
cost of labor in relation to their revenue. Essentially, it measures how much a
company is spending on labor compared to how much it is earning from sales. By
analyzing this metric over time, businesses can gain insights into how their labor
costs are impacting their profitability.
 Implementation of Strategic Pricing and Costing Plan/Output

 Key
Performance Prep cooks:
Indicators 1. Order turn-over time
(KPIs) 2. Order accuracy
3. Workstation cleanliness and safety

Supervisor:
1. Employee attendance
2. Employee continuous training events
3. Over-all cost reduction

 Strategy
Measures The max`s corporation aim to be the leading Filipino Company
with Brands most loved and as of March 31,2023 the company reported
revenue was PHP 2,853.74 million compared to PHP 2,166.61 million a
year ago. Net income was PHP 77.06 million compared PHP 41.48
million a year ago.

 Strategy MARKET DEVELOPMENTTACTICS OPERATING DETAILS

Programs and TIMETABLE
Activities
1) Promote the Max’s - Pork Barbeque and Egg Drop Soup in the
market. Advertise the product through broadcast and print media and
direct selling promotions based on the marketing budget.

2) Establish three branches of Max’s - Restaurant per year. Assess

the target market of the business through market survey, demand
analysis, market share and supply analysis. Hire and train additional
salespersons for the promotional purposes. Thoroughly examine the
applicants whether the individual is effective speaker and meet job
qualifications.

PRODUCT DEVELOPMENT

1) Determine the market trends - in the target market. Conduct

market research in the specific target market regarding trends.

2) Improve the product features and specifications of the existing

 product - Analyze the market trend and come up with an idea to
strategize with the content and product packaging and labelling

4) Indicate the customers’ level of satisfaction in the newly

developed products - After the test marketing determine their
satisfaction If the result is low, improve If the result is high the product
is now ready to commercialize.

 Strategy
Implementation PRODUCTS DETERMINE SET
PRICE CONVINCE
THE
BASED BUYERS OF
PRODUCT
ON PRODUCTS
COST
COST VALUE

Based on our survey the pricing strategy of max`s corporation that

they’ve using is cost-based pricing strategy. The illustration shows how
the cost-based pricing strategy implement in max`s corporation. Under
the cost-based pricing they are four different cost-based pricing such as:

1. Cost-plus pricing
2. Mark up pricing
3. Break-even pricing
4. Target profit pricing

 Target Date of
Implementation Based on the strategy program and activities of the company, the
target date of implementing the activities is yearly. The company is
continuously innovating their products and services such as Your Year,
Your Way: Max’s Restaurant Launches New Solo Meals to Mix and
Match on January 8, 2023

 Marketing
Forecasts and Advertising materials cost per year
Budget
TV advertisement PHP 30,000,000

newspaper advertisement PHP 7,500,000

 leaflets PHP 200,000

direct sales promotions PHP 1,000,000

TOTAL PHP 38,700,000

Strategic Pricing and Costing Control and Evaluation Tools