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Sean Stoner
Pricing Waterfall
Professor McGrath
28 January 2016
Pricing Waterfall: Hyde Park Prime Steakhouse
Organization Basics: Hyde Park’s headquarters is located in Cleveland, Ohio. The first
Hyde Park restaurant opened in 1988 and is still currently in operation. Hyde Park has
nine restaurants currently in operation, with eight of them throughout Ohio and one in
Pennsylvania (www.hydeparkrestaurants.com/maps/index.htm). Some of their corporate
financial information for the most recent year is as follows: sales $5.6 million and profits
$950,000.
Brand Environment: The type of product I did my analysis on was a calamari
appetizer. Calamari is a featured appetizer at Hyde Park. The industry Hyde Park falls
under is Premium Steak Restaurants in the US, NAICS OD4309.
Revenue (Mil) IVA (Mil) Profit Margin
2011 $6,664.8 $2,591.0 38%
2012 $6,825.9 $2,737.0 40%
2013 $6,737.6 $2,637.7 39%
2014 $6,885.9 $2,555.4 37%
2015 $7,041.6 $2,693.2 38%
Hyde Park is in the mature stage of the product life cycle. Sales and profits have both
gone up and down over the five year period for the industry. Some of the key
competitors for Hyde Park include, Morton’s The Steakhouse, Capital Grille, and Eddie
Merlot’s. The market share for Hyde Park is 0.80%. For Hyde Park’s market share, I got
it by dividing their total sales from 2015 by the industry sales of 2015. The competitor’s

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market shares are as follows, Capital Grille 6.4%, Morton’s 4.6%, and Eddie Merlots
1.0%. I got the market shares from market share reporter. The remaining 87.2% make
up the rest of the market share for numerous other steakhouses throughout the country.
Hyde Park’s margin compared to the rest of the industry rather low. This is because
there are only nine restaurants in mainly one geographical location. Many of the
competitors have large numbers of restaurants nationwide.
Brand Marketing Strategies: For the product, Hyde Park wants its restaurant to be a
premier steakhouse that customers can enjoy in an upscale environment. Most of Hyde
Park’s prices for their food are expensive, however they provide the highest hospitality.
Hyde Park has a selective distribution strategy. The manufacturer is the companies
that provide Hyde Park with their food supply. They have a few different suppliers such
as, US. Food Service, Sirna and Sons, and Euro Seafood. Once the manufacturer’s
receive the orders for food, they distribute them directly to their retailers (Hyde Park)
that then make the meals to provide to the end consumer. Hyde Park does not use very
many promotion tools. Hyde Park does utilize social media accounts such as, Twitter,
Facebook, and Instagram to share information pertaining to their restaurants. Word of
mouth is the main source of promotion utilized. The pricing for Hyde Park is rather high
to the general public. It is a more upscale premium steakhouse, in which customers
want to experience that environment, which makes the prices high. I found the pricing
for each appetizer of calamari from each of the steakhouse’s website menus. Hyde Park
sells their calamari for $13.00, Morton’s $13.75, Eddie Merlot’s $14.95, and Capital
Grille $15.00. All of their prices are in the same range with Hyde Park’s being slightly

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lower than their competitors. For the price per ounce, I could not get that information
because most of the steakhouses do not list the size of the calamari appetizer.
Brand Price Waterfall: The calculations can be seen in the appendix. All of the
information pertaining to the pricing I received was from Hyde Park’s General Manager
Justin Loftis.
Wrap-Up: I do not think Hyde Park’s waterfall would differ very much from their
competitors. Most of their prices are in the same range as well as where most of them
get their food sources from. The costs differ because their pocket price is slightly lower
than their competitors as well as their profit margin due to the initial lower starting price.
Compared to other industries, Hyde Park would have a higher profit margin due to how
cheap they receive their food from their suppliers, in which they can charge a higher
price for the appetizer to their customers. Hyde Park ended up with a $5.01 pocket price
and the profit margin percent was 39%. For elasticity, Hyde Park last year sold 8,615
calamari appetizers which made them about $112,000. Hyde Park is inelastic when it
comes to their price. The demand/total revenue does not move very much. If Hyde Park
were to increase their selling price to $14.50 with a demand of about 9,000, the
elasticity would be -.40, which would be between -1 : 1. One of the revisions I would
make is to make the initial selling price of the calamari higher. The demand is already
high so by raising the price, more revenue could be made from the appetizer. All of their
other costs are fine dealing with all that goes into making calamari. The pricing waterfall
can be seen in the appendix with the spreadsheet.