question: Why do restaurants force us to download their apps to give us large discounts?
comment: The app is a platform they can use to both advertise to you, and get user data. Your phone is basically a tracking device with an always-on microphone that you carry with you every place you go. That information is a GOLDMINE for companies.
passages: BULLET::::- Use by restaurants has been spreading since the opening in 2000 of Lentil as Anything in St Kilda, Melbourne, Australia. In subsequent years, further restaurants were opened around Melbourne including in Abbotsford Convent, Footscray (now closed) and Thornbury. In 2013 Lentil As Anything opened a restaurant in Newtown Sydney, Australia.
  
  BULLET::::- In 2003, One World Everybody Eats opened in Salt Lake City. The restaurant was closed in 2013.
  
  BULLET::::- Freeware applications are frequently distributed under donationware that prompts the user to donate to the author rather than paying for the software, as opposed to the Shareware model.
   Generally, the effect on the firm of small shifts in price (by changes in supply and/or demand, or else because of slight adjustments in monetary policy) is relatively minor compared to the costs of notifying the public of this new information. Therefore, the firm would rather exist in slight disequilibrium than incur the menu costs.
  
  Section::::History.
   In March 2018, the Toronto based mobile App Ritual adopted an aggressive strategy of sign up incentives to capture a significant portion of the City of London young professional lunch market. At the time of writing, the long term success of this strategy remains unclear. Ritual however has also attracted controversy by allowing random strangers to access users precise work place location and eating habits.
  
  Section::::Service Types.:Online Food App Services.:Food Riders.
   The downside of this exclusive approach is that items that are high in gross profit are typically the highest priced items on the menu and they typically are on the high end of the food cost percentage scale. This approach works fine in price inelastic markets like country clubs and fine dining white table cloth restaurants. However, in highly competitive markets, which most restaurants reside, think Applebee's, Chili's, Olive Garden, price points are particularly critical in building customer counts. In addition, food cost cannot be ignored completely. If food cost increases, total costs must increase enough to lower the overall fixed cost percentage or the bottom line will not improve. This is not a recommended strategy for neighborhood restaurant with average checks under $15.
   BULLET::::- Gaming corners: In order to better target the youth segment and to generate additional revenue from third-party sponsorship, several restaurant chains are launching multimedia gaming corners. McDonald's and Burger King in certain regions installed video game console systems.
  
  BULLET::::- Internet access outlets: Internet access points are becoming popular in cafeterias, shopping malls and full-service restaurants and are generally used to attract customers to the restaurant as well as expose them to third-party advertising.
   Using menu engineering in restaurants or menu items where price inelasticity is present is recommended and cost-margin in casual neighborhood restaurants and on menu items where price points are critical in building and keeping customers should be considered. Remember, the customer determines the best price to charge, not the restaurant operator. Customers do not care about your costs; they care about what you charge.
   During the economic crisis in the 1970s, many restaurants found it costly to reprint the menu as inflation caused prices to increase. Economists noted this, and it has become part of economic theory, under the term "menu costs". In general, such "menu costs" may be incurred by a range of businesses, not just restaurants; for example, during a period of inflation, any company that prints catalogs or product price lists will have to reprint these items with new price figures.
   Restaurants have also indulged in the mobile app market. Fast food companies such as Pizza Hut and Dominoes are among the many restaurants that offer an app designed for on the go, easy ordering. This idea allows for efficiency and lower wait times for busy customers who need a pit stop meal. Having this data on one's phone also allows the app to update so that the customers more frequently purchased items show up faster, which along with online payments being possible through the app, makes it even simpler for the consumer to choose, order, pay for and enjoy the food.
   According to a report from Forrester Research, promotions that work well with teens include advergames, instant-win games, online coupons, streaming video ads and cell phone promotions. Restaurant media that encompasses video ads and other multimedia content and encourages interactive game playing will effectively capture the attention of this segment.
  
  Section::::Competition in the food service industry.
   In 2011, the Cnet site "Download.com" started bundling the Babylon Toolbar with open-source packages such as Nmap. Gordon Lyon, the developer of Nmap, was upset over the way the toolbar was tricked onto users using his software. The vice-president of Download.com, Sean Murphy, released an apology: "The bundling of this software was a mistake on our part and we apologize to the user and developer communities for the unrest it caused."
   In hotels, POS software allows for transfer of meal charges from dining room to guest room with a button or two. It may also need to be integrated with property management software.
   Some food cooperatives like Macomb Co-op allow members to place orders of locally grown and/or produced food online and pick up and pay for their orders at a central location.
  
  Section::::Service Types.:Online Food App Services.
  
  Sometimes restaurants partner with online food app services to place their restaurant in their application. In this case, restaurants just focus on preparing the order. The app services provide the riders who deliver the food to the consumer.
   The manager, when called by the waiter, declared "Delmonico's never intends that any other shall get ahead of it... Forthwith, pie à la mode will be featured on the menu every day". A reporter for the "New York Sun" newspaper overheard the disturbance and wrote an article about it the next day. Soon, Pie à la Mode became a standard on menus around the United States.
   Apple also offers an iTunes Affiliate Program, which lets people refer others to apps and other iTunes content, along with in-app purchases, for a percentage of sales. The commission rate for in-app purchases was reduced from 7% to 2.5% in May 2017, while affiliate rates for paid apps, music, movies, books, and TV shows remained at 7%.
   Customer perception of items offered on a menu can also be affected by subtle textual manipulations. For example, descriptive labeling of item names may produce positive effects, leading to higher customer satisfaction, and higher perceived product value. Similarly, the presence of dollar signs or other potential monetary cues may cause guests to spend less.
  
  Section::::Managerial accounting.
   The primary goal of menu engineering is to encourage purchase of targeted items, presumably the most profitable items, and to discourage purchase of the least profitable items. To that end, firms must first calculate the cost of each item listed on the menu. This costing exercise should extend to all items listed on the menu, and should reflect all costs incurred to produce and serve. Optimally item costs should include: food cost (including wasted product and product loss), incremental labor (e.g., cost in in-house butchering, pastry production, or prep), condiments and packaging. Only incremental costs and efforts should be included in the item cost.
   For fast food restaurants, a benefit is the ability to update prices and menu items as frequently as needed, across an entire chain. Digital menu boards also allow restaurant owners to control the day parting of their menus, converting from a breakfast menu in the late morning. Some platforms support the ability allow local operators to control their own pricing while the design aesthetic is controlled by the corporate entity.
   With the proliferation of low-priced touchscreen tablet computers, more and more restaurants have implemented self-ordering through tablet POS placed permanently on every table. Customers can browse through the menu on the tablet and place their orders which are then sent to the kitchen. Most restaurants that have iPad self-order menus include photos of the dishes so guests can easily choose what they want to order. This apparently improves service and saves manpower on the part of the restaurant. However this depends on how intelligently the system has been programmed to be.
   On the other hand, even though two-sided pricing strategies generally increase total platform profits compared to traditional one-sided strategies, the actual end value of the two-sided pricing strategy is contingent on market characteristics and may not offset the costs of implementation. For example, profits of an application provider increase with the implementation of a two-sided pricing strategy of the platform provider only if the application is subsidized by the provider. Platform providers should also be more cautious when the giveaway product has appreciable unit costs, as with tangible goods. Free-PC incurred $80M in losses in 1999 when it decided to give away computers and Internet access at no cost to consumers who agreed to view Internet-delivered ads that could not be minimized or hidden. Unfortunately, willingness to pay does not materialize on the money side, as few marketers were eager to target consumers who were so cost conscious.
   BULLET::::- Communication: Mobile social media communication takes two forms: company-to-consumer (in which a company may establish a connection to a consumer based on its location and provide reviews about locations nearby) and user-generated content. For example, McDonald's offered $5 and $10 gift-cards to 100 users randomly selected among those checking in at one of its restaurants. This promotion increased check-ins by 33% (from 2,146 to 2,865), resulted in over 50 articles and blog posts, and prompted several hundred thousand news feeds and Twitter messages.
   In January 2019, more than 500 small to medium-sized restaurants filed an online petition to the Competition Commission of India (CCI) and the Prime Minister's Office (PMO), alleging that online food delivery companies such as Swiggy, Zomato, Uber Eats and FoodPanda were misusing their dominant market position. The consortium of restaurants cited that the use of deep discounting, in-house kitchens and internal sourcing of orders were wiping out small restaurants. Unlike in Indian retail, FDI norms do not apply to the restaurant or food service aggregators.
   The concept of a lump-sum cost (menu cost) to changing the price was originally introduced by Sheshinski and Weiss (1977) in their paper looking at the effect of inflation on the frequency of price-changes. The idea of applying it as a general theory of Nominal Price Rigidity was simultaneously put forward by several in 1985–6. George Akerlof and Janet Yellen put forward the idea that due to bounded rationality firms will not want to change their price unless the benefit is more than a small amount. This bounded rationality leads to inertia in nominal prices and wages which can lead to output fluctuating at constant nominal prices and wages. Gregory Mankiw took the menu-cost idea and focused on the welfare effects of changes in output resulting from sticky prices. Michael Parkin also put forward the idea. The menu cost idea was also extended to wages as well as prices by Olivier Blanchard and Nobuhiro Kiyotaki.
   In July 2013, additional principles were launched by the DAA to address interest-based data collected from smartphones and tablets. To give consumers a choice mechanism for that environment, in February 2015, the DAA officially launched AppChoices, an opt-out app for mobile devices.
   This caused complaints among many consumers, as they were forced to pay an additional early termination fee of $175 if they wanted to unlock the device safely for use on a different carrier. Other companies such as Google complained that tying encourages a more closed-access-based wireless service. Many questioned the legality of the arrangement, and in October 2007 a class-action lawsuit was filed against Apple, claiming that its exclusive agreement with AT&T violates California antitrust law. The suit was filed by the Law Office of Damian R. Fernandez on behalf of California resident Timothy P. Smith, and ultimately sought to have an injunction issued against Apple to prevent it from selling iPhones with any kind of software lock.
   In the hospitality industry, POS system capabilities can also diverge significantly. For instance, while a restaurant is typically concerned about how the sale window functions, whether it has functionality such as for creating item buttons, for various discounts, for adding a service charge, for holding of receipts, for queuing, for table service as well as for takeaways, merging and splitting of a receipt, these capabilities may yet be insufficient for a spa or slimming center which would require in addition a scheduling window with historical records of customers' attendance and their special requirements.
  