Taco Bell Rings In New Price Setup : Marketing: The low-price leader establishes three menu categories, all under $1.

In an attempt to build on the success of its 59-cent menu, Taco Bell on Monday unveiled price cuts and a marketing strategy that will group most of the chain’s Mexican food items into three price categories under $1.

Del Taco/Naugle’s, which competes head-to-head in Southern California with Taco Bell but has only a fraction of the outlets nationwide, implemented a similar strategy last week at its California stores. But officials from both companies say the changes aren’t part of an industry price war. Taco Bell has changed its menu boards so that most of the major food items will be grouped into three categories priced at 59 cents, 79 cents or 99 cents. The Irvine-based chain of 3,100 restaurants also lowered the prices of some items.

Some industry analysts said the low-price strategy should strengthen Taco Bell’s position as the industry’s low-price leader. At the same time, they said, Taco Bell will still be able to persuade customers to “trade up” to higher-priced items.

Taco Bell and Del Taco/Naugle’s are adopting the price-grouping strategy to simplify their menus for customers and to play up the idea that they offer a wide variety of inexpensive items.

Taco Bell plans a heavy television advertising campaign to promote its menu changes.

John Martin, president of Taco Bell Corp., said the company’s research has shown that price and value are the chief considerations among fast-food consumers.

“Consumers seem to have an amount in mind they want to spend,” Martin said. “They are trying to balance their checkbooks.”

Now, customers will be able to mix and match among the three price categories and stay within their budgets, Martin said.

Taco Bell test-marketed its low-priced menu in Green Bay, Wis., and Omaha, Neb., for more than a year before deciding to implement the change nationwide.

Two years ago, Taco Bell cut the price of its staple, hard-shell taco to 59 cents, down from 79 cents, along with several other items to offer its “value menu.”

The lower prices were considered a smashing success. Sales shot up 19% between 1988 and 1989.

For the third quarter ended Sept. 30, the PepsiCo Inc. subsidiary reported earnings of $48.3 million, up 19% from a year earlier, on revenue of $433 million, up 16%.

Analysts were impressed with the latest move.

“These people are excellent at marketing,” said Lawrence Adelman, an analyst for Dean Witter Reynolds in New York, “It gives them an opportunity to move away, to get the focus off 59 cents. They are leaving the opportunity to trade up, and I think they haven’t lost their orientation toward value.”

Janet Lowder, a restaurant consultant based in Rancho Palos Verdes, said the menu change was “a good move” and a sensible transition from the 59-cent items.

Martin said the strategy is aimed primarily at Taco Bell’s target market: 18- to 34-year-old males, who eat fast food an average of 17 times a month.

Paul Hitzelberger, vice president for marketing at Del Taco/Naugle’s, said his company started changing its menu last week to group items in price categories between 49 cents and 99 cents. He said the timing between Del Taco and Taco Bell’s marketing was coincidental.

Del Taco/Naugles, which has 300 California outlets, will be promoting its 49-cent items in a radio advertising campaign this week with the slogan, “Four major menus at minor prices.”