Management by Menu Chapter 1

LRJJ spring 2014 Food and Beverage Management

FBM3196

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Opening Questions

If you were writing a menu for a foodservice operation, what information would you need to know to put together an effective menu?

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ENLIVENING YOUR BUSINESS VISIONTHROUGH MENUS Lesson objectives

Upon completion of this chapter, you should be able to:

 Explain how menu selections are driven by your business vision.

Explain how customer motivations define your business.

Explain how your menus influence staffing, facility design, tableware, and profit potential.

Recognize the time-limited and cyclical nature of menus.

Identify paradigm shifts that affect restaurants and food services.

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ENLIVENING YOUR BUSINESS VISIONTHROUGH MENUS

Your business vision represents where you would like to see your restaurant in the future.

How could you to define your restaurant? • Wish to be a fine dining, quick service or another type

of restaurant?• Want to become a market leader in neighborhood

dining?• Want to involve sustainable food supplies and a social

consciousness?

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ENLIVENING YOUR BUSINESS VISIONTHROUGH MENUS

Your answer to these and other questions should drive your overall business concept and the food and beverage selections that you sell.

Once a business has authored a vision statement it can develop a business model, including menu offerings

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Your Vision and Mission statement

• Specific enough to energize your strategic planning.• Clearly defining what you are trying to do.• General enough to allow for market

developments over time.• Allow yourself to be flexible and be able to adapt as market

conditions change.

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Your vision statement

Vision“Our vision is to be the preferred evening

bar/restaurant for the LRJJ college and the SNU university”

MissionThe outlet will serve students living on or

around the LRJJ and SNU campus.We will offer authentic F&B favorites from

around the globe in a casual, comfortable setting at affordable prices

http://www.missionstatements.com/restaurant_mission_statements

http://examples.yourdictionary.com/examples/best-examples-of-a-vision-statement.html

http://sbinfocanada.about.com/od/businessplanning/a/writevision.htm

http://www.edifyempower.com/tips-for-writing-business-vision-mission/7

The Business Model

What does a business model or a plan indicate? The planned results. If financial aid is

requested from the bank, the business model will have to focus on how you will make your business profitable.

The business plan will also include strategies and action steps along with responsibilities for their implementation to help ensure that business goals are attained.

A big part of the business model is the product offerings to generate the revenue in our case the menu.

The business plan is followed by Marketing Plan and Operating Budget

http://restaurants.about.com/od/finances/a/Restaurant_plan.htm

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The Next Step

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Vision and Mission

Statement Develop a Business Model

Your Menu Offerings.

Brand Image

How to we get branded?

Who is branding your business?

Is a company's reputation part of the brand?

Is the customer perception about your services part of the brand ?

What is the advantage of being branded?

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Brand Image

A brand encompasses all of the characteristics and qualities of a business that most employees and customers would attribute to that company.

It includes the business’s mission, vision, and values, but it also answers for customers the questions:

“What does the company sell?” “Why /When should you patronize that

company?”

Brands create a promise of what guests can expect 11

How the Menu supports the Brand

Price point Types of ingredients used Caliber or style of cooking Overall feel of the menu Service style of the food and beverage Specific menu items may change over time,

but the menu’s “feel” does not.

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HOW CUSTOMERS USE YOUR BUSINESS

Think of customer motivations to visit your Restaurant!

You have the best Wifi connectionYou offer the most hygienic environmentyou area is safe and You have convenient parking and it is female friendlyYou are easy accessible by public transportYou allow petsYou are attracting a crowd with same social status, orientation

and hobbies You have a safe area where kids can playF&B is not the primary motivation for customer to visityour restaurant

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HOW CUSTOMERS USE YOUR BUSINESS

No brand can meet the needs of all people.However we have the potential to satisfy

multiple consumers needs The target market is the group of people that

the company wishes to attract• You need to understand consumer behavior if

you are to offer products and services that are appealing to the greatest number of potential customers.

• Don’t fall into the trap of thinking that you know everything that your target market wants.

• Your menu selections must parallel your target market’s needs and motivations (not your own).

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The Obstacle of Experience and Biases

Whereas this is a typical, if not necessary, tendency, it also blinds us to varying degrees and causes us to act in a less than objective manner.

Many of the most success full operators are persons who

are a lateral entry to the F&B operations

Professionals are so focused on how things should be they forget to fulfill the customers needs

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Markets

• The majority of operators develop menus and business models based on whom they wish to attract, the intended market.

• However we often find ourselves hosting potentially lucrative guests that we hadn’t planned on, the incidental market .

If you operate a restaurant focused on college student dinning , the parents of students that come to visit once or twice a semester would be an example of the incidental market.

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Markets

Intended markets are often described as target markets Definition of target markets:

A target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise

towards. Why is it important to establish a good

understanding of the target market? A well defined target market is the first

element to a marketing strategy

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Defining markets

Demographic?• A demographic study describes a population’s age,

marital status, housing type, household size, gender, race, ethnicity, education, occupation, income, vehicles, and other data.

• Includes population averages (median household income) and population percentages in various ranges (age ranges, married vs. unmarried)

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Defining Markets

Psychographic?• Psychographic studies describe the population’s

values, interests, and habits, such as how people are involved in the community, their hobbies, where they shop, what sports they support, how they spend their free time, their opinions, etc.

• For restaurateurs, the most important information is how they spend their money on food.

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Competition

A competitive analysis is a study of likely competitors in a local market

• It helps to make sense of demographic and psychographic studies

• It helps a businessperson decide if a market need is already met sufficiently or not fulfilled

• The business’s menu should work to meet the needs of a market segment in a given region as long as that market’s needs are not overly saturated with competitors

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Consumer Behavior

• What is a value decision?• You must be aware of your customer’s value

decisions.• Decide which goods and services they find

important enough to spend their money on.• The farsighted menu planner understands

that their actual customer base will be a mix of “target market and unexpected clientele”

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Consumer Behavior

Group Exercise: on campus RestaurantTo Start the planning process you need to

answer these questions:1. What mix of intended market and incidental market should

I plan for?2. What is the profit potential of each of these two market

segments?3. What products, services, and resources will I commit to

these markets?4. What types of value decisions do the members of these

market segments make?

Hand in paper next Monday and be ready for class discussion

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“How will customers use my business?”

Different types of menus respond to different needs and wants of different markets.

Convenience • To save time or reduce travel• To obtain nourishment• To avoid cooking for themselves due to

limited culinary ability• To avoid the work of preparing a meal and

cleaning up afterward

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Classify dining behaviors

Based on what can we classify our customers behaviors? • where customers live• on the activities at the time• pleasure and recreation

Group• Provide data from industry research to the

broad spectrum of customer motivations for eating outHand in paper next Monday and be ready for class discussion

•

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Dining Based on Living Arrangements

The captive customer examples• Campus dining• Hospital and healthcare food service• Assisted living and continuing care

retirement dining

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Dining Based on Activities

• The activity customer example • Employee dining… the employee cafeteria• Conducting business or business-related

entertainment… entertaining clients • Travelers and tourists away from their

homes…• Vacation destination restaurants

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Dining for Pleasure

The for pleasure example• Social networking and dining as a

recreational act• Status/ego (“Show off their riches”) • Food art as culture• Escape, particularly in the case of ethnic

dining

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Motivations…

Why is it important for us to understand and classify the motivation of our clients for dining out ?• Such as status and ego, food art as culture,

and escape, are the motivations least governed by customer-value decisions.

• Less likely to evaluate the prices you charge • Perceived as recreational budget spending

• It’s dining to embellish one’s lifestyle that complicates a value decision

• Perceived as household budget spending

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Your Menu as the Central Planning Document

What business implications does the choice of menu offerings have?

Impact operational criteriaFacilities designFinancial success

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Your menu choices have far-reaching implications

When you select a menu item, you commit to the following:

• I will construct, maintain, and equip my facility to accurately Prepare, Cook and serve this menu item.• For an existing business, the menu must be executable

with the existing production and refrigeration equipment• Menu should balance work flow to avoid overwhelming or

idling a work station• New kitchen construction should accommodate potential

future menu changes

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Your menu choices have far-reaching implications

When you select a menu item, you commit to the following:• I have reliable and affordable sources of ingredients

to prepare this item.• Product availability limitations mean that no

ingredient should appear on a menu if it will be difficult to source during the life of the menu

• I am prepared to store the ingredients to preserve the quality and protect the food from contamination and growth of pathogens.

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Your menu choices have far-reaching implications

When you select a menu item, you commit to the following:

• I can recruit and train staff to prepare this item consistently.Employee skill level defines how complex the cooking and plating processes can be for a foodservice operation

• I can standardize the recipe to achieve consistent results.• I can maintain an adequate inventory of china,

glassware, and flatware to serve this item.

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Your menu choices have far-reaching implications

Each of these decisions carries a financial commitment that may or may not be a wise business decision.• Does an expensive wood burning pizza oven make

sense ?• If I offer pork chops from free-range Berkshire hogs

finished on acorns, will I be able to charge enough to make it profitable?

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Recap Monday Lesson 3rd of March

• Provide data from industry research to the broad spectrum of customer motivations for eating outHand in paper next Monday and be ready for class discussion

Short group Discussion on the case study A night mare from the Seas

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THE MENU LIFE CYCLE

Once a menu has been created, it is not static.The menu must evolve over time.

These criteria are external to operator control, and others are based on internal strategic decisions that menu planners elected to make.

Groups work in class on some of the reason and factors that force operators to re-evaluate menu offerings

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THE MENU LIFE CYCLE

Operators are forced to update menus or face going out of business because of a number of factors.• Changing Tastes…• Customers are traveling more and thanks to media

technology are better informed• Customers are more adventures • Cooking methods changed • Wine lists have changed from German, French, and Italian

wines to also include wine from Chile, Australia. US Wines are no longer only from California but include Oregon, and Washington state.

• Tastes in wine have evolved from traditional old world styles (Bordeaux and Burgundy and Chablis) to new varietals like Malbec, Carmenere, Pinotage 36

Changing Customer Perceptions

• Some operators likely placed foie gras and caviar on their menus as a way to show worldliness and excellence.

• Now foie gras on a menu could possibly be considered a liability due to the concerns of the humane treatment of animals.

• Many ocean fish spices are close to extinction• Food Scandals are happening daily and due to

product globalization affect the

• http://animalrights.about.com/od/FactoryFarming/a/Foie-Gras.htm

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Changing Food Supplies

People become more health conscious and new scientific discoveries affect choices customers make

GMO, New ingredients become available• Kobe Beef, once only found in very expensive Japanese

establishments, is now available to those willing to pay the price.

• http://en.wikipedia.org/wiki/Kobe_beefSome common ingredients may no longer be

readily available. • Trans-fats have been outlawed by a number of large cities • http://www.heart.org/HEARTORG/GettingHealthy/FatsAndOils/Fats101/Trans-Fats

_UCM_301120_Article.jsp# 38

Internal Strategic Decisions

As visions change, so too should menus and menu selections.

Contemporary diners still demand quality, but their definitions of quality have changed.

Perceptive operators correctly read these trends and responded with changes in their menu offerings.

As the winds of culinary changes blow, chefs and menu planners must respond accordingly.

The sum of these forces causes eventual obsolescence of menus.

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SHIFTING PARADIGMS

• Beginning sometime in the late 1980s, many diners began rejecting the idea of fine dining and the traditional white-tablecloth concept.

• Operators have been able to enjoy respectable check averages without tuxedoed staff, linens, and heavy silver-plate.

• What Positive effect did that had on the operation?

• Less cost more profit• More casual service demanded less skilled

labor

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The Menu Life Cycle

1.4

A la carte Menu

Home WorkFor the following lessonsEach group will need 3 a la carte menus from

establishments in the city of shanghaiHow can you obtain this menus?? Paper copyYou need to understand the items on the menu

Hand in Wednesday

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SHIFTING PARADIGMS

Graded research projectStudent group research how dinning has

involved over the past from the early 1990 to today

Groups also report on the 10 upcoming (forecasted)

food and beverage trends.What is the benefit for a f&b manager to

constantly stay informed about eating and drinking trends.

Paper copy/ Font 12 Times Roman not more than two A/4 pages

Reference source and student input ( all members have to contribute)

Deadline Wednesday

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