Marketing and the Menu Chapter 7

Chapter 7  What is a market? Customers  What is marketing? A way of communicating a message to a market  Is there a difference between marketing and advertising? Advertising is one part of marketing – marketing is much bigger than just advertising

Contemporary Marketing Mix Marketing Activity for Restaurants  Product-service mix – food and services offered to customer.  Presentation mix – elements that make the operation look unique(color, lighting, furniture, decoration, uniforms, etc…)  Communication mix – Ways an operation tries to communicate with desired customer.

SWOT Analysis – for understanding current situations and looking for new opportunities. SWOT StrengthsWeaknessesOpportunitiesThreats Where does this place excel Places to improve (boring menu, dirty facilities, poor service, poor reputation) Ways to increase revenues or decrease costs (delivery, take out, kid’s menus, volume discounts from supplier) Factors outside the operation that could decrease revenues or increase costs (competition, product cost, road construction)

Market Research Methods  Experimental – try a product for a limited time or to a limited group.  Observational – Observing how customers react in a natural setting toward a product.  Survey – Gather information on a questionnaire – examples??  Sampling – Focus group, sampling trial

Marketing Communications  Advertising: paying to promote products, services or identity. Advertising options?  Sales Promotion: limited incentives to get customers. Examples?  Personal selling: Key to financial success – well trained staff  Public Relations: how an operation interacts with the community. Examples?  Direct Marketing: connecting with certain segment of the market. How?

Types of Menus  A la carte  Offers food separately at separate prices  Du jour  “of the day” changes daily  Cyclical  Repeated – institutional food services  Limited  Few selections – quick service restaurants  Fixed  Same items every day  California  All meals any time  Prix fixe  Complete meal grouped together for a single price  Table d’hote  Complete meal but choices of appetizers, entrees, desserts, etc… Set single price

Five Steps to Menu Planning 1. List all possible items 2. Eliminate items that are difficult to purchase, prepare or serve 3. Fine-tune remaining items to fit operation 4. Make sure all items can be successfully prepared at an appropriate price 5. Identify winning selections and create your menu

Menu Engineering A Menu Item B # Sold Menu Mix C Menu Mix % B/N D Item Selling Price E Food Cost Per Item F Contribution Margin Overhead & Profit D-E G Total Menu Revenue H Total Food Cost I Contribution Margin Overhead & Profit TOTAL G-H or F x B J Contribution Margin Category K Menu Mix Category L Classification Chinese Chicken Salad Mexican Pasta Salad Mexican Taco Salad Twisted Chicken Salad Sweet and Sour Meatballs Pasta Provencal Honey glazed Chicken Stir Fry Totals N 1600 M ( J) – M_____________/ N______________ = Average Contribution Rate,DOG – low contribution margin, low menu mix (low sales, low $$) if F is above the average J is High if F is below the average J is Low PUZZLE – high contribution margin, low menu mix (high sales, low $$) PLOW HORSE – low contribution margin, high menu mix (low sales, high $$) STAR – high contribution margin, high menu mix (high sales, high $$)

Now you create a menu

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