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. Strengths Weaknesses Opportunities Threats 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 List all possible items Eliminate items that are difficult to purchase, prepare or serve Fine-tune remaining items to fit operation Make sure all items can be successfully prepared at an appropriate price 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 TOTAL G-H or F x B J Category K Menu Mix Category L Classification Chinese Chicken Salad 210 6.85 2.05 1438.50 430.50 Mexican Pasta Salad 63 4.50 1.36 283.50 85.68 Mexican Taco Salad 390 6.00 1.77 2340.00 690.30 Twisted Chicken Salad 140 4.00 1.16 560.00 162.40 Sweet and Sour Meatballs 277 6.25 1.86 1731.25 515.22 Pasta Provencal 80 5.50 1.63 440.00 130.40 Honey glazed Chicken Stir Fry 440 1.35 1980.00 594.00 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 $$) STAR – high contribution margin, high menu mix (high sales, high $$)

Menu Descriptions Entice us to buy the food Lead us to expect it will taste great Chocolate Cake Belgian Black Forest Double Chocolate Cake

Which menu is better? Red Beans & Rice Seafood Fillet Grilled Chicken Chicken Parmesan Chocolate Pudding Zucchini Cookies Traditional Cajun red beans with rice Succulent Italian Seafood Fillet Tender Grilled Chicken Home-Style Chicken Parmesan Satin Chocolate Pudding Grandma’s Zucchini Cookies

Four Basic Themes Geographic Labels- Tex Mex Salad, Kansas City Barbeque Nostalgic Labels-Grandma’s Chicken Fricasse Sensory- Velvety Chocolate Mousse, Smooth, silky Brand Labels- Jack Daniels Glazed Ribs, Butterfinger Blizzard, Black Angus Beef Burger