Management by Menu C hapter 1

Management by Menu Chapter 1 • LRJJ spring 2014 • Food and Beverage Management • FBM3196

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?

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.

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?

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

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.

Your vision statement Vision “Our vision is to be the preferred evening bar/restaurant for the LRJJ college and the SNU university” Mission The 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/

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

The Next Step 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?

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

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.

HOW CUSTOMERS USE YOUR BUSINESS • Think of customer motivations to visit your Restaurant! • You have the best Wifi connection • You offer the most hygienic environment • you area is safe and • You have convenient parking and it is female friendly • You are easy accessible by public transport • You allow pets • You are attracting a crowd with same social status, orientation and hobbies • You have a safe area where kids can play • F&B is not the primary motivation for customer to visit • your restaurant

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).

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

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 theincidental market.

Markets • Intended markets are often described as target markets • Definition of target markets: • A target market is a group of customers that thebusiness 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

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)

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.

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

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”

Consumer Behavior • Group Exercise: on campus Restaurant • To Start the planning process you need to answer these questions: • What mix of intended market and incidental market should I plan for? • What is the profit potential of each of these two market segments? • What products, services, and resources will I commit to these markets? • What types of value decisions do the members of these market segments make? Hand in paper next Monday and be ready for class discussion

“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

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 out Hand in paper next Monday and be ready for class discussion

Dining Based on Living Arrangements • The captive customer examples • Campus dining • Hospital and healthcare food service • Assisted living and continuing care retirement dining

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

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

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

Your Menu as the Central Planning Document • What business implications does the choice of menu offerings have? • Impact operational criteria • Facilities design • Financial success

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, Cookand 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

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.

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.

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?

Recap Monday Lesson 3rd of March • Provide data from industry research to the broad spectrum of customer motivations for eating out Hand in paper next Monday and be ready for class discussion Short group Discussion on the case study A night mare from the Seas

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

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

Changing Customer Perceptions • Some operators likely placed foiegras and caviar on their menus as a way to show worldliness and excellence. • Now foiegras 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

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_beef • Some 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#

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.

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

1.4 The Menu Life Cycle

A la carte Menu • Home Work • For the following lessons • Each group will need 3 a la carte menus from establishments in the city of shanghai • How can you obtain this menus?? • Paper copy • You need to understand the items on the menu • Hand in Wednesday

SHIFTING PARADIGMS • Graded research project • Student 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

Management by Menu C hapter 1