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Purpose of Menu
- To know the prices and what is served
- Detailed information on allergies and nutrition information
- From owner’s standpoint, it tells you everything from equipment needed to food
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Who Prepares the Menu
People who are knowledgeable, know how food is cooked, know about nutrient content, know equipment
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Why Restaurants Fail
- Location
- Some new foods
- Lack of advertising
- Poor service
- Sanitation
- Lack of knowledge in finance
- Lack of knowledge in management
- Lack of knowledge about food
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Why Restaurants Succeed
- They enjoy eating and learning about the cuisine they have chosen
- They want their food to succeed
- They enjoy being with, and working with their target market
- They start at the level at which their experience indicates they should start
- Most start with traditional cuisine
- They are willing to learn from everyone
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Menu Trends
- Locally sourced meats and seafood
- Locally grown produce
- Sustainability
- -Balance of social, economic, and environmental factors
- Nutritionally balanced children’s meals
- Hyper local- restaurant has their own garden or do their own butchering process
- Sustainable seafood
- Gluten free/food allergy conscious
- Simplicity/back to basics
- Farm/estate branded ingredients
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3 Categories of Influence
- Organizational
- Customer
- Operational and managerial
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Organizational Influence
- Menu must be consistent with mission and goals
- Possible goals of foodservice industry
- -Schools
- -Hospitals
- -Restaurants
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Customer Influence
- Demographics
- Age
- Gender
- Health status
- Ethnicity
- Level of education
- Income
- Socioculture influence
- Nutritional requirements
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Customer Influence: Socioculture
- Marital status
- Making small meals when you’re by yourself
- Lifestyle
- Ethnic background
- Values
- Religious practices
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Operational & Managerial Influence
- Purchasing
- -What’s available for you to purchase
- Production
- -Staff, equipment
- Service
- Budget
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Operational & Managerial Influence: Production
- Equipment
- -You can only make what the equipment allows you to make
- Physical facilities
- -Space
- Personnel
- Skilled vs unskilled
- Availability of food
- Style of service
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Selective Menu
- Includes 2 or more choices in some or in all menu categories
- Full selective
- Semiselective
- Non-selective
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Full Selective Menu
All of the categories have a selection
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Semiselective Menu
Have some of the categories have a choice
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Non-Selective Menu
- Have no choice
- Used for special occasions
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Static Menu
Same menu used everyday
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Single Use Menu
Used one time and is not usually on the menu
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Cycle Menu
Serve the same menu every so often
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Menu Planning Variety
- Cooking methods
- Prices
- Color and texture
- Temperature
- Configuration
- -Everything cut in the same shape
- Taste
- Height
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Selling Price
- Needs to cover all costs, not just food costs
- Needs to also pay for labor, rent, utilities, upkeep
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No, you can cut corners
Can cut back hours and labor
Should foods costs be raised if not enough profit is being earned?
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Pricing: Psychological Aspects
- Odd cents
- Pricing by the ounce
- Two tier
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Odd Cents
Creates a sense of bargain
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Pricing by the Ounce
Helps customer feel like they have control of the price
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Two Tier Pricing
Have an upscale menu with higher prices, but it’s the same food
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Factor Method
- Also known as fixed factor and markup
- Raw food cost is multiplied by a predetermined factor that takes into account labor, supplies, and any projected profit
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Selling Price
food cost x factor
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Pricing Factor
100%/desired food cost%
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Prime Cost
Sum of food and labor costs is multiplied by a predetermined pricing factor that accounts for food and labor through separate percentages
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Break Even Pricing
Fixed cost/ selling price of meal- variable cost of meal
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Customer Satisfaction
- Surveys and Comment Cards
- Frequency Ratings and popularity indexes
- Sales data
- Assess actual reason for unpopularity
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Customer Satisfaction: Sales Data
Cash registers keep track of what was sold
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Customer Satisfaction: Assessing Reason for Unpopularity
- Prices
- Not enough promotion
- Unseasonal
- Wasn’t held to temperature
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Populartiy Index
- Must achieve 70% of expected number of sales for each item
- Total servings/number of unique entrees = expected # of sales
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Trend
- Long-term
- Local grown, organic
- Whole grain
- Gluten free
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Forecasting
- A systems approach to projecting or estimating patient/customer meals and food requirements
- Estimating future demand using past data
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Reasons to Forecast
- Means of communication with purchasing and food production
- Purchaser needs to know how much food to order
- Purchaser needs to know when the food needs to be available
- Minimizes over and under production
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Advantages of Forecasting
- Limited leftovers
- No run-outs
- More accurate purchasing of food supplies
- Meeting food cost goals
- Decreased inventory levels
- A smooth functioning food production area
- Creates a history of food consumption patterns for your facility
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Historical Data: Restaurants
- How many times the menu item was ordered
- How many times people came through
- Beverage sales
- How often you have to comp things
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Historical Data: Schools
- Sporting events
- # of students who get lunches
- Total number of people enrolled in school
- If staff purchase food
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Historical Data: Hospitals
- What type of patients come in
- What diets are served
- Typical stay length
- How many beds are there
- Admission and discharge dates
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Participation Factor
- Number of customers served/number of eligible customers
- Expressed as a percentage
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Short Term Factors Influencing Participation
- Weather
- Holiday
- Payday
- Special events
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Long Term Factors Influencing Participation
- Bad food
- Time of day
- New competition
- Economy
- Significant change in population mix
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Consistent Patterns Influencing Participation
- Discharges in hospitals- Fridays
- Planned patient admissions- Mondays
- Days of week that are heavier for surgeries and tests
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Selecting a Forecasting System
- Costs
- Accuracy/relevancy
- Lead time
- –Does it give you enough time to place orders
- Pattern of behavior
- –Can I adjust forecasting system
- Ease of use
- Level of detail
- Responsiveness
- –Generates accurate information on a timely basis
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Forecast Model: Moving Average
- Use records from the past
- Data is averaged and used as first forecast
- Next forecast is calculated by dropping the first number and adding the next
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Forecast Model: Exponential Smoothing
- Similar to moving average
- Weights data, more recent data are weighted more heavily than older data
- Accounts for seasonality of data
- Adjusts for forecast accuracy
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Forecast Model: Regression
- Past data are analyzed to determine the best mathematical approach to forecasting
- Requires assistance of a statistician
- Very detailed and involved, but will give accurate information
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Patron Sphere
- Focal point of purchasing
- Must decide what someone else will like
- –Low quality vs high quality ingredients
- Look at demographic coming into restaurant, cost
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Inner Sphere
- Most of a buyer's time is spent in here
- Buyer must have adequate time to do the job
- Good communication system is needed so information flows to and from management, accounting, and production
- List of approved purveyors and what each supplies must be formulated
- Things that can affect patron: budget, supplier ran out
- Purchase needs are determined, orders are placed and goods are received, stored, issued, and used
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Outer Sphere
- Generally called the market
- Need to know how it is organized and the functions required to get the right product at the right price
- – Do they do special deliveries, how many times do they deliver a month
- Things that can affect patron: drought, flood, early freeze, inflation
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Purchasing Authority
- The amount of the organizations money that an individual manager can spend on individual purchases without having to get the permission of superiors
- In general, as the managers attain more responsibility, the dollar amount they can spend increases
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Marketing Channel
- Growing
- Harvesting
- Transporting
- Processing
- Packaging
- Storing
- Selling
- Financing
- Supplying of market information
- –Nutrient content
- –Ingredients
- Each process and each transfer of ownership adds to the cost of the end product
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Place Value
- Getting the goods to the right place
- Transportation fee
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Time Value
The supplier adds cost to your end product to hold the item until you need it
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Form Value
Some break cases apart and sell you some
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Information Value
Provide nutrition information, recipe information, marketing
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Source Value
The distributor will track down an item for you if they don’t have it
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Primary Market
- Basic source of supply
- Farmers and ranchers
- Sets prices and quality standards
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Secondary Market
- Physical functional unit where products are accepted from the primary markets and distributed to local buyers
- Wholesalers, brokers, super distributors
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Local Market
- Suppliers within close proximity to the buyer
- The supermarket or farmer’s market
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Market Functions
- Exchange of commodities
- Supply of information pertaining to all aspects of commodities
- –May know that prices will go up/down
- –New items that are coming on the market
- Physical supply of commodities
- General business rules and laws pertaining to commodities
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Distributor
- Provide services above and beyond delivery at no additional cost to maintain customers
- Help unload goods
- May provide training to your wait-staff
- Quality control testing
- Can give you merchandising
- Provide nutrient information
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Broker
- Do not take title of the goods being sold
- Receive a commission for negotiating between the buyer and supplier
- –May need food from different distributors
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Manufacturer's Representative
- Do not take title, bill or set prices and often represent small manufacturing companies
- Companies play a flat commission on sales volume
- May know everything about one product, but nothing else
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Retailer
- Sells product to the customer
- Sam’s club, costco
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Factors Affecting Food Prices
- Adverse growing conditions
- Disease in animals
- Unusual consumer demand
- Seasonal variations
- Government policy
- Economic trends
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Skills Needed for Buyers
- Interpersonal communication
- Customer focus
- –Know it will have a good turn around
- Ability to make decisions
- Negotiation
- Analytical ability
- –Will this money I spent save me in the long run
- Managing change
- Conflict resolution
- Problem solving
- Influence and persuasion
- Computer literacy
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