TIM 313: Exam 1

How do you determine beverage cost and selling price?

1. 32 oz-2 oz=30 oz (ALWAYS the first step!) 2. 30 oz / the amount you pour in oz. This is the amount of drinks you have. (Remember: if the number comes out to a decimal, just round down to the nearest whole number.) 3. Divide the given cost by the amount of drinks you calculated. This is your beverage cost. 4. Divide your beverage cost by the beverage cost percentage. This is your selling price (Remember: round up to the nearest quarter.)

How do you determine food cost and selling price?

1. Change the purchased amount from lbs to oz (16 oz=1 lb) 2. Multiply the total amount oz to the percentage of loss 3. Subtract the amount lost in oz from the total oz 4. Multiply the purchased amount in lbs to the given price 5. Divide that price (the answer to the last step) by the difference that you got in step 3 6. Multiply the given serving size to the price you just got. This is your food cost. 7. Divide your food cost by your food cost percentage. Round up to the nearest quarter and this is your selling price.

How do you determine food cost and food cost percentage?

1. Do all the same steps for finding food cost steps 1-6. 2. Divide your food cost by the selling price. This is your food cost percentage.

How do you determine beverage cost and beverage cost percentage?

1. Follow same steps to get beverage costs 1-3 2. Divide your beverage cost by the selling price. This is your beverage cost percentage.

What are the three types of management in food service?

1. Top Managers 2. Middle Managers 3. Supervisors

What Is a franchise?

A food operating company that offers similar products or services in many locations. The franchisee pays fees to a franchisor in exchange for a right to use the name, building design, and business methods of the franchisor. The franchisee must agree to maintain the franchisor's business and quality standards (through the franchise agreement).

What is a chain?

A food operation that are a part of a.multiunit organization. They often share the same menu, purchasing supplies and equipment cooperatively and follow operating procedures that have been standardized for every restaurant in the chain. It may be owned by a parent company, franchise company, or a private owner or owners.

What is a noncommercial food operation?

A food operation that exists in properties for which providing food and beverage is not the primary mission. (Examples: schools, health care facilities, businesses, prisons and military installations)

What is an independent operation?

A food operation that is owned by an owner or owners who have one or more properties that have no chain relationship. Menus may not be identical between properties and food purchase specifications (quality/quantity and other characteristics of the food) may differ. Lastly, their operating procedures differ.

What is a commercial food operation?

A food operation that seeks to maximize profit through the sales of food and beverages. (Examples: freestanding/independent restaurants, hotel dining rooms, coffee shops, quick-service restaurants, and ice cream stands)

In identifying market area characteristics, what are some types of demographical information that would be helpful?

Age, gender, marital status, number of children, type of employment, area's volume of retail sales, the impact of tourism, types of other businesses, etc.

When should a Feasibility Study be conducted?

Before the food operation is constructed (if brand new) and or purchased/leased.

What is a typical type of public relations (plus what are some other types)?

Charity is the most typical. (Other types include: sponsoring local sports teams and other community organizations).

What types of strategies lie within the special promotions category?

Coupons, product sampling, contents, packages, premiums, gift card/certificate, discounting, and bonus offers.

What types of people are considered the primary category of people whom managers interact with?

Guests, owners, managers, and employees.

What is advertising used for?

Informing the public about the food service facility and persuading them to visit.

What types of strategies lie within the sales category?

Internal and external. Internal includes Suggestive selling, Internal merchandising, and special promotions.

Why is projecting operating results important?

It clearly explains the basis of the estimate for each major revenue and expense category. Potential investors need this information to decide whether they want to finance the project. It can also guide managers in planning the budget for the facilities first year of operation.

What does Internal merchandizing entail?

It involves the use of in-house signs, displays and other promotional material to increase sales. (Examples: Posters, table tent cards, Wine displays and desserts carts.

What is the general idea of publicity?

It is free coverage of an operation, its staff, or special property events by the media.

Why is evaluating the proposed site so important and what kind of information does it collect?

It is one of the most important variables in determining the success/failure of the food operation. It collects data such as number of people working in the surrounding area, parking, traffic flow, accessibility, etc.

What is the general idea of public relations?

It is the process of communicating favorable information about your operation to the public in order to create a positive impression.

What is Suggestive Selling?

It occurs when food servers use techniques to sell additional higher-priced menus items such as desserts, appetizers, wine, premium liquors, etc.

What is the purpose of estimating demand and how can the information be gathered?

It provides an overview of dining trends and market demands. It begins with the market area's restaurant and bar sales and can be gathered by surveying guests on their banquet, restaurant, and meeting room needs.

What does analyzing competitors do and what kind of information does it collect?

It takes an inventory of all competitors around the projected site, helps to establish pre-opening marketing strategies, and can be useful in creating the overall design of the food operation. It collects data such as the competitor's location, type of restaurant, volume of business, hours of operation, menu prices, type of service, number of seats, etc.

What is does the marketing plan do?

It translates ongoing market research into strategies and tactics.

What does external selling entail?

It uses sales people to sell outside groups on banquets and other large food and beverage functions. (Examples: food and beverage departments in the hotel, and caterers with banquet facilities.

What is the effect of public relations on guests?

Just by satisfying your current guests' satisfaction and correctly handling their issues and complaints is a big contribution to good public relations and the success of your company. With that, satisfied guests can spread positive word of mouth referrals to others.

What can managers do when dealing with publicity?

Managers should try to generate as much positive publicity as possible. For instance, they can inform the media of upcoming events in hopes that they will cover it in a positive light.

What are the 3 categories of people in the food service business?

Managers, production personnel, and service personnel.

What types of strategies lie within the advertising category?

Outdoor signs, newspapers, magazines, radio, television, direct mail, and the internet.

What are the seven tasks in the management process?

Planning, organizing, coordinating, staffing, directing, controlling, evaluating.

What are the tools used to implement the marketing plan?

Sales, Advertising, and Public Relations + Publicity.

What are the steps in a typical marketing plan?

Select target markets, determine market objectives, create action plans, evaluate plans, and set up new objectives.

What are the different types of internal selling strategies?

Suggestive selling, internal merchandising, and special promotions.

What types of people are considered the secondary category of people whom managers interact with?

Suppliers, the local community, and government regulatory agencies.

What is the effect of publicity?

The media can make your food service operation known by discussing the food, beverages, service atmosphere, table settings, and price. You can control the placement and content when you are advertising in the media, but you cannot control publicity. (It is basically raw exposure for the food operation).

Who is the franchisor?

They are the business or corporation that owns the trade-marks and business models who is also the seller of the franchise facility.

Who is the franchisee?

They are the owner and purchaser of the franchise facility.

What do Top Managers do?

They carry out the long-term plans and goals of the company and maintain the overall business environment.

What do Middle Managers do?

They carry out the short-term goals and keep communications flowing between upper management and supervisors and employees.

What do Supervisors do?

They link the management and employees together and typically use their technical skills to carry out the job.

What is a Feasibility Study conducted for?

To: identify market characteristics, evaluate the proposed site, analyze competitors, estimate demand, and project operating results.