ProStart 2 Chapter 2 Menu Management

Two step formula for "contribution margin" method

(Total nonfood cost + Target profit) ÷ Number of guests = "contribution margin" Contribution margin + Food cost = Menu price

Two main purposes of price on menu

1. It provides information to guests 2. it determines profitability

Limited menu

A menu that typically offers only a few items, which means fewer ingredients, making it easier to keep track of costs, inventory, and pricing

Contribution margin method

A pricing method that uses operation-wide data to determine a dollar amount that must be added to each major menu item's food cost.

Sales mix analysis

An analysis of popularity and profitability of a group of menu items to determine which items are most popular and which contribute the most money to expenses and profit; the results determine whether managers need to make changes in menu pricing, content, or design. To be effective, the analysis should be done at least four times per year.

Prix fixe menu

Both casual and formal operations use this type of menu, which offer guests multiple courses for a single set price, ensuring a higher check total by bundling multiple courses together while also offering the guest a discount on that higher total; for example, a choice of appetizer, full entree with sides,and a desert might be offered for one price, and that price is often slightly lower that if each course or item were purchased separately

Sales volume percentage

Comparing the number of each menu item sold to the total number of items sold on the entire menu in the same time period; allows managers to express a particular menu item's sales as a percentage of total sales.

Profit

Describes the amount of money remaining for an operation after expenses, or costs are paid.

placement

Guests are influenced by the __________________ of items on the menu. Marketers and chefs may choose to highlight the items they most want to sell by placing those items at the top of the menu.

Layout

How the menu is categorized and sequenced.

Formula for "food cost percentage" method

Item food cost ÷ Food cost percentage = Menu price

Stars

Menu items that are both popular and profitable.

Plow horses

Menu items that are popular but less profitable

Dogs

Menu items that are unpopular and unprofitable.

Puzzles

Menu items that are unpopular but very profitable.

limited time offer (LTO) menu

Menu with items that are only offered for a short period of time,allowing for the marketing of seasonal food or introduction of new menu ideas and concepts; LTO's are most popular with quick service and casual-dining operations, offering a low-risk way to test new ideas while increasing guest loyalty and keeping interest

Menu boards

Menus written on a board or wall - such as in chalk on a blackboard - that are visible to all the patrons in the dining room.

decrease its price.

One of the best solutions to helping out a puzzle is to

Food cost percentage method

Pricing method that sets the percentage of the menu price that the food cost must be, and then calculates the price that will provide this percentage.

Menu engineering

Process that systematically breaks down a menu's components to analyze which items are making money and which items are selling, so that managers know which menu items to leave alone, which need an increase or decrease in price, which to promote, and which to eliminate.

Spoken menu

Situation where servers memorize the menu and relay it verbally to guests, which can help personalize the menu and create a more intimate feel for the operation as a whole.

Target margin

The margin of profitability an operation is aiming for.

place an order

The menu is where sales are initially won or lost. If, for example, guests like what is on the menu, and the prices seem fair, then they are likely to ______________.

Sales volume

The number of times an item is sold in a time period; generally, managers sort the sales of items by category (appetizers, entrees, etc.)

Q factor

The total cost of food items that guests do not order but receive anyway, such as salt and pepper on the table, bread and butter or ketchup. This cost is usually factored into the price of each entree on the menu.

Menu

There is no stronger multipurpose tool for a restaurant than its ________.

California menu

This menu lists all meals available at any time of day, which accommodates a wider variety of guests who may differ in lifestyle and work schedules; guests can choose whatever they want whenever they want it-for an example, breakfast at dinner time. Dines that are open 24 hours a day might use a California menu.

Fixed menu

This menu offers the same items every day,with the advantage that guests know what to expect every time they return; many chefs work with a fixed menu to offer guests consistency, but then supplement the fixed menu with a du jour menu to offer variety

A la carte menu

This menu prices each item separately, and nothing comes with anything else; for example, a meal such as steak, potatoes, and a vegetable will have separate prices for each item, and they need to be ordered individually.

Table d'hôte menu

This type of menu, frequently seen at banquets, is similar to a prix fixe menu in that it bundles various elements of the menu into one package; for example, such a menu might present in advance-four meals, and each would include a number of courses and possibly even beverages, all for one price.

Cyclical menu

With this menu, chefs or managers change items after a certain period of time(daily, weekly, monthly ,etc) depending on their objectives and the target market; for example, an operation might serve four different menus that correspond to the sour seasons.

Pricing the menu

critical process for any operation.

These menu items should be eliminated if possible and replaced with more popular items.

dogs

These items are often an important reason for a restaurant's popularity, so changes in price or portion amount should be considered with care.

plow horses

The number of these on a menu should be limited. If sales of these items can be substantially increased without decreasing the price, the item could easily become a star

puzzles

They are the celebrities of the menu, the highest-priced, and may be less price sensitive than any other items on the menu.

stars

Margin

the difference between the amount of money left over from the sale of food and beverages and the cost of preparing them and paying for another overhead expenses, like rent and heat.

Du jour menu

this menu simply lists the menu items that are available on an particular day ("du jour is a french term that means "of the day"), often presented as a "Daily Specials" menu in the United states; it can be an insert in the standard menu, written on a blackboard, or described verbally by the service staff.