| The industry experts have long sought to establish the right 'pedigree'
of menu analysis for foodservice operators and educational guidelines.
Currently, there are plenty of theoretical alternative approaches to menu
analysis available published in professional hospitality journals. Although
all of these menu analysis approaches advocate different tactical solutions
for analyzing the menu items, performance, they all share the same objective,
which to improve (or to provide a solution for) the current menu items
performance. However the question that poses a great dilemma for the foodservice
operators is which approaches or methods are suitable for practical application?
A recent research indicates that none of the theoretical approaches of
menu analysis is totally embraced by the foodservice operators when a menu
analysis is conducted. This paper is to ascertain how is the foodservice
operators conduct their menu analysis and what criteria are they based
on?
INTRODUCTION
Menu is one of the important aspects for the success of any foodservice
establishment. Perhaps it is arguably the soul of the restaurant. Menu
infers several interpretations for both the buyers and sellers. Khan (1991)
suggests that "menus are statements" of the food and- beverage items provided
by a foodservice establishment, primarily based on consumer needs and/or
demands and designed to achieve organisational objectives" (p. 40). Mooney
(1994) and Kreck (1984) note that menu can be interpreted as a list of
product range that a restaurant offers and the same time it can be a piece
of literature or display used to communicate the product range to the customer.
However, a recent study argues that "menus are more than the conventional
function of a communications and selling tool but also a research and experimentation
device that can be studied to increase restaurant profit" (Seaberg, 1991).
An interesting point is that the battle for pre-eminence menu offered
to the consumers is an endless task faced by most foodservice operators.
The model of new menu development advocated by Mooney (1994) which is illustrated
in Figure 1, shows how critical it is to have thorough research and analysis
of the various elements from the restaurant's objectives and strategies
to the bureaucratic processes of menu planning, selection, design, pricing
and analysis.
A matter of fact this process is actually an endless cycle of research
and analysis because once a new menu is developed that menu is periodically
reviewed for its effectiveness. Quite simply, the research process is crucial
to find out what is going on in the market and the analysis process determines
which dishes need further assessment. It is this periodical review known
as menu analysis that determines the success of the menu performance.
In broad terms, menu analysis can be defined as a range of techniques
and procedures that enable more effective decision making both with respect
to marketing and operating the menu (Atkinson and Jones, 1994). Various
tactical solutions to menu analysis have been sought in endless attempts
by many restaurant operators to improve menu performance. One of the notable
approaches that has gained enormous momentum both from the hospitality
literature and educational curriculum is Boston's matrix technique (Morrison,
1996) also known as the 'portfolio analysis' or menu engineering'. Jones
(1994) defines this approach as the "systematic evaluation of a menu's
cost and/or sales data for the purpose of identifying
opportunities for improved performance" (p. 205). One of the specific Boston's
matrix techniques known as menu engineering made popular by Kasavana and
Smith (1982) has taken a step further with the introduction of the computer
software packages (Dougan, 1994; Kasavana, 1996, 1997 and 1998). However,
the irony is many scholars and menu planners have criticized the imperfection
of these matrix approaches including the Kasavana and Smith's menu engineering
approach (Hayes and Huffman, 1985; Atkinson and Jones, 1994; Beran, 1995).
Subsequently more tactical solutions to menu analysis have emerged.
The issue of non-material variable costs, which is claimed being ignored
in the previous menu analysis approaches, becomes prevalent of its important
in the works of Hayes and Huffman (1995), Bayou and Bennett (1992) and
LeBruto et. al. (1995 and 1997) respectively. Other approaches such as
the micro-marketing mix (Atkinson and Jones, 1994) and economic approach
(Beran, 1995) have each advocated their own method of tactical solutions
to menu analysis.
Figure 1. Model of New Menu Development
| Marketing Objective
>>> |
Service objectives
and strategy |
<<< Environmental
analysis |
| Internal sources >>> |
Idea generation and screening |
<<< Magazines / competitors /etc. |
| Budget development >>> |
Menu framework development |
|
| Dish cost development >>> |
Menu item screening |
<<< Market assessment |
| Yield testing >>> |
Menu item design and testing |
<<< Consumer taste panel |
| Opertional personel >>> |
Operational testing |
|
|
Market testing |
<<< Consumers |
|
launch new menu |
<<< Consumers |
| Menu analysis >>> |
Review menu effectiveness |
|
Adapted from Mooney (1994) Planning
and designing the menu, In Jones, P and Merricks, P., Eds., The Management
of Foodservice Operations, London: Cassell, p.51
Although all these menu analysis approaches advocate different tactical
solutions for analysing the menu items' performance, they all share the
same objective, which to improve (or to provide a solution for) the current
menu items performance. However, the question that poses a great dilemma
for the foodservice operators is which approaches or methods are suitable
for practical applications?
Recent research indicates that menu analysis is not purely on the "process
of analysing costs and sales data in order to manipulate.. products on
the menu [but understand] in-depth customers' need and perceptions" (Jones,
1994, p. 214). Jones (1994) in his article entitled Menu Analysis
highlights three main approaches. One of the approaches he suggests
is "based on intuition and experience rather than detailed
quantitative analysis" (p. 206). Another recent survey conducted by HOTELS
reveals that there are alternative approaches to menu analysis that can
build revenue and keep repeat customers (Hensdill, 1998). According to
this survey, the positioning and descriptions of the menu item on the menu
can influence its popularity. In addition this survey also points out that
creative menu design with the use of tasteful product pictures and the
size of the menu are an integral part of menu planners' menu analysis.
To sum up, this summary reveals that there is no definite evidence of
what actual/or dominant method(s) of menu analysis are adopted by menu
planners in the global foodservice industry. The industry experts have
long sought to establish the right "pedigree" of menu analysis for the
foodservice operators and educational guidelines. In order to achieve this,
further research is required to examine and understand how menu analysis
is conducted by menu planners.
METHODOLOGY
In this research, a qualitative approach was undertaken to ascertain
chain foodservice attitudes in the menu analysis decision-making. Although
the acceptance of qualitative research methodology is less prevalent than
the quantitative research (Maykut and Morehouse, 1994; Brotherton, 1999),
it is argued that the choice of qualitative research would fulfil the needs
of the purpose of this research project. Quite simply, the interest of
this research is a phenomenological approach, an approach to understanding
how menu analysis is conducted by foodservice operators rather than the
use of a positivist approach, which is largely based on measurable variables
and provable propositions (op. cit., 1994).
This qualitative research approach to inquiry also involved a case study
approach, where people and setting were explored in-depth and described
in a series of mini-case studies reports. It is believed that a series
of mini case studies reports would enhance the body of knowledge in understanding
the intended research objectives. Thus, personal interviews were
deployed to explore the phenomenon of interest from the
foodservice operators with the use of a semi-structured questionnaire,
which was composed based on the secondary research and piloted in predetermined
sampling settings.
Undoubtedly, a large-scale population would make this qualitative case
study research more valid and reliable. However, to conduct in-depth personal
interviews in a large-scale survey would be too costly and time consuming.
This to a large extent answers why a case study approach was adopted in
this qualitative research. A list of twelve UK chains companies (See Table
1) with over 25 restaurants brands was compiled. The reason behind the
selection of chain restaurants was as followed: Restaurants that have a
chain affiliation are known to be more standardised and organised in their
overall operations. Mass financial capabilities and diversification of
divisions and departments provide huge advantage in making the operations
more efficient and effective. Furthermore with the increased numbers of
outlets, a need for better menu analysis methodology is surely crucial
apart from being competitive in the market.
Table 1. Major UK Chain Restaurants,
1994-1995
|
Company
|
Key Brands
|
Outlets
|
| Allied Domecq* |
Big Steak, Wacky Warehouse, Exchange |
270 |
| Bass* |
Toby, Harvester |
278 |
| Bright Reason PLC |
Pizzaland, Bella Pasta, Pizza Piazza |
190 |
| City Centr Rest. PLC |
Deep Pan Pizza, Garfunkels, Chiuita, Caffe Uno, UK Diner,
Raja Mama's, Nachos |
205 |
| Granada |
Happy Eater, Little Chef, Welcome Break, Granada |
400* |
| Grand Metropolitan |
Burger King |
380 |
| McDonald's |
McDonald's |
650 |
| Pelican |
Cafe Rouge, Dome |
100 |
| Pepsico |
KFC |
367 |
| Pizza Express |
Pizza Express |
94 |
| Scottish & Newcastle* |
Chef & Brewer, Old Orleans |
1,600 |
| Whitbread |
Beeffeater, T.G.I Friday's, Pizza Hut+, Brewer Fayne |
875 |
+ Pizza Hut in the UK is a joint venture between Whitbread
and Pepsico
* Restaurant operators within public house estates, including
many outlets also serving food
Source: Davis, et.al., (1998) Food
and Beverage Management, 3rd Ed. Oxford: Butterworth
Heinemann, p. 239 (After Keynote 1996 Market Report:
restaurants)
To a large extent, the variables that needed to be measured were quite
complex and subjective because most of the different approaches to menu
analysis advocated different criteria and each of them function differently.
Some of the menu analysis approaches have incorporated tangible and intangible
elements to advocate their menu analysis techniques. Because
of this, 'statistical generalization' or enumerate frequencies'
were considered unsuitable, instead
'analytical generalisation' or 'expand and generalise theories' was a more
appropriate selection of measurement.
MENU ANALYSIS: QUANTITATIVE APPROACH
The findings show that the obvious equipment used by the chain operators
to analyse the menu performance is the Electronic Point-of-Sale (EPOS).
Almost all of these chain companies have an advance computer system, which
is linked with the EPOS. Because of this the menu analysis is entirely
conducted in the head office and such analysis from the EPOS at the restaurant
outlets are no longer applicable.
Quantitative data analysis is predominantly the main method to assess
the menu mix sales volume popularity) and gross profit
profitability/ contribution margin). The findings imply that once the new
menu is launched in the market, the first criterion used to review the
menu effectiveness is the menu sales mix reports (quantitative data). Daily
sales mix reports are accumulated for a period of one month to produce
a monthly sales mix report. Every menu item sales volume and gross profit
are analysed and the outcomes of what actions should be done for the menu
items are decided in several ways.
However, this quantitative data analysis is not the sole determinant
to decide what actions should be done to the menu items. Other criteria
such as based on intuition, experience and company's financial policy are
also taken into considerations for appropriate alternative approaches.
This seems to confirm Jones's (1994) propositions where he argues that
'menu changes.. .are based on strategic decisions rather than simply on
analyses of operating performance (and) the addition and removal of a new
menu item is often based on competitive and market analysis" (p.. 213).
Details of these alternative approaches are explained under sub-heading:
alternative approaches to simple and complex menu analysis.
MENU ANALYSIS: QUALITATIVE APPROACH
Qualitative analysis approach is indeed equally important as the quantitative
data analysis for the chain operators when a menu analysis is conducted,
specifically deciding what actions should be done for the menu items. Endless
research projects are carried out to analyse customer trends in food preferences
and acceptances. These research projects are vital to supplement information
for menu development so that improvement for new and current menu items
in term of its value and nutritional acceptances, taste, ingredients and
presentation can be enhanced.
The analysis of customer trends is obtained in many ways. The findings
reveal that market analysis is the common method used to obtain the plausible
answers of customer trends. Analysing the target market disposable
income and age population, competitors menu and awareness of
current issues in food preferences and acceptances is the main areas of
concern in the market analysis. Apart from this market analysis, travelling
to Italy and French, which known of their gastronomic expertise is visited
regularly to seek popular dishes that suitable for UK market, particularly
in London market.
Based on intuition and experiences rather than relying detailed quantitative
analysis are also played crucial part when a menu analysis is conducted.
It should be remembered that most of these chain companies have been established
for many years therefore, decision on how to analyse, amend and develop
the menu items is largely based on previous experiences. Because of this,
many of the chain operators analyse their menu items by advertised its
on the black board menu, popular radio channels, and relevant magazines.
Customer feedback such as complaints, suggestions and compliments about
the menu items are crucial for the success of the menu efficiency.
Sometimes low popularity and profitability of menu items
may not cause by diminishing of customer demands but poor control of the
food production is likely be the culprit. Because of this, mystery shoppers
are assigned to analyse the menu performances in term of its quality, presentation,
taste, and the waiting period after the order taken. The accumulative of
this crucial information is indeed the 'source of aspirations' for the
chain operators to act what amendments and developments should be done
for the menu items.
THE FINDINGS OF HOW MENU ANALYSIS IS CONDUCTED
The findings appear to disclose that the prevalent methods of how menu
analysis is conducted by chain operators are combination of qualitative
and quantitative analyses. Because of the complexity of the menu analysis
procedures, the author uses a diagram shown in Figure 3 to the present
the findings so that understanding of how menu analysis is conducted can
be enhanced. Figure 3 demonstrates how menu analysis is conducted using
both the qualitative and quantitative analyses. Each step of
the menu analysis procedures is explained according to the given numbers
shown in the Figure 3.
Figure 3 indicates that chain operators analyse their menu effectiveness
after the menu is launched. These findings can be linked to Mooney's (1994)
model of new menu development, where he argues that the review of menu
effectiveness (menu analysis) is performed after all the menu development
processes are thoroughly analysed and implemented.
Figure
3 Menu Development and Analysis
The Review of Menu Effectiveness
Notably, quantitative data analysis is the dominant approach used by
chain foodservice operators when analysing the menu mix. The use of sales
mix reports generated by EPOS is the main source of inputs to analyse the
menu mix performances. Sales volume popularity) and gross profit profitability
/ contribution margin) are the common criteria under investigation for
every menu item. In addition, the use of gross profit percentage (GPP)
is also found to be adopted. Although different methods are used
to measure menu effectiveness, some of the methodologies used by the chain
operators to analyse the menu item popularity and profitability seem corroborated
with the theoretical menu analysis approaches. Nevertheless, none of the
theoretical methodologies of menu analysis are totally embraced by the
chain operators.
Apart from using the quantitative data to analyse the menu performances,
the use of mystery shoppers is also adopted to analyse the menu performances
in term of its quality taste, value and overall presentation.
Additionally, periodical inspection of food production processes
are also conducted by the chain operators for making sure all standard
procedures are followed according to specification. The finding implies
that these analyses are indeed very essential so that the generation of
the sales analysis produces more accurate and reliable information.
After the menu analysis is completed, the next stage is to determine
whether the menu items should be modified or not. Based on the theoretical
menu analysis approaches, clear guidelines of what solution should be done
for the menu items are demonstrated. Unfortunately, there is no definite
evidence emerged in the findings in term of which criteria used to decide
whether the menu items should be modified or not. Furthermore, the
decision to ascertain which alternative approaches should be taken for
the menu items is somehow varied from one chain operator to another.
For example, one of the chain operators is hardly relied on the sales
analysis, instead the company's President experiences in products improvement
(modification) is the main source for decision-making. Unlike, other chain
operator, the menu items are analysed comprehensively and it involves more
than one person/department. Yet, the decision to ascertain which alternative
approaches should be taken for the menu items is still pending on the market
research and customer trends. Thus, the decision making to decide which
appropriate approaches to be done for the menu items is quite complex
and it involves various persons /departments. Nevertheless,
regardless of which decision the chain operators decide to base on, several
alternative approaches are highlighted based on the findings of the case
studies, which can be the ideal solution. Detail explanations of each of
these alternative approaches are presented below.
Alternative Approaches to Simple Menu Analysis
There are four alternative approaches, which fall under the 'simple
menu analysis'.
-
Promotion,
-
Re-position,
-
Retention and
-
Elimination
are the notable findings used by the chain operators when they decided
not to do anything to the menu items regardless of what results obtained
from the sales analysis. It should be remembered that in the theoretical
menu analysis, especially the Boston's matrix approaches, any menu items
that are categorised 'problem items' will be modified its composition in
order to change the items to 'star' or 'prime' category. However, in reality
this is no the case. From the analysis, it is found that the main reasons
why the foodservice operators are declined to modify the menu items composition
are because of the following criteria:
| Menu Promotion (1)
Promotion is used to analyse further the menu effectiveness because
experiences and marketing strategy indicated that lack of awareness from
the public eyes may be the caused why the menu items are low in demand.
This strategy is adopted because the result of low popularity obtained
from the sales analysis may not be necessary due to loss of customer demands.
This strategy correlate with Bowen and Morris (1995) definition that highlights
the advertising maxim, "unseen is unsold". Sometimes the demand
of the menu items is still alive but lack of public attentions can cause
the faith of the menu items in jeopardy therefore, every precaution should
be observed before the menu items undergo such modifications. Menu promotion
involves both internally and externally. Black board menu and mini table
standing menu, which highlights 'problem dishes' only, are the example
of internal promotion. On the other hands, using popular radio channels,
posters and fliers in busy places such as cinema, hybrid places, etc. is
the notable findings in their external promotions. |
| Menu Repositioning (2)
Changing the presentation and layout of the menu design is quite essential
for boosting the menu sales. A matter of fact, this is one of the dominant
approaches used to boost the sales of low popularity menu items by placing
them at the strategic location known to be in the centre of the menu. These
findings can be linked to the works of Miller (1980), where, according
to him, menu items that most want to sell should be placed above the middle
on a one-page menu. The analysis carried out on respondents' responses
has revealed that placing the items at the wrong position can cause an
adverse effect of its demand. Because of this, the result of the sales
analysis to some extent can provoke incorrect decision on what solutions
should be taken for the menu items. Additionally, proper choice of words
uses to describe the dish ingredients and methods of cooking also played
a part for improving the menu popularity. |
| Menu Retention (3)
Undoubtedly, successful menu performances in term of its popularity
and profitability should be retained. There is nothing to do with these
menu items except to maintain or/and improve its quality in order to increase
the popularity. However, an interesting finding obtained is that any menu
items, which are known as 'problem items', are still being retained in
the menu. Nonetheless, the composition of these items is subjected to be
reviewed and modification is likely to be implemented.
Subsequently, once these three options are finalised and implemented,
the menu items will undergo to menu analysis again. In fact, the review
of menu effectiveness is an ongoing process mainly because of the changes
in customer demands. It is these changes in customer demand, which make
the menu items to be reviewed periodically. Needless to say, the ultimate
aim is to detect the 'shadow of customer demands' (which either be high
or low) before it happened. Thus, the use of sales analysis to measure
the menu effectiveness to correlate with the alternative approaches as
to improve the item performance is insufficient. A matter of fact, using
market analysis and customer feedback to detect customer trends and correlates
with the alternative approaches as to improve the items performance is
more convincing than the sales analysis. These findings probably answer
the reason why the theoretical menu, which uses hard data to analysis menu
item performance as to improve the item popularity and profitability, is
problematic. |
| Menu Elimination (4)
There are several reasons why decision is made to eliminate the menu
item. Menu items that are no longer popular properly due to menu fatigue
and changes of customer preferences and acceptances such as healthy foods
are the real caused why the menu items are eliminated. Limited supplies
and escalating in product prices are also found to be the caused for menu
items to have been eliminated. An interesting point emerges that decision
making to eliminate menu items is predominantly based on qualitative analysis
rather than from the sales analysis. |
| Introduce New Menu Items (5)
Decision to introduce new menu items is mainly because of customer demands.
The most common sources referred by the chain foodservice operators when
considering to add menu items into the menu are company's research
and development department (R&D), market information from Mintel
and Keynote reports and Henley Data, professional hospitality journals
and customer feedback. It should be remembered that the addition
of menu items can only be materialised after thorough analysis from market
demands. Moreover, current kitchen equipment and personal expertise about
the new dishes are also due consideration in the internal analysis. Finally,
the new menu items are launched in the market and the process of measuring
the menu items effectiveness begins again. |
Alternative Approaches to Complex Menu Analysis
There are five alternative approaches, which fall under the 'complex
menu analysis'.
-
Presentation,
-
Re-price,
-
Re-costing,
-
Modify recipes and
-
Reposition
are the notable alternative approaches used by the chain foodservice operators
to modify the menu items composition. The finding reveals that most of
the chain operators make the decision to modify the menu items based on
the actual performance against the predetermined criteria and allow the
menu items to be further developed as appropriate. In this case, menu items
which fall below acceptable level are bound to be undergone such modifications.
Unfortunately, details of the 'acceptable level' are somehow quite ambiguous.
It appears that there is no definite time period when the menu must be
changed or modified after the launched of the menu. Regardless of how frequents
the menu items are modified, here are the alternative approaches adopted
by chain operators as to improve the current menu items performance.
| Menu Items Presentation (6)
The main references that are used to decide the modifications of the
menu items presentation are mystery shoppers and the customers. Customer
feedback such as complaints and suggestions are essential for
improving the menu items presentation. However,
what form of research instrument are used to seek customer feedback is
not mentioned. The author suggests that an "informal procedure" is likely
to have been adopted where such feedback is reported on a random basis
based on the recollection of staff experiences. Unlike the mystery shoppers,
there are more formal and standardised, and independently performed by
outside foodservice consultant. Depending on this feedback analysis, the
presentation of the menu items may be modified either one or combination
of these elements: taste, garnishing, saltiness, colour, texture, etc.
Nevertheless, the use of chefs artistic expertise in food presentation
also plays a part in decision making for menu items presentation. |
| Menu Re-pricing (7)
Usually, such decision to re-price the menu items is caused by several
factors. The finding indicates that inflation is the main caused
why chain operators re-price the menu items. Another factor that contributed
to menu re-pricing is because of over-pricing the menu items. For
example, one of the operators says that over-pricing the menu items could
be the main reason why the demand of such items declined and not because
of the deterioration of the foods quality or demand. When the selling price
is changed to slightly low than the former one, the popularity of the menu
items has increased by 5 percents. In addition, unavoidable factors such
increase in distribution costs and liquor tax imposed by the Government
also lead to re-pricing the menu items. Of course, other considerations
such as company financial policy, food costs and pricing strategies are
also contributed to the changing of the selling price. For instance, the
psychological pricing method where by all the menu prices end with either
5 or 9 number, which can be associated with the theory of 'magic numbers
or costless approaches' highlighted by Pavesic (1989) and Carvin &
Norkus (1990) also found being used by these chain operators. |
| Menu Re-costing (8)
An obvious finding show that the cause of re-costing menu items is highly
correlated with the change of the product specifications. Any changes on
products purchase price from the suppliers therefore, leads to the change
of the standard specifications. Notably, the standard specifications are
designed by the menu planners which than becomes the control tools for
menu recipes and portion size. Simply put, any modification on the items'
presentation is indirectly caused its recipe specifications to change.
Thus, any changes involve between these factors will lead to menu re-costing.
Apart for that, the change of the item portion size also leads to menu
re-costing. Above all, many chain operators have allocated a budgeted food
costs by the Finance department for every chain's outlet for cost control
purposes. Hence, any chains' outlets that are found to have been exceeding
the budgeted food costs that outlets' menu items cost will be
reviewed and menu re-costing is subsequently followed. |
| Recipes modification (9)
Recipe modification is basically linked with the menu re-costing. |
| Menu Re-positioning (10)
Unlike the menu repositioning discussed earlier, this part discusses
those menu items that involve several modifications from its name, recipe,
selling price and presentation. The findings reveal that after the menu
items undergo several modifications (depending on how many menu items are
modified) new menu design is developed with high probability of changing
the menu layout and general presentation of the menu card, since the former
menu card is no longer applicable with the modifications being made. Thus,
the applications of the menu repositioning discussed earlier are being
used again. However, if only a small proportion of the menu items undergone
such modifications than the menu items may go for promotion or repositioning. |
Launch Revised Menu Item(s)
Subsequently, after the menu items undergone such modifications regardless
of which alternative approach is used these revised menu items are reviewed
of its effectiveness again. Similar procedures of menu
analysis discussed above are applied and the processes of how menu analysis
is conducted begin again.
CONCLUSION
The analysis of the case studies reveals that the common methodologies
adopted by the chain operators when engaged in menu analysis are qualitative
and quantitative analyses. However, the finding indicates that the quantitative
analysis is insufficient to generate pertinent information for decision-making
in improving the menu items performance. Instead, the qualitative
analysis is notably regarded as the 'source or guidelines' in decision-making.
Subsequently, it is observed that the main focus of the menu analysis is
to detect the trends of customer demands before it actual occurred. Thus,
using the quantitative analysis for measuring the menu effectiveness as
to improve the menu items performance is actually incomplete simply because
there are other reasons that can cause the decline of the menu items sale,
which can not be explained from the sales data.
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