Menu Development Process
|Fourth International Conference
in Southeast Asia & Indo-China: Development, Marketing and Sustainability"
June 24-26, 2000
|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
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.
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.
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.
* 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.
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'.
Alternative Approaches to Complex Menu Analysis
There are five alternative approaches, which fall under the 'complex menu analysis'.
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.
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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Professor Kaye Chon
Chair Professor & Head
Dept of Hotel and Tourism Management
The Hong Kong Polytechnic University
Hung Hom, Kowloon, Hong Kong
Email: [email protected]