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A SIMULTANEOUS ASSESSMENT OF THE HIERARCHICAL MODELS OF MARKET ORIENTATION AND EXTERNAL ENVIRONMENTAL FACTORS (EEFs) ON THE RELATIONSHIP
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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.
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
Source: Davis, et.al., (1998) Food and Beverage Management, 3rd Ed. Oxford: Butterworth
Heinemann, p. 239 (After Keynote 1996 Market Report: restaurants)
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.
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.
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
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.
There are four alternative approaches, which fall under the 'simple menu
analysis'.
1. Promotion,
2. Re-position,
3. Retention and
4. 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:
There are five alternative approaches, which fall under the 'complex menu
analysis'.
1. Presentation,
2. Re-price,
3. Re-costing,
4. Modify recipes and
5. 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.
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)
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.
REFERENCES
Atkinson, H. and Jones, P. (1994), Menu Engineering: Managing the Foodservice Micro-
Marketing Mix, Journal of Restaurant and Foodservice Marketing, Vol.1, No.1, pp.37-55.
Beran, B. (1995), Menu Sales Mix Analysis Revisited: An Economic Approach, Hospitality
Research Journal, Vol.18, No.3, pp.125-141.
Canmin, J. and Norkus, G.X. (1990) Pricing Strategies for Menus: Magic or Myth?, The
Cornell Hotel and Restaurant Administration Quarterly, Vol. 31, No.3, pp.45-SO
Davis, B., Lockwood, A. and Stone, 5. (1998), Food and Beverage Management, 3rd ed.,
Oxford: Butterworth-Heinemann
Dougan, J. (1993), Menu Engineering with Electronic Spreadsheet, The Bottomline, Vol.8,
No. 6, pp.15-17.
Fuller, J and Wailer, K. (1991), The Menu Food & Profit, London: Stanley Thornes
Hayes, D. K. and Huffman, L. (1985), Menu Analysis: A Better Way, The Cornell Hotel and
Restaurant Administration Quarterly, Vol.25, No.4, pp.64-70.
Jones, P. (1994), Menu Analysis in Jones, P. and Merricks, P. (Eds), The Management of
Foodservice Operations, London: Cassell, pp.205-215.
Kasavana, L. M. (1996), Menu Engineering: Bottomline Software, The Bottomline, Vol. 11,
No. 13, pp.26-29.
Kotas, R. and Davis, B. (1981), Food and Beverage Control, Glasgow: International
Textbook.
Kreck, L. A. (1984), Menu: Analysis and Planning, 2nd ed., New York: Van Nostrand
Reinhold.
LeBruto, S. M., Quain, W. J. and Ashley, A. A. (1997), Using the Contribution Margin
Aspect of Menu Engineering to Enhance Financial Results, International Journal of
Contemporary Hospitality Management, Vol.9, No.4, pp.161-I67.
Mooney, 5. (1994), Planning and Designing the Menu, in Jones, P. and Merricks, P. (Eds),
The Management of Foodservice Operations, London: Cassell, pp.45-58.
Pavesic, D. (1983), Cost-Margin Analysis: A Third Approach to Menu Pricing and Design,
International Journal of Hospitality Management, Vol.2, No.3, pp. 127-134.
Pavesic, D. (1985), Prime Numbers: Finding Your Menu's Strengths, The Cornell Hotel and
Restaurant Administration Quarterly, Vol.26, No.3, pp.71-77.
Seaberg, A. G. (1991), Menu Design: Merchandising and Marketing, 4th ed., New York: Van
Nostrand Reinhold.
Uman, D., (1983), Pricing for Profits, Restaurant Business, 1 April, pp.157-168.
Contact:
Professor Kaye Chon
Chair Professor & Head
Dept of Hotel and Tourism Management
The Hong Kong Polytechnic University
Hung Hom, Kowloon, Hong Kong
Telephone: +852-2766-6382
Fax: +852-2362-6422
Email: hmkchon@polyu.edu.hk
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