Product and service deveIopment

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Aims and objectives
The main aim of product/service development is to enable
food and beverage managers to identify the influence of products,
services and producthervice development on the success
of the operation. Service is an integral part of all hospitality
products, therefore the approach to both product and service
development must be similar. For the purpose of this article
at least, the term ‘product’ may be assumed to include all
aspects of hospitality including service.

The aims of product development are to:
× Improve market share.
× Increase volume.
× Modify customer mix.
× Standardize and replicate existing products, as well as
to introduce new lines.
× Manage price against current trends in spending and
competition.
× Identify opportunities to gain advantage through
product promotion.

The significance of standards and standardization have been
identified and discussed in previous articles, particularly
, Quality. Clearly an integral part of product development
is to arrive at workable definitions and standards.
Such definitions and standards must be a direct response to
customer need for quality and value (price).

The objectives of product development are to:
× Appraise opportunities for enterprise (product development)
to improve trading position.
× Identify a range of strategies for improving the performance
of products, services, menus and drinks lists.
× Understand the impact of product development on a
range of related activities.
× Review existing products/services in terms of cost,
revenue and profit.
× Maximize operational potential by manipulating costs,
prices and/or sales mix.
× Justify costing/pricing strategy.
× Focus attention on those areas of the operation
(products and services) which yield most effect.

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What is product service development?Product development may be defined as the examination ofproducts and services in order to identify opportunities forimprovement, customer satisfaction and profit. Developmentmay include the modification of existing products in responseto identified opportunities and emerging trends. The purposeof product development is to provide popular, high-qualityproducts in an ever changing market, ensuring that suchproducts offer the best value, optimum choice, attract customand guarantee satisfaction (delight). Effective product developmentis based on knowledge of current productstrengths/weaknesses and customer need (trend), supportedby developments in technology and systems.Product knowledge is based on understanding of:- product standards, quality- market position- location, access, amenities- price, competition, differentiation- business patterns together with an appreciation ofconsumer needs (refer back to marketing):product attributes: value and unique selling points- service characteristics- staff skills and attributes- existing customer data- potential customer researchWhat is the product?Before we embark on product development we must have aclear understanding of what products and services are. In thehospitality industry we have a number of layers and interrelationshipswithin which development can take place: themeal experience, the menu, dishes and drinks, systems ofdelivery, style of service. For the purposes of development wecan identify three specific elements: concept, package,content (CPC). Product development requires the planned,harmonious, integration of each; a weakness in any onemight destroy the whole.- Concept The meal experience, environment, ambience,systems of delivery and service style.- Package Menus, dishes and drinks, choices andoptions, providing variety within constraints(limitations based on concept).- Content Commodity, method and process/procedures,planning and detailed specification.

Different operations may place greater emphasis and focusattention on one particular element, e.g.:TGI Fridays the total experience = conceptThe Savoy Hotel the menus and drinks lists = packageMcDonald’s the Quarterpounder = contentThere are two aspects of product development:(a) The development of new products/services, either as:(i) A response to emerging trends, consumer demand orchanges in technology andlor food processing, or(ii) InnovationFor example, the ability of petrol stations to dispense hotmeals only became possible as a result of technology(programmable microwaves) and food processing (cookchillproducts) and customer acceptance of both.(b) The modification of existing products/services (quality,efficiency, effectiveness, economy) which, like (a) abovemust be a response to trend, demand or innovation.For example, chocolate sweets do not sell well in hotweather. Many consumers who like chocolate wouldstore it in the fridge. If we recognize this trendldemandobviously it would make sense to display chocolatesweets in chilled cabinets. Add a little innovationsupported by food processing technology and we soonhave a range of ice creams based on popular sweets(Crunchie, Snickers, Mars, etc.) and we all know howpopular they have become.The main features of product development are concern for:- quality, raw materials, freshness, temperature, presentation- health, hygiene, safety- price, portion size, valueWhy is product service developmentimportant?Product development is visible evidence of our concern for,and response to, customer need and emerging trends. In orderto offer good quality and value we must continuouslyexamine issues of economy, efficiency and effectiveness.Keeping ahead of the competition will require innovation -products that are new, different and exciting - refinements toour brand image and reinforcement of product differentiation.

Opportunities and constraints:× brand image× nutrition and dietary requirements× availability of resources (including staff)× controllability of raw materials (standard yields)through:- purchasing (raw material specifications)- suppliers- perishability (convenience foods)- process (testinghasting)- holding ( freezekhill technology)× style of service× socio-economic changeThe meal experience today is no longer confined to the traditionalbreakfast, lunch and dinner. Afternoon tea, high teaand supper are already lost as populist eating activities and intheir place we have ‘all-day breakfasts’ and ‘grazing’. Inthe future meals like supper, after the theatre, might reappearbut only in response to social and cultural changes. Whereopportunities do exist then business is likely to be highlycompetitive. Increasingly other industries are recognizing thepotential offered by the provision of food and drink. They areno longer constrained by the need for production space,equipment and skills. We now find ourselves competing withpetrol stations, video rental stores and wine merchants whoare trying to develop and sell ‘packages’ which include foodand drink. Some of the best value breakfasts may be found inyour local supermarket and this may well be first choice formany people; not only is it convenient but they are familiarwith the surroundings. A ‘proper’ restaurant may appearthreatening.How do we remain competitive and what unique sellingpoints USPs can we identify? We have to be innovative. Oneapproach would be to fight back, for example, by showingvideos (as is the case with the increasingly popular ‘sportsbars’), although we would have to recognize there are somelevels, selling petrol for instance, on which we cannotcompete.We may be forced to expand into new areas which mayrequire a unique approach to product development. If we arelooking to promote existing products to a new market we willhave to maintain standards. In order to deliver the authenticBig Mac to the Russians, McDonald’s had to introduce acomplete manufacturing system to supply the basic rawmaterials. This included a brand new bakery to guarantee thespecification for their buns. They could nodwould not accepta retailing outlet using available, local, produce.

Opportunities and constraintsWhen considering product development we will be faced witha number of opportunities and constraints. We must considerthe ‘brand image’ that our company is trying to promote.There may be more cost-effective ways of producing ourmenu items but if these clash with the company image thenthey will be counter-productive. The manager of a ‘healthyeating’ restaurant will have to examine carefully the cost offresh foods and daily deliveries of ‘wholesome’ items againsttheir generally more cost-effective convenience alternatives.Similarly we must assess the nutritional content of dishes thatwe produce. It is clear that the general public, our customers,are being educated in health and nutrition both deliberatelyby the Government, through legislation and public informationleaflets, and more randomly by the popularity of cookeryprogrammes on television, cookery books, health and nutritionarticles in the media. We should try to be at least as wellinformed as our customers.Why bother having a product development plan?We need an effective plan in order to:× stay ahead in the market× streamline activities and costs× improve quality and profitabilityQuality assurance and standardization× selection (specification) of raw materials× standardized recipes (recipe manuals)× standardized methods (task cards)× standard yields (portion control charts and equipment)Specification: detail of product in terms of composition,dimension, colour, texture, etc.Standard: rule, model or criteria against which comparisonmay be made.The objective is to match product and service delivery tomarket expectations by the most advantageous means: toproduce saleable and profitable products based on the needsand wants of the customer. The manager’s job is to balanceinnovation and creativity with the needs of efficiency, effectiveness and economy. In order to achieve this successfully weneed the following:× market research - in order to determine products andservices that the customer requires× forecasting - in order to determine the probable volumeof sales

Accurate forecasting ensures availability of raw materials andefficient and effective use of personnel and equipmentresulting in a reduction of waste. As was seen,Marketing, we will require accurate information regarding:× past activity records (sales history)× advance bookings× current events× current trends× current promotional activity (merchandising)On the basis of this information, we can gather a range ofdishes and develop menus to meet expected demand. Ourforecasting activity should not only predict the number ofcustomers but also their menu choices. This is best achievedthrough use of a popularity index (see Table 6.1). We shouldbe able to determine the volume production requirements foreach dish in advance. Given such information we can nowidentify raw material requirements. Quantities may then befixed and the most effective purchase procedure identified.Table 6.1 Popularity IndexIMAGE(https://etravelweek.com/hmattachments/26_2010092401344219aMag.gif)The popularity index indicates not only the current relationship(sales popularity) of menu items, but also the need todevelop new products. We can examine the popularity ofmenu items (and the need for product development) stillfurther through the use of product life cycle theory.When examining the popularity of an item we need to putit in perspective with past and expected future sales. Allproducts go through what is called a ‘life cycle’(see Figure 6.1).Figure 6.1 (a) Product life cycle. (b) Products should bedeveloped and introduced on a regular basis to ensurecontinuity. (c) Although the general pattern (sequenceof stages) remains the same, the actual shape of eachcycle will be determined by the length (time) of thecycle. Consequently, achieving neat sales (as above) isnot always possible, but we must at least avoid toomany of our products going into decline at the sametime; it may be some time before our new product takeshold, indeed, the operation may never survive to see it.

IMAGE(https://etravelweek.com/hmattachments/26_2010092401344214tWY.gif)IMAGE(https://etravelweek.com/hmattachments/26_201009240134422rJd6.gif)IMAGE(https://etravelweek.com/hmattachments/26_2010092401344234b6H.gif)The life cycle may be short or long but the basic pattern ofrise and fall remains the same. Understanding the position ofa product in its life cycle will provide clues as to the mostappropriate action to take to improve performance andprolong life. This process of growth, maturity and decline insales applies equally to menu items, too many items in thedecline stage will result in ‘menu fatigue’, a tired and un-interesting menu. Other industries have recognized the significanceof the product life cycle and the pattern of continuousdevelopment. Strangely enough, as Figure 6.1 suggests, weshould be thinking about new products when we appear to bemost successful, such that a new product hits maturity asanother reaches the decline stage. The product life cycle maybe influenced by management decisions, particularly the wayin which the product is promoted: product association,merchandising or by adding value.

The purpose of productkervice developmentDesign of products and/or services requires the effectivedevelopment of an idea that can be sold at a profit. This mayinclude:× developing new productdservices for new markets× developing existing products/services for existing markets× developing new products/services for existing markets× refining existing products/services for existing markets× developing new applications for existing products andservices× standardizing products and services× implementing quality improvements× enhancing customer benefits× implementing cost efficiencies× responding to developments in technology× adapting to new legislationDevelopment is often concentrated on products and notservices. Design of services requires a greater understandingof ‘service attributes’ which may be physical, sensual(explicit) or psychological (implicit). Consider the opportunitiesthat exist to add value through service, particularly theimplied benefits.Who is responsible for producVservicedevelopment?Senior managersSenior management are not always in the best position toparticipate directly in product development. A famous storyis told of Ray Kroc of McDonald’s fame. Allegedly his onlyattempt at product development, the ‘Hula-Burger’ (grilledpineapple between two slices of cheese in a bun), was asingular failure. However, senior managers will determinepolicy and set guidelines for development within an identifiablebrand image.The marketing team will initiate product developmentbased on research evidence. Customers will express needs andexpectations. There will also be a response to external influencessuch as economics and developments in fashion andtrend.Unit managersOperational managers will primarily be responsible forproduct design, testing and implementation both of productsand of systems of delivery.

StaffStaff may assist in the initial market research (customerneedshystem weaknesses) and product design and testing.Staff, particularly the technical experts will also have an innovativerole to play, particularly when it comes to identifyingopportunities for the modification of existing products inorder to improve processing procedures, quality standards,efficiency and cost-effective processes. Staff will gather data,customer acceptance levels, invent new products, recommendmodifications to existing products and processes, anddevelop service activities.CustomersProduct and service development could not exist in theabsence of customers and customer comment. However,more care should be taken to seek customer views. Whatproducts and services are missing, which of the existing products/services are superfluous? In particular, how couldexisting products and services be improved?Product and service developmentstrategyHow are products and services developed?We have previously recognized that there are three mainelements (CPC) of the hospitality product. Bearing in mindthe relationship between concept, package and content it isgenerally recognized that product development will often befocused on the menu (package). Effective product developmentwill require an operational structure which is adaptableand encourages innovation: a culture which creates the rightenvironment, responsive to customers’ needs and encouragesstaff to generate new ideas.Concept development‘Shall we eat Italian or Chinese?’ is a question commonlyasked before an evening out. The meal experience contributesto the evening’s entertainment, sometimes as an integral part- cinema then a meal - sometimes as the sole activity. Someelements are beyond the control of the food and beveragemanager, choice of friends to dine with and topic of conversation,for example. Customer choice will be influenced bythe ambience, decor and style of the operation, and its system(style) of service.The food and beverage manager must be very clear whatconstitutes a ‘wonderful’ meal experience for the customer.On many occasions, ambience and decor will be a significantinfluence on the meal experience, sometimes more than theproducts (food and drink) on offer. Superb meals in ruralItaly or France bear testimony to the fact that poor facilitiesand surroundings often have little or no impact on the ultimatecustomer acceptance and enjoyment. Consider streetvendors in the East - Singapore, Thailand, Hong Kong andJapan - attempts to ‘clean up’ their act would in effectdestroy the very experience (concept) and some of the ‘adventure’of eating out in an authentic environment. Consider alsosoldiers assembling on a wind-swept mountain in theFalklands, a desert wadi in the Gulf or the rubble of what wasonce Bosnia, who appreciate a good plate of ‘scoff‘ and a hot‘brew’: simple elements of the meal such as quantity,substance and temperature are far more desirable than ambienceor style of service.

Managing resourcesA concept will carry with it a number of burdens, featureswhich are all too often forgotten by managers in their effortsto present what they think their customers want. Kitchen,restaurant, and bar areas must be designed to reinforce theconcept. Equipment, tables and seating must all conform.Appropriate raw materials must be selected and suitable staffchosen and trained. The concept will influence, or may itselfbe influenced by, the use andlor availability of space, the styleof furnishing, colour and decor. Equipment and furnishingsmust be set out to meet the demands of the production andservice style prompted by the concept. Equipment selectionwill be influenced, through the menu, by demands associatedwith methods of cookery, service style and time allowed. Theconcept will influence staffing arrangements by identifyingnecessary competences required, assessing skills, trainingneeds, shortcomings and talents. A good manager will takeevery opportunity to encourage learning, understanding anddevelopment among the staff by directly linking skill acquisitionto the demands of the concept.IMAGE(https://etravelweek.com/hmattachments/26_20100924013442138UMh.gif)IMAGE(https://etravelweek.com/hmattachments/26_20100924013442144ymq.gif)Characteristics of promptness, responsiveness, safety, service,courtesy, competence and communication will be themeasures used by the customer to assess performance of theservice provider. By ensuring that the whole ‘meal experience’is commensurate with the expectations of the customer wecan target effort on sales and promotion where it will yieldbest effect.Package deveIopmentDevelopment of the ‘hospitality’ package will primarily be inresponse to concept needs and is effectively focused on themenu and drinks lists. During discussion reference willfrequently be made to ‘the menu’. In general, comments willapply equally to drinks lists although more specific referencewill be made as and where appropriate.

Food production legislationIn addition to commodity planning attempting to achieveoptimum levels of efficiency, effectiveness and economy wemust also conform to limitations placed on us by thefollowing legislation:- The Food and Drugs Act 1955- The Food Hygiene (General) Regulations 1970- The Food and Drugs (Control of Food Premises) Act 1976- The Food Act 1984- The Food Hygiene (Amendment) Regulations 1990- The Food Safety Act 1990Suggested f utther readingBareham, J. (1995) Consumer Behaviour in the FoodIndustry. Butterworth-Heinemann.Fewell, A. and Wills, N. (1995) Marketing. Butterworth-Heinemann.Fuller, J. and Waller, K. (1991) The Menu, Food and Profit.Stanley Thornes.Harris, P. (1992) Profit Planning. Butterworth-Heinemann.Mennell, S. Murcott, A. and van Otterloo, A. (1992) TheSociology of Food. Sage Publications.Miller, J.E. (1987) Menu Pricing and Strategy. Van NostrandRheinhold.Tannahill, R. (1988) Food in History. Penguin.

Different operations may place greater emphasis and focusattention on one particular element, e.g.:TGI Fridays the total experience = conceptThe Savoy Hotel the menus and drinks lists = packageMcDonald’s the Quarterpounder = contentThere are two aspects of product development:(a) The development of new products/services, either as:(i) A response to emerging trends, consumer demand orchanges in technology andlor food processing, or(ii) InnovationFor example, the ability of petrol stations to dispense hotmeals only became possible as a result of technology(programmable microwaves) and food processing (cookchillproducts) and customer acceptance of both.(b) The modification of existing products/services (quality,efficiency, effectiveness, economy) which, like (a) abovemust be a response to trend, demand or innovation.For example, chocolate sweets do not sell well in hotweather. Many consumers who like chocolate wouldstore it in the fridge. If we recognize this trendldemandobviously it would make sense to display chocolatesweets in chilled cabinets. Add a little innovationsupported by food processing technology and we soonhave a range of ice creams based on popular sweets(Crunchie, Snickers, Mars, etc.) and we all know howpopular they have become.The main features of product development are concern for:- quality, raw materials, freshness, temperature, presentation- health, hygiene, safety- price, portion size, valueWhy is product service developmentimportant?Product development is visible evidence of our concern for,and response to, customer need and emerging trends. In orderto offer good quality and value we must continuouslyexamine issues of economy, efficiency and effectiveness.Keeping ahead of the competition will require innovation -products that are new, different and exciting - refinements toour brand image and reinforcement of product differentiation.

Opportunities and constraints:× brand image× nutrition and dietary requirements× availability of resources (including staff)× controllability of raw materials (standard yields)through:- purchasing (raw material specifications)- suppliers- perishability (convenience foods)- process (testinghasting)- holding ( freezekhill technology)× style of service× socio-economic changeThe meal experience today is no longer confined to the traditionalbreakfast, lunch and dinner. Afternoon tea, high teaand supper are already lost as populist eating activities and intheir place we have ‘all-day breakfasts’ and ‘grazing’. Inthe future meals like supper, after the theatre, might reappearbut only in response to social and cultural changes. Whereopportunities do exist then business is likely to be highlycompetitive. Increasingly other industries are recognizing thepotential offered by the provision of food and drink. They areno longer constrained by the need for production space,equipment and skills. We now find ourselves competing withpetrol stations, video rental stores and wine merchants whoare trying to develop and sell ‘packages’ which include foodand drink. Some of the best value breakfasts may be found inyour local supermarket and this may well be first choice formany people; not only is it convenient but they are familiarwith the surroundings. A ‘proper’ restaurant may appearthreatening.How do we remain competitive and what unique sellingpoints USPs can we identify? We have to be innovative. Oneapproach would be to fight back, for example, by showingvideos (as is the case with the increasingly popular ‘sportsbars’), although we would have to recognize there are somelevels, selling petrol for instance, on which we cannotcompete.We may be forced to expand into new areas which mayrequire a unique approach to product development. If we arelooking to promote existing products to a new market we willhave to maintain standards. In order to deliver the authenticBig Mac to the Russians, McDonald’s had to introduce acomplete manufacturing system to supply the basic rawmaterials. This included a brand new bakery to guarantee thespecification for their buns. They could nodwould not accepta retailing outlet using available, local, produce.

Opportunities and constraintsWhen considering product development we will be faced witha number of opportunities and constraints. We must considerthe ‘brand image’ that our company is trying to promote.There may be more cost-effective ways of producing ourmenu items but if these clash with the company image thenthey will be counter-productive. The manager of a ‘healthyeating’ restaurant will have to examine carefully the cost offresh foods and daily deliveries of ‘wholesome’ items againsttheir generally more cost-effective convenience alternatives.Similarly we must assess the nutritional content of dishes thatwe produce. It is clear that the general public, our customers,are being educated in health and nutrition both deliberatelyby the Government, through legislation and public informationleaflets, and more randomly by the popularity of cookeryprogrammes on television, cookery books, health and nutritionarticles in the media. We should try to be at least as wellinformed as our customers.Why bother having a product development plan?We need an effective plan in order to:× stay ahead in the market× streamline activities and costs× improve quality and profitabilityQuality assurance and standardization× selection (specification) of raw materials× standardized recipes (recipe manuals)× standardized methods (task cards)× standard yields (portion control charts and equipment)Specification: detail of product in terms of composition,dimension, colour, texture, etc.Standard: rule, model or criteria against which comparisonmay be made.The objective is to match product and service delivery tomarket expectations by the most advantageous means: toproduce saleable and profitable products based on the needsand wants of the customer. The manager’s job is to balanceinnovation and creativity with the needs of efficiency, effectiveness and economy. In order to achieve this successfully weneed the following:× market research - in order to determine products andservices that the customer requires× forecasting - in order to determine the probable volumeof sales

Accurate forecasting ensures availability of raw materials andefficient and effective use of personnel and equipmentresulting in a reduction of waste. As was seen,Marketing, we will require accurate information regarding:× past activity records (sales history)× advance bookings× current events× current trends× current promotional activity (merchandising)On the basis of this information, we can gather a range ofdishes and develop menus to meet expected demand. Ourforecasting activity should not only predict the number ofcustomers but also their menu choices. This is best achievedthrough use of a popularity index (see Table 6.1). We shouldbe able to determine the volume production requirements foreach dish in advance. Given such information we can nowidentify raw material requirements. Quantities may then befixed and the most effective purchase procedure identified.Table 6.1 Popularity IndexIMAGE(https://etravelweek.com/hmattachments/26_2010092401344219aMag.gif)The popularity index indicates not only the current relationship(sales popularity) of menu items, but also the need todevelop new products. We can examine the popularity ofmenu items (and the need for product development) stillfurther through the use of product life cycle theory.When examining the popularity of an item we need to putit in perspective with past and expected future sales. Allproducts go through what is called a ‘life cycle’(see Figure 6.1).Figure 6.1 (a) Product life cycle. (b) Products should bedeveloped and introduced on a regular basis to ensurecontinuity. (c) Although the general pattern (sequenceof stages) remains the same, the actual shape of eachcycle will be determined by the length (time) of thecycle. Consequently, achieving neat sales (as above) isnot always possible, but we must at least avoid toomany of our products going into decline at the sametime; it may be some time before our new product takeshold, indeed, the operation may never survive to see it.

IMAGE(https://etravelweek.com/hmattachments/26_2010092401344214tWY.gif)IMAGE(https://etravelweek.com/hmattachments/26_201009240134422rJd6.gif)IMAGE(https://etravelweek.com/hmattachments/26_2010092401344234b6H.gif)The life cycle may be short or long but the basic pattern ofrise and fall remains the same. Understanding the position ofa product in its life cycle will provide clues as to the mostappropriate action to take to improve performance andprolong life. This process of growth, maturity and decline insales applies equally to menu items, too many items in thedecline stage will result in ‘menu fatigue’, a tired and un-interesting menu. Other industries have recognized the significanceof the product life cycle and the pattern of continuousdevelopment. Strangely enough, as Figure 6.1 suggests, weshould be thinking about new products when we appear to bemost successful, such that a new product hits maturity asanother reaches the decline stage. The product life cycle maybe influenced by management decisions, particularly the wayin which the product is promoted: product association,merchandising or by adding value.

The purpose of productkervice developmentDesign of products and/or services requires the effectivedevelopment of an idea that can be sold at a profit. This mayinclude:× developing new productdservices for new markets× developing existing products/services for existing markets× developing new products/services for existing markets× refining existing products/services for existing markets× developing new applications for existing products andservices× standardizing products and services× implementing quality improvements× enhancing customer benefits× implementing cost efficiencies× responding to developments in technology× adapting to new legislationDevelopment is often concentrated on products and notservices. Design of services requires a greater understandingof ‘service attributes’ which may be physical, sensual(explicit) or psychological (implicit). Consider the opportunitiesthat exist to add value through service, particularly theimplied benefits.Who is responsible for producVservicedevelopment?Senior managersSenior management are not always in the best position toparticipate directly in product development. A famous storyis told of Ray Kroc of McDonald’s fame. Allegedly his onlyattempt at product development, the ‘Hula-Burger’ (grilledpineapple between two slices of cheese in a bun), was asingular failure. However, senior managers will determinepolicy and set guidelines for development within an identifiablebrand image.The marketing team will initiate product developmentbased on research evidence. Customers will express needs andexpectations. There will also be a response to external influencessuch as economics and developments in fashion andtrend.Unit managersOperational managers will primarily be responsible forproduct design, testing and implementation both of productsand of systems of delivery.

StaffStaff may assist in the initial market research (customerneedshystem weaknesses) and product design and testing.Staff, particularly the technical experts will also have an innovativerole to play, particularly when it comes to identifyingopportunities for the modification of existing products inorder to improve processing procedures, quality standards,efficiency and cost-effective processes. Staff will gather data,customer acceptance levels, invent new products, recommendmodifications to existing products and processes, anddevelop service activities.CustomersProduct and service development could not exist in theabsence of customers and customer comment. However,more care should be taken to seek customer views. Whatproducts and services are missing, which of the existing products/services are superfluous? In particular, how couldexisting products and services be improved?Product and service developmentstrategyHow are products and services developed?We have previously recognized that there are three mainelements (CPC) of the hospitality product. Bearing in mindthe relationship between concept, package and content it isgenerally recognized that product development will often befocused on the menu (package). Effective product developmentwill require an operational structure which is adaptableand encourages innovation: a culture which creates the rightenvironment, responsive to customers’ needs and encouragesstaff to generate new ideas.Concept development‘Shall we eat Italian or Chinese?’ is a question commonlyasked before an evening out. The meal experience contributesto the evening’s entertainment, sometimes as an integral part- cinema then a meal - sometimes as the sole activity. Someelements are beyond the control of the food and beveragemanager, choice of friends to dine with and topic of conversation,for example. Customer choice will be influenced bythe ambience, decor and style of the operation, and its system(style) of service.The food and beverage manager must be very clear whatconstitutes a ‘wonderful’ meal experience for the customer.On many occasions, ambience and decor will be a significantinfluence on the meal experience, sometimes more than theproducts (food and drink) on offer. Superb meals in ruralItaly or France bear testimony to the fact that poor facilitiesand surroundings often have little or no impact on the ultimatecustomer acceptance and enjoyment. Consider streetvendors in the East - Singapore, Thailand, Hong Kong andJapan - attempts to ‘clean up’ their act would in effectdestroy the very experience (concept) and some of the ‘adventure’of eating out in an authentic environment. Consider alsosoldiers assembling on a wind-swept mountain in theFalklands, a desert wadi in the Gulf or the rubble of what wasonce Bosnia, who appreciate a good plate of ‘scoff‘ and a hot‘brew’: simple elements of the meal such as quantity,substance and temperature are far more desirable than ambienceor style of service.

Managing resourcesA concept will carry with it a number of burdens, featureswhich are all too often forgotten by managers in their effortsto present what they think their customers want. Kitchen,restaurant, and bar areas must be designed to reinforce theconcept. Equipment, tables and seating must all conform.Appropriate raw materials must be selected and suitable staffchosen and trained. The concept will influence, or may itselfbe influenced by, the use andlor availability of space, the styleof furnishing, colour and decor. Equipment and furnishingsmust be set out to meet the demands of the production andservice style prompted by the concept. Equipment selectionwill be influenced, through the menu, by demands associatedwith methods of cookery, service style and time allowed. Theconcept will influence staffing arrangements by identifyingnecessary competences required, assessing skills, trainingneeds, shortcomings and talents. A good manager will takeevery opportunity to encourage learning, understanding anddevelopment among the staff by directly linking skill acquisitionto the demands of the concept.IMAGE(https://etravelweek.com/hmattachments/26_20100924013442138UMh.gif)IMAGE(https://etravelweek.com/hmattachments/26_20100924013442144ymq.gif)Characteristics of promptness, responsiveness, safety, service,courtesy, competence and communication will be themeasures used by the customer to assess performance of theservice provider. By ensuring that the whole ‘meal experience’is commensurate with the expectations of the customer wecan target effort on sales and promotion where it will yieldbest effect.Package deveIopmentDevelopment of the ‘hospitality’ package will primarily be inresponse to concept needs and is effectively focused on themenu and drinks lists. During discussion reference willfrequently be made to ‘the menu’. In general, comments willapply equally to drinks lists although more specific referencewill be made as and where appropriate.

Food production legislationIn addition to commodity planning attempting to achieveoptimum levels of efficiency, effectiveness and economy wemust also conform to limitations placed on us by thefollowing legislation:- The Food and Drugs Act 1955- The Food Hygiene (General) Regulations 1970- The Food and Drugs (Control of Food Premises) Act 1976- The Food Act 1984- The Food Hygiene (Amendment) Regulations 1990- The Food Safety Act 1990Suggested f utther readingBareham, J. (1995) Consumer Behaviour in the FoodIndustry. Butterworth-Heinemann.Fewell, A. and Wills, N. (1995) Marketing. Butterworth-Heinemann.Fuller, J. and Waller, K. (1991) The Menu, Food and Profit.Stanley Thornes.Harris, P. (1992) Profit Planning. Butterworth-Heinemann.Mennell, S. Murcott, A. and van Otterloo, A. (1992) TheSociology of Food. Sage Publications.Miller, J.E. (1987) Menu Pricing and Strategy. Van NostrandRheinhold.Tannahill, R. (1988) Food in History. Penguin.

The function of the menu is to:× appeal to customers× inform customers× direct customers’ attention to those items we prefer tosell× sell food and drink× enable predictions× enable planning× enable costings× enable records (sales history)× identify the need for training programmes to bedevisedFor the customer the menu may represent both physical andpsychological aspects of the hospitality package:Physical PsychologicalInformation ExperienceAdvice SatisfactionChoice ExperimentationValue ImpressionsAt best the menu is a physical representation of customerneeds and wants, as perceived by the menu planner. At worsta menu can be the embodiment of its writer’s ego. Forcing ourperceptions onto the customer can only be viewed as a veryshort-term approach to menu planning. Menu planning ismore than putting together a list of our favourite foods.Figure 6.2 The menu as a focal point.IMAGE(https://etravelweek.com/hmattachments/26_201009240134424mU9g.gif)The menu, especially in banqueting service, generally triggersthe planning process, though of course the menu can bederived from that process when it results from careful considerationof the resources available and the specific requirementsof customers.Decisions about what items to include in menus will influencethe size and effectiveness of both production and servicesystems. Unless the intention is to expand the system then it isgenerally better to increase the variety of choice for thecustomer whilst maintaining, or even reducing the potentialfor variety in the system. For example a burger house wouldneed carefully to consider including stews or braises on itsmenu, since the production and service systems were notestablished for that purpose; to do so would increase thevariety in the system and reduce the potential for control.

Variety can be achieved by ensuring products fit the system.Customers can have anything they want, so long as it is aburger: chicken burger, fish burger, vegetarian burger. Varietycan be further enhanced by the range of sauces andaccompaniments and choice of portion size and/or changesto shape and size of main ingredients, e.g. the long ‘double’bun.Besides communicating with the customer, the menu is acommunicator to staff in the kitchen, by way of providing abasis for the production schedule. To restaurant staff, themenu communicates by providing the clues for table lay-upand accompaniments. For bar staff it will provide clues as tolikely sales of wines, aperitifs and liqueurs. Staff who are notdirectly involved in food and beverage production or deliverymay be able to make a contribution to sales by activelypromoting food and beverage activities.Menu planning is important because, although the skillsthat relate directly to it are few, the menu effectively determinesthe nature of all subsequent activity and thus influencesall other requirements.The menu frequently results from a balancing act betweenthe needs of the customer and the needs of the business.Customers will look for quality and value whilst owners will,in the main, look for a return on investment.In demonstrating menu planning skills, it is expected thatthe manager is able to:× identify a range of suitable dishes and products to meetidentifiable customer needs× inform customers precisely what is on offer× justify the inclusion, positioning and price of every itemon the menu× identify opportunities which exist for influencingcustomer choice× optimize the use of resources in light of the needs of themenu× assess the individual viability of every item on the menuas well as the efficiency, effectiveness and profitabilityof the menu as a whole× make improvements to the menu by modifying itemswhich are not performing to expectations in terms ofpopularity, sales or profitability× increase total revenue and gross profit through adjustmentsto unit margin and average customer spend

Purpose of the menu for the customerThe menu confirms perceptionsh understanding of the concepton offer. Whether eating for necessity or pleasure - at work,as part of the daily grind or as part of a unique social occasion- customers will have pre-conceived expectations aboutthe meal experience. In many circumstances the menu will bethe basis for choice. At this point it would be appropriate toconsider the nature of choice from the customer’s point ofview. The decision to purchase food and drink results from arange of competing and complementary factors:× trial and error× recommendations resulting from other people’s experiences× influence of choice, preference and liking× whether ‘grazing’ or more purposeful ‘foraging’× passively participating in other people’s decisionsWhen putting a menu together the food and beveragemanager will be aware of all the expectations of customers.The choice of dishes may reflect these expectations but willnot, on its own attract desired customers. The menu itself willneed to be produced in a way that sends a particular message.The style, colour and layout of the menu will indicatewhether the operation is fast service or not, expensive or not,fun or not, the sort of place you may wish to entertain a businessor social partner (or someone else’s partner!). The menushould be designed to entertain, particularly for groups suchas children and especially where menu items themselves maybe fairly staidkandard, as in the traditional Christmas menuwhere turkey and pudding are expected.Informing the customer (concept reinforcement)As discussed above, together with the concept, the menu islikely to form the basis of a customer’s decision of where toeat. The detailed information will form part of the contractbetween customer and provider. For this reason, and manyothers, a menu’s meaning must be clearly understood by allwho are intended to use it. A menu must describe what is onoffer and how much it will cost and it should also suggesthow it will be served. If there are to be additional costs, thenthese must be clearly stated. As well as explicit information,menus contain implicit information. Style and presentation ofthe menu may suggest how the customer should dress orbehave. Menu language, particularly French, is often used toimply ‘haute cuisine’. However, menus in French may be infuriatingto customers who do not speak the language. Theestablishment may be out to impress but will fail to do so ifthe menu is not accompanied by an explanation, especiallywhen service staff are also unsure or ignorant of the contentof dishes. Worse still if the staff see this as a failing on thecustomers’ part, censuring the customer with a sigh andsmirk for their lack of knowledge.It could be argued that retailers, like Sainsbury’s, aredoing more to educate the public about food and good eatingthan caterers. Customers in the high street or local supermarketare faced with a variety of well-packed, wellpresentedand prominently merchandised foods and dishesthat also, by virtue of current retailing legislation, containdetailed information on nutritional content. However, thecaterer must not seek to re-educate the customer, ratherthey should attempt to widen their experience and expectations.

Appealing to the customerNot only does the menu provide information to the customerby way of ‘explicit’ detail of selection on offer andprices, it also informs whether there are cover charges addedor whether service is included. A great deal of ‘implied’information is also given. If the menu is scruffy andmarked or has frequent rubbings out and scribbled alterationsto price and content, it will say a lot about the willingnessof the management to tolerate and even encouragesecond best.Once the decision to eat has been made, the menu thenprovides the choice of what to eat. Each and every item on themenu should appeal. Prices should be realistic. The popularityof fixed price menus is growing. The public is muchmore aware of extortionate mark-up on some wines; it is notsurprising that these wines do not often sell. Menus that offervalue will appeal to customers. That value may be real and/orimplied. Real value may be identified in portion size, additionalitems and linked sales. Implied value may be found indescriptions, presentation and menu design. Caterers shouldnot ignore the fact that customers will be attracted by priceand value for money. It would be a mistake to ‘hide’ additionalcharges.The purpose of the menu for the managerManagement activity is primarily that of control, ensuringthat what is intended to happen actually happens. The menuis central to control activity (see Figure 6.3).Figure 6.3 The menu and control activity. Source: Fullerand Waller, 1991.IMAGE(https://etravelweek.com/hmattachments/26_2010092401344211ACgu.gif)IMAGE(https://etravelweek.com/hmattachments/26_2010092401344212l1oD.gif)

Menu planningTraditionally, in western society, meals are eaten in a series ofcourses: a ‘starter’, a ‘main course’ and a ‘sweet’. A menumay, particularly on special occasions, offer more courses -but often there will be less. Whatever the number of coursesthere will be a recognizable pattern or sequence to the meal.Additionally there are specific items or methods of cookeryand/or presentation that are associated with each of thecourses. In addition to accepted sequence and food itemsthere is also an accepted daily pattern and eating at particulartimes of the day is associated with particular items for thosemeal times. However it is important to recognize, at thispoint, that although this accepted procedure remainscommon there are a growing number of exceptions, particularlyin the fast food sector. As society develops, culturechanges and adapts. The growth of ‘grazing’, eating snackson the run throughout the day (note the growth of the retailsandwich industry) and the increasing popularity of the ‘allday’ breakfast should not go unnoticed by the menu planner.The drinks list, with the obvious exception of hot beveragesand the cocktail list, differs from the menu in one majorrespect. Items offered for sale on a drinks list do not requirerecipes, production or processing procedures. Once coldbeverages are delivered to the caterer they generally remainunaltered. Unit pricing, measuring and control are thereforesimplified. Like the menu however, there are accepted associationsand sequences. For example, aperitif, light wine, heavywine, liqueur with a meal; fruit juices, tea or coffee withbreakfast. Because beverages are less perishable they may beput out on display thus reducing the need for written lists(note the legal requirements for display of prices). This abilityto display products may be used to enhance the concept,for instance a Spanish tapas bar may have lots of wine bottleson display. Such displays are not just decoration however,they should be used to enhance sale (see Merchandising).The menu as a management toolIf the menu fails to meet the market requirements it willcertainly cause a fall in sales and profitability. Thereforedevelop the menu to suit your market (concept). The menu(sales history) provides a record of popularity for each dish.This enables forecasting and provides basic control data. Themenu is, therefore, a means of control; resources shouldrelate to the requirements of the menu (staff, machinery,materials, purchases, usage rates, money, time, space).Competent menu managementFrom the manager’s point of view the menu provides the principal‘interface’ between the product and/or service and thepotential customer. Decisions as to whether the customer willpatronize the establishment may be taken on the strength ofthe menu alone. Other decisions are likely to be made on thebasis of what the customer sees or does not see on the menu.As we have seen, the menu carries a number of impliedmessages that may or may not encourage the customer to usethe facilities on offer.

The customer is the main focus for all attention to themenu, its design, structure, the items selected and pricesshould be seen from the customer’s perspective. Failure toconsider the customer sufficiently may result in technicallycorrect menus that potentially offer profitability but whichdo not sell food or drink.As we have seen, as well as explicit and implicit information,the menu can provide a powerful means of communicatinga particular theme or concept to customers. Managersmust ensure that the message that the customer receives is thesame as the one that they intended to send.Extensive menus carry with them their own problems, notonly ensuring availability of all items but also of customersbeing confused by them. The way in which menus are readwill influence the choices that customers make. Eye movementacross the card (see Figure 6.4) will mean some itemsreceive more attention than others. The order in which themenu is read - ‘primacy and recency’, i.e. what was read firstand what has been read most recently - will also influencechoice. This has clear implications for the designers andcompilers of menus, particularly concerning the positioningof profitable or preferred items.Figure 6.4 Menu presentation and eye movement. (a)On an open double page, the eye moves to the top righthandcorner first. (b) The direction of eye movementacross a three-fold menu. Source: Fuller and Waller,1991.IMAGE(https://etravelweek.com/hmattachments/26_201009240134425R27B.gif)Improving the performance of a menu is dependent onrecording its current performance (sales history), settingtargets for improvement and monitoring progress. Key pointsare listed below:× The menu must reflect what the customer wants, balancedagainst what can be provided.× There is little point in developing new menu items simplybecause the chef or manager thinks it is a good idea.× Beware of sending the wrong message to customers,because of poorly presented, dirty or unkempt menus.× Measure and record menu activity, choices and popularity.If you can’t measure it you can’t improve it.

Content planningDish development and commodity planning is an integralpart of catering organization. As such it is concerned not justwith design and manufacture, but also with setting targetsand assessing the relative benefits of alternative strategies.Commodity planning is a continuous process, responding tochanges in demand, competition, technology and economics.The manager is principally concerned with controllingperformance through the standardization of products andcost-control procedures.Effective development strategy allows the manager to:× introduce and develop new recipes× introduce and develop new recipes for special dietaryrequirements× establish and update food production quality controlsystems and procedures× maintain food production quality control systems andprocedures× establish and maintain portion controlProducts and dishes should be developed according to theneeds and wishes as expressed by the customer. Increasinglythis seems to reflect the move toward healthy eating. Themanager must also consider the suitability and capacity of theproduction system and the effect that new products may haveon purchasing policy and raw material specifications. Aboveall, dishes, new or old, will have to meet customer’s ability/willingness to pay.Dish development (testing and tasting):× market potentiavdemand× price× unique selling points (USPs)× ingredient (availabilitykost)× process, procedures and systems× equipment× labour× food value (nutrition)× legislationAs noted Policy, thought should be given toethnic and cultural requirements. Merely adding a ‘vegetarianalternative’ can be counter-productive, especially if this isdone with little thought. Consider the number of standardmenu items that could be prepared with vegetable stocks andoils and vegetarian cheese (made with synthetic rennet)instead of the more traditional animal derivatives. Restrictivedish naming should also be avoided. Such action would allowa greater number of consumers, not just vegetarians, to selectfrom a wider range of menu items.

- Has the concept/package/content relationship been clarified?- Have menus been designed in line with the concept?- Have dishes been developed according to customerrequirements?- Are dishes and recipes consistent with the limitations ofthe production system?- Have dishes been tested and tasted?- Have raw material specifications, standardized recipesand methods been written?- Are equipment and staffing allocations consistent with theneeds of dishes that have been developed?- What other quality assurance techniques have beenincluded in the producthervice plan?- Do products and systems comply with current legislation?- Are accurate and reliable costings available and up todate?- Have systems been developed for performance monitoringand evaluation?- Are processes and procedures available for performanceimprovement?Legal implications associated with product/servicedevelopment (menu management)The menu will form the basis of the relationship between thecaterer and the customer. The rights of the customer areprotected, by law, in a number of ways:The Sale of Goods Act 1979: Defines the contractual relationshipand in particular specifies fitness for purpose as aprerequisite of a product or service suitability.Price Marking (Food and Drink on Premises) Order 1979:Specifies rules for the display and content description(prices and portion sizes) of menus. In particular, that accuratelypriced menus should be displayed at or near theentrance to the restaurant.The Consumer Protection Act 1989: Reinforces the PriceMarking (Food and Drink on Premises) Order, it warnsagainst misleading price information. VAT, service andcover charges must be clearly shown.Food Safety Act 1990: Concentrates on safety and hygiene,although here too there is reference to the quality andnature of food and particularly descriptive terms. Phraseslike ‘home-made’ and ‘fresh’ must be accurate and genuine.Trades Description Act 1968: Defines trading terms, definitions,nature and the sequence of content in dishes (meatand potato pie must contain more meat than potato, otherwiseit should be called potato and meat pie). The act alsospecifies rules regarding quantity, size and method ofmanufacture. Additionally, it also protects the customerfrom false or misleading statements.Fair Trading Act 1973: Also protects the customer fromfalse and misleading statements.In regard to law and the collection of tax, service issubject to VAT therefore it must be added to the bill first.VAT is payable on products and services.

What tactics can be applied to improveperformance?Reducing pricesAn increase in volume is required to make up for lost sales.Example: happy hour (drinks sold at half price)Under normal pricing strategy.Selling price L1.50Cost price L0.30Gross profit L1.20GP% 80At ‘happy hour’ the new selling price is L0.75, the cost stillremains at L0.30.Selling price L0.75Cost price L0.30Gross profit L0.45GP% 60Increasing sales will not improve the GP percentage, at theseprices gross profit will always be 60 per cent because we aremeasuring it per unit. Simple mathematics shows that nomatter how many units we sell the overall GP percentage forthe operation will not change, for example:                         Single unit 100 unit 1000 unitsSelling price (revenues) L0.75 L75.00 L750.00Total cost (at 30p per unit) L0.30 L30.00 L300.00Gross profit L0.45 L45.00 L450.00GP% 60 60 60However, total cash revenue is clearly increasing. So what dowe need to do to generate the same level of cash gross profitas we were able to achieve at normal selling price. The calculationis:Old profit level x 100——————————— = required level of salesNew profit levelSo that, in the above example:1.20 x 100————— = 2.66   0.45This means that we would have to be sure of selling at least2.66 times the normal volume in order to make ‘happy hour’worthwhile. Contrary to common belief, doubling sales willnot recover the effect of halving price. Indeed the lower theinitial GP percentage the greater the need to increase salesbeyond the assumed double, e.g. if the initial profit had beenonly 30p (40 per cent GP) we would need to sell four timesthe original volume to maintain position. GP percentagewould have to be at least 80 per cent (unit cost of 15p in theabove example) for us to maintain position with only adoubling of sales.

There are clearly implications for staffing and labour costs,which should also be included in the equation. Are we usinghappy hour to keep existing staff busy, or do we need to takeon additional staff to cope with the rush?Secondary salesThe effect of offering free wine, for instance, may be calculatedas follows:                      Food Wine TotalRevenue from meals 1100 200 1300(200 63 LS.SO)Variable cost 400 80 480GP contribution 700 120 820Labour 250Net 570IMAGE(https://etravelweek.com/hmattachments/26_2010092401344217di6Y.gif)With a ‘free wine’ promotion there will be no income fromwine, but wine consumed will be 100 per cent. Because of theanticipated increase in volume we will need six additionalstaff at L20 each. If volume doubles as a result of the promotion,then:                  Food Wine TotalRevenue from meals 2200 2200(400 63 L5.50)Variable cost 800 160 960GP contribution 1400 -160 1240Labour 3 70Net 870IMAGE(https://etravelweek.com/hmattachments/26_2010092401344218lpIG.gif)Although the difference in GP percentage and NP percentageis significant (some would say worrying), the improvement incash GP (income) is more worthwhile. GP percentage couldbe improved, beyond its original 56.36 per cent, througheffective selling by the service staff, e.g. liqueurs andspeciality coffees. After all, customers should now havesurplus funds and should be ‘in the mood’ for spending onthese little extras.Two-for-one promotionsA typical ‘dinner for two’ promotion (the cheapest mealoffered free) works in the following manner:First meal selling price  L19.80Second meal selling price L19.30Wine                      L9.95Coffee (2)                L1.30Service @ 15%             L7.55Total                     L57.90As the second meal is the cheaper, this will be deducted(L57.90 - L19.30), leaving the total payable at L38.60.

Why do it?- to increase volume- to fill seats- to cover fixed costs- to keep staff busy- to increase awarenessProfit sensitivityProfit sensitivity analysis is concerned with identifying whichelements of revenue have the greatest influence on profit. Theemphasis shifts from gross profit to net profit and the examinationof those items that respond positively to change.Price elasticity of demandA product is ‘elastic’ when an increase or decrease in its priceresults in a change in the volume purchased. A product is‘inelastic’ if a change in its price results in little or no changein volume (e.g. milk, bread and petrol). Eating out generallyis elastic, a ‘luxury’ which people can choose to take or dowithout. However, individual items on the menu will be moreelastic than others and we need to know which these are.Reducing the price of inelastic items will not increase volume,but increasing price will improve profitability. Increasing theprice of elastic items will result in a drop in sales, butreducing the price would lead to an increase in volumewhich, if managed properly, would result in an improvementto profitability.It is difficult to predict our customers’ responses to pricechanges. Price changes will need to be monitored carefully toidentify trends and determine elasticity.The profit multiplierThe ‘profit multiplier’ is a method of identifying those areaswhere change is likely to have most effect on profit. It assessesthe effect of an equal change in a number of factors, eachfactor being measured independently.Consider the effect on net profit of a 10 per cent increase ineach of the following:(a) the number of covers served(b) the price charged(c) food and beverage costs(d) fixed labour costs(e) variable labour costs(f) other fixed costsFor example if base figures show:Sales 50 000Total costs 45 000Net profit 5 000

Then after a 10 per cent increase in price:Sales will be 55 000Total costs 45 000 (remain the same)Net profit 10 000 (increase by 5000)Net profit has increased by 5000 following a 10 per centincrease in price. The profit multiplier is therefore 10, forevery 1 per cent increase in price results in a 10 per centincrease in net profit (see Table 6.3 for detailed analysis).Table 6.3 Profit multiplier analysisThe effect, on net profit, of a 10% increase in each key factor in this example would be:IMAGE(https://etravelweek.com/hmattachments/26_20100924013442221Vvo.gif)If the key factors are now ranked by size of profit multiplierthen clearly changing price will have most effect and changingvariable labour cost will have very little effect.Price charged            10.0Number of covers served   5.6Food and beverage costs  -4.0Other fixed costs        -2.6Fixed labour costs       -2.0Variable labour costs    -0.4Profit multiplier analysis - process- identify the key features influencing profit- assume a small change- calculate the multiplier- rank the multipliers (the higher the multiplier, thegreater the impact)- assess the implicationsThe +/- element is less significant than the size of the profitmultiplier (PM); it demonstrates direction rather than impact.It may be assumed that a 10 per cent decrease in food andbeverage costs, for instance, would result in a PM of +4.High levels of PM are not necessarily desirable. Becausethey suggest levels of elasticity they may equally be an indicationof stability. A stable business may attempt to manage itsproduct range in such a way as to keep all PM levels relativelylow. The basic concept of the profit multiplier may be applieddifferently in different situations. Different organizations willwant to identify different key factors. PM may be calculatedfor the business as a whole, or for different departments.

Profit maximizationOften popularity and profitability are confused. Menu itemscan be arranged on a grid - the so-called Boston Matrix (seeFigure 6.9) - representing their performance in regard tovolume (popularity) and cash contribution (profit).The cash cow: High sales and high profit contribution makethis the ideal product. It can be ‘milked’ for cash, if cared for and fed regularly.The plough horse: High sales and low profit contribution. Itworks hard but the profits are not always immediatelyapparent; it will take time to reap the full reward from thiscrop.The cuddly panda: Low sales but high profit. Loveable butelusive, it will require careful study and special attention.The dodo: Low sales and low profit. Probably extinct, inwhich case bury it.Figure 6.9 The Boston Matrix, developed by the BostonConsulting Group. Animal analogies are used to illustratethe effect of popularity and contribution uponperformance. Source: Fuller and Waller, 1991.IMAGE(https://etravelweek.com/hmattachments/26_201009240134428KafE.gif)IMAGE(https://etravelweek.com/hmattachments/26_201009240134429SxMo.gif)When considering strategiedtactics be aware of thepotential affects and possible consequences.Profit improvement strategyProfit may be enhanced by manoeuvring ‘cash cow’ menuitems towards the top right of the grid, as shown in Figure6.10.

Figure 6.10 Boston Matrix Evaluation.The plough horseTempting. but overpricedMaintain value, review costsand portion size.Careful price increases throughenhanced benefits and added value.Try re-packaging and/or linking.The cash cowSought after item, price does not mutterWarrants further promotion andmerchandising with prime menu positionPrice increases, but with caution.The dodoLow price, but uninterestingIs this an old product in decline,can it be revamped?Is it a new product that needs attention?If both cash contribution and volumeremain low it may be wise to eliminatethis product.The cuddly pandaLow price, good vulueRe-appraise, research (market, rawmaterial, etc.) and try a variety ofoptions.Increase promotions, restyle and/oradd value.Tactics for 'manoeuvring' menu items (modifyingperfor ma nce)Wine by the glassOffering an extended choice of wines by the glass has becomecommon in the USA. Ideally, at least twelve wines should beoffered, more if possible. There are problems - keepingquality and pilferage to name the obvious - but technology isnow available (vacuum dispensers), so that this is not such abig problem, particularly if good wines are chosen which sellwell. The loss of bottle sales is unlikely; it is probably morelikely that overall sales will increase. Wines by the glassworks better at lunch and quick meals, than it does at dinner,where bottle sales are more appropriate to lengthy (relaxed)dining. It is important to get the price right, identify whatwines by the glass are competing with - soft drinks, lager, etc.- and price accordingly. There is extra potential for saleswith dessert - sweet dessert wines, port and Madeira. Thistype of activity should be supported by merchandisingactivity and point-of-sale material. In addition it is importantto recognize the significance of motivating service (sales)staff.

Real ale and bottle-conditioned alesBeer, like wine, can be matched with food and because of thewide variety of brews and flavours. ‘Beer with food’ is fastbecoming the popular ‘meal experience’ choice. There is arecognizably increasing demand for good beers. Real ale,although popular, can be a problem for many caterers; itscomplex ‘technology’ means that a degree of skill is required.Bottle-conditioned ales provide caterers with an excellentalternative to real ale, they offer lots of choice and goodquality.Bottle-conditioned ales (BCAs) contain yeast and continue‘working’ after bottling; they are alive and require ageing,maturing. Care should be taken when pouring, sedimentshould be left in the bottle and for this reason BCA bottlesnormally have high accentuated ‘shoulders’.Potential problems for sales of bottle-conditioned ales- customer: knowledgehnderstanding - acceptance- product: shelf life and quality“- staff: knowledge and understanding, handling skill,pouringhediment- beer list: knowledge and understanding required in thewriting of a balanced list“(during ageing there is a marginal increase in alcohol and adecrease in sugar, so the beer becomes drier)Potential benefits for the caterer selling bottle conditionedales:- no capital investment- purchase amounts can be relatively low, enabling widerchoice, variety, frequent change- experimentation, novelty, USPs- foreign beers available, particularly Belgian, but alsoFrench and German- added value, high mark-upSignature dishesSignature dishes are those items, often having a unique nameand/or service style, which are specifically associated with aparticular operation. Customers will often seek out such arestaurant because of its association with a speciality dish.Signature dishes normally reinforce the quality image andbrand integrity of an operation. They often provide temptationfor others to copy.

Signature dish, ‘house speciality’, needs:- ingredients which are easily available and of goodquality all year (static cost, consistent standard)- specialist skill, quality standards, standardized recipe/method, specialized equipment- costing to be profitable, or attract customers who alsopurchase high profit itemsSummaryEffective product/service developmentWe have seen that, as part of work organization and performanceimprovement, product development is concernedprimarily with productivity, quality and profitability. It mightbe assumed that an increase in one will lead to a decrease inthe other. This is not the case; effective product developmentcan lead to improvements across the board. The philosophyof doing it right, first time, every time ensures that all effort istargeted at producing saleable product not waste.Measuring performanceIt is essential to record sales, profitability and popularity inorder to show how menu items are performing. Improvementcannot be shown if the starting point is unknown. Recordingand measuring processes allow managers to focus the activitiesof improvement programmes on specific targets ratherthan attempting to improve all things all the time.Beware of fatigue in the menu. A number of indicatorssuggest that the menu offers items that have seen better days.Menus that are subject to only infrequent or irregular revieware most at risk. Customers who ask for additional items or‘something else’; staff who are tired of producing the sameold items; sales of once popular items becoming sluggish, mayall indicate time for a review of the menu.Improving profitabilityThis article has identified the means by which the menu canbe used to control not only the activities and resourcesemployed but also the elements of the system of provisionthat result in a return on investment. An alternative toincreasing sales would be to consider the relationshipbetween sales, sales mix, costs and achievable gross profit. Inany event, the improvement of profitability assumes a soundknowledge of the current state of the operation in profitterms. That is, all items sold, their composition and theircontribution. The implications are clear; that the competentmanager must be aware of the performance potential of everyaspect of the operation’s resources. This must include themenu.Once implemented the effectiveness of any plan must beassessed.Product development checklist- Has marketing and forecasting activity accuratelypredicted the nature and level of demand?

Vegan and strict kosher diets, among others, require fargreater care in planning which will extend not just to foodusage but also to equipment, methods and processes whichmay be beyond the capacity of the average caterer. Detailedanalysis of the various ethnic and cultural requirements isbeyond the scope of this article and recommendations forfurther reading are identified at the end of this article.Commodity planning:× identifying and listing raw material requirements× fixing quantities× purchasing× storing and issuingRaw material managementThe direct influence the menu has on materials managementis great indeed. Food and drink suppliers are selected on thebasis of their ability to supply, consistently, those rawmaterials necessary for items specified on the menu. Consequentlyfood and drink purchasing specifications should bedesigned around the demands of the menu (see Figure 6.5).Figure 6.5 Purchase specifications and the needs of themenu. (a) Specification (description) for sirloin steak. (b)Specification (diagram) for sirloin steak (MLC). Source:Fuller and Waller, 1991.IMAGE(https://etravelweek.com/hmattachments/26_2010092401344215ZVua.gif)IMAGE(https://etravelweek.com/hmattachments/26_20100924013442164SSj.gif)

The function of the menu is to:× appeal to customers× inform customers× direct customers’ attention to those items we prefer tosell× sell food and drink× enable predictions× enable planning× enable costings× enable records (sales history)× identify the need for training programmes to bedevisedFor the customer the menu may represent both physical andpsychological aspects of the hospitality package:Physical PsychologicalInformation ExperienceAdvice SatisfactionChoice ExperimentationValue ImpressionsAt best the menu is a physical representation of customerneeds and wants, as perceived by the menu planner. At worsta menu can be the embodiment of its writer’s ego. Forcing ourperceptions onto the customer can only be viewed as a veryshort-term approach to menu planning. Menu planning ismore than putting together a list of our favourite foods.Figure 6.2 The menu as a focal point.IMAGE(https://etravelweek.com/hmattachments/26_201009240134424mU9g.gif)The menu, especially in banqueting service, generally triggersthe planning process, though of course the menu can bederived from that process when it results from careful considerationof the resources available and the specific requirementsof customers.Decisions about what items to include in menus will influencethe size and effectiveness of both production and servicesystems. Unless the intention is to expand the system then it isgenerally better to increase the variety of choice for thecustomer whilst maintaining, or even reducing the potentialfor variety in the system. For example a burger house wouldneed carefully to consider including stews or braises on itsmenu, since the production and service systems were notestablished for that purpose; to do so would increase thevariety in the system and reduce the potential for control.

Food and drink ordering procedures will be based on theneed to supply the customer with only those items offered onthe menu. Receiving and acceptance is determined by theability to utilize those items through the menu; food anddrink storage space is wasted by goods not utilized throughthe menu. Delivery and distribution is therefore organizedaccording to a schedule based on menu requirements. Costsand revenue figures should reflect the prices and popularity ofmenu items. Control of materials is impossible without accurateproduction and sales records.The commodity plan must account for the availability ofresources. The commodity plan for a city centre restaurant, acountry house hotel and a North Sea oil rig will necessarilydiffer. We cannot assemble a range of classical dishes, withthe intention of preparing from fresh ingredients and cookingeach dish to order if there is a shortage of labour, or if thelabour supply is unskilled. However, we can present such arange of dishes, with limited staff and skills, if we purchasethem ready prepared, but this will considerably affect therange, amount and type of equipment that we require.Convenience foods will have an influence on equipment selectionsuch that ultimately, at the highest levels of convenience,only reheating equipment is required. All preparation andcooking equipment becomes obsolete. The need for panwashing facilities is obviated by the use of disposablereheating containers.In addition to availability of resources, which for rawmaterials and sometimes labour is often seasonal, catererswill also be concerned with the seasonality of demand: thechanging pattern of customer preferences through the year.Many caterers will respond with either seasonal menus,particularly spring and autumn menus, or seasonal specialities.In examining the range of opportunities that exist, twoextremes are clearly identifiable: ‘total fresh traditionalprocessing’ and ‘total convenience assembly serve’. Manyoptions exist between these two extremes and there is no‘least cost’ formula that can be applied. A balance will needto be achieved whereby optimum benefit is obtained fromeach of the main resources. If we choose to increase spendingon raw materials then an equivalent decrease must be foundin labour and/or equipment spending (see Systemsmanagement, for more details).

Variety can be achieved by ensuring products fit the system.Customers can have anything they want, so long as it is aburger: chicken burger, fish burger, vegetarian burger. Varietycan be further enhanced by the range of sauces andaccompaniments and choice of portion size and/or changesto shape and size of main ingredients, e.g. the long ‘double’bun.Besides communicating with the customer, the menu is acommunicator to staff in the kitchen, by way of providing abasis for the production schedule. To restaurant staff, themenu communicates by providing the clues for table lay-upand accompaniments. For bar staff it will provide clues as tolikely sales of wines, aperitifs and liqueurs. Staff who are notdirectly involved in food and beverage production or deliverymay be able to make a contribution to sales by activelypromoting food and beverage activities.Menu planning is important because, although the skillsthat relate directly to it are few, the menu effectively determinesthe nature of all subsequent activity and thus influencesall other requirements.The menu frequently results from a balancing act betweenthe needs of the customer and the needs of the business.Customers will look for quality and value whilst owners will,in the main, look for a return on investment.In demonstrating menu planning skills, it is expected thatthe manager is able to:× identify a range of suitable dishes and products to meetidentifiable customer needs× inform customers precisely what is on offer× justify the inclusion, positioning and price of every itemon the menu× identify opportunities which exist for influencingcustomer choice× optimize the use of resources in light of the needs of themenu× assess the individual viability of every item on the menuas well as the efficiency, effectiveness and profitabilityof the menu as a whole× make improvements to the menu by modifying itemswhich are not performing to expectations in terms ofpopularity, sales or profitability× increase total revenue and gross profit through adjustmentsto unit margin and average customer spend

Above all the manager will be concerned with acommodity plan that enables control of:× raw materials× purchasing× suppliers× storage× perishability× processes× holding× style of serviceProduction methodsAs has already been noted a wide band of production opportunitiesexists between the two extremes of totally fresh traditionalcookery and assembly of convenience products. Of thedeveloping ideas and techniques most attention is focused onthe centralization of production, away from the point ofdelivery and the demands of service. The principal methodsinvolved are cook-freeze, cook-chill and sous-vide.Products and dishes, customer demand, size and scale ofoperation together with issues relating to quality, economyand value will influence the choice of production system.While at one time traditional methods, cook-freeze, cookchilland sous-vide were seen as independent, even incompatiblesystems, there is a growing trend towards a‘mix’n’match’ blend that derives benefits from each withoutincurring excessive additional costs. It is widely recognizedthat each system has particular strengths often related tospecific raw materials, principles of cookery and groups ofmenu items. Salads, sandwiches and pastries may beproduced on a seven-day ‘chill’ cycle. Stews, braises, pies andpuddings are more suited to a six-month ‘freeze’ productionplan. Roasting and frying may be done daily using traditionaltechniques. In many situations the precise method of productionwill be unknown, and of little interest, to the customer.Effective control requires a production plan that clearlydefines processes, procedures and schedules so that monitoringcan take place resulting in the generation of productioninformation that is essential to control activity. As aresult of management advice, owners will be able to moreeffectively balance capital and operational investment(systems of production are discussed in detail).Recipe developmentRecipe development will have to take account of plannedproduction methods and financial constraints. From a businessplanning point of view the manager will need to beaware of menu fatigue and product life cycle (see Figure 6.1).Examination of sales history should identify those menuitems that have been around for a long time and whose popularityis now in decline. These menu items will need to bereplaced with new and interesting dishes. Sales history shouldalso be able to demonstrate the direction in which customertastes are moving. Trends in modern diet and eating habitswill have to be accommodated.

Purpose of the menu for the customerThe menu confirms perceptionsh understanding of the concepton offer. Whether eating for necessity or pleasure - at work,as part of the daily grind or as part of a unique social occasion- customers will have pre-conceived expectations aboutthe meal experience. In many circumstances the menu will bethe basis for choice. At this point it would be appropriate toconsider the nature of choice from the customer’s point ofview. The decision to purchase food and drink results from arange of competing and complementary factors:× trial and error× recommendations resulting from other people’s experiences× influence of choice, preference and liking× whether ‘grazing’ or more purposeful ‘foraging’× passively participating in other people’s decisionsWhen putting a menu together the food and beveragemanager will be aware of all the expectations of customers.The choice of dishes may reflect these expectations but willnot, on its own attract desired customers. The menu itself willneed to be produced in a way that sends a particular message.The style, colour and layout of the menu will indicatewhether the operation is fast service or not, expensive or not,fun or not, the sort of place you may wish to entertain a businessor social partner (or someone else’s partner!). The menushould be designed to entertain, particularly for groups suchas children and especially where menu items themselves maybe fairly staidkandard, as in the traditional Christmas menuwhere turkey and pudding are expected.Informing the customer (concept reinforcement)As discussed above, together with the concept, the menu islikely to form the basis of a customer’s decision of where toeat. The detailed information will form part of the contractbetween customer and provider. For this reason, and manyothers, a menu’s meaning must be clearly understood by allwho are intended to use it. A menu must describe what is onoffer and how much it will cost and it should also suggesthow it will be served. If there are to be additional costs, thenthese must be clearly stated. As well as explicit information,menus contain implicit information. Style and presentation ofthe menu may suggest how the customer should dress orbehave. Menu language, particularly French, is often used toimply ‘haute cuisine’. However, menus in French may be infuriatingto customers who do not speak the language. Theestablishment may be out to impress but will fail to do so ifthe menu is not accompanied by an explanation, especiallywhen service staff are also unsure or ignorant of the contentof dishes. Worse still if the staff see this as a failing on thecustomers’ part, censuring the customer with a sigh andsmirk for their lack of knowledge.It could be argued that retailers, like Sainsbury’s, aredoing more to educate the public about food and good eatingthan caterers. Customers in the high street or local supermarketare faced with a variety of well-packed, wellpresentedand prominently merchandised foods and dishesthat also, by virtue of current retailing legislation, containdetailed information on nutritional content. However, thecaterer must not seek to re-educate the customer, ratherthey should attempt to widen their experience and expectations.

Dish development is associated with creativity, new andnovel ideas. However we should not ignore the constraints ofcontrol. New products will have to encompass the principlesof standardization, particularly if, as in the case of restaurantand brewery chains, dishes are to be replicated on a nationalscale. Whilst a certain amount of experimentation is required,unnecessary waste will be avoided through sound productknowledge and an understanding of the nature of rawmaterials. For example ‘goujon of cod’ may sound like a niceidea, but we should not need to prepare and cook the dish torealize that the structure of cod, with its large flakes, willalmost certainly result in much of the dish breaking up duringcooking. It is no accident that such a dish is primarily limitedto softer, finer textured fish such as sole. Dish developmentshould not only involve the cooking and testingtasting ofdishes but also an analysis of the nutritional content and anassessment of food loss during preparation and cooking.We must be able to produce dishes to a consistent standard.Sometimes it is necessary to modify traditional practice inorder to ensure reliability. We need to ensure that if a dish isgoing to appear on a menu over a given period we haveconsistent ingredient availability. Take the case of soup;although traditional practice might suggest cooking entirelyfrom fresh ingredients: a tomato soup based on the use of aparticular brand of tomato puree from a specified supplierwill produce a consistent and reliable product at any time ofyear and in any part of the country with no adjustments torecipe and very little change, if any, in cost. Because of theinherent variability of fresh produce, the use of fresh tomatoesto produce the same dish would result in either continuousadjustments to the recipe with the associated variationin cost or a variable end product.Recipe development will involve not just the examinationof raw materials and methods of processing but also assessmentof cooking and holding procedures and analysis of totalcost. Deep fried dishes, for example, must take account of oilabsorption and energy costs. For some products oil absorptioncan be very high. Modifying recipes and or cookingtemperatures can considerably affect the life and productivityof frying oils and hence substantially influence costs.Recipe development should establish the right product tomeet customer demands and the correct materials andmethod in order to be most cost effective. Advantage shouldbe taken of emerging techniques and technology. Above allwe must be able to communicate instructions - recipe,method, yield and portion size - to all concerned.The customer will determine quality based on their perceptionsof value (related to price) and fitness for purpose. Muchof what was discussed previously, in dish development, willrelate to fitness for purpose. Not only must a dish be edibleand nutritious, it must also be interesting (colour, texture andflavour) and well presented. Above all, reliability will featurehighly in customers’ assessment of our product quality. Wemust plan and organize to minimize defects and ensureconsistent results. A quality commodity plan will identifyinspection, assessment and evaluation procedures throughoutthe process. Variances from standard will be identified andcauses traced and eliminated.

Appealing to the customerNot only does the menu provide information to the customerby way of ‘explicit’ detail of selection on offer andprices, it also informs whether there are cover charges addedor whether service is included. A great deal of ‘implied’information is also given. If the menu is scruffy andmarked or has frequent rubbings out and scribbled alterationsto price and content, it will say a lot about the willingnessof the management to tolerate and even encouragesecond best.Once the decision to eat has been made, the menu thenprovides the choice of what to eat. Each and every item on themenu should appeal. Prices should be realistic. The popularityof fixed price menus is growing. The public is muchmore aware of extortionate mark-up on some wines; it is notsurprising that these wines do not often sell. Menus that offervalue will appeal to customers. That value may be real and/orimplied. Real value may be identified in portion size, additionalitems and linked sales. Implied value may be found indescriptions, presentation and menu design. Caterers shouldnot ignore the fact that customers will be attracted by priceand value for money. It would be a mistake to ‘hide’ additionalcharges.The purpose of the menu for the managerManagement activity is primarily that of control, ensuringthat what is intended to happen actually happens. The menuis central to control activity (see Figure 6.3).Figure 6.3 The menu and control activity. Source: Fullerand Waller, 1991.IMAGE(https://etravelweek.com/hmattachments/26_2010092401344211ACgu.gif)IMAGE(https://etravelweek.com/hmattachments/26_2010092401344212l1oD.gif)

Quality of end products will be determined primarily by:- quality of raw materials- skill of processing- consistency of methods- timing of processes and procedures- consistency in presentationPlanning and standardization proceduresDocumentation                Function- Job descriptions           identify tasks and                             performance targets- Personnel specifications   identify skills, knowledge,                             experience and attitude                             necessary for effective                             performance- Staff training manuals     re-enforce agreed                             standards- Equipment design           should be consistent with  specifications             product (output)                             speci ficatiodstandards- Equipment instructions     (use and cleaning) effective                             application of process- Equipment maintenance      ensure consistent  schedules                  performance- Raw material specifications  ensure consistency with                             product (output) standards- Work schedules             determine the allocation of                             labout resources,                             time/place- Standard recipes- Standard methods           enable measurable- Portion control            performance and control- Standard yields            of waste(See Systems management, for more detaileddiscussion of specifications.)Standardization:Advantages:- accurate cost control- consistent purchasing and issuing- predetermined, measurable yield- portion control- consistent quality- accurate sales and profit calculations- streamlined production- efficient, effective, economicDisadvantages :- customer boredom- loss of staff interest (accidents and mistakes)- lack of staff initiative and involvement in planning- limited skills developmentWhen is product/service developmentnecessary?Product development should be an ongoing process (seeprevious comments regarding product life cycle and Figure6.1). Much of management attention will be focused onmaintaining and improving profitability through modificationsto the sales mix and adjustments to costing and pricing.

Menu planningTraditionally, in western society, meals are eaten in a series ofcourses: a ‘starter’, a ‘main course’ and a ‘sweet’. A menumay, particularly on special occasions, offer more courses -but often there will be less. Whatever the number of coursesthere will be a recognizable pattern or sequence to the meal.Additionally there are specific items or methods of cookeryand/or presentation that are associated with each of thecourses. In addition to accepted sequence and food itemsthere is also an accepted daily pattern and eating at particulartimes of the day is associated with particular items for thosemeal times. However it is important to recognize, at thispoint, that although this accepted procedure remainscommon there are a growing number of exceptions, particularlyin the fast food sector. As society develops, culturechanges and adapts. The growth of ‘grazing’, eating snackson the run throughout the day (note the growth of the retailsandwich industry) and the increasing popularity of the ‘allday’ breakfast should not go unnoticed by the menu planner.The drinks list, with the obvious exception of hot beveragesand the cocktail list, differs from the menu in one majorrespect. Items offered for sale on a drinks list do not requirerecipes, production or processing procedures. Once coldbeverages are delivered to the caterer they generally remainunaltered. Unit pricing, measuring and control are thereforesimplified. Like the menu however, there are accepted associationsand sequences. For example, aperitif, light wine, heavywine, liqueur with a meal; fruit juices, tea or coffee withbreakfast. Because beverages are less perishable they may beput out on display thus reducing the need for written lists(note the legal requirements for display of prices). This abilityto display products may be used to enhance the concept,for instance a Spanish tapas bar may have lots of wine bottleson display. Such displays are not just decoration however,they should be used to enhance sale (see Merchandising).The menu as a management toolIf the menu fails to meet the market requirements it willcertainly cause a fall in sales and profitability. Thereforedevelop the menu to suit your market (concept). The menu(sales history) provides a record of popularity for each dish.This enables forecasting and provides basic control data. Themenu is, therefore, a means of control; resources shouldrelate to the requirements of the menu (staff, machinery,materials, purchases, usage rates, money, time, space).Competent menu managementFrom the manager’s point of view the menu provides the principal‘interface’ between the product and/or service and thepotential customer. Decisions as to whether the customer willpatronize the establishment may be taken on the strength ofthe menu alone. Other decisions are likely to be made on thebasis of what the customer sees or does not see on the menu.As we have seen, the menu carries a number of impliedmessages that may or may not encourage the customer to usethe facilities on offer.

Content planningDish development and commodity planning is an integralpart of catering organization. As such it is concerned not justwith design and manufacture, but also with setting targetsand assessing the relative benefits of alternative strategies.Commodity planning is a continuous process, responding tochanges in demand, competition, technology and economics.The manager is principally concerned with controllingperformance through the standardization of products andcost-control procedures.Effective development strategy allows the manager to:× introduce and develop new recipes× introduce and develop new recipes for special dietaryrequirements× establish and update food production quality controlsystems and procedures× maintain food production quality control systems andprocedures× establish and maintain portion controlProducts and dishes should be developed according to theneeds and wishes as expressed by the customer. Increasinglythis seems to reflect the move toward healthy eating. Themanager must also consider the suitability and capacity of theproduction system and the effect that new products may haveon purchasing policy and raw material specifications. Aboveall, dishes, new or old, will have to meet customer’s ability/willingness to pay.Dish development (testing and tasting):× market potentiavdemand× price× unique selling points (USPs)× ingredient (availabilitykost)× process, procedures and systems× equipment× labour× food value (nutrition)× legislationAs noted Policy, thought should be given toethnic and cultural requirements. Merely adding a ‘vegetarianalternative’ can be counter-productive, especially if this isdone with little thought. Consider the number of standardmenu items that could be prepared with vegetable stocks andoils and vegetarian cheese (made with synthetic rennet)instead of the more traditional animal derivatives. Restrictivedish naming should also be avoided. Such action would allowa greater number of consumers, not just vegetarians, to selectfrom a wider range of menu items.

Vegan and strict kosher diets, among others, require fargreater care in planning which will extend not just to foodusage but also to equipment, methods and processes whichmay be beyond the capacity of the average caterer. Detailedanalysis of the various ethnic and cultural requirements isbeyond the scope of this article and recommendations forfurther reading are identified at the end of this article.Commodity planning:× identifying and listing raw material requirements× fixing quantities× purchasing× storing and issuingRaw material managementThe direct influence the menu has on materials managementis great indeed. Food and drink suppliers are selected on thebasis of their ability to supply, consistently, those rawmaterials necessary for items specified on the menu. Consequentlyfood and drink purchasing specifications should bedesigned around the demands of the menu (see Figure 6.5).Figure 6.5 Purchase specifications and the needs of themenu. (a) Specification (description) for sirloin steak. (b)Specification (diagram) for sirloin steak (MLC). Source:Fuller and Waller, 1991.IMAGE(https://etravelweek.com/hmattachments/26_2010092401344215ZVua.gif)IMAGE(https://etravelweek.com/hmattachments/26_20100924013442164SSj.gif)

Food and drink ordering procedures will be based on theneed to supply the customer with only those items offered onthe menu. Receiving and acceptance is determined by theability to utilize those items through the menu; food anddrink storage space is wasted by goods not utilized throughthe menu. Delivery and distribution is therefore organizedaccording to a schedule based on menu requirements. Costsand revenue figures should reflect the prices and popularity ofmenu items. Control of materials is impossible without accurateproduction and sales records.The commodity plan must account for the availability ofresources. The commodity plan for a city centre restaurant, acountry house hotel and a North Sea oil rig will necessarilydiffer. We cannot assemble a range of classical dishes, withthe intention of preparing from fresh ingredients and cookingeach dish to order if there is a shortage of labour, or if thelabour supply is unskilled. However, we can present such arange of dishes, with limited staff and skills, if we purchasethem ready prepared, but this will considerably affect therange, amount and type of equipment that we require.Convenience foods will have an influence on equipment selectionsuch that ultimately, at the highest levels of convenience,only reheating equipment is required. All preparation andcooking equipment becomes obsolete. The need for panwashing facilities is obviated by the use of disposablereheating containers.In addition to availability of resources, which for rawmaterials and sometimes labour is often seasonal, catererswill also be concerned with the seasonality of demand: thechanging pattern of customer preferences through the year.Many caterers will respond with either seasonal menus,particularly spring and autumn menus, or seasonal specialities.In examining the range of opportunities that exist, twoextremes are clearly identifiable: ‘total fresh traditionalprocessing’ and ‘total convenience assembly serve’. Manyoptions exist between these two extremes and there is no‘least cost’ formula that can be applied. A balance will needto be achieved whereby optimum benefit is obtained fromeach of the main resources. If we choose to increase spendingon raw materials then an equivalent decrease must be foundin labour and/or equipment spending (see Systemsmanagement, for more details).

Above all the manager will be concerned with acommodity plan that enables control of:× raw materials× purchasing× suppliers× storage× perishability× processes× holding× style of serviceProduction methodsAs has already been noted a wide band of production opportunitiesexists between the two extremes of totally fresh traditionalcookery and assembly of convenience products. Of thedeveloping ideas and techniques most attention is focused onthe centralization of production, away from the point ofdelivery and the demands of service. The principal methodsinvolved are cook-freeze, cook-chill and sous-vide.Products and dishes, customer demand, size and scale ofoperation together with issues relating to quality, economyand value will influence the choice of production system.While at one time traditional methods, cook-freeze, cookchilland sous-vide were seen as independent, even incompatiblesystems, there is a growing trend towards a‘mix’n’match’ blend that derives benefits from each withoutincurring excessive additional costs. It is widely recognizedthat each system has particular strengths often related tospecific raw materials, principles of cookery and groups ofmenu items. Salads, sandwiches and pastries may beproduced on a seven-day ‘chill’ cycle. Stews, braises, pies andpuddings are more suited to a six-month ‘freeze’ productionplan. Roasting and frying may be done daily using traditionaltechniques. In many situations the precise method of productionwill be unknown, and of little interest, to the customer.Effective control requires a production plan that clearlydefines processes, procedures and schedules so that monitoringcan take place resulting in the generation of productioninformation that is essential to control activity. As aresult of management advice, owners will be able to moreeffectively balance capital and operational investment(systems of production are discussed in detail).Recipe developmentRecipe development will have to take account of plannedproduction methods and financial constraints. From a businessplanning point of view the manager will need to beaware of menu fatigue and product life cycle (see Figure 6.1).Examination of sales history should identify those menuitems that have been around for a long time and whose popularityis now in decline. These menu items will need to bereplaced with new and interesting dishes. Sales history shouldalso be able to demonstrate the direction in which customertastes are moving. Trends in modern diet and eating habitswill have to be accommodated.

Dish development is associated with creativity, new andnovel ideas. However we should not ignore the constraints ofcontrol. New products will have to encompass the principlesof standardization, particularly if, as in the case of restaurantand brewery chains, dishes are to be replicated on a nationalscale. Whilst a certain amount of experimentation is required,unnecessary waste will be avoided through sound productknowledge and an understanding of the nature of rawmaterials. For example ‘goujon of cod’ may sound like a niceidea, but we should not need to prepare and cook the dish torealize that the structure of cod, with its large flakes, willalmost certainly result in much of the dish breaking up duringcooking. It is no accident that such a dish is primarily limitedto softer, finer textured fish such as sole. Dish developmentshould not only involve the cooking and testingtasting ofdishes but also an analysis of the nutritional content and anassessment of food loss during preparation and cooking.We must be able to produce dishes to a consistent standard.Sometimes it is necessary to modify traditional practice inorder to ensure reliability. We need to ensure that if a dish isgoing to appear on a menu over a given period we haveconsistent ingredient availability. Take the case of soup;although traditional practice might suggest cooking entirelyfrom fresh ingredients: a tomato soup based on the use of aparticular brand of tomato puree from a specified supplierwill produce a consistent and reliable product at any time ofyear and in any part of the country with no adjustments torecipe and very little change, if any, in cost. Because of theinherent variability of fresh produce, the use of fresh tomatoesto produce the same dish would result in either continuousadjustments to the recipe with the associated variationin cost or a variable end product.Recipe development will involve not just the examinationof raw materials and methods of processing but also assessmentof cooking and holding procedures and analysis of totalcost. Deep fried dishes, for example, must take account of oilabsorption and energy costs. For some products oil absorptioncan be very high. Modifying recipes and or cookingtemperatures can considerably affect the life and productivityof frying oils and hence substantially influence costs.Recipe development should establish the right product tomeet customer demands and the correct materials andmethod in order to be most cost effective. Advantage shouldbe taken of emerging techniques and technology. Above allwe must be able to communicate instructions - recipe,method, yield and portion size - to all concerned.The customer will determine quality based on their perceptionsof value (related to price) and fitness for purpose. Muchof what was discussed previously, in dish development, willrelate to fitness for purpose. Not only must a dish be edibleand nutritious, it must also be interesting (colour, texture andflavour) and well presented. Above all, reliability will featurehighly in customers’ assessment of our product quality. Wemust plan and organize to minimize defects and ensureconsistent results. A quality commodity plan will identifyinspection, assessment and evaluation procedures throughoutthe process. Variances from standard will be identified andcauses traced and eliminated.

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