Menu as a tool | Hospitality Learning

Menu as a tool and resource

If you think Menu's function is to provide different variety of meals to the guest you will change your opinion after this chapter. We will review Menu as a Marketing tool, Control Tool, and Analyzing Resource.

Menu is the most important part of F&B operations. Besides carefully designed paper with food options to chose from menu carries multiple other key roles and can serve as a very handy tool.

Menu is your voice. It tells your guests your story, your mission and uncovers who you are
A primary determinant of Budget
Marketing tool
Connection with your guests
Profitability tool
Analyzing tool

Setting Menu prices is more of an art then mathematical exercise. Keep in mind, the guest doesn’t care about your food cost, profitability or contract labor that you need to involve. Guest has certain expectations and a certain budget.

You absolutely can use one of the standards methods to determine Menu prices:

Demand - Driven Pricing
Mark up method
Factor Method
Contribution Margin
Ratio Pricing
Prime Cost Method

But my best recommendation is to use a combination of a few. Sales price is not always the best choice.

In this case, price with higher Food Cost has better Contribution Margin.

When setting Menu prices using multiple methods allows better profitability.

Involve Prime Cost Method to ensure your labor factor involved in making a decision
Don’t forget about your demand. Keep in mind, at the end guest is the one who sets the price
Review Competitive Set and ensure you are competitive

Mix and match, review different scenarios, apply to your goals and finalize the decision. However, keep in mind, the menu must meet certain food cost percentage as a whole, not per individual item. We will return to this later!