Menu Planning and Design: Key Factors, Pricing, and Costing

This presentation analyzes the principles of menu planning and design, factors to consider for costing and pricing menus, and how to produce accurately costed and priced menus to meet customer requirements.

MENU
DEVELOPMENT,
PLANNING AND
DESIGN

TABLE OF CONTENT
 INTRODUCTION
 KEY FACTORS TO CONSIDER WHILE
COSTING AND PRICING MENUS
 PRODUCE ACCURATELY COSTED AND
PRICED MENUS TO MEET A RANGE OF
CUSTOMER REQUIREMENTS
 CONCLUSION
 REFERENCE

INTRODUCTION
 This presentation analyses the various principles involved in menu planning
and designing, various customers and business requirements that need to be
fulfilled for menu in order to maximise Pasco Cafe's profits.
 It also evaluates the numerous factors which determine pricing and costing of
items in menu and creates a plan to develop a menu considering these factors
for Pasco Cafe’.

Key factors to consider while costing and pricing menus
 There are various factors that one has to consider during menu planning with
regards to costing and pricing menus. Pasco Cafe' should price dishes in order
to cover operation costs related to all the factors given below, in order to run a
successful, profitable establishment.
 Direct Costs: Costs which are directly related to the food items present in the
Pasco Cafe's menu itself are direct costs.

CONT.
 Indirect Costs: Costs associated with staffing and
labour costs, overhead expenses incurred by the
cafe due to investment in ambiance or décor,
lighting, cutlery and utensils are indirect costs. The
marketing costs related to promoting Pasco Cafe' in
market, are also part of its indirect costs.
 Volatile Market Costs: Any food costs that
regularly tend to fluctuate in the market are volatile
food costs.

CONT.
 Competitor's Pricing: Pasco's administration needs to keep their menu
pricing on or around the same level as their competitor's in order to function
productively. If the strategy is to charge extra, it is prudent to justify this this
change by differentiating the dishes from competitors.
 Boundary Pricing: Cafe's administration needs to know the profit margins for
the range of highest and lowest prices charged for an item, so it can calculate
the lowest price to charge while earning sufficient profits for sustainable
operations.

P4 Produce accurately costed and priced menus to meet a
range of customer requirements
 There are various
individual metrics that first
need to be calculated by
Pasco Cafe', in order to
effectively and profitably
decide menu prices. Most
imperative of these metrics
are as follows:

CONT.
 Food Cost Percentage: This determines the proportion of primary and
accompanying components that are needed to prepare a dish so the bare cost of
dish can be calculated. It can be calculated by dividing portion cost by dish's
selling price (Filimonau and Krivcova, 2017).
 Energy Costs: These are the recurring energy costs incurred during the
establishment's operations and have to be factored into the menu prices in
order to price dishes profitably. These costs can also be minimised by
investing into renewable energy market.

CONT.
 Revenue Sources: In
order to price menu
efficiently, Pasco Cafe's
all possible sources of
revenues have to be
identified first to
maximise its profitability.

CONT.
 Staffing Costs: Costs associated with hiring and maintaining staff has to be
accounted for in the menu prices.
 Staffing Costs = Total sales / Number of employees.
 Produce costs: The fluctuating costs of input seasonal ingredients plays major
influence on profitability of Pasco Cafe' and its menu prices. These can be
calculated by including appropriate markup costs in present production costs.

CONCLUSION
 This presentation identifies and analyses the
key factors that have to be considered while
deciding the pricing and costing of items in a
menu in order to maximize the profits of the
respective establishment.
 It also produces an accurately priced menu that
takes into consideration the various customers
and business requirements and how they can be
fulfilled to achieve optimum productivity.

REFERENCES
 Baiomy, A.E., Jones, E. and Goode, M.M., 2019. The influence of menu
design, menu item descriptions and menu variety on customer satisfaction. A
case study of Egypt. Tourism and Hospitality Research. 19(2). pp.213-224.
 Cruz Moreira, R.P. and et.al., 2018. An Evolutionary Mono-Objective
Approach for Solving the Menu Planning Problem.
 Filimonau, V. and Krivcova, M., 2017. Restaurant menu design and more
responsible consumer food choice: An exploratory study of managerial
perceptions. Journal of cleaner production. 143. pp.516-527.

THANK YOU.