Menu Development, Planning, and Design: Costing, Pricing, and KPIs

This report provides a comprehensive overview of menu development, planning, and design within the hospitality industry, emphasizing the importance of an efficient menu that reflects the organizational brand and enables business control. It delves into key considerations for menu costing and pricing, including direct and indirect costs, competition, service costs, and boundary pricing. The report outlines various approaches to menu pricing, such as pricing by portion cost, raw food cost, competition, and demand analysis. Furthermore, it discusses how to plan for menu development using Key Performance Indicators (KPIs) to measure success, including sales indicators and customer feedback. The conclusion highlights that effective menu design requires skills and knowledge to achieve the food organization's objectives.

MENU DEVELOPMENT, PLANNING
AND DESIGN

TABLE OF CONTENTS
 INTRODUCTION
 MAIN BODY
 TASK 2
 Determine the key considerations which need to be taken into account when costing and pricing menus
 Producing costed and priced menus to meet a range of customer requirements
 Approaches to menu costing and pricing
 Plan for menu development using KPIs to measure success
 CONCLUSION
 REFERENCES

INTRODUCTION
 Menu designing is the essential practice which the hotel organisation lay
out, it plays an important role as efficient menu reflects the organisational
brand, vision.
 Menu in any hospitality industry is the primary aspect for communication it
also enables the organisation to control the business.
 It gives the proper roadmap as what ingredients and dishes need to be
include, it also helps in setting the prices which the customer pays against
the purchased service.

TASK 2
DETERMINE THE KEY CONSIDERATIONS WHICH NEED TO BE
TAKEN INTO ACCOUNT WHEN COSTING AND PRICING MENUS
 Pricing strategy plays a vital role while
developing and designing menu.
 It is the main thing that is being considered
by customers while selecting restaurants.
 It is important for manager to price menu in
an effective manner.

CONTINUE…
Direct cost: It refers the cost that is directly associated
with the food item in the menu itself such as:
purchasing of food, drip loss, portion size and food waste
from spilling or spoiling.

CONTINUE…
 Indirect cost: This cost does not include
the actual ingredient that go with each
item but this cost might also affect when
dishes are prepared.

CONTINUE…
 Competition: It is other main factor that needs to be considered while
menu planning. Manager needs to consider prices of their competitors
for the same item.
 Service cost: The type of service that restaurant is going to offer can
also affect menu pricing. For find dinning, restaurants need to pay high.

CONTINUE…
 Boundary pricing: It refers the cost
that manager pays for its location, for
quality of food.
 Along with this, location of restaurant,
ambiance, and other environmental
factors also affect menu planning.

PRODUCING COSTED AND PRICED MENUS TO MEET A
RANGE OF CUSTOMER REQUIREMENTS
Approaches to menu costing and pricing
 There are 4 approaches of menu pricing by which restaurants can plan
their menu and decide pricing such as:
 Pricing by portion cost: A standard portion cost is the cost of serving
one item as per the standard recipe.

CONTINUE…
Pricing by raw food cost: As per the raw
price of each item, pricing is being decided.
For attracting customers, manager prices
slightly low and it makes them beneficial
(Victor and et.al., 2018).

CONTINUE…
 Pricing by competition: When
prices of food item are being
decided as per the price of
competitors then it is called
pricing by competitors.