Menu Planning, Designing, and Development: Cost and Price Analysis

This report delves into the critical aspects of menu planning, design, and development, emphasizing the significance of cost and price considerations for businesses like Pasco Café. It highlights key factors influencing menu pricing, including the cost-to-profit ratio, revenue figures, energy costs, staffing expenses, business environment policies, the cost of products, customer affordability and willingness to pay, available resources, and seasonality restrictions. The report further explores methods for calculating ingredient proportions, sales mix, main revenue sources, and overall staffing costs. It also details how to determine the cost-to-profit margin ratio and accurately price dishes using a specific formula illustrated with an example of Genoise sponge preparation. The conclusion underscores that various elements, such as ingredient costs, staffing, regulations, and customer preferences, significantly impact the costing and pricing of food and beverage products, with resource availability and desired profit margins playing crucial roles in the final pricing strategy.

MENU PLANNING,
DESIGNING and
DEVELOPMENT

TOC
 Introduction
 Key consideration
 Cost and price of the menu

Introduction
As the quality and quantity of menu are
important equally important other factor
to ensure that business can attract more
customers is price of the menu and to
ensure that business is able to earn
intended profit important consideration is
cost of the menu.

Key Considerations
Some of the key considerations are as follows while
determining price and cost of the menu are-
Cost to profit Ratio
It is the decision of owner and manager of Pasco
Café what ratio they like to keep for the profit. In
refers to profit margin ratio of the food and
beverages.

Cont..
Revenue Figure
This is another consideration for determination of
price this refers to revenue being earned by the
Pasco Café. Revenue figures become basis of
the determination of cost and price of the menu.

Cont..
Energy Cost
 Energy cost refers to cost of energy
which incurs in the operation of the Café.
This includes in the cost of menu and
which is later added in the price of the
menu which is collected from the
customers.

Cont..
Staffing Cost
 This is another consideration for
the costing and pricing
determination. Staff of the café
includes front office staff and
those who are involved in services
of the customers and those who
are involved in preparation of the
food.

Cont..
Business environment
Policies
 This includes decision of
costing and pricing which
includes consideration of
the policies of the
business environment

Cont..
Cost of Product
 This includes cost of the product which
means direct cost which is incurred in the
production of a single product in this
context single serving. This includes cost
of raw material and cost which incurs in
production.

Cont..
Customers
 Customers are also important
consideration for the cost and price
decision. Price which customers can pay
and which price customers are willing to
pay. This becomes a important
consideration for the price decision.

Cont..
Available Resources
 In case the equipments and resources
which are required to prepare the food
and beverages are difficult to acquire the
cost of the product increases
automatically

Cont..
Seasonality Restrictions
 Products whose demand is seasonal in
nature also affect pricing decision. These
products give profit for a fixed price so
these products can be priced high than
other products whose demand is not
seasonal