Food Service Exam 1

macro vs micro marketing

macro - look at the economy’s entire marketing system

micro - look at individual company

different types of economies

• Free Market Economy - “capitalism”, market driving, price is a measure of value and what consumers are willing to pay

• Russia - mixed economy

• china - socialist market

• Value exchange - something of value exchanged for something of value

law of diminishing demand

history of marketing

late 1800s - industrial revolution

1920s - advertising and sales focus - differentiating products

1950s - marketing dept, consumer research, advise mgmt of how to design, price, distribute, and promote

marketing concepts

Management philosophy of how a company views customers and the sale of their products (goods, services, ideas)

manufacturing/production concept

available and affordable

product concept

customers prefer existing product, should focus on improvement

selling concept

need a large selling and promotion effort

marketing concept

determine needs and wants of target market

societal marketing concept

org determine needs and wants and company needs deliver to improve consumers and society’s well being

marketing strategy

plans

goals and objectives

standards

contracts

policies and procedures

programs

target mix

fairly homogenous group of customers to whom a company wishes to appeal 

marketing mix

controllable variables which the company combines in order to satisfy the target group

• product

• price 

• place

• promotion

approaches to plans

• strategic plan, defined target market and marketing mix, identify resources needed, objectives to be received

• look at duration, scope, and method of development

• short range - 1 year

• med range - 2-5 years

• long range - 5 years

• scope - what you will concentrate on

•  bottom up - info from employees 

• top down - developed by top mgmt

strategic plan

long term, overview of marketing in the organization

done after market has been defined

outlines resource allocation

objectives

integrated marketing plan

a management concept that is designed to make all aspects of marketing communication such as advertising, sales, promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation

Press-Gainey patient satisfaction

patient satisfaction surveys

rate 1 to 5

situation analysis (SWOT)

identify marketing opportunities and potential problems

current condition and where organization is going

SWOT - strengths, weaknesses, opportunities, threats

market segmentation

division of total market into groups of customers who have similar needs, wants, values, and buying behaviors

market research

systematic assembly and analysis of facts relevant to marketing, need good facts to make decisions

1. define the problem

2. secure internal data

3. finding secondary data

4. collecting primary data

5. data analysis 

6. interpret research and make recommendations

7. report

stages of marketing activities

• pioneering state - bringing, extensive advertising-promotion

• competitive stage - try to increase place in market, know your niche

• retentive stage - have customers need to keep them happy

market share

percentage of industry sales for a product

environmental factors and impact on marketing

brand

name, term, design, symbol, or feature that identifies on seller’s good or service as different from another

brand equity

value of a brand

brand loyalty

repeated customer purchase of a specific brand

customer loyalty

frequency with which a customer consistently purchases a specific brand

social media

no longer a luxury but a necessity

pay attention to what others are talking about

find your niche

be careful - everything is public

build blog brand

SSS rule - short sweet and saturated with valuable info

promote and publicize - comments, keep readers coming back, spread the word

importance of sustainability

social - health and well being, equity

economic - resource efficiency, market stability

environment - resource conservation, biodiversity protection

ways foodservice can go green

healthy retail offerings

sustainable food

purchasing

green buildings

energy and water conservation

waste management

procurement

food

supporting products and equipment

organic

not taking off, cost

cage free/hormone free

fair trade

cocoa, coffee, bananas, tea, and sugar

must be free of forced labor or poor working conditions for laborers

crips raise through sustainable methods no GMOs

have a floor price

local

150 mile radius

food miles traveled

taste and flavor

support local farmers

convenient

community based food system

challenges with food procurement

seasonality

volume

quality

specification and packaging consistency

competitive cost

disposable products

avoid polystyrene products

avoid waxed cardboard

use products with recycled content

FDA limits use of recyclable in precuts carrying food

LEED

leadership in energy and environmental design

energy efficient equipment

program of US Environmental Protect Agency and Dept of Energy

international standard for consumer products

use ip to 50 percent less energy than conventional

energy use in food service

fryers, hot food holding, refrigerators, freezers, steam cookers, dishwashers, ice makers, griddles, ovens

water conservation and efficiency

high efficiency dishwashers, foot petal sinks, motion sensor sinks and light, high velocity pre since spray nozzles, leak inspections, only operating dishwaters when full, hand scraping food scrapes, energy efficient aerators

waste management

buy in bulk, pulpers, garbage disposals, recycling program, composting programs

types of owernship

• proprietorship - owner has total decision making authority and retains all profits, least costly form of ownership, easy to initiate and discontinue, avoids double taxation. Unlimited personal liability, limited access to cash, management limited to skills and abilities of owner

• partnership - increased sources of knowledge/ability/capital, easy to initiate, avoids double taxation. General partner has unlimited liability, potential for personality conflicts, partners bound by law of agency, difficult for partner to dispose of interest without dissolving the company

• C corporation - limited liability of owners, easier to attract capital, ease in transferring ownership. Costly and time consuming to create, double taxation, increased legal requirements, limited control for person who starts company

• S corporation - limited liability of owners, ease in transferring ownership, avoids double taxation. Can be at a higher tax rate than C corp. Limited to 75 or less stockholders

• LLC/PC - limited liability of owners, can have multiple owners, avoids double taxation. Costly and time consuming to create. Transfer of ownership requires approval of all the owners.

cash vs accrual accounting

cash - record transaction at the time the cash actually goes in or out

accrual - record transactions when revenue is earned

major expenses and usual percent for restaurants

labor

food

operating costs

60-65% of cost

cash handling

separation of duties

who has access to dahs

security/background checks

reconciliation - unannounced audits, cash drawers, surveillance cameras 

fixed vs variable vs semi variable costs

fixed - do not vary with volume or service rendered, non controllable

variable costs - vary directly/proportionately w/ volume of business

semi variable - vary in same direction but less proportionately w/ changes to vol

direct vs indirect costs

direct - items of cost which are specifically traceable to an item

indirect - elements of cost that are associated with an item but not directly traceable to an item (utilities, supervisors salary et)

sunk vs differential costs

• sunk - already incurred and cannot be recouped

• differential - about of increase or decrease in cost when you compare alternative choices 

assets

things that a company owns which have value

equities

ownership or claims against the assets, groups of individuals who have rights associated with the assets

liabilities

claims against the company, interest of the creditors

capital

interest of the owners in the company

what is a balance sheet

statement which shows the financial condition of a business at a given point in time

assets, liabilities, owners equity

fixed assets

purchased for long term use and are not likely to be converted quickly into cash

current vs long term liability

current - debts which are to be paid within he next operating period

long term - long term debt

what is an income statement

statement which shows the results of operating a business over a period of time

revenue, expenses

straight line depreciation formula

original cost - less salvage value/useful life

why might a business use accelerated depreciation

original cost x double declining balance %

reduce its taxable income in early years of an asset’s life

purchases method to calculate food cost

total purchases / # of meal served

inventory method of calculating food cost

beginning inventory + food purchases for that month - closing inventory / food sales for month

calculate pre-costing an item

EP cost / number of portions

conventional method for calculating selling price

raw food cost and mark up factor

100/mark up % = mark-up factors

SP = raw food cost X raw food cost 

prime cost method for calculating selling price

food cost % + labor cost % = prime cost

100%/prime cost % = mark-up factor 

actual cost method for calculating selling price

food cost + labor cost + variable costs + fixed cost + profit

what method for calculating selling price is used most and why

demand-oriented pricing

whatever market will bear

often time based pricing (lunch, early bird specials)

competitive pricing

compare to competition

not a calculation

odd-cents pricing

ends in odd number

just below zero

pricing by the ounce

salads, sandwich, bars

two tier food service

offering upscale items at a different price

A la carte

Table d’hote

fixed priced menus

menu engineering

computerized menu analysis

focus on looking at which menu items make money