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Introduction The purpose of this section of the assessment is to evaluate the role of menu as a strategic tool and develop the menu based on the concept paper identified. It also evaluates the human resource implications and the marketing mix associated with it. Therefore, the marketing aspect of the firm will be clearly outlined in this part of the assignment. Menu as a strategic tool Menu is one of the controllable aspect of the strategy and can be considered as the key element used to portray the marketing strategy of organizations in the country. It can helps the consumers to identify the factors satisfying their own needs. The menu list including the prices and products is essential means of communicating the offerings of the restaurant and sets up the expectation of the consumers (Torres, 2016). The intangible factors such as consumer preferences and current food trends have a significant influence on the choice of products among the consumers (Petrc, Mikinac & Edmonds, 2019). The whole point of introducing the menu to the consumers is to inform them regarding the choices available so that they can identify the ones that can fulfil their needs and wants. Moreover, various menus provide information regarding the ingredients used, preparation techniques and nutritional content which significantly influences the value of items offered and helps consumers in weighing each item with one another. The new menu developed also goes through the product lifecycle phases which includes the introduction, growth, maturity and decline stages. In the introduction stage, the role of the menu is to inform consumers about the restaurant offering and kick start the sales revenue (Maltese, Giachino & Bonadonna, 2016). However, it takes time for the company to gain actual profit margin. In case of the growth stage, the marketing efforts made in the previous stage has significant influences the sales of the company which results in profit generation. However, the profit margin and revenue levels decreases when the menu items reaches the maturity stage and begins to decline at the late maturity stage (Torres, 2016). The competition is significantly high in New Zealand so developing a new concept will have a short term competitive advantage as companies will aim to develop similar items to remain competitive in the market. Photos, organization, readability, simplicity, colour and information are key factors affecting the success of the menu design (Torres, 2016). The main purpose of the menu is to prioritize the objective of the business as it is relevant to the beverages and food products offered by the company (Narimawati & Pangestu, 2020, July). Therefore, it should include visionary goals followed by tactical goals but should focus on the value of the offerings. Value has been identified as a key factor affecting the sales volume among the organization. For example, simply writing fillets of sole bonne femme would add low value to the consumers when compared to presenting it as fillets of sole bonne femme served in a white sauce with fresh mushrooms and potato borders. The inclusion of words like “and” and “with” adds value to the consumers which makes the dishes more informative and has a better sales appeal (Narimawati & Pangestu, 2020, July). The words like plain, boiled, hashed, minced and mashed should not be used on the menu. Instead of using the word plain, the word natural has a better positive impact on the consumers. The association of few words such as fresh tender, green, young, spring, new, chilled, special, choice are few words enhancing the quality of the food appeal. It makes the food much more attractive for the consumers. Menu development based on the concept
The menu has been developed based on the objectives and gap identified in the market. The menu has been specially designed to bring out the essence of the north Indian dishes with authentic use of spices. The menu design also needs to be authentic and represent the value which is being added to the product. The menu design are divided into static menu, A’la Carte Menu, Table d’hote Menu, Du Jour Menu and Cycle Menu. However, in this scenario a static menu will be developed as the items will be segregated effectively into different sections. A classic design as mentioned above will be used as the design for the menu as it portrays the classy and value offered by the restaurant. The menu holds significant importance for the consumers and it can be used to improve the value offered to the consumers by using effective menu and use of effective words that highlights the value provided. Human resource implications The menu developed is quite lengthy and vivid which implies that the restaurant will require adequate amount of staffs to deliver all the dishes on time and prep for them on a daily basis (Hedayati Mehdiabadi & Li 2016). Therefore, the restaurant will hire one head chef, two sous chefs, five station and line chefs, three commis chefs and two kitchen porters. On the other hand, a manager will be appointed to manage the orders and communicate effective with the consumers and the staffs to offer the best quality service. The company will hire a dishwasher, service staffs such as waitresses and waiters. Therefore, in overall the restaurant will be expected to hire to 20 employees for ensuring full functionality of the restaurant. The menu developed will have a significant impact on the staffs especially the chefs and waiters as they have to be prepared for the variety of orders they cater to and prepare for it from beforehand. The menu consists of 60 items out of which 50 items will require time to prepare and have a distinctive taste so chefs and waiters will be put under pressure at all times. However, the phenomenon will be experienced during the growth and initial part of the maturity phase as it is the time with highest sales volumes and order request. Moreover, the restaurant also offers takeaways so developing products so that the amount of orders to be dealt will be huge based on the expected sales and popularity of the cuisine. Marketing mix product The product includes the north Indian dishes which includes entrees, main course, rice, breads, desserts and drinks. The restaurant will include both non vegetarian and vegetarian dishes which brings the essence of North India (Wu, & Li 2018). The portion offered will be considerable with use of authentic Indian spices. The company will also offer takeways with the same menu. price The prices of the offerings will be moderately prices and the restaurant will use cost leadership pricing strategy and offer products at a low profit margin (Kim & Kim, 2018). The company will also use competitive pricing to ensure that the products are priced at par with the other cuisines especially other Asian cuisines which are popular in New Zealand. The average cost of a meal will be around $25 which is reasonable compared to any classy restaurant. place The location of the restaurant is a key factor as it helps in attracting more consumers (Othman et al. 2019). The restaurant will be opened close to the Queens Arcade in New Zealand to ensure that larger crowd can be attracted towards the offerings. Promotion In term of promotion, the restaurant will use both digital and traditional marketing methods to increase their brand awareness in the market. Posters and hoardings will be used in high end streets and busy areas such as malls and airports to increase awareness. Social media platforms will be used to promote the offering and the discounts on the food offered by the company. The company will also form partnership with delivery services to ensure that larger consumers can order takeaway food and penetrate the market effectively. Takeaway is a key aspect of the services to develop partnership with online ordering services is a key to increase the popularity of the takeaways. process The process will start with receiving orders and move to preparing dishes based on the orders and delivering them. The takeaways will be packed differently in compared to the food served within the restaurant. The chefs will prep ingredients beforehand to ensure that the food can be delivered within 30 minutes of ordering the food. people The restaurant will hire one head chef, two sous chefs, five station and line chefs, three commis chefs and two kitchen porters. On the other hand, a manager will be appointed to manage the orders and communicate effective with the consumers and the staffs to offer the best quality service. The company will hire a dishwasher, service staffs such as waitresses and waiters. Therefore, in overall the restaurant will be expected to hire to 20 employees for ensuring full functionality of the restaurant. Physical evidence Physical evidence will include receipts, brochures and discounts coupons shared for promoting the brand.
References Hedayati Mehdiabadi, A., & Li, J. (2016). Understanding talent development and implications for human resource development: an integrative literature review. Human Resource Development Review, 15(3), 263-294. Kim, M. S., & Kim, J. (2018). Linking marketing mix elements to passion-driven behavior toward a brand. International Journal of Contemporary Hospitality Management. Maltese, F., Giachino, C., & Bonadonna, A. (2016). The safeguarding of Italian eno-gastronomic tradition and culture around the world: A strategic tool to enhance the restaurant services. Calitatea, 17(154), 91. Narimawati, U., & Pangestu, A. (2020, July). Designing Electronic Menu Applications for Restaurant Businesses. In IOP Conference Series: Materials Science and Engineering (Vol. 879, No. 1, p. 012120). IOP Publishing. Othman, B., Harun, A., Rashid, W., Nazeer, S., Kassim, A., & Kadhim, K. (2019). The influences of service marketing mix on customer loyalty towards Umrah travel agents: Evidence from Malaysia. Management Science Letters, 9(6), 865-876. Petrc, A. Š., Mikinac, K., & Edmonds, I. (2019). STRATEGIC APPROACHES TO MENU TRANSLATION ANALYSIS. Tourism in South East Europe…, 5, 689-703. Torres, A. M. (2016). Electronic Menu and Ordering Application System: A Strategic Tool for Customer Satisfaction and Profit Enhancement. International Journal Science and Technology, https://doi. org/10.14257/ijunesst, 4, 401-410. Wu, Y. L., & Li, E. Y. (2018). Marketing mix, customer value, and customer loyalty in social commerce. Internet Research.
Start Up Capital
Sources of Capital
Startup Expenses
Owners’ Investment (name & % ownership)
Buildings / Real Estate
Your name & % ownership
$ 100,000
Purchase
$ 50,000
Venture Capital
500,000
Construction
50,000
Other Investor
–
Remodeling
50,000
Other Investor
–
Other
–
Total Investment
$ 600,000
Total Buildings and R / E
$ 150,000
Bank Loans
Leasehold Improvements
ANZ bank
$ 500,000
Plumbing
$ 10,000
Bank 2
–
Ventilation
9,000
Bank 3
–
Electricity
12,000
Bank 4
–
Cosmetic Upgrades
12,000
Total Bank Loans
$ 500,000
Total L / H Improvements
$ 43,000
Other Loans
Capital Equipment List
Source 1
$ –
Furniture
$ 15,000
Source 2
–
Equipment
100,000
Total Other Loans
$ –
Fixtures
10,000
Machinery
75,000
Other
–
Summary Statement
Total Capital Equipment
$ 200,000
Sources of Capital
Location and Admin Expenses
Owners’ and Other Investments
$ 600,000
Rental
$ 35,000
Bank Loans
500,000
Utility Deposits
25,000
Other Loans
–
Legal and Accounting Fees
4,000
Total Source of Funds
$ 1,100,000
Prepaid Insurance
35,000
Pre-opening Salaries
180,000
Startup Expenses
Other
–
Bldgs / Real Estate
$ 150,000
Total Location and Admin Expenses
$ 279,000
Leasehold Improvements
43,000
Capital Equipment
200,000
Opening Inventory
Location / Admin Expenses
279,000
Protein
$ 5,000
Opening Inventory
15,000
Spices
1,000
Advertising / Promo Expenses
28,000
Vegetables
1,000
Other Expenses
220,000
Cutlery and crockery
3,000
Total Startup Expenses
$ 935,000
Sweets
5,000
Total Inventory
$ 15,000
Advertising and Promotional Expenses
Advertising
$ 20,000
Signage
3,000
Printing
2,000
Travel & Entertainment
2,000
Other / Additional categories
1,000
Total Adv and Promo expenses
$ 28,000
Payroll and payroll taxes
Salary for staffs
$ 160,000
Salary for managers
60,000
Total Payroll and payroll taxes
$ 220,000
Profit and Loss Statement
Profit and loss projections
Year-by-year profit and loss assumptions
Year 1
Year 2
Year 3
Year 4
Year 5
Annual cumulative price (revenue) increase
–
2.00%
4.00%
6.00%
8.00%
Annual cumulative inflation (expense) increase
–
2.00%
4.00%
6.00%
8.00%
Interest rate on ending cash balance
0.50%
0.50%
0.50%
0.50%
0.50%
Year 1
Year 2
Year 3
Year 4
Year 5
Revenue
Gross revenue
$925,000
$943,500
$981,240
$1,040,114
$1,123,324
Cost of goods sold
$246,250
$251,175
$261,222
$276,895
$299,047
Gross margin
$678,750
$692,325
$720,018
$763,219
$824,277
Other revenue [source]
$0
$0
$0
$0
$0
Interest income
$0
$0
$0
$0
$0
Total revenue
$678,750
$692,325
$720,018
$763,219
$824,277
Operating expenses
Sales and marketing
$28,000
$28,560
$29,702
$31,485
$34,003
Payroll and payroll taxes
$220,000
$224,400
$233,376
$247,379
$267,169
Depreciation
$78,600
$80,172
$81,744
$83,316
$84,888
Maintenance, repair, and overhaul
$4,000
$4,080
$4,160
$4,240
$4,320
Total operating expenses
$330,600
$337,212
$348,982
$366,419
$390,380
Operating income
$348,150
$355,113
$371,036
$396,800
$433,896
Interest expense on long-term debt
$17,992
$14,300
$10,459
$6,465
$2,312
Operating income before other items
$330,158
$340,813
$360,576
$390,335
$431,585
Loss (gain) on sale of assets
$0
$0
$0
$0
$0
Other unusual expenses (income)
$0
$0
$0
$0
$0
Earnings before taxes
$330,158
$340,813
$360,576
$390,335
$431,585
Taxes on income
30%
$99,047
$102,244
$108,173
$117,100
$129,475
Net income (loss)
$231,111
$238,569
$252,403
$273,234
$302,109
Cumulative income
$231,111
$469,680
$722,083
$995,318
$1,297,427
Breakeven Analysis
Balance Sheet
Balance sheet projections
Assets
Initial balance
Year 1
Year 2
Year 3
Year 4
Year 5
Cash and short-term investments
$165,000
$732,301
$850,653
$973,443
$1,104,336
$1,253,864
Accounts receivable
$46,250
$47,175
$49,062
$52,006
$56,166
$56,166
Total inventory
$18,500.00
$18,870.00
$19,624.80
$20,802.29
$22,466.47
$22,466
Prepaid expenses
5,000
5,000
5,000
5,000
5,000
$5,000
Deferred income tax
1,000
1,000
1,000
1,000
1,000
$1,000
Other current assets
20,000
20,000
20,000
20,000
20,000
$20,000
Total current assets
$255,750
$824,346
$945,340
$1,072,251
$1,208,969
$1,358,497
Buildings
$150,000
$150,000
$150,000
$150,000
$150,000
$150,000
Land
0
0
0
0
0
0
Capital improvements
$ 43,000
43,000
43,000
43,000
43,000
43,000
Machinery and equipment
$ 200,000
200,000
200,000
200,000
200,000
200,000
Less: Accumulated depreciation expense
0
78,600
158,772
240,516
323,832
408,720
Net property/equipment
$393,000
$314,400
$234,228
$152,484
$69,168
($15,720)
Goodwill
$3,000
$0
$0
$0
$0
$0
Deferred income tax
1,000
1,000
1,000
1,000
1,000
1,000
Long-term investments
50,000
50,000
50,000
50,000
50,000
50,000
Deposits
10,000
10,000
10,000
10,000
10,000
10,000
Other long-term assets
30,000
30,000
30,000
30,000
30,000
30,000
Total assets
$742,750
$1,229,746
$1,270,568
$1,315,735
$1,369,137
$1,433,777
Liabilities
Initial balance
Year 1
Year 2
Year 3
Year 4
Year 5
Accounts payable
$12,313
$12,559
$13,061
$13,845
$14,952
$14,952
Accrued expenses
6,000
6,000
6,000
6,000
6,000
6,000
Notes payable/short-term debt
7,000
7,000
7,000
7,000
7,000
7,000
Capital leases
35,000
35,000
35,000
35,000
35,000
35,000
Other current liabilities
Total current liabilities
$60,313
$60,559
$61,061
$61,845
$62,952
$62,952
Long-term debt from loan payment calculator
50,000
$407,686
$311,680
$211,834
$107,994
$0
Other long-term debt
$0
$0
$0
$0
$0
$0
Total debt
$110,313
$468,245
$372,741
$273,679
$170,946
$62,952
Other liabilities
0
0
0
0
0
0
Total liabilities
$110,313
$468,245
$372,741
$273,679
$170,946
$62,952
Equity
Initial balance
Year 1
Year 2
Year 3
Year 4
Year 5
Owner’s equity (common)
$ 600,000
$600,000
$600,000
$600,000
$600,000
$600,000
Paid-in capital
0
0
0
0
0
0
Preferred equity
0
0
0
0
0
0
Retained earnings
0
0
0
0
0
0
Total equity
$600,000
$600,000
$600,000
$600,000
$600,000
$600,000
Total liabilities and equity
$710,313
$1,068,245
$972,741
$873,679
$770,946
$662,952
Cash Flow Statement
Cash flow
Year 1
Year 2
Year 3
Year 4
Year 5
Total
Operating activities
Net income
$231,111
$238,569
$252,403
$273,234
$302,109
$1,297,427
Depreciation
$78,600
$80,172
$81,744
$83,316
$84,888
$408,720
Accounts receivable
($925)
($1,887)
($2,944)
($4,160)
$0
($9,916)
Inventories
($370)
($755)
($1,177)
($1,664)
$0
($3,966)
Accounts payable
$246
$502
$784
$1,108
$0
$2,640
Amortization
0
0
$0
$0
$0
$0
Other liabilities
0
0
$0
$0
$0
$0
Other operating cash flow items
0
0
$0
$0
$0
$0
Total operating activities
$308,662
$316,602
$330,810
$351,833
$386,997
$1,694,904
$0
Investing activities
$0
Capital expenditures
$0
$0
$0
$0
$0
$0
Acquisition of business
0
0
0
0
0
$0
Sale of fixed assets
($99,047)
($102,244)
($108,173)
($117,100)
($129,475)
($556,040)
Other investing cash flow items
0
0
0
0
0
$0
Total investing activities
($99,047)
($102,244)
($108,173)
($117,100)
($129,475)
($556,040)
Financing activities
Long-term debt/financing
$357,686
($96,006)
($99,846)
($103,840)
($107,994)
($50,000)
Preferred stock
0
0
0
0
0
0
Total cash dividends paid
0
0
0
0
0
0
Common stock
0
0
0
0
0
0
Other financing cash flow items
0
0
0
0
0
0
Total financing activities
$357,686
($96,006)
($99,846)
($103,840)
($107,994)
($50,000)
Cumulative cash flow
$567,301
$118,352
$122,791
$130,893
$149,528
$1,088,864
Beginning cash balance
$165,000
$732,301
$850,653
$973,443
$1,104,336
Ending cash balance
$732,301
$850,653
$973,443
$1,104,336
$1,253,864
Return of Investment
Net Income Method Original Investment Value $935,000 Net Income $302,109 ROI 32.3% Capital Gain Method Original Share Price $12.50 Current Share Price $15.20 ROI 21.6% Total Return Method Original Share Price $12.50 Total Dividends Received $1.25 Current Share Price $15.20 ROI 31.6% Annualized ROI Original Share Price $12.50 Sale Share Price $15.20 Purchase Date 1/1/2021Sale Date 8/24/2021Annualized ROI 35.5%