Literature review

Prof N Irabanta Singh *

* What is literature review ? A literature review is a scholarly literature on a specific topic by summarizing and analyzing published on that topic.A literature review has three main purposes viz.

i) to evaluate the state of research on a topic
ii) to familiarize reader(s) with what has already been done in the field what their strength and weakness are, and
iii) to suggest future research directions or gaps in knowledge.

The literature review must be defined by a guiding concept ( e.g research objective, the problem or issue we are discussing or our argumentive thesis). Besides enlarging our knowledge about the topic, we gain and demonstrate skill in two areas viz.
(i) information seeking: the ability to scan the literature efficiently, using manual or computerized methods, to identify a set of useful articles and book,
ii) Critical appraisal: the ability to apply principles of analysis to identify unbiased valid studies.

* What should a literature review contain ?:

A literature review can also be described as a piece of discursive prose, not a list of describing or summarizing one piece of literature after another.It is usually a bad sign to see every paragraph beginning with the name of a researcher.We have to organize the literature review into sections that present themes or identify trends, including relevant theory.We need not try to list, all the materials published, but to synthesize and evaluate it according to the guiding concept of our thesis or research question. We are to use an overall introduction and conclusion to state the scope of our coverage and to formulate the question, problem, or concept our chosen material illustrates. Usually we will have the option of grouping items/themes into sections. This helps to us indicate comparisons and relationships. We may be able to write a paragraph or so to introduce the focus of each section.

Case study : Sales Enhancement Strategy in Spice Market Restaurant London.
Sales in Restaurant, Such as
* Revenue Management (Cleophean&frank,2011
* Restaurant Revenue Management (Thomson 2010,)
* Restaurant sales Management (Gupta et.al.2007)
* Food Services Operator Revenue (Rodger ,2008).
* Sales Enhancement strategy base on Menu Engineering
* Study of Readiness to pay (Choi 2006 etc ), are vital aspect that need deliberation on sales enhancement strategy in Restaurant

Theory of strategy in business: Strategy theory is a diverse multidisciplinary academic field with competing school of thought base on partially incommensurable basic assumption , with disagreement about what strategy theory should seek to describe.The strategy literature has usually dominated by a conflict between planning and learning school. Strategy analysis was aspect to result in a deep knowledge of environment and subsequently, in the adoption of defensible competitive situation in the market structure (Porter 1980) and base upon firm valuable resources (Barney 1981)The significant of strategy management and strategy thinking in hospitality study has never been greater. In the field of hospitality and its related field research must consider and provide strategic approaches to deal with challenges and opportunity for the future(Harrington and Ottenbacher 2011).

Sales in Restaurant: The knowledge acquired from Restaurant QSC (Quality, service & cleanliness) study possibly will help restaurant organization determined the level of weighting given to a particular inspection variable. The study also put forward the used of FQSC( Financial , Quality ,Service & cleanliness) inspection as a replacement of traditional QCS to highlight financial performance(DiPietro,Prsa 7 Gragry 2011.).The idea described above includes marketing strategy which are more important then serving quality food in catering business. Thus it is strongly recommended the FQSC approch ,which emphasizes on food quality as well as quality delivered to customer.

Restaurant Revenue management: Revenue management is activated by two strategic levers, viz
a) Duration Control
b) Menu pricing (kimes and chase,1998,kimes el al ,1998 and kimes 2008

a)The research endorses the idea of administering two lever as under:
i) Duration control in restaurant business is very important from cooking food to serving the dishes, time slot has been fixed which helps the restaurant business to over use the space/seat for the next customer which apparently generate revenue.
ii) On the other hand menu pricing is one of the important tools which are used by restaurateur to manipulate customer.

Food service operator revenue management in restaurant

In an extremely competitive market, Restaurant operator have to focus on two important factors: viz
a) Effective capacity utilization
b) Revenue maximization

From these two variables the management method for food services operators revenue and capacity management strategies have been put forwarded to ensure long time services.(whelam –Ryan 2007)Most recent study shows the complex relationship among food service quality ( physical environment, food and service) restaurant image and customer perceived value, customers’ satisfaction and behavior intension in restaurant industry( Ryu et al, 2012). The key idea described above reveal how food service operator revenue can be managed in a restaurant business . There are two main factor which food service operator should focus on viz i) effective capacity utilization ii) revenue maximization for the long survival of the business.

Menu pricing in restaurant through product cost percentage, product cost plus and contribution margin

Food service industry experts suggest that menu-prices be assigned on the basis of one of the following general concept
a)Product cost percentage
b)Product cost: plus
c) Contribution margin

Product cost percentage: A pricing method that relies on product cost percentage targets when determining menu prices is know as product cost percentage (pricing method). The pricing approach can be defended for two important result a) successful restaurant know the value of serving good food. It usually costs more to produce then lower quality food b) restaurants which set menu prices according to product cost(product, labour, other expenses and profit) (Hayes& Miller, 2010 P.353)

Product cost : Plus: All of the product cost : Plus: Pricing system that have been developed result from the very logical effort by food service operator to have additional expenses – related to too variable to their product pricing model( Hayes & Miller, 2010 P 356).Hence, according to the researcher, the product cost percentage method is deemed the most suitable for restaurants.

Contribution margin: Kasavana& smith (2010) proposed four categories of menu item

* stars: menu item with high popularity and high cm
* Plow horses: menu item with high popularity and low cm
* Puzzles : menu item with low popularity and high cm
* Dogs : menu item with low popularity and low cm

Nowadays , the calculation of product (food or beverage ) cost percentage and product cost :plus pricing are standard contant in all cost related hospitality text books.Thus study endorses the three general concepts menu pricings viz
a)Product cost percentage
b)Product cost: plus
c) Contribution Margin.

It is very true that most of restaurant business try adopt one of this concept of Menu pricing.

Menu prices performance: It can be considered under three aspect
a) Value for serving good food to the guests
b) Setting menu price based on food product costs
c) Food service pricing factor

Value for having good food to the guest: Nowadays, nutritional information (NI) is the concerned for consumers eating healthy food at home as well as eating in the restaurant. Consumers are most concerned about fat, saturated fat and trans- fat on NI.A deeper understanding of consumers’ concerned could permit restaurateurs to use nutritional information (NI) on menu to their competitive advantages by effectively deploying a market segmentation strategy( Josiam& Foster, 2009).

Setting menu prices base on food product costs

Menu pricing takes into account of the cost of the product and the product cost has a percentage of revenue. Restaurateurs developed and utilized the following pricing formula:
Cost of product sold/ all product sales = product cost percentage

This formula can be worded differently for a single (food) menu item
item food cost /selling price = item food cost percentage

Food service pricing factor: A pricing factor when multiplied by items cost will result in a selling price that yields the desired item cost percentage. This is the oldest and most traditional menu pricing system presently use and it is still in wide spread use even today( Hays and Millars, 2010)

Menu pricing analysis: As a food services operator what is the accurate choice to make in relation to our menu selection , pricing point and staffing levers all while delivering an outstanding product to guest based ,that is looking for more value for their spend today than ever before (kidd,2011)The menu pricing analysis should also asses the available item and incorporate change whenever required.

Conclusion: As per restaurant revenue management , revenue can be maximized by a proper pricing management, capacity – utilization. Revenue management are two important factors for long run of restaurant business. The most important topic in this literature review is menu pricing which includes three main categories
* Product cost percentage
* Product cost: plus
* Contribution margin

Out of the three categories, product cost percentage calculation is the best method but there is limited literature on the topic. Hence to find out more research about uses and importance of menu pricing technique is required.


Full text of the lecture delivered on 14-01-2019 during the refresher course of research methodology for college and university teachers organized by Academic Staff College Manipur University.