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Value Innovation:. Solutions To Increase Participation & Grow Dining Revenues In Tough Economic Times. Your Hosts. Richard Fritz, Director of Dining Services Murray State University & H. David Porter, FCSI President & Chief Executive Officer Porter Khouw Consulting, Inc.

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Value innovation

Value Innovation:

Solutions To Increase Participation & Grow Dining Revenues In Tough Economic Times


Your hosts

Your Hosts

Richard Fritz,Director of Dining Services Murray State University

&

H. David Porter, FCSI President & Chief Executive Officer

Porter Khouw Consulting, Inc.


Value added dining at msu a case study

Value-Added Dining At MSU:A Case Study


Campus overview

Campus Overview

  • Campus master plan calls for 12,000 students by 2012.

    • Projection for 4,800 residential students

    • Large commuter population

  • Retention issues (rate currently 60-70%)

  • “Our goal is to provide our campus community with a dining experience.”

    • Inviting ambiance

    • Friendly staff

    • High food quality & good selection

  • Changes to the campus student center.

    • “The Curris Center has transformed more into meeting space than a true student center.”

  • Campus expanding to the south, away from the residential living & dining area.


Inside msu dining services

Inside MSU Dining Services

  • Self operated & self supporting

  • Mix of meal plan options

  • One residential dining venue & multiple retail locations

  • Challenges:

    • Reduction in meal plan participation due to campus policy changes

    • Students buying down to lowest priced meal plan

    • Campus moving south, away from Winslow Dining Hall

    • Minimal funds for upgrades/new facilities

  • How can MSU Dining Services add value without capital improvements or other major investments?

  • How can MSU Dining capture more cash business from the campus community?

  • What if there were no meal plan customers? How would MSU dining compete for business?


Value innovation

Looking for Solutions

  • MSU hired Porter Khouw Consulting to create a campus-wide dining services master plan. The goal: To identify ways to boost revenue & customer satisfaction for/with campus dining services.

  • Discover:

    • Focus groups & personal interviews

      • Students (residential & commuter)

      • Faculty/staff

      • Administrators

  • Web-based survey: More than 1,100 responses


Value innovation

Looking for Solutions

  • Customer feedback: Hours of Operation

    • Limited hours of operation

      • T-Room in Curris Center closes at 2:30 p.m. M-F and is closed on weekends.

        • Centrally located

        • Popular with students

      • Limited campus dining options after 8:30 p.m.

        • Fairly heavy on-campus delivery

      • Business going off campus

        • Campus surrounded by restaurants


Value innovation

Looking for Solutions

  • Customer feedback: Meal plans

    • Students feel ripped off (leftover meals & Flex Dollars).

    • Meal plan equivalency not “fair”/full meal value

    • Complaints from parents about leftover meal plan money.

    • One plan limited one meal per meal period.

    • Campus food perceived as expensive.

  • Results:

    • Most residential students were buying the lowest priced plan.

    • Leftover Flex Dollars=run on Fast Track c-store.

  • “The meal plan program is one of the major factors contributing to students being driven off campus.” –MSU administrator


Value innovation

Looking for Solutions

  • Customer feedback: Menu Variety & Selection

    • More variety in Winslow Dining Hall

      • Less ‘fancy’ food like tapas, more pizza & chicken fingers

      • Wider variety of weekends


Value innovation

Looking for Solutions

  • Customer feedback: Pricing:

    • Some administrators & students expressed some dissatisfaction with the price of food on campus, particularly in T-Room (too high)

    • Portion vs. price especially at the entrée station in the T-Room.

    • “Students think the T-Room prices are expensive, especially when compared to off-campus restaurants that offer $1 menus and combo meals.”

    • “We (commuter students) can eat off campus for less than we can on campus with a much larger variety…especially with the wide variety of discounts available to Murray students…The price of eating on campus is not worth the convenience.”


Innovative thinking

Innovative Thinking

  • What if:

    • Potential number of required meal plan holders is stagnant?

    • Optional meal plan participants are opting not to purchase full meal plans?

    • There is an large untapped cash business that your department isn’t realizing? Hint: The answer may lie in your residential dining component.

    • How can you enhance your dining program to add VALUE and build business and customer satisfaction without major capital investment?


The power of value

The Power of Value

  • A value-added dining program:

    • Provides meaningful residential life experience (especially for freshmen)

    • Allows meal plan holders to eat what & when they want

    • Provides the ultimate flexibility in dining options

    • Eliminates missed meals

    • Appeals to parents

    • Provides an easy transition from home for incoming freshmen

    • Enhances social interaction & community bonding

      • Can have a positive impact on recruitment & retention


Elements of a value added dining program

Elements of a Value-Added Dining Program

  • Extended hours of operation

    • Tailored to the student clock

    • Generally doesn’t conflict with class schedules

    • Continuous service

      • Food is always accessible (just like home)

  • Anytime Dining Meal Plans (for all customer groups)

    • Provides unlimited access to residential dining venues during operating hours

      • Extras: Guest meals and dining dollars

    • Plans can also be divided into three tiers:

      • Unlimited Silver, Gold & Platinum

    • Encourages residential students to stay on plan & commuters to buy higher priced plans.

  • Wide variety of food & services

    • Menu options that appeal to students

    • Added benefits: special theme dinners, free parking, etc.


Value added effects on campus dining program

Value-Added Effects on Campus Dining Program

  • Increased customer satisfaction

    • Students have access to food nearly all day

  • Boost in meal plan participation

    • Meal plan retention rates increase

  • Enhanced dining & social experiences for customers

  • Enhanced community gathering opportunities

    • Meaningful freshmen experience


But what about

But What About…

  • Increased Food Cost

    • Perception: “The students will eat us out of house & home.”

      • Reality: Most students still eat between 11-13 meals per week.

      • Reality: Food costs remain stable or decrease

        • Less waste

  • Increased Labor Cost

    • Perception: “Our labor costs will skyrocket.”

      • Reality: Service can be throttled up or down depending on daypart

      • Reality: A mix of served and self-serve stations help keep labor cost low.

  • Meal plan price increase?

    • Perception: We will have to charge more for meal plans.

      • Reality: In most cases, meal plan prices do not increase.


Value innovation

New Directions at MSU

  • New Meal Plan Offerings & Program Changes

    • Meal Plans

      • New Anytime Dining Plan introduced in Fall 2010.

        • Unlimited Access Plan: Provides access to all-you-care-to-eat dining in Winslow Dining Hall from 7 a.m.-11 p.m. Monday-Friday & 8 a.m.-8 p.m. Saturday & Sunday plus eight guest meal passes & $75 in Flex Dollars per semester. Estimated cost: $1,436 per semester (current 125 plan priced at $1,327)

        • MSU may consider adding a 5-Day Unlimited Access Plan.

        • All freshmen students will be required to purchase this plan.

        • This includes bulk of meal plan holders.

        • Net: $1 million in meal plan surplus (money that can be used to make other dining service program enhancements/renovations)

    • Other Meal Plan Options:

      • 175 meals/ $400 Flex, Cost: $

      • 125 meals/ $300 Flex, Cost: $

      • 85 meals / $150 Flex, Cost: $

    • MSU eliminated existing highest cost & unpopular plans.

    • Adjusted meal plan pricing so there is minimal difference between the plans.

      • Strategy: Get students to buy/stay on the plan that offers the best value (unlimited access).


Value innovation

New Directions at MSU

  • Additional changes to Winslow Dining Hall

    • Trayless dining

    • More customer-friendly servery with relocated salad bar & new all-day breakfast bar.

    • Beverage stations relocated to dining areas.

    • More display cooking/made-to-order foods

    • Metered parking near building

      • Hang tags for commuter meal plan holders

  • T-Room: MSU is considering renovating this facility in Fall 2011.

  • Sugar Cube: Menu mix modified to appeal to a broader customer group.

    • More grab-and-go

    • Wide variety of coffee & espresso-based drinks


Value innovation

Questions?


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