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Value Innovation:

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:

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  1. Value Innovation: Solutions To Increase Participation & Grow Dining Revenues In Tough Economic Times

  2. Your Hosts Richard Fritz,Director of Dining Services Murray State University & H. David Porter, FCSI President & Chief Executive Officer Porter Khouw Consulting, Inc.

  3. Value-Added Dining At MSU:A Case Study

  4. 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.

  5. 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?

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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.”

  11. 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?

  12. 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

  13. 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.

  14. 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

  15. 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.

  16. 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).

  17. 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

  18. Questions?

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