Menu engineering

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  • 1. 05/17/14 SAARC Train the Trainer menu engineering principles revisited • based on the bcg four box analysis • addresses issues of gross profit control and menu profitability • represents major break with past attitudes to menu pricing • we do not take percentages to bank – but real time money • key words – contribution margin and popularity • menu profitability measured through – popularity and profitability ( cash gross profit – contribution margin ) of each menu item kasavana and smith - 1982
  • 2. 05/17/14 SAARC Train the Trainer popularity profitability menu item categories
  • 3. 05/17/14 SAARC Train the Trainer • stars / winners / prime – menu item which is popular and profitable • puzzles / marginals / sleepers – profitable but not popular • plowhorse / marginals / standards – popular but not profitable • dogs – neither popular nor profitable menu engineering terminology
  • 4. 05/17/14 SAARC Train the Trainer steps to achieve menu profitability • analysis of popularity and profitability of each menu item: popularity = no. of portions sold profitability = contribution margin/cash gross profit • continual reappraisal of the choice of menu items – very helpful to us as we are committed to menu changes bi annually in our outlets • continual reappraisal and review of menu prices, portion costs and sometimes menu design
  • 5. 05/17/14 SAARC Train the Trainer strategies for dealing with stars: • maintain it’s high visibility • test for it’s price elasticity and increased prices • maintain the high level of quality, presentation and portion size • these are really your signature dishes • promote it internally with suggestive selling selling • in brief – retain this item
  • 6. 05/17/14 SAARC Train the Trainer strategies for dealing with puzzles, marginals, sleepers : • lowering price point may increase popularity – use the early bird incentive method • basic question – how do I increase popularity? • renaming menu item is an option as current name is not attractive and heavily merchandise • re plating the menu item is an option to make it attractive - working on accompaniments and portion size/quality • promote internally through word of mouth, table tent,displays, menu boards, sales incentives
  • 7. 05/17/14 SAARC Train the Trainer strategies for dealing with plowhorse,marginals,standards: • these are demand generators and attract price sensitive guests • test price elasticity and eventually increase prices • try to reduce cost by buying differently, re costing recipe, re looking at recipe, reducing portion, combining with less expensive items • may change physical location on menu • finally if labour cost of production is also high as well as cumbersome ( typically during rush hour ) – then replace
  • 8. 05/17/14 SAARC Train the Trainer strategies for dealing with dogs , losers : REMOVE FROM MENU ( Unless owner’s favourite )
  • 9. 05/17/14 SAARC Train the Trainer Therefore - rule of thumb - the four ‘ r’ menu engineering remedy • stars – retain • plow horse – re price • puzzles – re plate • dogs – remove
  • 10. 05/17/14 SAARC Train the Trainer Menu Engineering Worksheet Example