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
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
