This document discusses menu engineering principles and strategies for improving menu profitability. It describes analyzing menu items based on their popularity and profitability, categorizing them as stars, puzzles, plowhorses, or dogs. Stars are popular and profitable, puzzles are profitable but not popular, plowhorses are popular but not profitable, and dogs are neither. The document recommends continually reevaluating menu items and prices based on this analysis. It provides strategies for each category, such as retaining stars, lowering prices for puzzles to increase popularity, raising prices of plowhorses, and removing dogs from the menu.

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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

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popularity
profitability
menu item categories

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• 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

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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

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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

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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

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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

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strategies for dealing with dogs , losers :
REMOVE FROM MENU
( Unless owner’s favourite )

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Therefore - rule of thumb - the four ‘ r’ menu
engineering remedy
• stars – retain
• plow horse – re price
• puzzles – re plate
• dogs – remove

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Menu Engineering Worksheet Example