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Menu Engineering
From VANEEpedia
Menu Engineering is the process of using a marketing assessment to help generate additional gross profit from a restaurant’s menu. The term has become a buzzword within the industry which has come to mean “doing something/anything to improve menu performance”.
Process
The process of menu engineering begins with an evaluation of the popularity (volume) and profitability (gross profit contribution) for each menu item. All items are then categorized based on whether they are High or Low volume and High or Low gross profit. Then by changing the menu items or the menu itself, an operator can increase the total gross profit and the bottom line profitability of the restaurant.
There are many ways to craft a menu that will influence the way customers order. By carefully choosing words for menu item names and descriptions, and a well-planned menu layout and design an operator can increase sales, customer satisfaction and profits.
In its truest sense, the term menu engineering refers to the specific restaurant menu analysis methodology developed by Michael L. Kasavana, Ph.D and Donald J. Smith at the Michigan State University School of Hospitality Business in 1982. The following terms can categorize the volume and profitability of any given menu item.
Stars (High Volume, High Gross Profit)
Stars are extremely popular and have a high contribution margin. A Star should be a flagship or signature item.
Plow Horse (High Volume, Low Gross Profit)
Plow Horses are high in popularity but low in contribution margin. The operator will want to make a change to improve the gross profit of this item by increasing the price or reducing the food cost without making the item unpopular.
Puzzles (Low Volume, High Gross Profit)
Puzzles are generally low in popularity and higher contributions. The operator will want to make a change to increase the volume of this item. The item may be too expensive (hence the high gross profit and low sales) or poorly merchandised on the menu (bad placement, uninteresting menu name or description)
Dogs (Low Volume, Low Gross Profit)
Dogs are low in popularity and low in contribution margin. The operator should remove this item from the menu to clear the way for better performing menu items.