What is Menu Engineering and Why do you need it?
Menu engineering is a marketing oriented approach to the evaluation of current and future menu pricing, design and content decisions. Menu engineering is a quantitative model designed to provide a basis for analyzing a menu’s success both in terms of attracting and maintaining clientele as well in terms of profitability. Effective menu engineering depends heavily on the profitability of your menu’s various dishes.
Menu engineering focuses on three elements :-
- Customer demand – The total number of customers served
- Menu mix – Number of each menu Item sold in a given period
- Gross margin – The gross profit for each menu Item
First, analyze each item sold during a given period. Then each item is plotted on a scatter graph by menu item category (i.e., entrees).
Typically, the vertical position of the plot point for each menu item is based on the margin of a single unit of sale. The horizontal position of the plot point for each menu item is based on sales mix as a percentage (the percentage of units sold within the menu category belonging to the given item). These scatter diagrams divide menu items into four quadrants that are used to evaluate the menu success as follows:
- Stars– Menu items that are high both in popularity and gross margin – Examples: Paneer Makhni or Chicken Biryani or Dal Makhni
- Work horses– Menu items with high popularity and low margin -Examples: Raan or Laal Maas
- Puzzles – Menu items with low popularity and high margin – Examples: Pineapple Raita, Green Salad, Tamatar ka Shorba
- Dogs– Menu items that are low both in popularity and margin – Examples: Gucchi Mattar
Identify items that can be enhanced to improve popularity, and opportunities to improve margin through recipe reformulation or price increase to match market values. Cull the menu to remove items that do not perform, thereby focusing sales efforts on those items that are popular and make you money.
Menu engineering is an ongoing process. Typically, the greatest success in increasing margin occurs the first time Menu engineering is implemented.
Menu engineering is an important tool that should be used regularly by every restauranteur and hotelier to maximise profitability.
To know more about Menu Engineering for your Restaurant : http://restaurantengine.com/better-restaurant-menu/