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Menu Analysis & Engineering . HRT383. References. Mill, Robert Christie (1998) Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering, pp 114-116. Upper Saddle River, N.J. : Prentice Hall.

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References l.jpg
References

  • Mill, Robert Christie (1998) Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering, pp 114-116. Upper Saddle River, N.J. : Prentice Hall.

  • Drysdale, John A. & Jennifer Adams Aldrich (2002). Profitable menu planning / Chapter 5: Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle River, N.J. : Prentice Hall, TX911.3.M45 D79 2002

  • CD-ROM TX911.3.M45 D79 2002

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Objectives

By the completion of this presentation you should be able to:

  • Analyze a menu for profitability

  • Apply menu engineering to menu analysis

  • Price menu items

  • Locate menu items on a menu.

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Menu engineering

Plowhorses

Puzzles

Stars

Dogs

Menu

Placement

Pricing

Important Terms

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Introduction

This presentation explains how to evaluate a menu

  • When measuring a menu to see if it is successful 2 criteria must be met to declare it a winner:

    • Must be profitable in terms of individual item profitability

    • Most profitable item must be selling the best.

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Method, called menu engineering, developed by Donald Smith Ph.D., Westin Hotels Distinguished Professor at Washington State University

This method rates the menu by measuring each entrée as to its profitability (gross profit) and its sales. It then combines these measurements and places each menu item into one of four classifications.

Stars, Plowhorses, Puzzles, & Dogs

Puzzle

Plow

Horse

Star

Dog

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Contributing Margin Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Determine the contributing margin (CM) of each item

    • CM same as item’s Gross Profit

    • Use total food cost (include garnish, accompaniments served with entrée such as salad, potatoes, rolls, butter etc.).

Selling Price – Food Cost = Contributing Margin

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Contribution Margin Ph.D., Westin Hotels Distinguished Professor at Washington State UniversityDollars vs. Food Cost Percentage

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Contribution Margin Ph.D., Westin Hotels Distinguished Professor at Washington State UniversityDollars vs. Food Cost Percentage

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Data Trap Spring ‘08 Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • See Lunch Hand Out

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Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

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Popularity Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Average Popularity

    80% of the average item sales per Dessert:

    100 / 4 X 80% = 20%

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Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

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HRT383 Lunch Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

20%

0 Contribution Margin $3.44

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HRT383 Lunch Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

20%

0 Contribution Margin $3.44

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Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

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The Four Key Menu Categories Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Plowhorses are items that are relatively popular but have a high contribution margin. Items in this category can have their menu prices increased or the portion size cut in a attempt to increase CM. If market is price resistant

  • Stars have both high popularity and high CM

  • Puzzles have relatively low popularity and high margins; lower price.

  • Dogs are both low in popularity and CM; eliminate

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HRT383 Lunch Desserts Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Increase $

Cut Portion ?

Popularity

20%

Eliminate?

0 Contribution Margin $3.44

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Data Trap Spring ‘08 Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • See Lunch Hand Out for

    • Main Courses

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Lunch Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

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Popularity Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Average Popularity

    80% of the average item sales per Main Dishes:

    100 / 11 X 80% = 7.27%

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Lunch Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

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Exercise Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Please work with your fellow students and come up with suggestions/decisions.

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HRT383 Lunch Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

100%

Popularity

7.27%

0 Contribution Margin $6.88

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Lunch Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

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Group Work Ph.D., Westin Hotels Distinguished Professor at Washington State University

Please on Menu Categories and make recommendations for Menu changes


Lunch main courses l.jpg
Lunch Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

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The Four Key Menu Categories Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Plowhorses are items that are relatively popular but have a high contribution margin. Items in this category can have their menu prices increased or the portion size cut in a attempt to increase CM. If market is price resistant

  • Stars have both high popularity and high CM

  • Puzzles have relatively low popularity and high margins; lower price.

  • Dogs are both low in popularity and CM; eliminate

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Main courses l.jpg
Main Courses Ph.D., Westin Hotels Distinguished Professor at Washington State University

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Up Selling Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Manager’s Special

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Placement Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Two Schools of thought

  • Menu Sequence

    • Menu should follow progression of meal

  • Focal Points

    • Use focal points on the menu to push certain menu items

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Focal Points Ph.D., Westin Hotels Distinguished Professor at Washington State University

Single Sheet Menu

Twofold Menu

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Focal Points Ph.D., Westin Hotels Distinguished Professor at Washington State University

Focal Point

Threefold Menu

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Specials Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Larger Bolder type than the rest of menu

  • Longer description

  • Concept of Closure

    • people’s eyes are drawn to what ever is enclosed by a box

  • Color, illustration, and/or pictures, bullets can be used to draw attention to signature items.

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Branding Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Fast food

  • Coke / Pepsi

  • TGIF

  • Jack Daniels

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Menu Pricing Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Odd-Cents pricing

    • Majority of prices end in either a “5” or a “9”

  • Price rounding.

    • Within certain price bands, price increases have little negative impact on customers

  • Placement

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Price Placement Ph.D., Westin Hotels Distinguished Professor at Washington State University

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Price Placement Ph.D., Westin Hotels Distinguished Professor at Washington State University

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Conclusion Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Menu analysis is important

  • If demographic studies, internal capacities, cost cards, and markups have been executed correctly, the score should be a good one

  • Analysis should be done using either the Smith or the Hurst methods to ascertain the profitability of the menu

  • If the analysis shows a poor menu, make improvements

  • Good menu: first step has been taken toward running a profitable operation.

  • It’s just that simple

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Where to Get More Information Ph.D., Westin Hotels Distinguished Professor at Washington State University

  • Mill, Robert Christie (1998) Restaurant Management: Customers, operations, and employees / Menu Scoring & Menu Engineering, pp 114-116. Upper Saddle River, N.J. : Prentice Hall.

  • Drysdale, John A. & Jennifer Adams Aldrich (2002). Profitable menu planning / Chapter 5: Menu Analysis, pp. 101-115. 3rd ed. Upper Saddle River, N.J. : Prentice Hall, TX911.3.M45 D79 2002

  • CD-ROM TX911.3.M45 D79 2002

  • Most Menu & F&B Management Books

HRT383


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