MENU ENGINEERING

The marketing orientated approach to the evaluation of a menu with regard

to its present and future content, design and pricing is termed as Menu
Engineering. Its origin is based on the famous Boston Consulting Group
(BCG) portfolio technique. The concept of menu engineering requires food
and beverage managers to adapt themselves to the contribution that menu
items make to the total profitability of a menu. The menu engineering high
lights the good and the poor performers in a menu, and provides vital
information for making the next menu more acceptable and appealing to the
customers, and also more profitable for the management.
Menu Engineering focuses on the three main elements :
1. Demand : The number of customers who visited the restaurant and
had meals in the restaurant. The feed back form is filled up by them
and their remarks regarding the menu are taken into account.
2. Menu Mix : The dishes which are more ordered by the guests are
analysed to know that which set of dishes are more popular and how
management can improve its profitability by having better menu mix.
3. Contribution : The gross profit earned by selling a particular menu is
analysed and compared with the other menus gross profit (Gross Profit
= Sale Food cost / Variable Cost).
The following pre-requisites are must for using this technique :
1. Standard Recipes : All recipes prepared by the kitchen must be of a
standard including its portion size, presentation of dish,
accompaniments served, etc. This will ensure the accurate food cost.
2. Uniform Rate : The rates of all the raw material must be standard
and uniform so that there is no variation in food cost for the menus.
3. Sales Analysis : The sales analysis of each menu and meal must be
done carefully and it must be accurate so that the different menus
sales can be analysed. This can be done by making analytical sales
summary sheet.
4. Computers : For the purpose of calculating sale, food cost, gross
profit, etc it is recommended that the computer should be used so that
all calculations are done accurately and with speed.
Using the simple matrix, menu items can be grouped depending upon the
popularity among guests, gross profit contribution, etc. The four squares of

the matrix commonly plotted depending upon the performance of items in a

particular square.
1. Star : Menu items high in menu mix and also high in gross profit
margin. It lists those menu items which are more frequently ordered
by the guests and management also makes a better gross profit on
selling them.
2. Plow horses : Menu items high in menu mix but low in gross profit
margin. It lists those menu items (in combinations) which are usually
ordered by the guests but by selling this menu mix management does
not make a large gross profit. But these dishes cannot be avoided or
rate changed as they are more price sensitive.
3. Puzzles : Menu items low in menu mix and high in gross profit margin.
It lists those menu items which are not more often ordered by the
guests; but management makes a better gross profit on selling them.
4. Dogs : Menu items low in menu mix and low in gross profit margin. It
lists those menu items which are not more often ordered by the guests
and management also does not make a large gross profit.
MENU MATRIX
PLOW HORSES :

STARS :

Customer Perception :
Over priced, standard type items

Customer Perception :
Restaurants prestige items

Management Action :
Ensure rigid specifications for
purchasing, recipe and presentation
are strictly maintained.

Price unimportant to
purchase decision.

Locate items to a low profile

position on menu

Management action :
Ensure rigid specifications for
purchasing, recipe and
presentation are strictly maintained.

To increase contribution margin

by packaging with a high
contribution item.

Feature prominently on menu

Test small price increases.

DOGS :

Test price increases in high season

PUZZLES :

Regularly promote.

Customer Perception :
Low priced, but items dull and
uninteresting
Management Action:
Try revamping item.
If a new menu item, spend time
to check if it can be improved.
Review alternative menu items.
Increase the price and raise status
to puzzle.

Customer Perception:
Tempting but overpriced.
Management Action :
Reposition and feature more
prominently on menu
Increase merchandising.
Change the name of the dish
and presentation.
Give the special status to the dish.

Remove from menu.

Low-------------------------------------Gross
Margin----------------------------------------High

Profit

Assignments:
Q. 1
You are the manager of a specialty Chinese restaurant of a five
star hotel. Plan and illustrate a Guest Comments Card which will help
you to plan for better Food and Service for the future.
Q. 2
(i) What is Menu Engineering?
(ii) Explain what you will do with: a) Items high on popularity and
low in profitability b) Items low on popularity and high in
profitability.