Restaurant Menu Engineering To Maximize Profitability

     Menu Engineering refers to the type of engineering that can increase your restaurant’s profits. By using this method we can create perf...

     Menu Engineering refers to the type of engineering that can increase your restaurant’s profits. By using this method we can create perfect menu with more profitability of the restaurant. This is an in brief study of menu. You can renovate the menu & remove unwanted dishes from it.

Menu Design:

A subset of menu engineering focused on the visual science and appeal of a restaurant’s menu. Menu design makes impression of your brand in front of the Guest. Menu design should reflect a restaurant’s brand and personality while taking into account consumer psychology and visual aesthetics.

Brand:

The core associations that a consumer has with a business. A restaurant’s “brand” is the first thing that comes to mind when a guest hears the name. It’s often the components that set this business apart from others.

Cost of Goods Sold (COGS):

A mathematical equation to determine the cost required to create each of the food and beverage items on the menu. It is the sum of beginning and purchased inventory subtracted by final inventory. When costing a dish we have to think about cost of each ingredient separately. COGS is particularly important for menu engineering because lowering it has a direct correlation to a more profitable restaurant.

Food Cost Percentage:

A mathematical equation that calculates the percentage of a menu item cost that the restaurant takes as profit. It’s calculated by dividing the cost to create the menu item by the price of the item. The difference is the percentage that the restaurant makes on each sale of that item.

Contribution Margin:

A mathematical equation that measures a menu item’s profitability over time. By subtracting food costs within a certain time period from menu item sales within that same period, restaurateurs can use this metric to measure how sales affect income and how costs are affected over time.

Stars:

The quadrant of items in a menu engineering chart that are both highly profitable and highly popular. They makes high profitability because of it's popularity in the menu. These are the items that should be consistent on the menu and used in promotions whenever possible.

Plowhorses:

The quadrant of items in a menu engineering chart that are very popular but not very profitable for the business. These are likely the items that guests expect to see, but may need to have ingredients or portion size modified to improve margin. By performing modification we can get more profit from this.

Puzzles:

The quadrant of items in a menu engineering chart that are highly profitable to the restaurant but aren’t popular with guests. These are potentially hidden gems that need to be reinvented by lowering prices, changing their position on the menu, or packaging them a different way. Staff may increase it's popularity by upselling, they can suggest these dishes to the guest make this dishes star.

Dogs:

The quadrant of items in a menu engineering chart that are neither popular or profitable. Most likely, these items should be removed from your menu and replaced with more profitable dishes.

Menu Psychology:

The application of consumer behavior theories to menu design. Menu item organization, placement, and visual cues can be strategically implemented based on what we know about human psychology.

Dish Costing:

Menu prices are the backbone of your sales so it’s important to consider many factors when setting your pricing. First, be aware of the cost of the raw ingredients for each item. Missing on this one can be a costly mistake. Second, consider what your competitors are charging for similar items. Last, you’ll want to consider portion size and labor. If your prices aren’t competitive and customers don’t feel that what they get is worth the cost, they won’t come back.

By costing your menu, you can ensure that your listed price will generate maximum profits. Costing your menu means breaking down every item to its individual ingredients to determine the cost of each item. This is a necessity for every menu item to account for every cent of food costs, because engineering a menu depends heavily on the profitability potential of every item. 


Paradox of Choice:

The theory that more choices can actually lead to increased confusion and poor decisions. In menu engineering, studies have shown that there is a sweet spot between too few and too many choices.

Decoy Effect:

A psychological phenomenon that says people are more likely to change their preference between two options when a third, less appealing option, is introduced to show the “value” of the most expensive option. In menu engineering, this is the science of bundling options to improve their perceived value.

Semantic Salience:

The impact that a symbol has on a particular situation or decision-making process. This is often used to define the impact that a dollar sign on a menu item (or lack thereof) has on the perceived value.

Sensory Descriptors:

Words and phrases that appeal directly to a person’s sight, smell, hearing, taste, or feeling. These words, like “succulent,” “smooth,” and “aromatic,” are often used in menu item descriptions to draw out a specific reaction from the guest.

    What other unusual terms have you come across during your menu analysis? Share your helpful terms in the comments below.




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SetupHotel: Hospitality Tourism Management And HealthCare Fitness Guide: Restaurant Menu Engineering To Maximize Profitability
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