How do you use menu engineering matrix to identify and promote your star and plowhorse items?

1 What is the menu engineering matrix?

The menu engineering matrix is a grid that plots your menu items according to two criteria: their contribution margin and their menu mix. The contribution margin is the difference between the selling price and the food cost of an item, and it measures how much profit each item generates. The menu mix, on the other hand, is the percentage of total sales that each item represents, and it measures how popular each item is among your customers. With this matrix, you can divide your menu items into four distinct quadrants: Stars, Plowhorses, Puzzles and Dogs. Stars have both high contribution margin and high menu mix; they are your best performers and should be highlighted and promoted on your menu. Plowhorses have low contribution margin but high menu mix; they are your workhorses and should be maintained to build customer loyalty and volume. Puzzles have high contribution margin but low menu mix; they are your potential stars and should be tested and repositioned on your menu. Lastly, Dogs have both low contribution margin and low menu mix; they are your worst performers and should be eliminated or replaced on your menu.

2 How to calculate the contribution margin and menu mix?

To use the menu engineering matrix, you need to calculate the contribution margin and menu mix of each item on your menu. Start by determining the selling price and food cost of each item, using recipes, inventory records, and supplier invoices. Then, subtract the food cost from the selling price to get the contribution margin. After that, divide the contribution margin by the selling price to get the contribution margin percentage. Additionally, determine the total sales and number of sales of each item for a given period. Finally, divide the number of sales of each item by the total number of sales to get the menu mix. This will show how much each item contributes to your total sales volume.

3 How to plot the menu engineering matrix?

Once you have calculated the contribution margin and menu mix of each item, you can plot them on the menu engineering matrix. To do this, you first need to determine the average contribution margin and the average menu mix of all your items by adding up the contribution margin and menu mix of each item and dividing them by the number of items. Then, draw a grid with four quadrants and label them as stars, plowhorses, puzzles, and dogs. Mark the horizontal axis as menu mix and the vertical axis as contribution margin, plotting the average contribution margin and average menu mix as center points. Finally, plot each item on the grid according to its contribution margin and menu mix using dots, circles, or symbols. Place each item on the quadrant that corresponds to its relative performance - for example, if an item has a contribution margin of $8 and a menu mix of 10%, it belongs to the star quadrant.

4 How to promote your star items?

Your star items are your most profitable and popular items, so you want to make them stand out and encourage more customers to order them. To promote them, place them in prominent positions on your menu, such as the top or center of each section, or on separate boxes or inserts. Use eye-catching fonts, colors, or graphics to draw attention to them. Additionally, use descriptive and appealing names, descriptions, or stories for your star items. Highlight their benefits, features, or ingredients that make them unique or superior with sensory or emotional words that stimulate appetite or curiosity. Suggestive selling techniques can also be used to upsell or cross-sell your star items. Train your staff to recommend them to customers, or offer them as part of a combo or a special deal. Use signs, posters, or table tents to advertise them in your restaurant. Monitor and adjust the prices of your star items regularly; you can increase the prices slightly to maximize your profit without losing customers' perceived value or satisfaction. Experimenting with different price points or formats can also be beneficial.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?