Presentation on Menu merchandising

1. Menu Merchandising
Presentation covers following Topics…
• Menu Design/Structure
• Menu Pricing
• Menu as Marketing Tool
• Constraints of Menu Planning
• Menu Engineering: Objectives,
methods and advantages.

2. Introduction
• Menu has a lot of sale value. To make best and most effective use of
menu as a means of advertising and selling is MENU MERCHANDISING.
• Techniques used to stimulate sales within the Food and Beverage facility:
• Floor stands - displayed used at reception to display menu of the day.
• Tent cards – placed on tables to promote events, attractions and
encourage upsells.
• Posters - displayed in reception area, lobby walls, elevators, cloakrooms,
in restaurant dining area itself.

3. Elements to strengthen Menu Merchandising
• The menu must fit the facility, market and ability of staff if the to succeed.
• Considerations to increase merchandising value of Menu:
• Design in Style – Design of menu is first thing guests will notice. Hence, the
menu shouldn’t look like just another laminated take-out sheet.
• Illustrative Images – Adding images of best dishes and specialities will sell
more than a clever turn of phrase.
• Provoking Content– Content must be descriptive and to the point. Tell
guests what they get and employ prompting words like “free,” “special,”
“best,” “chef’s choice,” etc.

4. • Compatibility – Design the menu to
complement the interiors of restaurant;
it enhances the ambience of the facility.
• Presentation – Cleanliness, legible and
elegance are the keywords. Guests
don’t want to look at tattered, worn-
out pages.
(Imagine being handed a sticky menu
encrusted with assorted food particles.
Yuck! This means no sale, no return
guests, and bad word of mouth.)

5. Menu Design/Structure
The first impression is always important, the entire menu should
complement the operation-
Factors/Consideration in Menu Design:
• Theme: Interior Décor
• Format: Menu’s size, Printed letters, Font size, Space
• Sequence: Appetizers, soups, entrees, desserts
• Depends on the operation (side orders, salads, sandwiches, beverages)
• Depends on popularity and profitability
• Creativity: Material, Color, Space, Layout, Art works, Boxes etc.

6. Menu Pricing
• The pricing of a menu is “art of pricing”.
• Usually, the menus are priced by the General Manager,
Executive Chef, Food and Beverage Manager, Sales
Manager, Purchase Manager.
• Factors like food cost and raw material cost, operational
cost, competitor’s price, guest ability to pay etc. are
considered while fixing the price.

7. Factors to be considered in fixing selling price
• Elasticity of Demand
• Perception of Value
• Competition
• Relationship Between Prices and Volume
• Profit Percentage
• Total Cost Consideration
• Long Term Implication for Pricing

8. Menu Pricing Methods
• Food Cost Method – Most common method. Hotel fixes a certain
percentage of food cost, so before deciding the price, portion size and food
cost of the dish are calculated.
• Demand Oriented Perceived Value Pricing- Based on perception of guest.
The price of dish matches with the perception of value for money. Eg The
guest in a silver service/speciality restaurant is ready to pay more than in a
self service cafeteria.
• Profit Percentage Method- Includes all cost plus a desired profit percentage
to determine the selling price.
• Price based on Competitor’s Price- Does not work on cost, profit etc. takes
competitor’s price as a guideline and fixes the price slightly higher or lower.

9. Types of Menu
1. Table d’ hote: Meaning “from the host’s table”. It
offers a complete meal at an affixed price no matter how
much food has been consumed. Includes appetizer menu,
Banquets Buffets, Coffee houses, Cyclic menu.
2. A la carte: Meaning “from the card” having dishes
listed separately and individually priced.
For example: Breakfast menu, Luncheon menu, Dinner
menu, Californian menu, Ethnic menu Speciality menu,
Room service menu, Lounge menu
3. Other types of menu: Static menu, Du jour menu,
Wine menu, Dessert menu

10. Menu Engineering
• A relatively new method of menu analysis
& food pricing is called menu engineering.
• To judge the success of dishes in terms of
their popularity & profitability
• Menu engineering requires the manager to
know each menu item’s food cost, selling
price and quantity sold over a specific
period of time.

11. Objectives of Menu Engineering
Menu engineering focuses on three main elements:
• Demand: Guests feedback and their remarks regarding menu are taken
into account.
• Menu Mix: The dishes which are more ordered by guests are analysed to
know that which set of dishes are more popular and how management
can improve its profitability by having menu mix.
• Contribution: The gross profit earned by selling a particular menu is
analysed and compared with other menus gross profit (Gross profit = Sales
– food cost/variable cost).

12. In Menu Engineering items are divided in to four categories on the
basis of their sale and profit margin
• Stars: Menu items high in both popularity and contribution margin.
They may be signature items.
• Plow Horses: Menu items high in popularity but low in contribution
margin.
• Puzzles: Menu items low in popularity but high in contribution margin.
• Dogs: Menu items low in popularity and low in contribution margin.

14. Suggested action on various categories
Category Action
STAR Promote through menu positioning
PLOW HORSE Increase price reduce recipe cost
PUZZELLE
• Reduce price rename/reposition dish
• Use extensive suggestive selling
• Combine with plough horse – combo
DOG
• Replace
• Redesign
• Remove from menu

15. Advantages of Menu Engineering
• Identify and categorisation of dishes in regards to sale and profit margin.
• Identifying preferences of guests.
• Showcasing high profitable items.
• Select the menu items to be repositioned to gain popularity.
• Helps to revise recipe and portion size of dishes.
• Understanding when to keep and when to take off items from menu.
• Determine which menu items are over or under priced.
• Designing profitable menu.
• Increasing productivity of staffs.
• Improving operational control.
• Revising purchase specifications.

16. Constraints of Menu Planning
• Skills of staff
• Facility Layout/Design
• Availability of ingredients
• Availability of Equipment
• Type of target market
• Seasonality of business
• Quality Levels and Costs
• Menu Merchandising