CMAA Short Quiz

Transcription

1 Agenda CMAA 2008 Psychology of Menu Design Dr. Dave Pavesic Short Quiz 1. Do you have certain menu items that you or your chef would prefer to sell more than others? 2.Would you like to get each member to spend a minimum amount each time they dine in one of your club s restaurants? 3.Are you trying to achieve a certain food cost percentage or gross profit in your food and beverage operations? Optimizing Menu Design Marketing Tool Profit Tool 1

2 The Menu is a Critical Marketing Tool The power to influence choice 4 out of 5 make choices based on personal food preferences and their dining budget 1 out of 5 are completely undecided on what they will order and spend Design with a purpose Commonly used design techniques Menu as a Marketing Tool Reflects the Club s Image Says a lot about the professionalism of the club management and executive chef Menus are critically important to financial success A properly designed menu can improve revenue by an average of 2% to 10% A tool to sell more of what a the club wants to sell Optimizing Design Number of Items on a Menu 60% 60% of sales from 8-12 entrée items Sales 2

3 Optimizing Design Number of Items on a Menu 60% Top items Within a Category: 60% to 70% of sales comes from the top 3 to 4 items Sales Optimizing Design Some General Suggestions Appetizers: 4-8 Soups: 2-5 Salads: 3-6 Sandwiches: 4-8 Entrees: 8-24 Starch & Vegetables: 3-5 Other side dishes: 4-6 Desserts: 4-8 Total number of items will vary by type of club, dining venue, seating capacity, location, kitchen size, preparation skills, and service staff Optimizing Design Menu Revisions 3 to 4 times a year 10% of core menu should be changed every 60 to 90 days Stay abreast of market trends Complete revamp every 3 years 3

4 Optimizing Design Menu Psychology Exercise One Warm Apple Crisp Heath Bar Rain Forest Nut Crunch Sundae Bombe Glace au Citron Soufflé Grand Marnier Warm Strawberry and Blackberry Cobbler Key Lime Cheesecake 4

5 Please write down as many of the ice cream flavors and desserts as you can recall. The Theory of Primacy and Recency states that You are more likely to recall the first or last thing you hear or read. Optimizing Design Primacy and Recency Theory The order of menu items needs to be deliberate First and last positions are preferable Break long lists into 2 columns Warm Apple Crisp Heath Bar Rain Forest Nut Crunch Sundae Bombe Glace au Citron Key Lime Cheesecake Oreo Cheesecake Chocolate Peanut Butter Pie Grandma Jones Bread Pudding Warm Peach Cobbler 5

6 Optimizing Design Gaze Motion and Menu Hot Spots Optimizing Design Gaze Motion / Hot Spots Three panel menu Optimizing Design Gaze Motion / Hot Spots One panel menu

7 Optimizing Design Gaze Motion / Hot Spots Two panel menu Optimizing Design Eye Magnets Optimizing Design Eye Magnets Overuse of any graphic element reduces it s effectiveness 7

8 Optimizing Design Colors Good Good Good Bad Bad Bad Optimizing Design Fonts 8

9 Readable Type Fonts Times New Roman Century Schoolbook Comic Sans Arial Optimizing Profit Pricing Psychology $19,999 $20,000 9

10 Optimizing Profit Pricing Psychology End prices in either 5 or 9 Price increase to the next $.25 increment are not easily detectable by customers Keep in mind the Consumer s pricing thresholds $7.95 Optimizing Profit Price Increase Strategy Price increases are gradually taken over a period of time Change only 25% of the items in a menu category every 90 days by increasing the price to the next $.25 increment $7.95 $8.25 Optimizing Profit Pricing Placement 10

11 Exercise Two 11

12 Menu Sales Mix Analysis Goals of an Effective Menu Highlights what the members want and what the club prepares and serves best Is a communication, merchandising and cost control tool Obtains the desired check average to realize sales and profit goals Utilizes kitchen staff, equipment, and stations in an efficient manner Makes forecasting more accurate and consistent Criteria in Menu Sales Mix Analysis Food Cost Percentage This is the raw food cost of the ingredients including the entrée and all accompaniments, e.g., salad, bread, potato Popularity (Number Sold) High Volume or Popular Items Low Volume or Not Popular Items Contribution Margin (a.k.a. Gross Profit) Individual CM/GP = Menu Price - Raw Food Cost 12

13 Example Assume a steak dinner with salad, B&B and vegetable has a menu price of $14.95 With a raw food cost of the ingredients of $6.73, the individual GP/CM would be $14.95-$6.73 = $8.22. If the number sold on a given night were 40 the Weighted or Total CM/GP = $8.22 X 40 or $ Low Menu Engineering High Low No. Sold High HVLGP Plowhorses Chicken Pasta LVLGP Dogs Liver HVHGP Stars Steaks Prime Rib LVHGP Puzzles Lobster Lamb Individual CM/GP Biases of Menu Engineering Completely ignores Food Cost Percentage Biased toward high individual contribution margin items (which typically have the highest food cost percentages) May reduce demand because of they are typically the highest priced menu items (not recommended when demand is price elastic) Works well in some clubs where price inelasticity exists. 13

14 The Fallacy of Gross Profit Pricing A popular selling menu item with a low to moderate GP/CM will bring in more total (or weighted) gross profit than an unpopular menu item with a high individual CM/GP. High Gross Profit And Low Food Cost % ARE NOT MUTUALLY EXCLUSIVE ATTRIBUTES! Cost Margin Analysis Low Food Cost Percentage High HCLGP Problems Shrimp Creole Child s Portions LCLGP Sleepers Ethnic Dishes Fad Foods HCHGP Standards Steaks Prime Rib LCHGP Primes Signature Items House Specialties Low Weighted Gross Profit High 14

15 Cost/Margin Analysis Not biased toward low food cost or high individual CM/GP Can be used in highly competitive markets where strong price elasticity is present Actually considers 3 variables, not just 2 food cost CM/GP Popularity Cost/Margin Menu Sales Mix Analysis Software Cost/Margin Menu Sales Mix Analysis Software 15

16 Menu Design Strategies for Primes Should stand out on the menu Keep quality high and portions adequate Features as signature items Test for price elasticity and increase price Monitor quality and presentation standards Put in prominent place on menu Emphasize through font size and style, color, and graphics Menu Design Strategies for Standards Test for price elasticity by increasing price Reduce the portion size Eliminate an accompaniment Move to a less prominent spot on the menu Lower ingredient costs Combine main ingredient with another lowcost ingredient and merchandise Menu Design Strategies for Sleepers Place in prominent location on menu to increase selection likelihood Feature on menu boards, table tents, and suggestive sell Lower price to create special value meal Increase portions and accompaniments to create a great value Rename and promote as signature item 16

17 Menu Design Strategies for Problems Raise the price Lower the food cost by reducing portions or accompaniments Hide it on the menu Combine with low cost ingredients and develop a lower cost substitute Remove from the menu as last resort The Perfect Menu Sales Mix The one that optimizes gross profit and sales revenue while lowering the overall food cost percentage 17