LU9 + LU10 - LU9: Food & Beverage - Selling Prices & Menu Engineering

5 important questions on LU9 + LU10 - LU9: Food & Beverage - Selling Prices & Menu Engineering

Profitability is defined in terms of contribution margin

If menu item's CM is equal to or more than the average CM of all items sold then it is deemed HIGH in profitability, if not then LOW

How to advise Stars?

  • Maintaining rigid specifications
  • Place in a highly visible location on the menu
  • Test for selling price inelasticity
  • Use suggestive selling techniques

How to advise Plowhorses?

  • Increase prices carefully
  • Test for demand
  • Relocate items to lower profile on the menu
  • Shift demand to more profitable items
  • Combine with lower-cost products
  • Assess the direct labor factor
  • Consider portion reduction
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How to advise Puzzles?

  • Shift demand to these items
  • Consider a price decrease
  • Add value to the items

How to advise Dogs?

  • Remove from the menu
  • Increase the selling price

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