MENU ENGINEERING 2MENU ENGINEERING 2How to calculate Market Mix %How to calculate Market Mix %
How to measure High/Low PopularityHow to measure High/Low Popularity
How to calculate item CM and total CMHow to calculate item CM and total CM
How to measure High/Low ProfitHow to measure High/Low Profit
IF functionIF function
Menu engineering quadrantMenu engineering quadrant
MARKET MIX %MARKET MIX %Number sold:Number sold:
Item A – Item A – 2424Item B – Item B – 3232Item C – Item C – 2020
TOTAL NO MENU ITEMSTOTAL NO MENU ITEMS: 3 (use count : 3 (use count function)function)
TOTAL ITEMS SOLDTOTAL ITEMS SOLD: 76: 76
What is the Market Mix % for Item A?What is the Market Mix % for Item A?
Market Mix % for Item AMarket Mix % for Item A
= = Number of Item A soldNumber of Item A sold
Total number of items soldTotal number of items sold
= = 24 x 100 24 x 100
76 176 1
= 31.58% = 31.58%
Measuring PopularityMeasuring PopularityCount number of items on the menuCount number of items on the menuE.g. number of items = 3E.g. number of items = 3Calculate average MM% for each item’s share of Calculate average MM% for each item’s share of the menuthe menu
e.g. Average MM% e.g. Average MM% = = 100100 No. of menu itemsNo. of menu items
Average MM% Average MM% = ?= ?
What do you multiply the average MM% by to get What do you multiply the average MM% by to get your popularity measure ?your popularity measure ?
Measuring PopularityMeasuring Popularity
- - multiply by 70%multiply by 70%
Therefore popularity measure = 33.33 x 70%Therefore popularity measure = 33.33 x 70%
= 23.33= 23.33
If MM% < 23.33 then Popularity is If MM% < 23.33 then Popularity is LOWLOW
If MM% > 23.33 then Popularity is If MM% > 23.33 then Popularity is HIGH HIGH
Calculating CMCalculating CM
How do you calculate Item CM???How do you calculate Item CM???
How do you calculate total CM???How do you calculate total CM???
Calculating CMCalculating CMItem CMItem CM = item SP – item CP = item SP – item CP
Total CMTotal CM = (item SP x no. items sold) – = (item SP x no. items sold) – (item CP x no. items sold)(item CP x no. items sold)
Item A SP Item A SP = R100.00= R100.00Item A CP Item A CP = R40.00= R40.00Item B SPItem B SP = R80.00= R80.00Item B CPItem B CP = R35.00= R35.00Item C SPItem C SP = R130.00= R130.00Item C CPItem C CP = R50.00= R50.00
What is the total CM for each item and What is the total CM for each item and the total CM for the entire menu?the total CM for the entire menu?
No. Item A sold = 24
No. Item B sold = 32
No Item C sold = 20
Measuring ProfitabilityMeasuring Profitability
Work out total CM per itemWork out total CM per itemA = R1440A = R1440B = R1440B = R1440C = C = R1600R1600 R4480R4480
How do we measure whether CM is LOW How do we measure whether CM is LOW or HIGH?or HIGH?
Measuring ProfitabilityMeasuring Profitability
TOTAL ITEM CMTOTAL ITEM CM TOTAL NO. OF ITEMSTOTAL NO. OF ITEMS
Average Item CMAverage Item CM = = R185R185 33
= R61.66 = R61.66
if total item CM > R61.66if total item CM > R61.66Then the CM category is HIGH (High profitability) Then the CM category is HIGH (High profitability)
What is a Star, Plowhorse, Puzzle, Dog?What is a Star, Plowhorse, Puzzle, Dog?
STARSTAR PUZZLEPUZZLE
PLOWHORSEPLOWHORSE DOGDOG
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