How do you set and justify your menu prices based on menu engineering research?

2 Identify your menu categories

The next step is to classify your menu items into four categories based on their contribution margin and popularity: stars, plowhorses, puzzles, and dogs. Stars are high-profit and high-demand items that you want to promote and highlight on your menu. Plowhorses are low-profit and high-demand items that you want to optimize and reprice to increase your margin. Puzzles are high-profit and low-demand items that you want to test and evaluate to improve their appeal. Dogs are low-profit and low-demand items that you want to eliminate or replace with better options.

3 Apply pricing strategies

The third step is to apply different pricing strategies to each menu category to maximize your profit and value perception. For stars, you can use premium pricing, bundling, or anchoring to justify their high value and quality. For plowhorses, you can use value pricing, portion control, or ingredient substitution to reduce their cost and increase their margin. For puzzles, you can use psychological pricing, decoy effect, or storytelling to enhance their attractiveness and demand. For dogs, you can use discount pricing, cross-selling, or menu removal to minimize their impact and clear your inventory.