Evaluating Edibles: The Merits of Menu Simulation
Guess what? Restaurant menu development doesn’t have to be a guessing game. Thanks to menu simulators, we can tell you what your customers will buy and how much they’re willing to pay.
Reflecting the real-life choices of restaurant guests when they order, menu simulators can:
• Test the demand for a particular item as its price rises
• Gauge the expected sales of a new item
• Estimate the number of items an average guest might order
• Project the gross profit of a given menu with set prices
• Determine what happens to profit margin if prices are raised or lowered
• Assess the impact on demand as item calories increase
Whipping up a Menu Simulator
Menu simulator studies are typically conducted online. Creating a simulator starts with the restaurant marketing team and the research supplier working together to create a virtual menu—one that exactly matches what currently exists, or final proposed changes. This “benchmark” will be the first menu simulator that respondents will see.
After the benchmark, each respondent will see up to four additional menus. Depending on what our restaurant client wants to test, these menus can vary in items, calories or price. We’ve found four to be the optimum number of menus per respondent; after seeing five, respondents begin to show fatigue.
But this doesn’t mean that restaurants are limited to five menus throughout the exercise. With an appropriate sample size, many sample menus can be tested. At Q2, we’ve tested up to 60 different menu variations.
Noshing Numbers
A smorgasbord of information is contained in the data collected from a menu simulation study. Along with the percentage sales of a particular menu item, below are other deliverables that we commonly provide clients.
• Menu Spreadsheet: Clients receive an electronic spreadsheet they can manipulate at will to see how changing the price or calories of menu items impacts their bottom line.
• Retention Charts: What happens to an item that is ordered on the initial menu when its price rises 10¢, 20¢? What if the price does not change? What percentages of respondents re-order items?
• Item Analysis: When an item rises in price, do respondents move to a smaller size of that item? Do they purchase fewer items? Do they leave out a drink or a side dish?
• Price Threshold: If the price of the benchmark meal goes over a certain price threshold (e.g. $10), how do respondents react? How many still order the same meal? How many order less? What becomes of the average check when the price of the benchmark goes over the price threshold?
Endless Buffet
The power of the menu simulator is that it allows an infinite number of tests the client can perform. Once the structure is finalized, it’s rather easy to create simulators for customer subgroups (e.g. heavy users). Best of all, the menu simulator model can be updated easily if it becomes the regular part of a wave study.
This article was written by Kirsty Nunez. Kirsty Nunez is President and Chief Research Strategist at Q2 Insights. Q2 Insights is a market research consulting firm with offices in San Diego and New Orleans. Kirsty can be reached at (760) 230-2950 and kirsty.nunez@q2insights.com.
This entry was posted in Restaurant and tagged Tags: Calories, Menu Simulation, Price Modeling, Restauarnt, Restaurant Industy, Restaurant Menu, restaurant menu development, Restaurant revenue on December 18, 2011 by Kirsty Nunez