New York Magazine published a piece providing some insight into the marketing – one might even say “gastro-econo-engineering” – that goes into well-planned restaurant menus today. The information is pulled from the book Priceless: The Myth of Fair Value (and How to Take Advantage of It) by author William Poundstone.

The terminology Poundstone uses seems roughly analogous to that employed by other businesses in portfolio planning, the BCG Growth-Share Matrix.

From the New York article:

Puzzles, anchors, stars, and plowhorses; those are a few of the terms consultants now use when assembling a menu (which is as much an advertisement as anything else). “A star is a popular, high-profit item-in other words, an item for which customers are willing to pay a good deal more than it costs to make,” Poundstone explains. “A puzzle is high-profit but unpopular; a plowhorse is the opposite, popular yet unprofitable. Consultants try to turn puzzles into stars, nudge customers away from plowhorses, and convince everyone that the prices on the menu are more reasonable than they look.”

Instead of puzzles, anchors, stars, and plowhorses charted based on popularity and profit margin, the BCG matrix uses stars, cash cows, dogs, and question marks organized by market growth rate and relative market share. So, the tools are similar in their mechanism but analyze slightly different marketing situations.

While a cash cow sounds like an expensive filet mignon, I can see why Poundstone wouldn’t want to label any restaurant dish with “dog”. These are both simple but powerful tools that can be used in strategic planning exercises to illuminate options for improving future profitability.

Another indispensible but deliciously simple strategy tool? SWOT.

Via Tyler Cowen’s Ethnic Dining Guide via Marginal Revolution via New York Magazine.