This project requires reading the Donates: Finding the New Pizza (Attached) case and answering the following discussion questions:
1. Map the research design used by Donation for new product development.
2. Evaluate the Wausau meetings as an exploratory methodology to help define the research question.
3. Evaluate the test marked Donates used.
4. What were its advantages and disadvantages?
5. What measurement scales would you have used on the survey that was part of the in-restaurant product tests?
Writing Guidelines:
- Read the assignment carefully and answer each question.
- Limit your submission to the questions asked and issues mentioned.
- Be specific.
- Proofread your work carefully. Check for correct spelling, grammar, punctuation, and capitalization.
- There is no word limit.
Content:
- Addresses the questions in complete sentences, not just simple yes or no statements.
- Supports his or her opinion by citing
specific information from the text.
- Stays focused on the assigned issues.
- Writes in his or her own words and uses quotation marks to indicate direct quotations.
- Provides clear organization (for example, uses words like first, however, on the other hand, and so on, consequently, since, next, and when).
Donates: Finding the New Pizza
> Abstract:
The pizza segment of the fast-food industry is very aggressive.
In the restaurant industry, the introduction of new diets and changing consumer tastes requires restaurant chains to make decisions on how to respond. This case examines Donation, an independent premium pizza restaurant chain based in Columbus, Ohio, and their research behind introducing a low-carbohydrate pizza option. The company deviated from their normal product development research process to quickly take advantage of a current trend. Tom Grouse, the chief concept officer at Donation, faced the question of whether the
low-carb diet was just a temporary fad or a lasting trend that the restaurant should address. Grouse acknowledges that restaurants are influenced by various factors such as product, messaging, weather, reputation, and competition, but changing eating habits have the most significant impact. To stay informed, Donation monitors syndicated research from The Hanoverian Monitor and NYPD Eating Trends, collects feedback from customers via their website, and holds monthly WAUSAU Meetings where employees share their observations on popular culture and its effect on Donation.
Recently divested by fast-food giant McDonald's, Donates had access to extensive research on the eating habits of Americans for four years. According to the 2003 Healthfully Trend Report, 26% of eaters were "Carr aware" in late July. This meant that they were incorporating low-Carr habits into their diets. Grouse, who followed the Atkins diet, noticed at company meetings that there were leftovers of pizza crust, which led them to initially worry about the quality of the crust. However, Donates realized that their employees were avoiding carbohydrates found in the grain-based foundation of pizzas. This discovery prompted Donates to begin a research-based product development process, as they value premium quality and an abundance of toppings as their main selling point.The process begins with developing a product prototype, followed by employee taste testing and concept screens where participants are shown photos of food products and asked about their uniqueness, fit, price attractiveness, and likelihood of purchase. In-restaurant tests are then conducted in multiple restaurants within the chain. During these tests, participants complete self-administered surveys or phone surveys for delivery customers. In the product prototype phase, Donates faced issues with low-quality crusts. However, they had a creative
idea to market a pizza without crust, focusing on quality toppings instead. This concept was deemed unique and fitting with the company's identity. By November 1, Donates decided to proceed with the idea of a dough-free pizza. One breakthrough was finding the right plate for the pizza."Simplicity is often the most effective form of innovation," explained Grouse. "This is especially true when the product is created by 16-17 year olds." Donates discovered a unique make-bake-serve plate, constructed from paper that can withstand high temperatures. However, during employee taste tests of the initial prototypes, there was a slight issue.
To assess different recipe variations, Donates conducted central location taste tests. "We introduced a new recipe that includes soy crisps, which provide texture and added protein without the negative impact of carbohydrates." The recipe containing soy crisps only marginally outperformed the one without crisps, and adding them would result in higher product costs. "Sometimes, it's important to look beyond the numbers and focus on the core aspect of your identity. We strive to be the best, and offering protein for carb-conscious customers aligns with our mission." Due to the less favorable reputation of soy in the market, Donates does not mention this special ingredient in its advertisements or on its website. Instead, they describe their pizza as containing "protein-enriched crumbles." A pizza without dough is constructed in the same manner as a traditional one, with one noticeable difference. The crustless pizza is built on a plate, starting with sauce followed by protein crumbles and toppings. For every pizza, Donates measures all topping servings precisely.01 of a pound to ensure consistency from pizza to pizza and restaurant
to restaurant.
To maintain consistency with the dough content in each pizza across our various restaurants, we have implemented a training program for our store-level employees. So, what should we name a pizza with less dough? Should we go with the "No Carr" or "Low Carr" branding, as seen in many other food items recently launched, or should we opt for a name that aligns with our positioning? We considered nearly 70 names, some of which were clever, such as 'NADIA pizza' or even 'Not-A-Pizza'. We even conducted trademark searches for several names. Eventually, we tested three names using a phone survey over a weekend. 'No Dough@' emerged as the winner due to its clear message and ability to convey the benefits of low-Carr. Meanwhile, Donates, the company's name, kept a close eye on the calendar.
By December 22, we began testing the new product in two stores located in Columbus. We displayed advertisements in the windows of these test stores, highlighting the new No Dough@ pizza. Grouse explained that starting January 2nd, there is typically a 25% increase in salad sales. This is not surprising given that "losing weight" has consistently been one of Americans' top three New Year's resolutions. Furthermore, we wanted to establish ourselves as leaders in offering crust-free pizza and saw it as a significant marketing advantage. Despite the fact that our new product development process usually takes 12 to 14 months, this time we were able to complete it in just 6 months to seize what Donates perceived as a crucial marketing opportunity.
On January 19th, Donates introduced its No Dough@ pizza in all 184 of its stores."We consider ourselves
a 'smart speed organization,'" explained Grouse. "We have the ability to make decisions based on facts but still move quickly." Donation offers No Dough@ as one of three crust options for their pizza, allowing people who want to consume less carbohydrates to enjoy their preferred pizza toppings. In January 2004, about 28 percent of Americans, equivalent to 59 million people, were watching their carbohydrate intake, according to market research conducted by Valve Group, a Cincinnati-based firm. To track interest and response in this market segment, Donates utilizes various techniques such as ongoing telephone tracking studies, e-mails from customers through their website, and comment cards received in restaurants. "No Dough@ is meeting our expectations," Grouse shared. "We are also receiving incremental business and more frequent visits or calls from our regular customers." However, one unexpected market segment for Donates was the gluten-free market. "We are receiving emails that say, 'Thank you! Now I can eat pizza again!'" In regards to the research design used by Donation for new product development and the test market they employed, it would require further discussion and evaluation of its advantages and disadvantages.What types of measurement scales were used on the survey in the in-restaurant product tests?
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