Chicken Coop, a fast food chain, is experiencing a consistent growth in sales, approximately at a rate of 10% annually. However, in 1995, there was a drop in sales in 20 out of 76 stores. These particular stores had always been the top performers, generating 32% of the total retail sales. The main concern for management is to develop and swiftly execute a strategy to address this decline in sales.
Buckmeister is faced with the decision of whether to invest in market research, determine the amount of money to allocate, and which programs to support. His two vice presidents, one in quality and one in marketing, have presented contrasting proposals.
Market analysis
The problem can be analyzed through product differentiation, aggressive marketing, price discounts, and the degradation of food quality in some restaurants. The different options for market research are as follows: Tast
...e Tests - Gather unbiased information about the quality of menu items relative to competitors. Each taste test would cost $6000 and involve 8-12 customers. Conducting this test at every 20 problematic branches of the coop would result in a total cost of $120,000, which is not a cost-effective proposition.
The Quality Inspection Program involves a quality inspector visiting each restaurant to note the measures taken. However, Buckmeister is skeptical about whether people will be able to determine if all kitchen processes and standards are being followed.
Brand image Monitoring Surveys aim to collect data on the brand's image compared to its competitors through telephone interviews. This method is considered uneconomical and uncontrollable from the company's perspective.
The Customer Experience Study (CES) aims to gather information on how customers perceive their visits to Coop's restaurants. While it
is a more economical option, the credibility of this study is questionable.
Customer Feedback Cards are considered the easiest and most economical choice for gathering feedback from customers.
The customer feedback cards serve the purpose of collecting feedback on customer satisfaction.
Recommendation
It is highly recommended to implement customer feedback cards as they are cost-effective and provide direct information on individual experiences. Additionally, it is suggested to conduct a training seminar for all current and new employees to maintain consistent customer service and restaurant etiquette. The utilization of pricing discounts and advertising should be limited to products with significant profit margins.
Promotional offers are beneficial in attracting customers and generating positive word of mouth, ultimately driving more foot traffic to the business.
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