The "Chicken Coop"
Daryl Buckmeister, CEO of The Chicken Coop, must decide whether to invest in market research, how much money to spend, and which programs to fund. His two vice presidents (of quality and marketing) have presented very different proposals.
Decline in sales
For the first time ever, the "Coop" is experiencing a decline in sales by 6% in 20 of 76 "Coop" restaurants even though the overall growth rate was steady for the chain. These same stores were carrying about 32% of the company's retail sales.
Weak to no Market Research
The CEO of the company has maintained a steady visit to some of his stores but this was not really any type of market research. These visits were more of an internal quality assurance program. He did speak with customers and received valuable feedback during his visits which certainly can be market research.
Deviating from Mission
Trevor Wallace has led the company away from the "We are chicken" campaign into other areas that may not reflect the image of what Buckmeister intended. Even though the "chick-pizza" is successful, this could also be the reason why sales are declining in many of the outlets. They could be diluting the brand image
Lackluster Performance of 4 P's
The Coop has no major market research to go off of in order to effectively position them in a changing market. R&D doesn't seem to be supported by good research in the market segments.
No Competitor insights
The Coop is depending on a marketing VP with experience in the hotel industry and not any real experience in fast food. They have no current research so they have no way of knowing the effects that their competitors are having on the retail sales.
Poor Sales Strategy
There is no focus of a sales strategy. The current strategy is not working. This is probably due to the fact that there is no research being done on the market yet.
No Target Market or Segmentation
The only segmenting they have done is towards the age group of 18 to 45 male and female. This is incredibly weak and should be narrowed greatly!
(Please see exhibit A)
S1. Good Quality W1. No market ResearchO1. Great market SegmentationT1 Large Chains ie KFC, Burger King, etc S2 Strong MarketW2. No market segmentationO2. Large MarketT2. Avian Flu S3. Product flexibility W3. No knowledge of CompetitionO3. Strong distributionT3. Rising Poultry prices S4. Strong growth rate in marketW4. Poor use of 4 P'sO4. Room for expansion - untapped market potentialT4. Health trends away from fast food S5. Consumable goods! W5. Straying from the "We Are Chicken" directionO5. good supply of chickenT5. Transportation fuel costs rising S6. Well defined growth market in U.S. O6. ConsumableT6. Health Costs for employees rising
Alternatives & Evaluations
(See exhibit B)
McMichael's Proposal Taste Tests - VP of Quality proposed to have a taste test and to implement a Quality Inspection Program (QIP). The taste test would be held at The Coop's R&D kitchens in Waltham, MA. The taste tests would be to gather objective information about the quality of the Coop's menu items, relative to the competition.
Pro's & Con's
1Controlled environment 1Convenience sample/ demographics didn't represent overall customer base well enough 2Systematic Approach2No screening of respondents
3No influence by facilities or service3Time Consuming
4Respondents readily available4Data skewed
Trevor Wallace, VP of Marketing, proposed to implement a Brand Image Monitoring System and a Customer Experience Study. Pro's & Con's
1Quantitative data1Very expensive and not concrete. Costs could go even higher depending on incidence rates 2Representative sample of customers2
3Rolling Q reports3Lack of in depth analysis