MKTG 379 MW 10am
February 8, 2012
Case 1 Summary- The Coop
BACKGROUND AND PROBLEM STATEMENT
The Chicken Coop is a restaurant started back in 1974 by CEO, Daryl Buckmeister. Chicken Coop is a quick service restaurant chain with sales growing at about 10% per year. In 1995, sales sporadically were down in 20 of the 76 stores. These 20 stores had consistently been the strongest stores accounting for 32% of retail sales. The main issue is management needs to formulate a strategy in response to the sales slump and immediately implement a strategy. Buckmeister 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.
The analysis of the problem comes down to product differentiation, aggressive marketing, price discounts and the quality of food getting degraded at some of the restaurants. The various alternatives for market research are as follows: Taste Tests: Gather objective information about quality of menu items, relative to the competition. It will require $6000 for one taste test which would involve 8-12 customers. If this is conducted in every 20 problematic coop’s branch, cost of $120,000 will be incurred, which is not an economical proposition. Quality Inspection Program: In this program a quality inspector will visit each restaurant and note the measures. Buckmeister is skeptic that people will not be able to find out whether all the processes & standards are followed in the kitchen or not. Brand image Monitoring Surveys: The purpose of this would be to gather data on brand image against its competitors done through telephone interviews. This is uneconomical and uncontrollable from the company’s perspective. The Customer Experience Study (CES): The purpose of the Customer Experience Study would be to gather information on how customers viewed their visits to the Coop’s restaurants...
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