The Coop

Case Outline

The "Chicken Coop"

Problem Statement

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!

S.W.O.T. ANALYSIS

(Please see exhibit A)

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

S1. Good Quality W1. No market Research O1. Great market Segmentation T1 Large Chains ie KFC, Burger King, etc...

S2 Strong Market W2. No market segmentation O2. Large Market T2. Avian Flu

S3. Product flexibility W3. No knowledge of Competition O3. Strong distribution T3. Rising Poultry prices

S4. Strong growth rate in market W4. Poor use of 4 P's O4. Room for expansion - untapped market potential T4. Health trends away from fast food

S5. Consumable goods! W5. Straying from the "We Are Chicken" direction O5. good supply of chicken T5. Transportation fuel costs rising

S6. Well defined growth market in U.S. O6. Consumable T6. Health Costs for employees rising

Alternatives & Evaluations

(See exhibit B)

Alternative 1

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

Pro's Con's

1 Controlled environment 1 Convenience sample/ demographics didn't represent overall customer base well enough

2 Systematic Approach 2 No screening of respondents

3 No influence by facilities or service 3 Time Consuming

4 Respondents readily available 4 Data skewed

Alternative 2

Trevor Wallace, VP of Marketing, proposed to implement a Brand Image Monitoring System and a Customer Experience Study.

Pro's & Con's

Pro's Con's

1 Quantitative data 1 Very expensive and not concrete. Costs could go even higher depending on incidence rates

2 Representative sample of customers 2

3 Rolling Q reports 3 Lack of in depth analysis

4 Recurring survey possibility 4 Telephone interviews looked at like telemarketing schemes - not good

5 Customer's have no knowledge of who is paying for the research 5 Could be paying customers to go to the competition

6 Good incentive program capabilities 6 Recurring expense

Alternative 3

Daryl Buckmeister, CEO, proposed to start a customer feedback program.

Pro's & Con's

Pro's Con's

1 Minimal cost 1 Not much detail

2 Customer convenience 2 Managers can skew data

3 Time conscious/quick turnaround on info 3 Employees can skew data

4 Recurring/continuous