The-Coop-Marketing-Research

HarvardBusinessSchool9-599-113Rev.August24,1999ProfessorsRuthBoltonandYoungmeMoonpreparedthiscaseasthebasisforclassdiscussionratherthantoillustrateeithereffectiveorineffectivehandlingofanadministrativesituation.TheCoopisafictionalcompany;anyresemblancetorealindividualsorfirmsisunintentional.Copyright©1999bythePresidentandFellowsofHarvardCollege.Toordercopiesorrequestpermissiontoreproducematerials,call1-800-545-7685,writeHarvardBusinessSchoolPublishing,Boston,MA02163,orgoto—electronic,mechanical,photocopying,recording,orotherwise—withoutthepermissionofHarvardBusinessSchool.1TheCoop:MarketResearchDarylBuckmeister,CEOofTheChickenCoop,waspuzzled.Eversincehehadstartedhisrestaurantbusinessbackin1974,hehadgrownsalesbyabout10%peryear,evenduringeconomicdownturns.Thisgrowthrecordwasparticularlyimpressivebecausethequickservicerestaurant(QSR)industryhadbeengrowingatonly5%peryearduringthepastfiveyears.In1994,“TheCoop’s“averagesaleshadbeenahealthy$775,000perrestaurant.However,in1995–forthefirsttimeincompanyhistory–salesweredownin20ofTheCoop’s76stores.Worse,manyofthestrugglingrestaurantshadlongbeenconsideredthecompany’sstrongest;together,the20restaurantsaccountedfor32%ofretailsales.Theaveragedeclineinsalesforthese20storeswas6%.Buckmeisterknewthathehadtogettothebottomoftheproblemasquicklyaspossible;thequestionwas,how?Hisimmediateinclinationwastosimplygovisitsomeoftheslumpingstoreshimselftofindoutwhatwasgoingon.Hehadalwayspridedhimselfonbeinga“handson”kindofguy,andhebelievedthatupuntilnow,hiscompany’ssuccesshadbeenlargelyduetohisabilityto“stayintouch”withhiscustomerbase.Infact,itwasnotatalluncommonforhimtoshowupunannouncedatoneofhisstorestosnooparoundthekitchen,samplethefood,andchatwithhiscustomers.However,atarecentmeetingtoreviewTheCoop’sfirstquarterresults,1twoofhistopmanagershadarguedforasubstantialinvestmentinmoresystematicmarketresearchtoaddressqualityandcustomersatisfactionissues.Butalthoughbothmanagersagreedontheneedforprogrammaticmarketresearch,theyagreedonlittleelse.AnitaMcMichael,Vice-PresidentofQuality,wasadvocatingaQualityInspectionProgram(QIP).Theprogramentailedsending“qualityinspectors”–disguisedascustomers--toselectedstores.TocomplementtheQIP’sinvestigationofin-storeservice,McMichaelwasalsoproposingcontrolledtastetestscomparingthecompany’sfooditemswiththoseofthecompetition.TrevorWallace,Vice-PresidentofMarketing,wasrecommendinganambitiousthreeprongedapproach.Thefirststepwouldbetoconductsomefocusgroups.However,thecenterpieceofhisapproachwouldbeaBrandImageMonitoringSurvey(BIMS)thatcouldserveasapilotforacontinuousbrand-trackingprogram.TocomplementtheBIMSresearch,WallacewasproposingthatthecompanyinvestinaCustomerExperienceStudy(CES),inwhichcustomerswouldbepaidtovisit1TheChickenCoop’sfiscalyearbeganApril1.Firstquarterretailsalesweregenerallyaboveaveragequarterlysales.FortheexclusiveuseofM.WANGThisdocumentisauthorizedforuseonlybyMengyanWanginBUS253a:Spring2012taughtbyXINWANGfromJanuary2012toJuly2012.599-113TheCoop:MarketResearch2TheCoop(andpossiblythecompetition),withouthavinganyknowledgeofwhichcompanyhadhiredthem.Alloftheseoptionssoundedprettyexpensive–certainlymorethanthecompanyhadeverspentonmarketresearch–andBuckmeisterwasskepticalastowhetheranyofthemwouldprovideanyrealpayoffforthecompany:Dowereallyneedanyofthisstuff?Idon’tknow,butIfeelfunnyaboutpayingsomehigh-pricedmarketresearchfirmtotellmesomethingthatIcanfigureoutsimplybyvisitingtheseproblemstoresonmyown.Mythinkingis,whynotjustputasetofcustomerfeedbackcardsineachofthesestores?That’swhatIseealltheotherstoresdoing.Myguessisthatthiswouldtelluseverythingweneedtoknowtogetinthereandfixthings.Clearly,Buckmeister’sexecutivemanagementteamfeltotherwise.Ameetingwasscheduledforthefollowingday,whichbarelygaveBuckmeisterenoughtimetocarefullyconsiderhisoptionsandcometoadecisionabout(1)whethertoinvestinmarketresearch,andifso,(2)howmuchmoneytospendand(3)whichprogramstofund.CompanyBackgroundBuckmeisterhadstartedTheChickenCoopin1974,attheageof27.Backthen,hehadborrowed$20,000fromthebanktoopenthetiny,24-hourrestaurantcalledTheChickenGrille(renamedTheChickenCoop)inthetinytownofBoxborough,MA.Theoriginalrestauranthadbeensmall–just6tablesand8counterstools–butitwastherethatBuckmeisterhadfirstexperimentedwithdifferentmethodsforpreparingtasty,easy-to-serve,chickendishes.Hismotto–“Wearechicken”–hadreflectedhissimplephilosophy:Toprovidethebest-tastingmealaroundbyspecializinginthepreparationanddeliveryofchicken.Eventually,Buckmeisterhadopenedasecondstore,thistimeinAndover,MA.Ashissuccessgrew,hehadbegunexpandinghismenuofferings,addingsidedishessuchasfrenchfries,bakedpotatoes,andcornonthecob,aswellastwotypesofchickensandwiches.By1985,hehadopenedatotalof24restaurants,manyofwhichoffereddrive-throughservice.Thecompanyhadreachedthe$58.9millionmarkinsalesin1994,asexpansioncontinuedthroughouttheregionalnortheasternUnitedStates.[SeeExhibit1forTheCoop’ssal