February 28th, 2012

Research Brief:Leveraging Marketing Research

to Help Solve Management’s Decision Problem 

By: David SchwartzMSBA, MBA, MSc.

More Often About the Same Less Often

Enter Brands 1 2 3

For each of the restaurants listed , please indicate whether you are eating from there more often, less often, or about the same frequency as a year or so ago.

How Did Consumers Answer The Question Below?The Answer Provides A Leading Indicator For Future Market Share Growth.

Marketing Research Highlights

1. Management Decision Problem (MDP), Market Research Problem (MRP), and Components

2. Hypotheses and Desired Outcomes

3. Statistical Analysis

4. Key Takeaways

5. Recommendations

What should Wendy’s do to improve its service and brand orientation in order to increase their market share?

Management Decision Problem

To determine the various needs of fast food restaurant patrons and the extent to which the current offerings are satisfying those needs.

Marketing Research Problem

• Is there a particular demographic profile that more frequently visits fast food restaurants?

• How well do existing fast food establishments meet the consumer’s requirements?

Components

MDP • MRP • Components

Demographic: Ideal Customer Profile

Hypotheses • Desired Outcomes

Variable Chi-Square (Sig.)

Age 0.062

HHI 0.484

Gender 0.634

Employment Status

0.450

Education 0.214

Marital Status

0.582

Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer.

Statistical Analysis: Crosstabs

Wendy’s Restaurants (Visitation Age Vs. Groups)

Key Takeaways: Wendy’s “Eating There More Often” Exceeds “Less Often” by 14.5%Target Age Group: 18–24 and 25-29 “Less Often”Target Age Group: 30-34 “Same”

Statistical Analysis: Crosstabs

McDonald’s Restaurants (Visitation Vs. Age Groups)

Key Takeaways: McDonald’s “Less Often” Exceeds “More Often” by 6.4%Target Age Group: 18–24 “Less Often”Target Age Group: 35-39 “Same”

Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer.

Statistical Analysis: ANOVA

Key Takeaways: Males: 25-39 eat at fast-food restaurants more frequently (on average)Females: 18-24 eat at fast-food restaurants more frequently (on average)Target Age Group: 35-39 “Same”

Frequency: All Restaurant PatronsSplit Analysis: Male & FemaleVariables:1.Age Group2.Visitation

Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer.

Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer.

Frequency: All Restaurant PatronsSplit Analysis: Male & FemaleVariables:1.Employment Status2.Visitation

Key Takeaways: Males: Full- and Part-time employed males eat at fast food restaurants more frequently (avg.) Females: Couldn’t reject the null hypothesis

Statistical Analysis: ANOVA

Hypothesis 2: Wendy’s meets the customer’s overall performance requirements at least as good as the market share leader.

1 2 3 4 5 6 7 8 9 10

Terrible Perfect

Now, taking into account everything that you look for in a fast-food restaurant, how would you rate each of the following:

Hypothesis 2: Wendy’s meets the customer’s overall performance requirements at least as good as the market share leader.

Statistical Analysis: Paired T Test

Test: Paired T TestIs there is significant difference in the means between Wendy’s and McDonald’s regarding “total performance”?

Key Takeaway: There is a is significant difference in the means between Wendy’s and McDonald’s regarding “total performance”.

Statistical Analysis: ANOVA

Wendy’s: Total Performance by Age Group

McDonald’s: Total Performance by Age Group

Test: ANOVAThe difference in the means between Wendy’s and McDonald’s regarding “total performance”.

Key Takeaway: Somewhat surprisingly, consumers perceive that Wendy’s overall performance is significantly higher than McDonald’s (on average). McDonald’s largest group (18-24 year olds) scored them the lowest (on average).

Key TakeawaysMDP: What should Wendy’s do to improve its service and brand orientation in order to increase their market share?

MRP: To determine the various needs of fast food restaurant patrons and the extent to which the current offerings are satisfying those needs.

1. Wendy’s has 14.5% more “Eating There More Often” than “Less Often” over the past year.

2. McDonald’s has 6.4% more “Eating There Less Often”

3. 30% of McDonald’s largest customer group (18–24 year olds) are eating at McDonald’s less often.

4. Females in the 18-24 age group visit fast-food restaurants significantly more than the females in other age categories.

5. Full- and part-time employed males visit fast-food restaurants significantly more than males in the other employment categories.

6. Consumers perceive that Wendy’s overall performance is significantly higher than McDonald’s (on average).

7. McDonald’s largest group (18-24 year olds) scored them the lowest on performance (on average).

10 Recommendations

1. Wendy’s should try and exploit McDonald’s various weaknesses once deeper insights are gathered.

2. Wendy’s should specifically target the 18-24 year old segment (females in particular).

3. Given the management decision problem, it is important for Wendy’s to better understand the consumer’s evolving food preferences.

4. Detailed customer satisfaction insights would be more beneficial that merely having a rating for total performance.

5. The current survey doesn’t address key areas such as service, price, comfort, and store cleanliness.

6. The next version of the survey should include some opened ended questions in order to more deeply probe the consumer on recent market dynamics.

7. The current survey touched on recency and frequency, but it didn’t include questions on spend.

8. The next survey should ask questions that will help Wendy’s determine the company’s next innovation.

9. The current survey doesn’t provide enough focus on critical areas such as customer preference and attitude.

10. Now that we know important pieces of the “what,” the next survey must also address the “how.”

The End