The Chicken Coop Marketing Research

Daryl Buckmeister is the CEO and first started the company in 1974. Since the beginning it has had an annual 10% increase in sales. He is a “hands on” kind of man and believes that the success of the company is due to his “stay in touch” with the customer basis technique. His top two managers believe that they need to invest in a “more systematic market research to address quality and customer satisfaction needs” and each advocated for different approaches. Anita McMichael was for a Quality Inspection Program (QIP) through which "quality inspectors disguised as customer would be send to selected stores.

She also proposed a controlled taste test comparing the company's food items with those of the competition. Trevor Wallace was for a three prong approach of a focus group, Brand Image Monitoring Survey (BIMS) that could serve as a pilot for a continuous brand-tracking program and Customer Experience Study (CES), in which customers would be paid to visit The Coop (and possibly the competition), without having any knowledge of which company had hired them. Buckmeister is faced with the following decisions:  whether to invest in market research, and if so,  how much money to spend and  which programs to fund.

Company Background

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Buckmeister started the company in 1974 at the age of 27 in Boxborough, MA. It was originally called The Chicken Grille and was renamed The Chicken Coop. Their philosophy is “We are Chicken.” Their second store was in Andover, MA. By 1985 there were a total of 24 restaurants and grew over the years to have up to 76 stores. As the company expanded, Buckmeister still stayed heavily involved in the developmental aspects of each restaurant. The Coop sought to provide high levels of service, cleanliness, and value which Buckmeister believed is what customers looked for in a family restaurant and targeted customers between the ages of 18 and 45.

The Coop Menu

As the company grew, they expanded their menu from the traditional chicken only to include side dishes and desserts. In 1982 Anita McMichael was hired on to as quality control over the food portion of the restaurants to ensure the customer was getting the quality of food that was expected of The Coop. She implemented strict quality control practices covering every step in the food preparation and delivery process. The newest item added to the menu is the “chick-pizza” that was developed by Trevor Wallace, Vice-President of Marketing. With the ever growing cost, the company worked hard to increase the store profits and margins. During the past five years “The Coop has grown from 9.3% to 11.5% through effective pricing and control of labor cost.” Read also Research Proposal sample on customer satisfaction

Growth Opportunities

Wallace was known for his “off-the-wall” ideas such as the “chick-pizza” and was often in conflict with McMichael. She believed that ideas such as these would deviate from the company’s “we are chicken” brand image and often “opposed menu-expansion that she felt were inconsistent with The Coop’s brand image. Wallace’s newest idea was co-branding (two-in-one stores). Buckminster was worried that co-branding could dilute or confuse The Coop’s brand image. McMichael on the other hand felt that the future grown opportunities lay in the home delivery market and predicted that The Coop could eventually grow home delivery to exceed meals consumed in the restaurant.

The Sales Slump

Going over recent sales report, Buckmeister noticed that something was not right. He visited local restaurants to determine why sales have taken a hit and determined the following:

1. there were significant deviations from performance standards in the kitchen,
2. employees were inadequately trained, and
3. customer were not satisfied with The Coop’s food prices.

Buckmeister was hesitant from departing from The Coop's value based strategy and looked into the marketing spending. The marketing spending was consistent with those of major companies such as KFC which used promotional items such as radio, television, and direct mail. Buckmeister was forced at this point to consider one of the recommendations from his two VP’s.

McMichael stated the underlying problem was in operations while Wallace was convinced that the problem was in the company’s brand image and its marketing activities. McMichael's Quality Inspection Program (QIP) involved employing a trained staff of people to visit Coop restaurants on a regular unannounced basis while the taste test involved having customer compare The Coop's food to those of its competitors in a controlled environment (the kitchen laboratory and would sample menu selections from The Coop and the competition). This would help evaluate the companies operation techniques while Wallace's would evaluate the brand image.

Wallace’s recommendation was a three-part program:

• conduct a series of focus groups, each would contain 8-12 consumers, last about two hours, and would cost about $15,000 for three different groups;
• hire a market research form to conduct a Brand Image Monitoring Survey (BIMS) of adults in the areas surrounding each Coop outlet; and
•  a series of Customer Experience Studies (CES) in which the an outside company would hire individuals to visit Coop restaurants and competition restaurants and evaluate them on a variety of specific criteria.
• The customers in the CES approach would have no knowledge of which restaurant was paying for the research .
• Both recommendations involved a substantial investment in market research as opposed to Buckmeister’s idea of “customer feedback” cards.

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