Market Research

Marketing Research Project

Wendys: History and Life after Dave Thomas

Submitted By:

Group-7 Members:

Rahul Budhia, Rajnish Sharan Singh, Ranjana Mohan, Ravi Gupta, Richa Choudhary, Rishabh Kant Singh

Group-8 Members:

R. Sandhya, Sabyasachi Bhanja, Sandarbh Goswami, Saptorshi Bagchi, Sarang Pious, Sarath Chandra

Chapter 1

Q1. Discuss the role marketing research can play in helping a fast-food restaurant such as Wendys

formulate sound marketing strategies.

In a highly competitive market similar to that of a restaurant business, each player has to keep a track on

the preference movements of the consumer and also have to closely watch what the competition is doing.

For each player there is only one chance to proactively implement a strong positioning before anyone else

does it. Therefore there arises a high demand of understanding the market before others.

Wendys is a distinctly positioned brand in the perception map of the user base, but due to changing

lifestyles, eating habits and choices change. McDonalds and Burger King with their huge capital and global

presence have the capability of tapping this problem before Wendys can do. Therefore, there is a

tenacious need for Wendys to conduct market research to safeguard the position they have in the

mindshare of the consumers.

Through research, the management can identify the key points to service the customers with best offerings.

This will help them design an apt marketing strategy.

Awareness of competition and our brand:

Through a smart research design we can find what our consumer feels and knows about all the competing

brands in the segment; how they react to the advertisements/schemes/offers coming from the market; how

adaptive they are to the changes coming in the products/services offered by the brands. Questions like this

can be easily answered through research. The results will enable the management to use the information

as a tool against difficulties coming from the market.

Know what customer needs:

Marketing doesnt end with a good branding and enhanced visibility. It also includes finding out what is

missing and what should be added in the offerings. With this research we can effectively find out what is

lacking in the menu which the target consumer looks for and bring it on the menu before any one in

competition does.

Customer demographics:

Having consumer bases explicit details will certainly ease the process of designing the marketing strategy.

Managers would know exactly where to invest and how much to invest to grab more eyeballs and thus big

digits in the balance sheet.

Dining Preferences:

With every 100 miles (it is said that) people differ in personal behavior and preferences. To prove it, the

sales of different stores in different geographical locations with same offerings and identical infrastructure

are different. With our research we can find out from the masses what are the developing tastes of dining in

that particular geographical area. This will help us redesign the service encounter for the users and change

the platform of perhaps eat-in to drive-in as an instance.

Receptiveness v/s Culture:

Local culture also plays a major role in the way how people react to communications floated by the brands.

States like Alabama are more family-oriented and relaxed in nature, whereas people in Colorado are fast

moving and career oriented. If we happen to understand them more in detail, we can easily design our

advertising more effectively.

Chapter 2

Q1. Wendys is considering further expansion in United States. Define the management decision

problem.

Management Decision Problem: Which geographic locations in the United States should Wendys

expand?

Reason- For further expansion it is necessary to know which location Wendys should cater to as it would

require analysis on aspects such as cost of setting up a store , number of competitors, total population in

that geographic region.

Q2. Define an appropriate marketing research problem based on the management decision problem

you have identified.

Marketing Research Problem: Determine the customer preference towards consumption of fast food in

the determined location with respect to the competitors and the manner in which they would like to be

served.

Reason- Based on the managements decision to open a store it then becomes important to understand the

market situation in that region so as to create an efficient marketing plan for its customers for appropriate

positioning, featuring on the price points of their offering, their target population and the mode of service

delivery preferred.

Chapter 3

Q1. Formulate an appropriate research design for investigating the marketing research problem you

have defined.

RESEARCH DESIGN FOR WENDYS EXPANSION PLAN:

Research design is a blue print of the research we wish to conduct as a company, to find out the reasons of

a failure or possibilities of progress. To understand whether Wendys will prosper or not by expanding their

stores PAN USA, we need to have a sharp research design.

Following illustration defines the plan:

Chapter 4

Q1. Use the Internet to determine the market shares of the major national fast-food chains for the

last calendar year.

Market Share of leading fast food chains in the United States

Major Fast Food Chains in U.S % of Mkt. Share in 2013

Mc Donalds Corporation. 21.7 Yum Brands Inc. 8.1

Doctors Associates Inc. 6.7 Wendys International Inc. 5.5 Burger King Corporation 4.1

Other 53.9

McDonalds held, by far, the largest market share of the United States fast food industry in 2013. Its closest

competitor was Yum! Brands - owner of popular chains Taco Bell, KFC, Pizza Hut and Wing Street. The top

five brands accounted for just under half of the entire U.S. fast food industry, which, in 2013, generated

over 191 billion U.S. dollars in revenue. This revenue was forecasted to rise above 210 billion dollars in

2018.

53.9

4.1

5.5

6.7

8.1

21.7

0 10 20 30 40 50 60

Other

Burger King Corporation

Wendy's International Inc.

Doctor's Associates Inc.

Yum Brands Inc

Mc Donald's Corporation

Mkt.Share in % of Major Fast Food Chains in U.S in 2013

Mkt.Share in %

Q2. What type of syndicate data will be useful to Wendys ?

Type of syndicate data to be used by Wendys could be taken from consumers who is an important stake

holder in a fast food industry. The methodology to be followed is to conduct surveys encompassing

1) The life style and psychographics of the consumers.-This would cater to the demographics and

preferences of the target population and further present a clear view in the segmentation process.

2) The advertising evaluation of Wendys competitors.- Since Wendys competitors always had an

edge over advertising Wendys needs to work on an appropriate advertising plan for efficient

positioning among the target consumers.

Chapter 5

Q1. Discuss the role of qualitative research in helping Wendys expand further in the United States.

Wendys is one of the leading fast food companies in United States with over 10000 outlets. Although the

company has substantial market share after McDonalds and Burger King, it has to improve its capacity to

compete with these rivals. In order to further expand in United States Qualitative research will be an

important tool of survey. Wendys can select a group of 6 to 10 customers of different age groups for a

Focus Group Discussion. The moderator should conduct the discussion with an aim to achieve the

following:

1) To get a clear image of fast food industry in United States

2) To understand the customers perception towards other competitors (McDonalds and Burger

King). This will help the company identify the area of expansion

3) To understand the customers perception towards its product and services. The qualitative study

will give a theoretical background and enhance the idea about customers perception of the brand

Chapter 6

Q1. Wendys has developed a new fish sandwich with a distinctive Cajun taste. It would like to

determine consumers response to this new sandwich before introducing it in the marketplace. If a

survey is to be conducted to determine consumer preferences, which survey should be used and

why?

In order to determine the consumer preference for Wendys newly developed fish sandwich mall intercept

form of personal interview survey should be used. As in this form of survey the respondents are intercepted

while they shop in the shopping mall and they are tested. As Wendys is introducing its new fish sandwich

it will like to know that what is the consumer review on this sandwich and how consumer take this sandwich

and so this type of survey method will be best to take out their taste view their size, sample, price view for

this sandwich. Another important benefit of using this type of survey is that it will not only give consumers

preference but also it will act as a test market on its own and that too here consumers are not paying for

anything. As the survey is about food so physically testing the food is very important and this survey

method will give all that benefits and tasting of food will be proceeded by small questionnaire in which

customer can show their level of satisfaction or dissatisfaction for this newly developed fish sandwich.

Given below are the fact and findings from various researches to substantiate the importance and

advantages of using mall-intercept survey method-

A. Background

Mall intercept surveys are widely used and (theoretically) able to reach a large segment of the population.

In any given two-week period, about 2/3 of U.S. households shop one or more times at a mall. According to

a CASRO membership survey, about 25% of all marketing research and 64% of personal interviews are

conducted at malls.

B. Pluses and Minuses

The good things about mall samples are:

1) Experimental control.

2) Ability to see things.

3) Availability of kitchens, etc.

4) Minimal Cost.

C. Effect of Mall Samples on Results

1) For copy, concept, and product tests, data suggest that mall samples understate scores.

2) Ossip reported four studies that found lower top box concept scores for mall surveys compared to door

to door, even after controlling demographic differences.

3) Gannon reported study comparing mall and mail panel for a concept/product test. Mall study got lower

concept top box but higher product test attribute ratings.

D. "Ideal" Mall Sampling Plan

According to an article by Seymour Sudman, to achieve a very good sample via the mall intercepts method.

However, this is what can be done.

1) Randomly select states or regions.

2) Randomly select cities within region.

3) Randomly select malls within cities.

4) Post interviewers at randomly selected mall entrances.

5) Interview all days and all times mall open.

6) Count traffic so interviews are proportional to traffic based on day of week and time of day.

7) Determine frequency of mall shopping and weight sample so that frequent shoppers not over-

represented.

Chapter 7

Q1. Discuss the role of experimentation in helping Wendys determine its optimal level of

advertising expenditures.

Wendys is the third hamburger chain by sales after McDonalds and Burger King. Although having a major

market share, it needs to brand itself in such a way that people are more drawn towards its quality and

optimal price.

Wendys has introduced various new meals in their list which emphasizes on higher quality, great taste and

fresh and never frozen ground beef. So in order to study the customers awareness of the competitors and

how they respond to the new meals, Wendys can perform standard test marketing for their new meals by

introducing them to customers and collecting reports of what they thought about the new meals. And if the

initial findings are found successful, they can expand the same test to different cities and also ask whether

they would like to have any changes in the taste or quality or price and act accordingly. It can also help in

determining how the consumers rank Wendys in comparison with its competitors.

Chapter 8

Q1. Illustrate the use of primary type of scales in measuring consumer preferences for fast-food

restaurants.

Chapter 9

Q1. Illustrate the use of likert, semantic differential, and staple scales in measuring consumer

preferences for fast food restaurants.

Answer:

LIKERT SCALE : This scale is a widely used rating scale that requires the respondents to indicate the

degree of agreement or disagreement with each of a series of statements about the stimulus object.

Disagree completely

Disagree somewhat

Neither Agree nor Disagree

Agree somewhat

Agree completely

Choose one response for each statement

1) I try to stay current on the latest health and nutrition information.

Scale Basic characteristics Consumer preference measurement use

Nominal Numbers identify and classify objects

Dish name, numbering of dish, Food categories, Store name

Ordinal Numbers indicate the relative position of objects but does not indicate the relative difference in their magnitude

Preference ranking, quality ranking, customer satisfaction ranking, food quality ranking, service quality ranking.

Interval Difference between objects can be compared

Attitudes, opinion, index numbers, age group, Income group

Ratio Zero points is fixed, ratios of scale can be computed

Age, income, cost, frequency

2) I read nutritional labels on most products I buy.

3) I consider the amount of fat in the foods I eat at fast-food restaurants.

Semantic differential: This is the 7-point rating scale with endpoints associated with bipolar labels that

have semantic meaning.

Please rate the restaurants you, yourself, have eaten from in the past three months using a 7-point scale,

where 7 means you think it is perfect, and 1 means you think it is terrible.

Terrible (1) 2 3 4 5 6 Perfect (7)

Stapel Scale: A scale for measuring attitudes that consists of a single adjective in the middle of an even-

numbered range of values, from -5 to +5, without a neutral point (zero)

FAST-FOOD RESTAURANT

+5

+4

+3

+2

+1

High Quality

-1

-2

-3

-4

-5

Chapter 10

Q1. Develop a questionnaire for assessing consumer preferences for fast-food restaurants.

Questionnaire for assessing consumer preferences for fast-food restaurants.

1. Age

5-12

13-16

17-23

24-32

>32

2. Gender

Male

Female

Other

3. Ethnicity

Asian

European

American

South American

African

Australian

4. Occupation

Student

Working Professional

Other

5. What is your annual income?

Below 2 lakh

2 lakh 5 lakh

Above 5 lakh

6. Relationship status

Single

Recently married

Married and staying with children

Married and staying with children

7. How often do you visit a fast food restaurant?

Daily

Once a week

Occasionally

I dont like fast food

8. Rate the following in a fast food restaurant which would influence you to visit a fast food restaurant

from 1 -5 (1 being the lowest and 5 being the highest)

Food

Ambience

Comfort

Cost effectiveness

Healthy food

Quick service

9. Which food are you likely to order in a fast food restaurant?

Chicken Burgers

Beef Burgers

Ham Burgers

Potatoes

French fries

Sandwiches

Shakes

Deserts

10. With whom do you usually like to visit a fast food restaurant?

Family

Friends

Someone special

Alone

Chapter 11 & 12

Q1.What sampling plan should be adopted for the survey of chapter 6? How should the sample size

be determined?

Group7Ans. Wendys has developed a new fish sandwich with a distinctive Cajun taste. It would like to

determine consumers response to this new sandwich before introducing it in the marketplace.

We can take a convenience sample of 200 visitors (approx equal male- female ratio) asking them about

what level of satisfaction they get from this new offering; are they satisfied with the quality, price and

quantity level of this new offering?

Group8Ans. Since we are considering mall intercepts as one of our sampling techniques, it would fall

under the category of probability sampling. Since we have no control over which customer to be

considered, the probability of every customer to be chosen would be equal.

Typically for testing new products, a minimum sample size of 200 is considered while the range of sample

size would be between 300 and 500. The appropriate sample size of a particular study can be determined

using both qualitative and statistical factors. The qualitative factors include the importance of the decision,

the nature of the research, the number of variables, the nature of analysis, resource constraints etc. The

statistical approach would involve determining the sample size based on the construction of the confidence

intervals around sample means and proportions.

"Ideal" Mall Sampling Plan-








represented.

Chapter 13

Q1. How should the fieldworkers be selected and trained to conduct the fieldwork for the survey?

Ans. A survey is a method of descriptive research design which is in turn, a conclusive research

methodology. The purpose of such a technique would be to arrive at a conclusion so as to address a

problem. In order to address the marketing research problem that has been defined, we probe into what a

survey actually means. A survey is a structured questionnaire given to a sample of a population and

designed to elicit specific information from respondents.

The field force is made up of both actual interviewers and supervisors involved in data collection. Since a

survey involves less interaction except for interviews, requirement of such personnel is limited. However,

there exists a potential for bias in (1) selecting respondents selecting the incorrect sample (2) asking

questions omitting certain questions (3) recording answers recording incorrectly or incompletely.

Interviewers can influence the bias in their own ways inflection, tone of voice, suggesting answers, etc.

Hence, while selecting the fieldworkers, care should be exercised to avoid the above mentioned

possibilities which might flaw the research of hamper its results.

In a computer based or internet survey, such occurrences are low. Hence a team of supervisors must be

selected to train them and to supervise the interview process. If interviews are conducted across

geographies, the scope of such supervision is limited.

Chapter 14

Q1. How should the missing values be treated for the following demographic variables : education

(D5), income (D6), employment status (D7), and marital status (D8) ?

Variable D5

Variable D5 is a categorical variable which shows the different levels of education. The unanswered

responses would be where the respondent answered Prefer not to answer. This can be considered as a

missing value and it can be replaced with the most frequently occurring level of education response to

this question.

Variable D6

Variable D6 is a categorical variable which shows the respondents familys annual household income

level. The unanswered responses would be where the respondent answered Prefer not to answer. This

can be considered as a missing value and it can be substituted by an imputed response. The respondents

pattern of responses to other questions is used to impute or calculate a suitable response to the missing

values.

Variable D7

Variable D7 is a categorical variable which shows the employment status of the respondent. The

unanswered responses would be where the respondent answered Prefer not to answer. This can be

considered as a missing value and it can be replaced with the most frequently occurring employment

status response to this question.

Variable D8

Variable D8 is a categorical variable which shows the marital status of the respondent. The unanswered

responses would be where the respondent answered Prefer not to answer. This can be considered as a

missing value and it can be replaced with the most frequently occurring marital status response to this

question.

Q2. Recode payment method (D1) by combining Debit card, Check and other into one category.

Variable D1 has been recoded by combining Debit card, Check, and other into one category

Old values

Cash- 1

Credit card- 2

Debit card- 3

Check- 4

Other- 5

Prefer not to Respond- 6

New values

Debit, check, other- 1

Cash- 2

Credit card- 3

Prefer not to Respond- 4

Q3. Recode number of people living at home (D3A) as follows:

For adults age 18+, four or more should be combined into one category labeled 4 plus; for each of

the three remaining age groups ( under5, 6-11, and 12-17), two or more should be combined into a

single category labeled 2 plus.

Variable d3a_1 has been recoded into d3a_1_r.

New values in d3a_1_r

0 is 0

1 is 1

2 is 2

3 is 3

4-15 is 4 plus

Variable d3a_2 has been recoded into d3a_2_r

New vales in d3a_2_r

0 is 0

1 is 1

2-9 is 2 plus



0 is 0

1 is 1

2-9 is 2 plus



0 is 0

1 is 1

2-9 is 2 plus

Q4. Recode education (D5) by combining the lowest two category and labeling it completed high

school or less.

Variable d5 has been recoded into variable d5_r

New values for d5_r

1 - Completed high school or less

2- Some college

3- Completed college

4- Post graduate

5- Prefer not to answer

Q5. Recode income (D6) by combining the highest three categories and labeling it $100,000 or

more.

Variable d6 has been recoded into d6_r

New values for d6_r

1- Under $25000

2- $25000 but under $50000

3- $50000 but under $75000

4- $75000 but under $100000

5- $100000 or more


Q6. Recode employment status (D7) by combining homemaker, retired and unemployed into a

single category.

Variable d7 has been recoded into d7_r

New values for d6_r

1- Home maker, retired, unemployed

2- Full time

3- Part time

4- Student


Q7. Classify respondents into light, medium and heavy users of fast food based on the frequency

distribution of S3A: In the past four weeks, approximately how many times, have you, your-self,

eaten food from a fast-food restaurant? Use the following classification: 1-4 times =light, 5-8

times= medium, 9 or more times= heavy.

Variable s3a has been converted into s3a_r

New values for s3a_r

1- 1 to 4/ light

2- 5 to 8/ medium

3- 9 to 99/ heavy

Chapter 15

Q1. Run a frequency distribution for all variables except respondent ID (responseid). Why is this

analysis useful?

Ans. This analysis is useful because we obtain a count of the number of responses associated with

different values of one variable and to express these counts in percentage terms.

For the frequency distribution please refer the output file.

Q2. Cross-tabulate fast food consumption classification (recoded S3A) with the demographic

characteristics: age(S1), gender(S2), payment method(D1), number of people living at home(D3A),

education (D5), income (D6), employment (D7), marital status (D8), and region. Interpret the results

Ans. It is clearly seen from the crosstabs that young people in the age category of 18-24 have the

maximum consumption and as the age increases, the frequency of consumption decreases. There are total

575 respondents in the age category of 18-24. Out of these, 90 respondents (max) visited the fast food

restaurants 4 times in past one month.

Out of 1440 respondents, 1277 respondents had done the payment by cash. College goers visits fast-food

restaurant more as compared to graduates and post-graduates.

Q3. Cross-tabulate payment method (recoded D1) with the demographic characteristics: age(S1),

gender(S2), number of people living at home(D3A), education (D5), income (D6), employment (D7),

marital status (D8), and region. Interpret the results.

Ans. According to age category, around 88.6% respondents had done payment with cash and rest done

with the credit card(3.2%) and debit card(6.5%). There are 85% respondents in each category of annual

household income which had done their payments with cash which was followed by debit card.

Q4. Cross-tabulate eating there more often, less often, or about the same as a year or so

ago(q8_1,q8_7,q8_26,q8_36,q8_39) with the demographic characteristics : age(S1), gender(S2),

payment method(D1), number of people living at home(D3A), education (D5), income (D6),

employment (D7), marital status (D8), and region. Interpret the results.

Ans. Out of four brands (i.e. Mc Donalds, subway, Burger King, Wendys), Mc Donalds have the highest

number of responses.

Age category More often About the same Less often

18-24 Subway>Mc

Donalds>Burger

King>Arbys

Mc Donalds>burger

King>Subway>Arbys

Mc Donalds>burger

King>Subway>Arbys

25-29 Subway>Mc

Donalds>Burger

King>Arbys

Mc Donalds>burger

King>Subway>Arbys

Mc Donalds>burger

King>Subway>Arbys

30-34 Subway>Mc

Donalds>Burger

King>Arbys

Mc Donalds>burger

King>Subway>Arbys

Mc Donalds>burger

King>Subway>Arbys

35-39 Subway>Mc

Donalds>Burger

King>Arbys

Mc Donalds>burger

King>Subway>Arbys

Mc Donalds>burger

King>Subway>Arbys

40-45 Subway>Mc Mc Donalds>burger Mc Donalds>burger

Donalds>Burger

King>Arbys

King>Subway>Arbys King>Subway>Arbys

In all the age categorys, number of responses for Arbys is least, so people preferred going to the other

brands than Arbys.

Number of female respondents is greater than male respondents in all categories i.e. More often, About the

same and less often.

Number of responders paying with cash is high as compared to other mode of payment in all categories i.e.

More often, About the often and less often.

The customer who had completed their high school found to be visiting more often to the Arbys as

compared to other categories. For the category of some college and completed college, they contributed

highest proportion to the total customer but they are losing out their customer base as compared to

previous year.

Customers earning between 25,000-50,000 and 50,000-75,000 contributes highest. They are losing out

customer base of earning income of 50,000-75,000 who visits the least compared to last year.

South region contributes highest proportion of customers. They are losing out on customer base of

northeast when compared to last year.

Q5. Do the ratings on the psychographic statements (q14_1, q14_2, q14_3, q14_4, q14_5, q14_6,

q14_7) differ for males and females (S2)? How would your analysis differ if the ratings on the

psychographic statements were treated as ordinal rather than interval scaled.

Ans. Yes, it differs Gender wise. Female are more concerned about latest health and nutrition information,

they prefer buying product with nutrition levels, make more effort to find out the nutritional content of the

food they eat and consider the amount of fat in their as well as in their kids food.

The analysis wont differ when we take data in interval scaled.

Q6. Do the respondents agree more with I have been making an effort to look for fast-food choices

that have better nutritional value than the foods I have chosen in the past (q14_6) than they do

with I consider the amount of fat in the foods my kids eat at fast food restaurants (q14_5)? How

would your analysis differ if these ratings were treated as ordinal rather than interval scaled?

Answer:

Above frequency table shows two variables:

Variable 1: I have been making an effort to look for fast food choices that have better nutritional value than

the foods I have chosen in the past

Variable 2: I consider the amount of fat in the foods my kids eat at fast food restaurants

Both these variables are measured on interval scale and the percentage of respondents that completely

agree with 1st statement is higher than the 2nd statement. If these variables are changed on ordinal scale,

the analysis would not differ.

Chapter 16:

Q1. Do the restaurant rating (q9_1,q9_7,q9_26,q9_36,q9_39) differ for the various demographic

characteristics (some recoded as specified in Chapter 14) : age (S1), gender (S2), payment method

(D1), number of people living at home (D3A), education (D5), income (D6), employment (D7), marital

status (D8), and Region. Interpret the results.

1) Variable q9_1

An N-way anova has been done by taking variable q9_1 (Arbys rating) as the dependent variable

and s1, s2, d1, d3a, d5, d6, d7, d8, region as dependent variables. The following results were

observed:

Levene's Test of Equality of Error Variancesa

Dependent Variable: Id like you to rate the restaurants you, yourself, have eaten from in the past

three months using a 10-point scale, where 10 means you think it is perfect, and 1 means you

think it is terrible.

F df1 df2 Sig.

1.584 494 19 .117

Tests the null hypothesis that the error variance of the dependent variable is equal across groups.

a. Design: Intercept + s1 + s2 + d1_3 + d3a_1 + d3a_2 + d3a_3 + d3a_4 + d6 + d5 + d7 + d8 +

region

Tests of Between-Subjects Effects

Source

Type III Sum of

Squares df Mean Square F Sig.

Corrected Model 157.795a 43 3.670 1.220 .167

Intercept 375.637 1 375.637 124.864 .000

s1 25.679 4 6.420 2.134 .076

s2 .051 1 .051 .017 .897

d1_3 10.879 4 2.720 .904 .461

d3a_1 15.880 6 2.647 .880 .509

d3a_2 7.470 3 2.490 .828 .479

d3a_3 5.876 3 1.959 .651 .583

d3a_4 10.036 2 5.018 1.668 .190

d6 23.141 6 3.857 1.282 .264

d5 21.707 4 5.427 1.804 .127

d7 21.387 5 4.277 1.422 .215

d8 .042 1 .042 .014 .906

region 10.354 3 3.451 1.147 .330

Error 1413.932 470 3.008

Total 29606.000 514

Corrected Total 1571.728 513

a. R Squared = .100 (Adjusted R Squared = .018)

As we can see, the model itself is not significant. All the variables have significance values greater than

0.05. Hence we can say that rating q9_1 does not differ for various demographic characteristics such as

the variables mentioned above.

Variable q9_7

An N-way anova has been done by taking variable q9_7 (Burger kings rating) as the dependent variable

and s1, s2, d1, d3a, d5, d6, d7, d8, region as dependent variables. The following results were observed:

.

Source

Type III Sum of



Intercept 468.086 1 468.086 140.853 .000

s1 17.127 4 4.282 1.288 .273

s2 6.823 1 6.823 2.053 .152

d1_3 9.300 4 2.325 .700 .592

d3a_1 40.369 6 6.728 2.025 .060

d3a_3 10.291 3 3.430 1.032 .378

d3a_2 10.809 4 2.702 .813 .517

d3a_4 26.800 3 8.933 2.688 .045

d5 4.772 4 1.193 .359 .838

d6 40.431 6 6.739 2.028 .060

d7 13.780 5 2.756 .829 .529

d8 2.841 1 2.841 .855 .355

Error 2618.703 788 3.323

Total 42641.000 831



As we can see, the model itself is not significant. Only the variable d3a_4 (number of children between age

12-17 live in a home) is significant and all other variables are insignificant. So, the restaurant rating q9_7

only differs for variable d3a_4

Q2. Do the four groups defined by the extent to which you find it difficult to make up your mind

about which fast food restaurant to go to (q13) differ in their restaurant ratings

(q9_1,q9_7,q9_26,q9_36,q9_39)?

Variable q9_1

We will take q9_1 as the dependent variable and q13 as the independent variable and run a one-way

anova. The results are as follows


Dependent Variable: Id like you to rate the restaurants you, yourself, have eaten from in the past three

months using a 10-point scale, where 10 means you think it is perfect, and 1 means you think it is

terrible.

Source

Type III Sum of



Intercept 5586.326 1 5586.326 1.849E3 .000

q13 27.005 3 9.002 2.980 .031

Error 1706.598 565 3.021

Total 32824.000 569



As we can see, the model is significant. Also, the variable q13 is significant. So, there is difference among

the four groups of q1 w.r.t the restaurant ratings q9_1 (Arbys ratings)

Variable q9_7







Source

Type III Sum of

Squares Df Mean Square F Sig.


Intercept 8811.063 1 8811.063 2.612E3 .000

q13 41.886 3 13.962 4.139 .006

Error 3116.975 924 3.373

Total 47283.000 928





Source

Type III Sum of

Squares Df Mean Square F Sig.


Intercept 5586.326 1 5586.326 1.849E3 .000

q13 27.005 3 9.002 2.980 .031

Error 1706.598 565 3.021

Total 32824.000 569




the four groups of q1 w.r.t the restaurant ratings q9_1 (Arbys ratings)

Variable q9_7




Dependent Variable: Id like you to rate the restaurants you,

yourself, have eaten from in the past three months using a 10-

point scale, where 10 means you think it is perfect, and 1

means you think it is terrible.

Source

Type III

Sum of

Squares df

Mean

Square F Sig.


Intercept 8811.063 1 8811.063

2.612E

3 .000

q13 41.886 3 13.962 4.139 .006

Error 3116.975 924 3.373

Total 47283.000 928




the four groups of q1 w.r.t the restaurant ratings q9_7 (Burger Kings ratings)

Variable q9_26







Source

Type III Sum of



Intercept 8916.302 1 8916.302 2.159E3 .000

q13 48.575 3 16.192 3.921 .008

Error 4703.850 1139 4.130

Total 54241.000 1143




the four groups of q1 w.r.t the restaurant ratings q9_26 (Mc Donalds ratings)

Variable q_36




Dependent Variable: Id like you to rate the restaurants you, yourself, have eaten

from in the past three months using a 10-point scale, where 10 means you think it

is perfect, and 1 means you think it is terrible.

Source

Type III Sum of



Intercept 9908.298 1 9908.298 3.325E3 .000

q13 19.372 3 6.457 2.167 .090

Error 2720.689 913 2.980

Total 58225.000 917



As we can see, the model is not significant. Also, the variable q13 is not significant. So, there is no

difference among the four groups of q1 w.r.t the restaurant ratings q9_36 (Subways ratings)

Variable q_39




Dependent Variable: Id like you to rate the restaurants you, yourself, have eaten from in the past three

months using a 10-point scale, where 10 means you think it is perfect, and 1 means you think it is

terrible.

Source

Type III Sum of



Intercept 11034.666 1 11034.666 3.829E3 .000

q13 55.879 3 18.626 6.463 .000

Error 2717.500 943 2.882

Total 56893.000 947




the four groups of q1 w.r.t the restaurant ratings q9_39 (Wendys ratings)

Chapter 17:

Q1. Can each of the restaurant ratings (q9_1, q9_7, q9_26, q9_36, q9_39) be explained in terms of

the ratings on the psychographic statement (q14_1, q14_2, q14_3, q14_4, q14_5, q14_6 and q14_7)

when the statements are considered simultaneously?

Answer:

Arbys

As we can see that all the significance value of all the variables is greater than .05. So we can say that the

ARBYS rating cannot be explained by any of the 7 psychographic statements.

Burger King

From the given table we can see that significance value of 3 psychographic statements is less than .05.

Hence the restaurant ratings can be explained by these statements.

Burger King rating is affected by the following variables:

I consider the amount of fat in the foods I eat at fast food restaurants

I have been making an effort to look for fast food choices that have better nutritional value than the

foods I have chosen in the past

I am eating at fast food restaurants less often out of concern for the high fat content in the foods at

fast food restaurants

McDonalds

From the given table we can see that significance value of 1 psychographic statement is less than .05,

hence McDonalds can be explained by the following variable:



Subway

From the given table we can see that significance value of 1 psychographic statement is less than .05,

hence Subway can be explained by the following variable:



Wendys

As we can see that all the significance value of all the variables is greater than .05. So we can say that the

WENDYs rating cannot be explained by any of the 7 psychographic statements.

Chapter 18

Q1. Can the males and females (S2) be differentiated based on the ratings on the psychographics

statements (q14_3, q14_4, q14_5, q14_6, and q14_7) when the ratings are considered

simultaneously? Run a two group discriminant analysis. Then run a logit analysis. Compare the

results from the two analyses.

1) Discriminant Analysis

Tests of Equality of Group Means

Wilks' Lambda F df1 df2 Sig.

I try to stay current on the

latest health and nutrition

information

.989 9.734 1 874 .002

I read nutritional labels on

most products I buy .987 11.549 1 874 .001

I am making more of an

effort to find out about the

nutritional content of the

foods I eat at fast food

restaurants

.989 9.577 1 874 .002

I consider the amount of

fat in the foods I eat at fast

food restaurants

.987 11.642 1 874 .001


fat in the foods my kids

eat at fast food

restaurants

.997 2.385 1 874 .123

I have been making an

effort to look for fast food

choices that have better

nutritional value than the

foods I have chosen in the

past

.987 11.959 1 874 .001

Tests of Equality of Group Means

Wilks' Lambda F df1 df2 Sig.

I try to stay current on the

latest health and nutrition

information

.989 9.734 1 874 .002

I read nutritional labels on

most products I buy .987 11.549 1 874 .001

I am making more of an

effort to find out about the

nutritional content of the

foods I eat at fast food

restaurants

.989 9.577 1 874 .002


fat in the foods I eat at fast

food restaurants

.987 11.642 1 874 .001


fat in the foods my kids

eat at fast food

restaurants

.997 2.385 1 874 .123

I have been making an

effort to look for fast food

choices that have better

nutritional value than the

foods I have chosen in the

past

.987 11.959 1 874 .001

I am eating at fast food

restaurants less often out

of concern for the high fat

content in the foods at fast

food restaurants

.994 4.937 1 874 .027

Here we can see that the question or variable I consider the amount of fat in the foods I my kids eat at fast

food restaurant is not statistically significant. So, there is no difference between males and females w.r.t

this question.

Test Results

Box's M 24.894

F Approx. .882

df1 28

df2 2.580E6

Sig. .645

Tests null hypothesis of equal population covariance matrices.

Box test has been accepted. So the covariance matrix for males and females are the same.

Wilks' Lambda

Test of

Function

(s) Wilks' Lambda Chi-square df Sig.

1 .978 19.132 7 .008

Here, the wilks lambda is significant. So the mean of discriminant function is different for males and

females. The model is able to differentiate between males and females w.r.t the variables.

Standardized Canonical Discriminant Function Coefficients

Function

1

I try to stay current on the latest health and nutrition information .095

I read nutritional labels on most products I buy .386

I am making more of an effort to find out about the nutritional content of

the foods I eat at fast food restaurants -.041

I consider the amount of fat in the foods I eat at fast food restaurants .648

I consider the amount of fat in the foods my kids eat at fast food

restaurants -.688

I have been making an effort to look for fast food choices that have

better nutritional value than the foods I have chosen in the past .637

I am eating at fast food restaurants less often out of concern for the high

fat content in the foods at fast food restaurants -.192

Structure Matrix

Function

1

I have been making an effort to look for fast food choices that have better

nutritional value than the foods I have chosen in the past .785

I consider the amount of fat in the foods I eat at fast food restaurants .774

I read nutritional labels on most products I buy .771

I try to stay current on the latest health and nutrition information .708

I am making more of an effort to find out about the nutritional content of

the foods I eat at fast food restaurants .702

I am eating at fast food restaurants less often out of concern for the high

fat content in the foods at fast food restaurants .504

I consider the amount of fat in the foods my kids eat at fast food

restaurants .350

If we see the standardized canonical discriminant function coefficient and the structure matrix, variable

q14_6 which has high discriminant loading has a lower standardized discriminant function coefficient. This

may be due to multicollinearity.

Classification Resultsa

Are

you?

Predicted Group Membership

Total Male Female

Original Count Male 227 184 411

Female 208 257 465

% Male 55.2 44.8 100.0

Female 44.7 55.3 100.0

a. 55.3% of original grouped cases correctly classified.

Finally if we see the classification matrix, the hit ratio is only 55.3% which is very low. Although this model

is classifying the respondents, it is not able to do the classification accurately. The validity of the model is

very low. So, the males and females cannot be differentiated accurately.

2) Logistic regression

Again, a logistic regression is ran using the same variables to predict whether the respondent is male

or female. The result and the interpretation is as follows

Model Summary

Step -2 Log likelihood Cox & Snell R Square Nagelkerke R Square

1 1191.828a .022 .029

a. Estimation terminated at iteration number 3 because parameter estimates changed by less

than .001.

As we can see the Cox and Snell R square and Nagelkerke R square are very low. This shows that the

independent variables are not able to predict the dependent variables effectively.

Classification Tablea

Observed

Predicted

Are you? Percentage

Correct Male Female

Step 1 Are you? Male 142 269 34.5

Female 114 351 75.5

Overall Percentage 56.3

a. The cut value is .500

Here, the overall percentage correct is 56.3 which is very low. The validation is not satisfactory. Prediction

accuracy is very low.

Variables in the Equation

B S.E. Wald df Sig. Exp(B)

Step 1a q14_1 .024 .097 .063 1 .802 1.025

q14_2 .091 .089 1.038 1 .308 1.095

q14_3 -.010 .103 .009 1 .923 .990

q14_4 .149 .099 2.263 1 .132 1.161

q14_5 -.161 .084 3.681 1 .055 .851

q14_6 .151 .097 2.426 1 .119 1.163

q14_7 -.046 .078 .341 1 .559 .955

Constant -.529 .223 5.646 1 .017 .589

a. Variable(s) entered on step 1: q14_1, q14_2, q14_3, q14_4, q14_5, q14_6, q14_7.

Here, we can see that all the variables are not significant w.r.t at 5 % significance level. This explains why

the model is not good. Therefore, the model is not able to distinguish between males and females w.r.t the

given variables.

To compare the two-group discriminant analysis and logistic regression, we can say that logistic regression

is better at saying that the model is not good than the two-group discriminant analysis. The two- group

discriminant analysis show that the variables have discriminating power but the accuracy of model is not

good, while the logistic regression outrightly rejects the model. So, logistic regression is better than

discriminant analysis in this case.

Chapter 19

Q1. Factor analyze the psychographic statement (q14_1 to q14_7). Use principal component

analysis with varimax rotation. Interpret the factors.

Answer:

Upon using factor analysis for the data set with the variables q14_1 through q14_7 as variables to

constitute factors, one factor is formed.

Appropriateness of Factor Analysis:

The KMO value of 0.922 indicates that factor analysis.

Determination of number of factors:

Based on the Eigen value interpretation, there is only factor formed and variable 1 i.e., q14_1 explains

maximum percentage of the factor, by 71%.

Rotation of factors:

Since only one factor is formed, rotation was not performed in spite of selecting the option for varimax

rotation while performing factor analysis.

Interpretation of Factors:

Since only one factor was formed out of all the variables, the factor loading plot was not plotted. Then the

interpretation is restricted to the Eigen values in the Principal Component Analysis table, the calculation of

factor scores from the coefficient matrix, the scree plot and determining the model fit using the residuals

between observed and computed correlation values.

The scree plot indicates the presence of a single factor.

The eigen values indicate that 71% of the variance is cumulatively explained by the factor composed of all

the variables considered.

The factor score can be computed using the above table.

Factor1 = 0.170 (q14_1) + 0.164 (q14_2) + .... + 0.156 (q14_7).

Goodness of fit of the model:

As per the residual computation between the observed and computed correlations, there were 10 residuals

with a value greater than 0.05 which does not indicate a good fit of the model. There might be a

requirement of reconsidering the model.

The above results indicate that all the health conscious factors can be singly accommodated into one

factor. All the variables considered for such analysis indicate the health consciousness of a customer.

Hence, while modeling customer preferences based on the health aspects, other variables should also be

considered. Such consideration will prove beneficial while offering new products or while assessing how

existent products will fit into the new market and its customers.

Chapter 20

Q1. How would you cluster the respondents based on the psychographic statement

(q14_1,q14_2,q14_3,q14_4,q14_5,q14_6, andq14_7)? Interpret the resulting clusters.

Complete Linkage(Farthest Neighbour)

Agglomeration Schedule

Stage Cluster Combined Coefficients Stage Cluster First Appears Next Stage

Cluster 1 Cluster 2 Cluster 1 Cluster 2

1 1 2 716.000 0 0 6

2 3 4 733.000 0 0 3

3 3 6 823.000 2 0 4

4 3 5 999.000 3 0 5

5 3 7 1239.000 4 0 6

6 1 3 1396.000 1 5 0

A cluster analysis was run on 1450 respondents, each responding to items on psychographic statement

questionnaire on Wendys Fast Food Chain on their attitude towards healthy eating at Fast Food

Restaurants. We used a hierarchical clustering analysis method in which we used the Furthest Neighbor

method in which the intervals were measured using Sq. Euclidean Distances.

From the above Fig 1 and Table 1 we can see that 4 clusters were formed using the dendogram.

Q14_1 & Q14_2: Cluster 1

Q14_3 & Q14_4: Cluster 2

Q14_6 & Cluster 2: Cluster 3

Q14_5 & Cluster 3: Cluster 4

Cluster 1: People who are keen on being updated regarding latest information about nutrition and health.

Cluster 2: Make an effort on knowing the nutrition value of the food before consumption.

Cluster 3: Loyal towards foods with better nutrition value.

Cluster 4: People keeping a check on the nutritional content of the food consumed at fast food restaurants

and self.

Chapter 21

Q1. Provide similarity ratings on a scale of 1 to 7 for all possible pairs of the following brands of

fsast-food restaurants: Arbys, Burger King, Churchs, Dominos Pizza, KFC, McDonalds, Pizza Hut,

Subway, Taco Bell and Wendys. Develop a two-dimensional MDS map. Interpret the dimensions

and the map.

Answer:

The dataset for the exercise to perform an MDS was constructed based on direct approach of perception

data. The restaurants were measured on a likert scale of 1 to 7 based on similarity judgements.

A stress level of 0.03 indicates the model has good to excellent fitness of data.

From the perceptual map above, dimension 1 can be interpreted as price and dimension 2 to be popularity

of the brand.

As per the map, the QSRs Wendys KFC, McDonalds, Churchs and Burger King are low price restaurants

which are quite highly popular and they cluster together in the map. The restaurants Pizza Hut and

Dominos Pizza are also high on popularity whereas they are perceived to be quite high on the expenses,

as per the map. Due to the similarity in the offerings, these restaurants also cluster together on the map.

Then the low on popularity but medium price range restaurants Arbys, Subway and Taco Bell cluster

together on the lower side of the map.

Chapter 23

Q1. Write a report for Wendys management summarizing the results of your analyses. What

recommendations do you have for the management?

Answer:

Defining the Management Decision Problem:

As per the analyses and research, the following recommendations are made to the Wendys fast food chain

management.

The Management Decision Problem formulated as per the scenario presented was Which geographic

locations in the United States should Wendys expand in? Based on this management decision problem,

the following Market Research Problem was arrived at Determine the customer preference towards

consumption of fast food in the determined location with respect to the competitors and the manner in

which they would like to be served.

An Appropriate Research Design that would help the management make this decision is presented in the

chart below. As per the depiction, the hypothesis would be that expansion will help catalyze growth of the

company. Market research will be conducted with the methods of qualitative research by employing the

methods of questionnaire, secondary data analysis, focus group interviews and fieldwork. The objectives to

be achieved through this exercise are to find out the perception about Wendys as a fast food chain, the

existence of demand and the ROI of venturing into a new market and how it will help the company grow.

Competitor Analysis:

Analysing the market shares of major fast food chains in the US gives an insight into how big the market of

fast food restaurant is and which are the major competitors. The following chart illustrates this information.

McDonalds by far held the largest market share of the United States fast food industry in 2013. Its closest

competitor was Yum Brands - owner of popular chains Taco Bell, KFC, Pizza Hut and Wing Street. The top

five brands accounted for just under half of the entire U.S. fast food industry which in 2013 generated

over 191 billion U.S. dollars in revenue. This revenue was forecasted to rise above 210 billion dollars in

2018.

An analysis of the competitors gives an insight into how big market players they are, how deep the pockets

of such established businesses are and how established they are. This analysis helps Wendys prepare for

the next big step of entering a foreign land. So the biggest player that Wendys would have to counter in the

US market will be McDonalds.

New Product Development for the foreign market:

Wendys tried developing a new product, a fish sandwich with Cajun Taste. In order to determine the

consumer preference for Wendys newly developed fish sandwich mall intercept form of personal interview

survey can be used.

53.9

4.1

5.5

6.7

8.1

21.7

0 10 20 30 40 50 60

Other

Burger King Corporation

Wendy's International Inc.

Doctor's Associates Inc.

Yum Brands Inc

Mc Donald's Corporation

Mkt.Share in % of Major Fast Food Chains in U.S in 2013

Mkt.Share in %

Given below are the fact and findings from various researches to substantiate the importance and

advantages of using mall-intercept survey method:

Mall intercept surveys are widely used and (theoretically) able to reach a large segment of the population.

In any given two-week period about 2/3 of U.S. households shop one or more times at a mall. According to

a CASRO membership survey, about 25% of all marketing research and 64% of personal interviews are

conducted at malls.

The advantages of mall samples are:

1) Experimental control.

2) Ability to see things.

3) Availability of kitchens, etc.

4) Minimal Cost.

Effect of Mall Samples on Results:

1) For copy, concept, and product tests, data suggest that mall samples understate scores.

2) Ossip reported four studies that found lower top box concept scores for mall surveys compared

to door to door, even after controlling demographic differences.

3) Gannon reported study comparing mall and mail panel for a concept/product test. Mall study got

lower concept top box but higher product test attribute ratings.

How to select an "Ideal" Mall Sampling Plan?








represented.

Advertising expenditures:

Wendys is the third hamburger chain by sales after McDonalds and Burger King. Although having a major

market share, it needs to brand itself in such a way that people are more drawn towards its quality and

optimal price.

Wendys has introduced various new meals in their list which emphasizes on higher quality, great taste and

fresh and never frozen ground beef. So in order to study the customers awareness of the competitors and

how they respond to the new meals, Wendys can perform standard test marketing for their new meals by

introducing them to customers and collecting reports of what they thought about the new meals. And if the

initial findings are found successful, they can expand the same test to different cities and also ask whether

they would like to have any changes in the taste or quality or price and act accordingly. It can also help in

determining how the consumers rank Wendys in comparison with its competitors.

Selection of field workers for the survey:

A survey is a method of descriptive research design which is in turn, a conclusive research methodology.

The purpose of such a technique would be to arrive at a conclusion so as to address a problem. In order to

address the marketing research problem that has been defined, we probe into what a survey actually

means. A survey is a structured questionnaire given to a sample of a population and designed to elicit

specific information from respondents.

The field force is made up of both actual interviewers and supervisors involved in data collection. Since a

survey involves less interaction except for interviews, requirement of such personnel is limited. However,

there exists a potential for bias in (1) selecting respondents selecting the incorrect sample (2) asking

questions omitting certain questions (3) recording answers recording incorrectly or incompletely.

Interviewers can influence the bias in their own ways inflection, tone of voice, suggesting answers, etc.

Hence, while selecting the fieldworkers, care should be exercised to avoid the above mentioned

possibilities which might flaw the research of hamper its results.

In a computer based or internet survey, such occurrences are low. Hence a team of supervisors must be

selected to train them and to supervise the interview process. If interviews are conducted across

geographies, the scope of such supervision is limited.

Factor analysis for variables:

The results indicate that all the health conscious factors can be singly accommodated into one factor. All

the variables considered for such analysis indicate the health consciousness of a customer. Hence, while

modeling customer preferences based on the health aspects, other variables should also be considered.

Such consideration will prove beneficial while offering new products or while assessing how existent

products will fit into the new market and its customers.

Clusters of Customers:

Cluster 1: People who are keen on being updated regarding latest information about nutrition and health.

Cluster 2: Make an effort on knowing the nutrition value of the food before consumption.

Cluster 3: Loyal towards foods with better nutrition value.

Cluster 4: People keeping a check on the nutritional content of the food consumed at fast food restaurants

and self.

Interpretation of the perceptual map to aid in market entry decision:

From the perceptual map above, dimension 1 can be interpreted as price and dimension 2 to be popularity

of the brand.

As per the map, the QSRs Wendys KFC, McDonalds, Churchs and Burger King are low price restaurants

which are quite highly popular and they cluster together in the map. The restaurants Pizza Hut and

Dominos Pizza are also high on popularity whereas they are perceived to be quite high on the expenses,

as per the map. Due to the similarity in the offerings, these restaurants also cluster together on the map.

Then the low on popularity but medium price range restaurants Arbys, Subway and Taco Bell cluster

together on the lower side of the map.

Wendys is also perceived to be similar to the McDonalds, KFC and other QSR type restaurant. There

exists competition in this sector as per the initial competition analysis performed. While entering a market

like the USA which has established players and the market is mature, the strategy that Wendys has to

adopt is to be thought about by the management more with respect to sustainability in the area.

Market Research

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