February 28 th , 2012

1. Research Brief: Leveraging Marketing Research to Help Solve Management’s Decision Problem By: David Schwartz MSBA, MBA, MSc. February 28th, 2012

2. How Did Consumers Answer The Question Below? The Answer Provides A Leading Indicator For Future Market Share Growth. 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. More Often About the Same Less Often 1 2 3 Enter Brands

3. Marketing Research Highlights Management Decision Problem (MDP), Market Research Problem (MRP), and Components Hypotheses and Desired Outcomes Statistical Analysis Key Takeaways Recommendations

4. MDP • MRP • Components Management Decision Problem What should Wendy’s do to improve its service and brand orientation in order to increase their market share? Marketing Research Problem To determine the various needs of fast food restaurant patrons and the extent to which the current offerings are satisfying those needs. Components • 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?

5. Demographic: Ideal Customer Profile

6. Hypotheses • Desired Outcomes

7. Statistical Analysis: Crosstabs Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer. 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”

8. Statistical Analysis: Crosstabs Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer. 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”

9. Statistical Analysis: ANOVA Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer. • Frequency: All Restaurant Patrons • Split Analysis: Male & Female • Variables: • Age Group • Visitation 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”

10. Statistical Analysis: ANOVA Hypothesis 1: The visitation frequency of patrons depends in part on the demographic of the customer. • Frequency: All Restaurant Patrons • Split Analysis: Male & Female • Variables: • Employment Status • 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

11. Hypothesis 2: Wendy’s meets the customer’s overall performance requirements at least as good as the market share leader. Now, taking into account everything that you look for in a fast-food restaurant, how would you rate each of the following: 1 2 3 4 5 6 7 8 9 10 Terrible Perfect

12. Statistical Analysis: Paired T Test Hypothesis 2: Wendy’s meets the customer’s overall performance requirements at least as good as the market share leader. Test: Paired T Test Is 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”.

13. Statistical Analysis: ANOVA Wendy’s: Total Performance by Age Group Test: ANOVA The difference in the means between Wendy’s and McDonald’s regarding “total performance”. McDonald’s: Total Performance by Age Group 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).

14. Key Takeaways MDP: 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. • Wendy’s has 14.5% more “Eating There More Often” than “Less Often” over the past year. • McDonald’s has 6.4% more “Eating There Less Often” • 30% of McDonald’s largest customer group (18–24 year olds) are eating at McDonald’s less often. • Females in the 18-24 age group visit fast-food restaurants significantly more than the females in other age categories. • Full- and part-time employed males visit fast-food restaurants significantly more than males in the other employment categories. • 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 performance (on average).

15. 10 Recommendations • Wendy’s should try and exploit McDonald’s various weaknesses once deeper insights are gathered. • Wendy’s should specifically target the 18-24 year old segment (females in particular). • Given the management decision problem, it is important for Wendy’s to better understand the consumer’s evolving food preferences. • Detailed customer satisfaction insights would be more beneficial that merely having a rating for total performance. • The current survey doesn’t address key areas such as service, price, comfort, and store cleanliness. • The next version of the survey should include some opened ended questions in order to more deeply probe the consumer on recent market dynamics. • The current survey touched on recency and frequency, but it didn’t include questions on spend. • The next survey should ask questions that will help Wendy’s determine the company’s next innovation. • The current survey doesn’t provide enough focus on critical areas such as customer preference and attitude. • Now that we know important pieces of the “what,” the next survey must also address the “how.”

16. The End