case introduction

Wendy’s

Wendy’s is the number three hamburger chain by sales, which trail only those of McDonald’s and Burger King. The company, with approximately $12 billion in system-wide sales in 2008, owns or franchises more than 10,000 restaurants. In mid-2006, Wendy’s created a new area of marketing to lead innovation efforts for the Wendy’s brand. The expanded role of Wendy’s marketing department included the establishment of an Innovation and Strategy group comprised of Research and Development, Strategic Insights and Innovation, and Operation Innovations.

Marketing Issue and Marketing Research

Wendy’s is leading the way with some innovations such as fruit bowls and combo-meal flexibility. Wendy’s uses no preservatives in its bowls of pineapple, honeydew, cantaloupe, and grapes, which come with a low-fat, strawberry-flavored yogurt for dipping. Wendy’s is also pinning hopes on a new double-sided grill to boost burger quality and speed of service. But Wendy’s has a few hurdles to overcome. Rivals have caught up to the menu innovations of Wendy’s. McDonald’s has crested a youth wave with “I’m lovin’ it” and music promotions. And, while Wendy’s in the past came within a half share point of overtaking number two Burger King, Burger King now looks to have widened that gap, thanks to edgy marketing that’s given it a cult following among the fast-food faithful.

In order to survive the merciless fast-food industry, Wendy’s conducted a survey. Wendy’s wanted to study customer demographics, customer satisfaction, and patronage preference. The questionnaire that was used is provided here; the associated data collected can be downloaded from Blackboard.

Wendy’s Internet Interview Questionnaire

Patronage

Q1: In the past 4 weeks, approximately how many times, have you eaten food from a fast-food restaurant?

0. 6 times and below

1. 7 times and above

Satisfaction

Q2: I’d like you to rate the restaurants you have eaten from in the past 4 weeks using a 7-point scale, where “7” means you think it is prefect, and “1” means you think it is terrible. Now taking into account everything that you look for in a fast-food restaurant, how would you rate Wendy’s?

Psychographic Statements

Q3: Below is a list of statements that may or may not be used to describe you in general. Using a scale from 1 to 7, where a “1” means you disagree completely with the statement, and a “7” means you agree completely. Of course, you may use any number between 1 and 7 that best describes how much you agree or disagree with the statements.

Q3_1: I try to stay current on the latest health and nutrition information.

Q3_2: I read nutritional labels on most products I buy.

Q3_3: I am making more of an effort to find out about the nutritional content of the foods I eat at fast-food restaurants.

Q3_4: I consider the amount of fat in the foods I eat at fast-food restaurants.

Q3_5: I consider the amount of fat in the foods my kids eat at fast-food restaurants.

Q3_6: 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.

Q3_7: I am eating at fast-food restaurants less often out of concern for the high fat content in the foods at fast-food restaurants.

Q4: Sometimes it is difficult for people to make up their minds about which fast-food restaurant to go to on a given visit. Think about when you go to a fast-food restaurant. In general, which of the following statements best describes the extent to which you find it difficult to make up your mind about which fast-food restaurant to go to?

1. I always know exactly which fast-food restaurant I am going to go to.

2. I usually know exactly which fast-food restaurant I am going to go to.

3. I’m usually undecided about which fast-food restaurant I am going to go to.

4. I’m always undecided about which fast-food restaurant I am going to go to.

Demographics

These next questions are about you and your household and will just be used to divide our interviews into groups.

Q5: Are you …?

1. Male

2. Female

Q6: Which of the following best describes your household’s total yearly income before taxes?

1. Under $50,000

2. 50,000 to $74,999

3. $75,000 or above

Data Analysis

A) T-test and ANOVA

A1) Do the two gender groups (Q5) differ in terms of overall satisfaction (Q2)? Interpret the results.

A2) Do the three income groups (Q6) differ in terms of overall satisfaction (Q2)? Interpret the results.

B) Multiple regression

B1) Can overall satisfaction (Q2) be explained by the seven statements in Q3 (Q3_1 to Q3_7)? Interpret the results.

B2) Can decision-making (Q4) be explained by the seven statements in Q3 (Q3_1 to Q3_7)? Interpret the results.

C) Discriminant analysis and logit regression

C1) Do a two-group discriminant analysis with the two patronage groups (Q1) as the dependent variable and the seven statements in Q3 (Q3_1 to Q3_7) as the independent variables. Interpret the results. Do a similar analysis with the logit model and compare the results with those obtained by two-group discriminate analysis.

D) Factor Analysis

Can the seven statements in Q3 (Q3_1 to Q3_7) be represented by a reduced set of factors? What would be the interpretation of these factors? (Hint: Do a principal components analysis with varimax rotation.)

E) Cluster Analysis

How would you cluster the respondents based on the seven statements in Q3 (Q3_1 to Q3_7)? Interpret the resulting clusters.

Conclusion and Recommendations

1. Based on the results, what recommendations do you have for the management?

2. If the survey conducted by Wendy’s were to be conducted in your home country (international students) or a non-US country in which you have a career interest (US students), how should it be conducted?