Marketing Research Decision in Chik-Chicken Assignment

Assignment Task 

Instructions

Create a dummy analytics report for the Chic- Chicken case. 

Introduction 

It was 12 August 2016. Kiran Sarkar, a 2016 IIM Kozhikode graduate, exited Mohit Gupta’s cabin, mulling over the meeting that had just concluded. Besides Mohit, who was the managing director of Chic-Chicken, the meeting had also been attended by Rohit Sen, the marketing head; Suhani Sharma, the product development head; and Saraj Ahmad, the HR head.

Chic-Chicken India, a franchise of Chic-Chicken International based in Dubai, was fast losing its customers to other international fast-food giants—mainly McDonalds, Dominos, and KFC—as Indians seemed to be developing greater interest in American and Italian fast food. McDonalds, Dominos, and KFC had established many fast-food outlets in almost every city where Chic-Chicken was operating, making them the most aggressive competitors to Chic-Chicken.

Chic-Chicken had shown a 3?cline in 2016 while the chicken fast-food market in India grew by 11%. More alarming was that out of 112 outlets, 36 outlets that accounted for 55% of the total sales had shown a decline of more than 8%. The team believed that the situation had worsened because of negative PR about Chic-Chicken using beef flavour in its French fries, which had contributed to a loss of market share and consumers’ faith in India. Suhani had contended that customers were skeptical of the quality of food.

All of them realized that retention of customers was extremely important—satisfying them so that they would return in the future. However, all three heads had suggested different

reasons for the low rate of repeat purchases. While Rohit was of the opinion that improving the ambience and atmosphere of the restaurant outlets would make them a more desirable destination for the customers, Suhani believed that improving the food quality and offering more choices than the conventional Chic-Chicken menu would help retain existing customers and attract new customers.

Both Rohit and Suhani were also deeply concerned because, as per the HR records, the company had high staff turnover, which they thought resulted in poor service quality. Consequently, they argued, the customers stopped patronizing Chic-Chicken. Looking at the HR records, Mohit said to Saraj, “I feel that a majority of the employees are not committed to the organization. It seems many search for new jobs from the day they complete training at our company.”

All of the department heads wanted to conduct a formal marketing research study to improve the performance of Chic-Chicken. However, all of them had different opinions about the focus of the proposed research, and their suggestions ran in entirely different directions. Rohit wanted to know whether the brand image of Chic-Chicken was positive and strong. He also thought that the market research agency could identify which attributes constitute ‘ambience’ and ‘value for money’ for consumers. Mohit maintained a wholly different opinion about the situation: he was not sure whether it would be worth spending money on the formal market research in the first place. He knew that the market research agency would charge a hefty sum for sharing their findings, which he could otherwise get from the store managers—who, in turn, would collect customer feedback through feedback forms when customers would dine in.

Other international fast-food giants, such as McDonald’s, KFC, and Domino’s, had also started establishing themselves in the Indian market. The situation was thus critical and required immediate attention, Mohit thought. He was reluctant to making additional investments in market research. By contrast, he was more inclined to visit the stores personally or to send the other heads, who could then get an idea of what was going wrong. He thought this would help to increase company performance and change customers’ perception. Furthermore, he wanted to introduce a feedback card in all stores, whereby store managers would collect feedback from customers and send the responses to the head office. If a market research study were unavoidable, he might agree to spend some money on it, but he first needed more accurate customer information. He knew that each of the heads had his or her own opinion about the situation, but unsubstantiated opinions were of no avail. He knew that he had to act fast, so he told Kiran:

Chic-Chicken in India

The types of customers that Chic-Chicken attracted in India were quite different from those in other countries. There were families with young children who frequented it, but diners also included many young people, aged between 19 and 30, with no kids. Chic- Chicken had adapted itself according to the convenience and lifestyle of Indian consumers, including a huge vegetarian population. So, Chic-Chicken came up with a new product line, which included items such as the Chic-cheese burger and Chic-vegi burger. They also made Chic-Chicken outlets places to relax and experience entertainment.

When Chic-Chicken was started in Mumbai, India, in 2003, the main challenge was to convince customers that the burgers and soft drinks could constitute fast food. The customers were accustomed to local fast-food choices like pav bhaji, chana bhatura, puri sabji, etc. If they patronized fast food restaurants, McDonald’s was their first choice. It took the Chic-Chicken marketing department a lot of effort to popularize the concept of burger meals made by an Arabian company. The eating-out culture was also not very prominent in India as compared to the Western countries. Moreover, the taste palettes of Indian customers were different from those of other countries.

In an attempt to cater to Indian tastes, Chic-Chicken introduced new items on its menu. In India, it did not serve beef in any of its menu items, relying instead on burgers made of veggies, rice, and beans. Chic-vegi burger, Chic-cheese burger, Chic-paneer wrap.pizza and Chic-puff were some of the vegetarian items that Chic-Chicken launched, with spices favouring Indian tastes. The non-vegetarian items included the Chicken Chic-grill burger and Chicken Chic-maharaja. These Indianized products became so popular that they were later offered in restaurants in the Middle East as well. The product development team also came up with special sauces, using local spices, which did not contain beef. A separate product line was introduced without eggs for those following vegan diets.

Industry Background 

The QSR format emerged in India in a small way with the arrival of McDonald’s in 1996 and Chic-Chicken in 2003. Since then, it had grown over the years and had become a key segment of the Indian foodservices industry taking place immediately after full-service restaurant [1]. Currently, the QSR is estimated to be worth INR 85 billion and is growing at a compounded annual growth rate (CAGR) of 25 percent. Further, it is expected that the QSR sector will grow threefold, to INR 250 billion, within five years [2].

Rapid urbanization and modernization, and the spending power of the middle class and millennials, are some of the important drivers of growth in the QSR industry. Moreover, working professionals are getting busier and, hence, have to depend on fast food for their meals. These factors apply to Indians as well. Nowadays, women tend to be more engaged in their professional lives and often are not getting enough time to cook food at home. Because of this, the whole family becomes dependent on fast food to a greater degree [3]. The QSRs in India are present in different formats, such as dine-in restaurants, food courts in malls, and drive-in restaurants on highways, all of which provide the customers easy access [4]. However, more of these QSRs are found in metro and mini-metro cities, due to higher consumption and consumer awareness.

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