Download Premium Pizza Inc.

Premium Pizza Inc.
The past several decades have shown an increase in the
use of promotions (coupons, cents-off deals marked on
the package, free gifts, etc.), primarily because of their
success at increasing short-term purchase behavior. In
fact, sales promotion has been estimated to account for
over one-half of the typical promotion budget, while
advertising accounts for less than half. In many industries, however, the initial benefit of increased sales has
resulted in long-term escalation of competition. As firms
are forced to ‘‘fight fire with fire,’’ special offer follows
special offer in a never-ending spiral of promotional
deals.
The fast-food industry has been one of the most
strongly affected by this trend. Pizzas come two for the
price of one; burgers are promoted in the context of a
double-deal involving cuddly toys for the kids; tacos are
reduced in price on some days, but not on others. It is
within this fiercely competitive, erratic environment that
Premium Pizza Corporation has grown from a small
local chain into an extensive Midwestern network with
national aspirations. Over the past few years, Jim
Battaglia, vice president of marketing, has introduced a
number of promotional offers, and Premium Pizza parlors have continued to flourish. Nevertheless, as the
company contemplates further expansion, Jim is concerned that he knows very little about how his customers
respond to his promotional deals. He believes that he
needs a long-term strategy aimed at maximizing the
effectiveness of dollars spent on promotions. And, as a
first step, he thinks it is important to assess the effectiveness of his existing offers.
Specific Objectives
In the past, Jim has favored the use of five types of coupons, and he now wants to determine their independent
appeal, together with their relation to several identifiable
Exhibit 1
characteristics of fast-food consumers. The five promotional concepts are listed in Exhibit 1. The consumer
characteristics that Jim’s experience tells him warrant
investigation include number of children living at home,
age of youngest child, propensity to eat fast food, propensity to eat Premium Pizza in particular, preference
for slices over pies, propensity to use coupons, and
occupation.
The specific research problems of the study can be
summarized as follows:
◆
◆
◆
Evaluate the independent appeal of the five promotional deals to determine which deals are most
preferred;
Determine why certain deals are preferred; and
Examine the relationships between the appeal of
each promotional concept and various consumer
characteristics.
Proposed Methodology
After much discussion, Jim’s research team finally
decided that the desired information could best be
gathered by means of personal interviews, using a combination of open- and closed-ended questions. A mediumsized shopping mall on the outskirts of a metropolitan
area in the Midwest was selected as the research site.
Shoppers were intercepted by professional interviewers
while walking in the mall and asked to participate in a
survey requiring five minutes of their time.
The sampling procedure used a convenience sample
in which interviewers were instructed to approach anyone passing by, provided that they met certain criteria
(see Exhibit 2). In sum, the sample of respondents was
restricted to adult men and women between the ages of
18 and 49 who had both purchased lunch, dinner, or
carryout food at a fast-food restaurant in the past seven
Five Promotional Concepts
Coupon A: Get a medium soft drink for 5 cents with the purchase of any slice.
Coupon B: Buy a slice and get a second slice of comparable value free.
Coupon C: Save 50 cents on the purchase of any slice and receive one free trip to the salad bar.
Coupon D:
Buy a slice and a large soft drink and get a second slice free.
Coupon E: Get a single-topping slice for only 99 cents.
1
The contributions of Jacqueline C. Hitchon to this case are gratefully
acknowledged.
530
case 8
days and had eaten restaurant pizza within the last 30
days, either at a restaurant or delivered to the home. In
addition, interviewers were warned not to exercise any
bias during the selection process, as they would do, for
example, if they approached only those people who
looked particularly agreeable or attractive. Finally, interviewers were asked to obtain as close as possible a 50–50
split of male and female participants.
The questionnaire was organized into three sections
(Exhibit 3). The first section contained the screening
questions aimed at ensuring that respondents qualified
for the sample. In the second section, respondents were
asked to evaluate on 10-point scales the appeal of each of
the five promotional concepts based on two factors:
Exhibit 2
perceived value and likelihood of use. After they had
evaluated a concept, interviewees were asked to give reasons for their likelihood-of-use rating. The third and
final section consisted of the questions on consumer
characteristics that Jim believed to be pertinent.
The questionnaire was to be completed by the interviewer based on the respondent’s comments. In other
words, the interviewer read the questions aloud and
wrote down the answer given in each case by the interviewee. It was decided to show respondents an example
of each coupon before they rated it. For this purpose,
enlarged photographs of each coupon were produced. It
was also thought necessary to depict the 10-point scales
that consumers would use to evaluate the promotional
Interviewer Instructions
Below are suggestions for addressing each question. Please read all of the instructions before you begin questioning people.
Interviewer Instructions
Approach shoppers who appear to be between 18 and 49 years of age. Since we would like equal numbers of respondents in each
age category and a 50% male-female ratio, please do not select respondents based on their appeal to you. The interview should
take approximately five minutes. When reading questions, read answer choices if indicated.
Question 1:
Question 2:
Question 3:
Terminate any respondent who has not eaten lunch or dinner from any fast-food restaurant in the last seven days.
Terminate any respondent who has not eaten pizza within the last 30 days. This includes carry-out, drive-thru, or
dining in.
Terminate respondent if not between 18 and 49 years of age. If between 18 and 49, circle the appropriate number
answer. For this question, please read the question and the answer choices.
After completing questions 1 through 3, hand respondent the coupon booklet. Make sure that the booklet and the response sheets
are the same color. Also check to see that the coupon booklet number indicated on the upper right-hand corner of the response
sheet matches the coupon book number.
Question 4:
Ask the respondent to open the coupon booklet and read the first coupon concept. Read the first section of
Question 4 showing the respondent that the scales are provided on the page above the coupon concept. Enter his
or her answer in the box provided.
Read the second section of the question and enter respondent’s answer in the second box provided.
When asking the respondent, ‘‘Why did you respond as you did for use,’’ please record the first reason
mentioned and use the lines provided to probe and clarify the reasons.
This set of instructions applies to Questions 5 through 8. Periodically remind the respondent to look at the scales provided on the
page above the coupon concept that he or she is looking at.
Question 9:
Question 10:
Question 11:
Question 12:
Question 13:
Question 14:
Question 15:
Question 16:
Question 17:
Enter number of children living at home. If none, enter the number zero and proceed to Question 11.
Enter age of youngest child living at home in the box provided.
Read the question and each answer slowly. Circle the number corresponding to the appropriate answer.
Read the question and each answer slowly. Circle the number corresponding to the appropriate answer. If answer
is never, proceed to Question 14. Otherwise, continue to Question 13.
Circle the number corresponding to the appropriate answer. Do not read answer choices.
Circle the number corresponding to the appropriate answer. Do not read answer choices.
Read the question and each answer slowly. Circle the number corresponding to the appropriate answer.
Read the question and each answer slowly. Circle the number corresponding to the appropriate answer.
If an explanation is requested for occupation, please tell respondent that we are looking for a broad category or title.
‘‘No occupation’’ is not an acceptable answer. If this should happen, please probe to see if the person is a student,
homemaker, retired, unemployed, etc.
At the end of the questionnaire, you are asked to indicate whether the respondent was male or female. Please circle the appropriate
answer. This is not a question for the respondent.
case 8
53
Questionnaire
Exhibit 3
Response Number
Coupon Book
(Approach shoppers who appear to be between the ages of 18 and 49 and say . . . )
Hi, I’m
from Midwest Research Services. Many companies like to know your preferences and opinions about new products and
promotions. If you have about 5 minutes, I’d like to have your opinions in this marketing research study.
(If refused, terminate)
1. Have you eaten lunch or dinner in, or carried food away from, a fast-food restaurant in the last seven days? . . . (must answer yes to
continue)
2. Have you eaten restaurant pizza within the last thirty days, either at the restaurant or by having it delivered? . . . (must answer yes to
continue)
3. Which age group are you in? (read answers, circle number)
1 18–24
2 25–34
3 35–49
4 Other—Terminate interview
I am now going to show you five different coupon concepts and ask you three questions for each. Please respond to each coupon
independently of the others. Look at the next coupon only when I ask you to.
4. Please read the first coupon concept. Using a ten-point scale, how would you rate this concept if one represents very poor value and
ten represents very good value?
Looking at the second scale, how would you rate this concept if one represents definitely would not use and ten represents definitely
would use?
Why did you respond as you did for use?
5. Please turn the page and read the next coupon concept. Ignoring the last coupon and using the same scale, how would you rate this
concept in terms of value?
Referring to the second scale, how would you rate this concept in terms of your likeliness to use?
Why did you respond as you did for use?
6. Please turn the page and read the next coupon concept. Ignoring the last coupon and using the same scale, how would you rate this
concept in terms of value?
Referring to the second scale, how would you rate this concept in terms of your likeliness to use?
Why did you respond as you did for use?
7. Please turn the page and read the next coupon concept. Ignoring the last coupon and using the same scale, how would you rate this
concept in terms of value?
Referring to the second scale, how would you rate this concept in terms of your likeliness to use?
Why did you respond as you did for use?
532
case 8
Exhibit 3
Questionnaire (Continued)
8. Please turn the page and read the next coupon concept. Ignoring the last coupon and using the same scale, how would you rate this
concept in terms of value?
Referring to the second scale, how would you rate this concept in terms of your likeliness to use?
Why did you respond as you did for use?
Thank you. The following questions will help us classify the preceding information.
9. How many children do you have living at home?
If answer is none, proceed to question 11.
10. What is the age of your youngest child?
11. How often do you eat fast food for lunch or dinner?
(read answers, circle number) 1 Once per month or less
2 Two to three times per month
3 Once or twice a week
4 More than twice a week
12. How often do you eat at Premium Pizza?
(read answers, circle number) 1 Never visited Premium Pizza
2 Once per month or less
3 Two to three times per month
4 Once a week or more
If answer is never, proceed to question 14.
13. Do you yourself usually buy whole pies or slices at Premium Pizza?
1 whole pies
2 slices
(circle one)
14. Have you used fast-food or restaurant coupons in the last 30 days?
1 yes
2 no
(circle one)
15. Have you ever used coupons for Premium Pizza?
(read answers, circle number) 1 Never
2 I sometimes use them when I have them.
3 I always use them when I have them.
16. What is your marital status:
(read answers, circle number) 1 Single
2 Married
3 Divorced, separated, widowed
17. What is your occupation?
This is not a question for the respondent.
Please circle appropriate answer—respondent was: 1 male
2 female
(circle number)
Thank you for your participation—Terminate interview at this time.
case 8
53
Exhibit 4
Stimuli
Very
Poor
Value
Definitely
Would
Not Use
2
2
3
3
4
4
5
5
6
6
7
7
8
8
Very
Good
Value
9
10
9
Definitely
Would
Use
10
COUPON
Premium Pizza, Inc.
offer. Coupons and scales were therefore assembled in a
booklet so that, as the interviewer showed each doublepage spread, the respondent would see the scales on the
top page and the coupon in question on the bottom page
(see Exhibit 4).
Because the researcher wished to counterbalance the
order in which the coupons were viewed and rated, the
five coupons were organized into booklets of six different
sequences. Each sequence was subsequently bound in one
of six distinctly colored binders. A total of 96 questionnaires were then printed in six different colors to match
the binder. In this way, there were 16 questionnaires of
each color, and the color of the respondent’s questionnaire indicated the sequence that he or she had seen.
The questionnaire and procedure were pretested at a
mall similar to the target mall and were found to be
satisfactory.
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