3- a) The Coop’s research program should be divided into three parts in order to be

successful, an exploratory, a descriptive and an experimental research.

We have thought that the best way to start our research would be throughout the

exploratory part, since it would tell us where the real problem is. Thereafter we could

focus the rest of the research in the key point.

We would continue with the descriptive research, where we aim to obtain a wide

overview of the market, being able to have larger amount of people’s opinion but from

a shallow perspective.

Finally, we would implement an experimental research to complement the other two

methods, since with this research we would confirm if the other assumptions obtained

fit with a real experience in the Coop.

Within the five options that the case offers, we have decided to drop the Taste Tests

that McMichael proposed, as Buckmeister in his thorough visits only detected two

stores with significant deviation from performance standards in the kitchen. Therefore,

we have come to the conclusion that the taste is not the key problem of their slump in

sales.

Additionally, going through the other proposal of McMichael – Quality inspection

Program – we have thought that the inspectors that she wants to hire may not be

customers of QSR market or would not be aware of the Coop philosophy so they would

not be able to provide the data of the quality standards that we are looking for.

Buckmeister’s idea about Customer Feedback Cards may not give us an objective

opinion since there would be two customer’s profiles willing to fill in these cards: loyal
clients and disappointed clients. This data would provide us extreme opinions that

would not be very useful.

This would leave us with both of Wallace’s proposals: Brand Image Monitoring Surveys

and the Customer Experience Study. However, as we mentioned before, the first

research that should be done is an exploratory one.

As an exploratory research, we thought that a focus group would be the best option,

but not the proposed one about taste tests. We would recommend facing the focus

group towards brand image, service and experience. The reason of this decision is to

get an in-depth overview of all the aspects of the restaurant, which would lead us to

the key problem.

The Brand Image Monitoring Surveys which consists on telephone surveys, although it

is expensive, would be very useful to get data from a wider segment, decreasing the

possibility of skewed information and validating the information collected before.

Finally, we would end up our market research with the Customer Experience Study

proposed by Wallace. This would imply the hiring of an external marketing firm which

would anonymously send experts to evaluate the Coop and its competitors on a

variety of specific criteria. This would help increase objectivity from a more

professional perspective.

b) We have predicted the Income Statement of 1995 with two options, only with the

marketing research and another one adding home delivery and co-branding.
The first one has been done considering that the marketing research would permit the

Coop maintain their previous sales growth and stop decelerating. To implement this,

we have calculated the average of the other previous years and added it to 1994.

Additionally, we have taken into account the expense of the market research, which

has been added to “advertising and research”. According to the case and our decisions,

the focus group cost would be the same as the one that McMichael proposed as the

taste test: $6,000. The BIMS costs $35,000 taken then average of their range. And

finally, we have added the CES which costs $45,600. In all of the cases, we have chosen

to hire an external firm to make it more objective.

The last column would be the same as 1995 adding the assumptions of home delivery

and co-branding as we consider them positive for the Coop. The first assumption

concerned sales. We have predicted that it will grow 30%, as we would get into a new

segment which would double the size of the one we where before, as shown in Exhibit

3. Additionally, concerning management and team labor, costs would drop 20% due to

the co-branding benefits of sharing some fixed costs.

1995 with home

delivery and co-
1990 1991 1992 1993 1994 1995 branding
sales 40,20 44,20 48,70 53,50 58,90 64,80 84,24
food and paper 16,30 17,90 19,70 21,70 23,90 26,30 34,13
management and team labor 7,70 8,40 8,90 9,50 10,00 10,68 8,54
benefits 0,80 0,90 1,00 1,10 1,20 1,33 1,33
total labor and benefits 8,50 9,30 9,90 10,60 11,20 12,00 9,87
contribution 15,40 17,00 19,10 21,20 23,80 26,54 40,24
advertising and research 2,50 2,80 3,40 3,20 3,40 4,56 4,56
retail store operations 3,30 3,60 4,20 4,40 5,00 5,55 4,44
operating margin 9,60 10,60 11,50 13,60 15,40 17,34 31,24
general and administrative 5,90 6,50 7,30 7,80 8,60 9,45 9,45
net operating income 3,70 4,10 4,20 5,80 6,80 7,97 21,79

Although the financial assumptions are only representative predictions, we have tried

to adjust it as much as possible taking into account the limited information we had.