Problem Definition
After a slump in sales in 20 of The Coops stores, Chief Executive Officer of The Coop, Daryl Buckmeister must make a decision on whether to invest in market research and if so, how much money to spend and which programs to fund. His vice presidents McMichael and Wallace have offered two different proposals that voiced a need for more systematic market research to address quality and customer satisfaction issues.
At the root of the problem is to determine the cause of sales decline (Appendix A SWOT Analysis): McMichael believed it was an operation problem- either customer service or food quality, while Wallace thought it was a problem in brand image and marketing activities, old fashioned and out of step with times. In addition, Buckmeister must decide on various other issues such as co-branding, sales promotions and product management.
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Decline in sales: realizing a decrease in sales by 6% first time in 1995 in 20 of The Coop’s 76 stores. These same stores were about 32% of the company’s retail sales.
2. Away form Company’s Objective: Wallace has led The Coop away from the “We are chicken” tagline, which has altered the image the founder of the company portrayed. Chicken pizza a success but may be diluting the brand image
3. Lack of market research: Buckmeister performed informal visits to stores to investigate internal quality assurance by monitoring performance and talking to customers. There lies no systematic market research that helps the company to understand its positioning and satisfaction with customers. No competitor insights as well.
4. Poor sales strategy: no direction for sales due partly to lack of market research data.