Case Study Of Scott's Restaurants

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About Scott’s Restaurants and Description of its Situation

In late 1979 Scott’s Restaurants, a company of KFC planned to enter the take-out pizza market in order to avoid the repeating experience of fried chicken. Before planning anything Scott’s conducted the consumer research on the problems of entering the pizza market. This research was conducted to get an idea that what methodology Scott’s can adapt to have the primitive position in take-out pizza market. This research was quite complex and the results provided by it was quite straightforward, concise and motivating. According to the research, the main area where Scott’s can focus to have a primitive position in the market is:

  • Cleanliness
  • Quality of Product
  • Quality of Service.

Mr. Hunter was quite impressed by the results of the research and he presented the idea to board of directors of Scott’s. It was planned to implement it on the pilot project involving six test stores in Ontario and Quebec before introducing full scale-pizza restaurants.

In late 1980, finally, the plan of the pilot project was implemented according to results of the research report and 5 test store was opened in Ontario which was named “The Pizza Tree” and one test store in Quebec which was named “Au Jardin De La Pizza”. All these stores were open adjacent to KFC, out of which two stores in Whitby and Sherbrooke (Quebec) was having shared seating space with KFC and others were having no seating. Special insulated boxes were introduced to maintain the quality of pizza and the price of pizza was kept 10% less as compared to the market, delivery charges were $1 extra. A year later in the year 1981, Mr. Hunter reviewed the results of the pilot project. He noted that out of 6 test stores only three stores are near the target of achieving projected volumes. This made him clear that they had made some mistake implementing the plan. Later he realized that the consumer research report only recommended what Scott’s needed to do to attain a primitive position in the market but it did not give any geographical or demographical indication that where the most successful stores should open and who are the potential customers.

How Scott’s tried to improve the mistake?

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When Mr. Hunter realized that the consumer research report did not give any geographical and demographical indications that where the store should be opened. He hired a firm of management consultants to do the research based on various demographics like age, sex, background, income, education, type of housing etc. so that Scott’s can have the data that where they can open their most successful stores. But when the results of this research were compared to the actual sales of the test stores it was totally opposite. According to the new research the Whitby location was ranked low to have the successful store but it was having the highest sale, and the Thornhill location was ranked top to have a successful store but it was having a low sale. This difference was further addressed by Scott’s personnel as advertising, promotional and visibility problems.

Even if the pilot project was not that successful but it provided Scott’s with some useful information. Like Store in Withby (shared seating with KFC) having highest sale was not affecting the sales of KFC but it improved the sales of KFC also by 3%. While the store in Sherbrooke was a huge failure even though the consumption on pizza in highest in Quebec as compared to other states, but it indicated that consumers are ready to pay more for specialty pizzas. This information was not enough for Mr. Hunter to go full-scale development and have a primitive position in the market.

How Scott’s should have designed their research?

The biggest problem that Scott’s face was with marketing research. Scott’s did not focus on all the segments of the marketing mix while conducting consumer research rather they just focused on problems associated to enter the pizza market. In order to be more successful, while doing the consumer research based on the problems to enter pizza market, Scott’s must have also conducted the other research based on marketing mix and various demographics like age, sex, background, income, education, type of housing etc. in starting only. This must have helped the Scott’s to understand what their customer wants, what is their target market and where to open the stores. This research could have further helped them do to segmentation basis on the menu, seating preferences etc. After having proper details of their segmentation, target market, the positioning of restaurants Scott’s could have planned their marketing strategy and implemented it on the pilot project.

The implementation of marketing research in a proper way while keeping marketing mix and marketing metrics in mind could have helped Scott’s to achieve a primitive position in take-out pizza market.

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