Introduction: Objectives and Methodology
Given the saturated nature of the fast food market in Australia, client Backyard BBQ were keen on identifying marketing opportunities that might be gleaned from consumer research. This study was therefore conducted chiefly to validate the views of Back Yard management about the trend toward healthy eating, inherent superiority in respect of product quality, and discovery of comparative advantages or drawbacks versus the competition.
Fieldwork was mounted in the Sydney CBD on a broad cross-sectional sample of 300 shoppers and restaurant patrons. Edmark scheduled intercept interviews based on a structured questionnaire over the course of a week so as to cancel out variation owing to workday and leisure-time patronage patterns of fast food customers.
Findings and Conclusions
Patronage Behaviour – The modal value for frequency of fast food restaurant patronage is twice monthly (34% of all those interviewed). A large segment of the diners, this frequency implies, are less well-off and may well count fast food patronage as a payday treat.
More broadly, however, no less than 4 in 5 patrons come to one fast food branch or another just once to four times a month, suggesting a predominant view of the category as “special treat” rather than functional, day-to-day necessity.
The Market Segments – Fast food patrons are heavily skewed in favour of childless (49%) young singles (62%). Nonetheless, the volume of dine-in traffic (and meal spending) that can be generated by married individuals and those divorced or separated is by no means inconsequential. Among them, the three civil status segments average two children each.
An analytical cross tabulation between “preferred ” fast food establishment (that most often patronised) and a recode of the “number of children ” variable into “none”/”one or more” was inconclusive. If having a family is a critical marketing opportunity, the present survey does not provide actionable proof.
In respect of occupation and occupational status, the key finding may well be that BackYard patrons tend to be better-educated (p < 0.01).
In general, there is no reason to expect a gender divide. At BackYard, however, one finds that men are twice as likely to dine in as women do, a gender skew that happens to hold at Burger King and Kentucky Fried Chicken as well. For the rest, diners at McDonald’s and Hungry Jack are more likely to be women. On further analysis, the result is a Pearson chi value that, at five degrees of freedom, is high enough to make the null hypothesis improbable: at p < 0.001, the significance statistic suggests a one-in-a-thousand chance that these gender breaks could have occurred by chance variation alone.
Income and Share of Diner Outlays – Spending tends to be low at $6 or less each time for two-thirds of the market represented by the sample.
Back Yard may “own” about one-eighth of the market (12.7%), if disclosure of restaurant patronised most often in a given month is anything to go by. With a 45% share of claimed preference, McDonald’s dominates the category.
Perhaps the most critical finding of this survey, however, is that Back Yard has a better class of diner than market-leading competitors. In a market where patrons are more often than not in the $59,999 to $100,000 annual income range (41%), followed by the ‘mass market’ (38% earning $50,000 or less a year), and one-fifth (21%) exceeding the $100,000 benchmark, there is an important opportunity in knowing that client’s patrons are chiefly upmarket or upper-middle class. In contrast, the three imported chains seem to appeal chiefly to the mass market (the BK finding notwithstanding since it is unlikely to hold up under more rigorous analyses like the t-test).
Diner Criteria – When respondents were prompted and asked to rate nine patronage requirements on a six-point rating scale, further analysis with the ANOVA showed that five mattered. Going by high mean ratings and narrower dispersion of scores, Back Yard patrons were especially emphatic on three of these, at least compared to McDonald’s: friendly, knowledgeable and courteous employees. A desire for healthy, nutritious food and for salads and salad bars comprised secondary wants (both by relative priority and in comparison to patrons of the category leader).
Satisfaction and Loyalty – Back Yard patrons appear to enjoy the most satisfying dining experiences since they are apt to assign the restaurant the highest ratings on overall satisfaction (a mean of 6.89 on a 7-point scale versus, say, 4.34 for McDonald’s), likelihood of repeat patronage (mean 6.74), and propensity for endorsing to friends and family (mean 6.74). The correct application of ANOVA to the data reveals that differences across restaurant preference groups are statistically significant (p <0.001).
Limitations and Next Steps
At this time, we can derive more insights from the data by, for example, doing cross-tabulations of civil status by number of children.
More rigorous technical analysis is also possible. For one, it was misleading to model the three loyalty indices in regression form since the collinearity statistics showed they were closely related variables. This is true both technically, from examination of the Tolerance and VIF measures (Salvatore and Reagle, 2001, p. 206), and from a practical viewpoint since marketing practitioners interpret all three to measure the same pleasing outcome. Other steps that might have been taken are: a t-test for differences of mean income across ‘independent’ samples, trying the Kolgomorov-Smirnov test for the ordinal scale ‘education’ by chain, and embarking on Discriminant Analysis of wants versus restaurant preference.
Subsequent surveys of fast food patrons might also investigate the convenience afforded by multiple locations (especially outside the CBD), whether insights into occupation were skewed by surveying the CBD exclusively, how food preferences vary for adults and children, and dominant recall from chain advertising.
Conclusion
Essentially, this study affords BackYard BBQ new insight into opportunities for growth. Giving priority to preserving its customer base and to expanding from strength, clients might aggressively seek greater share of dining occasions (and therefore consumer outlays) among upscale entrepreneurs and employees in the CBD. This the establishment can do by reminding those loyal to other chains about the quality of its service and secondarily, healthy fare and nutritious salads. Back Yard might also embellish its thematic advertising by offering families and discriminating singles more reasons to switch (or come in more frequently) with a focus on appetite appeal of familiar foods.
There is a place for trial promotions in the marketing mix since current patrons are consistently very satisfied with dining at Back Yard.
The alternative, growth through expanding to the mass market, is not to be recommended because of the resistance implied in low average spend, having only one location, getting embroiled in couponing, and diluting the superb image of the restaurant.
Lastly, “product quality” is not per se a source of competitive strength since the low-income segments define value in terms that they can afford.