Market Research at Chili Restaurant - Business Essay Example

Executive Summary

Ø  Management from Chili restaurant conducted study on what makes customers satisfied, likely to return and likely to recommend the restaurant to others - Market Research at Chili Restaurant introduction. Four hundred customers represented across demographic profile were made respondents.

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Ø  Results find that customers seek the true value of their money particularly they are concerned with the reasonableness of the prices of the food purchased as well as how large these purchases are.

Ø  Customers who are satisfied with the restaurants are those who keep abreast of the things around them and are sought out by people and friends for their expertise about products and brands. They come back to the restaurant with the purpose of adding something in their portfolio of new things. Thus, keeping a variety of new food products would keep this kind of customers satisfied and returning to the restaurant.

Ø  The restaurant is preferred by customers who are not very particular about the food that they eat or those who do not avoid fried foods. Thus, a need for dietician is recommended so that keeping variety of healthful food can be looked into in the restaurant.

 

 
Methodology

In its continuous improvement of its products and services, Chili’s Restaurant conducted a marketing survey of its customers. There were a total of 400 customers sampled for the survey, where 236 were males and 164 were females. More than 50 per cent were 35 to 49 years; almost 50 per cent don’t live at home with children; and more than 25 per cent of the respondents reported an income range of £30,001 – £50,000.

The subjects were asked to answer a survey questionnaire which was composed of 35 questions. These questions were divided into five sections. The first question looks into the Life Style of the customers consisting of 11 questions. The second section looks into the perception of the customers towards Chili Restaurant consisting of ten questions. The third section looks into the Satisfaction and Patronage of the customers on Chili Restaurant consisting of four questions. The fourth section looks into the Selection factors where customer were made to rank which among the four attributes (price, food quality, atmosphere and service) were the main factor for selecting the restaurant they dine in. The fifth section looks into some classification variables of the customers (i.e, accessibility, advertisement recall, some demographic profile).

Results

A principal component analysis was done on ten items of the Perception Measures. The values on eigenvalues (Table 1), the cumulative percentage which should reach at least 80% (Table 2), as well as the scree plot shows four components could well explain variation in the data (Manly, 2000, p. 76-78). Table 2 shows the factor loadings that are significant (i.e., /0.50/>) and indicated by the underscored values. The first component talks about the Value-added component of the service rendered to the customers. The second component pertains to getting the best out of the money paid for without the frills of how customers were treated by the restaurant employees. The third component pertains to getting the best out of the money paid for without the frills of how the food was prepared. The fourth component is about not being particular on how the place is.

A Discriminant Analysis was conducted using Life Style of the costumers as the independent variables and the variables Satisfaction, Likely to Return and Likely to Recommend were used as dependent variables. The dependent variables were recoded so that there are only two possible responses. All responses ranging from 1 to 4 were recoded to Less Satisfied, Less likely to return or Less likely to recommend, and responses from 5 to 7 were recoded as Satisfied, Likely to return or Likely to recommend.

Using Satisfaction with Chili Restaurant as dependent variable, the mean values of the discriminant function across groups (i.e, Satisfied and Less Satisfied customers) are not equal, W=0.430, p=0.000, which means that we can proceed with discriminant analysis using Lifestyle factors as independent variables. Table 4 clearly shows that those satisfied customers have higher discriminant function values over those who are less satisfied with the restaurant. Structure Matrix (Table 5) shows that those customers who are not careful about what they eat (-0.555) and those who do not avoid fried foods (-0.539) are likely satisfied with the restaurant. Also those who customers who are party person (0.494), who likes to buy new products (0.429), who try new and different things (0.338), whom people (0.331) and friends (0.321) come to for information on products are satisfied with Chili Restaurant. Standardized Canonical Discriminant Function Coefficients (Table 6) shows that being satisfied with Chili Restaurant has to do with not being careful about what one eats (-0.796). Using Lifestyle of the customers to classify satisfied and less satisfied customers predicts 90% of the customer respondents. (Table 7)

Using Likely to return as dependent variable, the mean values of the discriminant function across groups (i.e, Less likely to return customers and Likely to return customers) are not equal, W=0.460, p=0.000, which means that we can proceed with discriminant analysis using Life style as independent variables. Table 9 clearly shows that those returning customers have higher discriminant function values over those who are not likely to return. Structure Matrix (Table 10) shows that those customers who do not avoid fried foods (-0.575) are likely to return to Chili Restaurant. Also those customers who are party person-type (0.489), who buy new products (0.376), whom people (0.324) and friends (0.348) come to for advise on products are likely to return to Chili Restaurant. Standardized Canonical Discriminant Function Coefficients (Table 11) pertains to Eating Variety of foods. Using Lifestyle of the customers to classify returning and non-returning customers predicts 84% of the customer respondents.

Using Likely to recommend as dependent variable, the mean values of the discriminant function across groups (i.e, Less likely to recommend customers and Likely to recommend customers) are not equal, W=0.486, p=0.000, which means that we can proceed with discriminant analysis using Life style factors as independent variables. Table 14 clearly shows that those customers who recommend Chili Restaurant have higher discriminant function values over those who do not recommend. Structure Matrix (Table 15) shows that those customers who are party person type (0.413), who buy new products (0.325) and whom friends come to for advise on products and brands (0.300) are likely to recommend Chili Restaurant. Using Lifestyle of the customers to classify recommending and less recommending customers predicts 92.3% of the customer respondents.

 

 

Discussion

These results would indicate that the customers are kind of people who are cognizant about what food service is. They put value that the food served to them have excellent taste, is fresh and in proper temperature. They value employees who are friendly and knowledgeable on food service as well as a place which is fun to come to and which has interiors they find attractive. More than this however, the customers value that their getting what their money is worth as it relate to the price of the food served as well as getting large portions of the food purchased. It is therefore recommended that these criteria are looked into and become the basis by which to base developments for the restaurant. The price of the food, for one, should be kept reasonable at all times.

The kind of customers who come to the Chili Restaurant satisfied, who keeps coming back and recommends it to others are those customers who are party-type, who buy new products, whom people and friends come to for advise on products and brands, and who try new things. This kind of customers therefore come to the restaurant for the purpose of finding something new in what is offered either for curiosity’s sake or updating their portfolio of “new things”. And when they do find something new, they would tend to talk about it to their friends. They are the mavens in the restaurants. They are instruments by which to advertise new products created by the restaurants. It is recommended therefore to spot these kind of customers and treat them well, as they, in many ways help maintain customers in Chili Restaurants. Keeping them informed of new endeavors or ventures of the management will surely work for the restaurant. Another means of keeping this kind of customers is by having variety of food products. Food that introduces new taste, new presentation and the like would surely catch their attention.

The restaurant may also need a dietician as those who come back to the restaurant are not consciously careful about the food they eat nor do they avoid fried foods, which are detrimental to one’s health especially for those who have hypertension. Keeping a variety of food that is nutritious as well would be a good value for customers.

 

 

 

 

 

 
References

Manly, Bryan F. J. (2000). Multivariate Statistical Methods: A Primer. Chapman & Hall/CRC.

 

 

 

 

 

FACTOR ANALYSIS USING PRINCIPAL COMPONENT ANALYSIS

 

Table 1: Total Variance Explained

 

Component
Initial Eigenvalues
Total
% of Variance
Cumulative %
1
3.518
35.176
35.176
2
2.096
20.961
56.138
3
1.922
19.215
75.353
4
1.032
10.323
85.676
5
.495
4.949
90.625
6
.363
3.631
94.256
7
.308
3.081
97.337
8
.146
1.460
98.797
9
.086
.863
99.660
10
.034
.340
100.000
Extraction Method: Principal Component Analysis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Table 2: Component Matrix(a)

 
Component
12
3
4
X12 — Friendly Employees
.557
-.720
.231
.163
X13 — Fun Place to Eat
.683
.146
.207
-.529
X14 — Large Size Portions
.392
.536
.678
.274
X15 — Fresh Food
.700
.226
-.493
.213
X16 — Reasonable Prices
.415
.563
.635
.292
X17 — Attractive Interior
.598
.104
.132
-.673
X18 — Excellent Food Taste
.694
.194
-.558
.167
X19 — Knowledgeable Employees
.721
-.416
.128
.062
X20 — Proper Food Temperature
.583
.289
-.577
.094
X21 – Speed of Service
.475
-.772
.206
.167
Extraction Method: Principal Component Analysis.

a  4 components extracted.

 

 

SATISFACTION AS DEPENDENT VARIABLE

 

Table 3: Wilks’ Lambda

 

Test of Function(s)
Wilks’ Lambda
Chi-square
df
Sig.
1
.464
301.684
11
.000
 

Table 4: Functions at Group Centroids

 

Satisfaction
Function
1
Less Satisfied
-1.073
Satisfied
1.073
Unstandardized canonical discriminant functions evaluated at group means

 
Table 5: Structure Matrix

 
Function
1
X10 — Careful About What I Eat
-.555
X4 — Avoid Fried Foods
-.539
X2 — Party Person
.494
X9 — Buy New Products
.429
X8 — Eat Balanced, Nutritious Meals
-.407
X1 — Try New And Different Things
.338
X3 — People Come to Me
.331
X6 — Friends Come to Me
.321
X11 — Try New Brands
.257
X7 — Self-Confident
.098
X5 — Likes to Go Out Socially
.018
Pooled within-groups correlations between discriminating variables and standardized canonical discriminant functions

Variables ordered by absolute size of correlation within function.

 

Table 6: Standardized Canonical Discriminant Function Coefficients

 
Function
1
X1 — Try New And Different Things
.445
X2 — Party Person
.440
X3 — People Come to Me
.395
X4 — Avoid Fried Foods
-.415
X5 — Likes to Go Out Socially
-.002
X6 — Friends Come to Me
-.041
X7 — Self-Confident
-.002
X8 — Eat Balanced, Nutritious Meals
.470
X9 — Buy New Products
.101
X10 — Careful About What I Eat
-.796
X11 — Try New Brands
-.012

Table 7:

 

LIKELY TO RETURN AS DEPENDENT VARIABLE

 

Table 8: Wilks’ Lambda

 

Test of Function(s)
Wilks’ Lambda
Chi-square
df
Sig.
1
.460
305.076
11
.000
 

Table 9: Functions at Group Centroids

 

Likely to Return
Function
1
Less likely to return
-.892
Likely to return
1.311
Unstandardized canonical discriminant functions evaluated at group means

 

 

Table 10: Structure Matrix
Function
1
X4 — Avoid Fried Foods
-.575
X10 — Careful About What I Eat
-.497
X2 — Party Person
.489
X9 — Buy New Products
.376
X8 — Eat Balanced, Nutritious Meals
-.370
X6 — Friends Come to Me
.348
X3 — People Come to Me
.324
X7 — Self-Confident
.203
X1 — Try New And Different Things
.181
X5 — Likes to Go Out Socially
.130
X11 — Try New Brands
.068
Pooled within-groups correlations between discriminating variables and standardized canonical discriminant functions

Variables ordered by absolute size of correlation within function.

 

Table 11: Standardized Canonical Discriminant Function Coefficients

 
Function
1
X1 — Try New And Different Things
.261
X2 — Party Person
.388
X3 — People Come to Me
-.332
X4 — Avoid Fried Foods
-.783
X5 — Likes to Go Out Socially
.206
X6 — Friends Come to Me
.638
X7 – Self-Confident
.196
X8 — Eat Balanced, Nutritious Meals
.715
X9 – Buy New Products
.305
X10 — Careful About What I Eat
-.610
X11 — Try New Brands
-.301
 

Table 12:

 

LIKELY TO RECOMMEND AS DEPENDENT VARIABLE

 

Table 13: Wilks’ Lambda

 

Test of Function(s)
Wilks’ Lambda
Chi-square
df
Sig.
1
.486
283.433
11
.000
Table 14: Functions at Group Centroids

 

Likely to Recommend
Function
1
Less likely to recommend
-.431
Likely to recommend
2.443
Unstandardized canonical discriminant functions evaluated at group means

 

 

Table 15: Structure Matrix

 
Function
1
X2 — Party Person
.413
X9 – Buy New Products
.325
X6 — Friends Come to Me
.300
X10 — Careful About What I Eat
-.281
X4 — Avoid Fried Foods
-.276
X3 — People Come to Me
.220
X7 — Self-Confident
.115
X8 — Eat Balanced, Nutritious Meals
-.100
X11 — Try New Brands
-.068
X1 — Try New And Different Things
.059
X5 — Likes to Go Out Socially
.025
Pooled within-groups correlations between discriminating variables and standardized canonical discriminant functions

Variables ordered by absolute size of correlation within function.

 

 

Table 16: Standardized Canonical Discriminant Function Coefficients

 
Function
1
X1 — Try New And Different Things
.442
X2 — Party Person
.699
X3 — People Come to Me
-2.129
X4 — Avoid Fried Foods
-.775
X5 — Likes to Go Out Socially
-.141
X6 — Friends Come to Me
2.178
X7 – Self-Confident
-.148
X8 — Eat Balanced, Nutritious Meals
1.626
X9 – Buy New Products
.647
X10 — Careful About What I Eat
-.711
X11 — Try New Brands
-.894
 
Table 17:

 

 

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