Chick-fil-A's New Menu Items: Evaluation and Strategy Insights

1 New product evaluation Chick-fil-A Western Governors University Marketing C212 Professor Anthony Duran October 12, 2023

2 Table of Contents New product evaluation Chick-fil-A 3 Research Method One 3 Research Method Two 4 Research Method Three 4 Competitive Advantage 4 Inherent Risk One 5 Inherent Risk Two 5 Customer Relationship Management 5 CRM Information 6 Distribution Channels 6 Pricing Strategy 7 Promotional Strategy 8 References 10

3 New product evaluation Chick-fil-A Marketing “refers to activities undertaken by a business establishment or an individual to promote their service and products.” (The Economic Times, 2023) Chick-fil-A is a well-known restaurant founded in 1946 in Hapeville, Georgia, known for its marketing as a restaurant specializing in chicken sandwiches. They currently have almost 3,000 locations in the United States, Canada, Puerto Rico, and the United Kingdom. Now, Chick-fil-A offers a menu of chicken sandwiches, wraps, Nuggets, chicken fingers, waffle fries, and a limited breakfast menu. Even with their success, they need more variety in their menu. The high proposal is to add two new food products to enhance the menu variety: fried chicken wings and onion rings. The target market for this launch would be the United States, with an initial rollout in four locations around the Chick-fil-A headquarters in Atlanta, Georgia. The chicken wing should be comparable in price to the tenders it offers, along with the onion ring price relative to the waffle fries. Research Method One When determining a need and market for new products, a survey could be used to determine the target customer for the latest products. This is a form of descriptive research. Descriptive research "describes systematically inaccurately the facts and characteristics of a given population or area of interest” (Dulock H.L 1993). The survey can disseminated through various media links printed on the receipt, social media, and website. The data would help determine the demographics and marketability of the product.

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4 Research Method Two A consumer Advisory Board should established to determine if there is a market for these two products. n example of an exploratory research method. “The goal of exploratory research is to formulate problems, clarify concepts, and form hypotheses.” (De Langhe, R., Schliesser E. 2017) A consumer advisory board would be a great way to gather insight into customers’ feelings and attitudes toward the new products. The board could provide insight into whether the product would be successful. Research Method Three Focus groups will be used as fact-finding to understand the needs and market for these two new products. Focus groups are another example of an exploratory research method. However, the parties involved differ from customers, like a consumer Advisory Board. This method brings multiple people to discuss a specific topic. In the case of Chick-fil-A, the discussion topic would be adding chicken wings and onion rings to an existing menu offering. Competitive Advantage With Chick-fil-A's loyal customer base, adding chicken wings and onion rings to their existing menu may drive additional repeat visits. With their extremely fast drive-throughs and a plethora of dipping sauce offerings, that would be a perfect complement to a quick fix for lunch. Having a strategic alliance with Uber Eats allows customers to order these new offerings from anywhere and have them delivered. This alliance positions Chick-fil-A with a further competitive advantage to their brand that other restaurants cannot replicate.

5 Inherent Risk One Supply chain issues are The first inherent risk of introducing a new product. It's often difficult to source products; having several backups when sourcing is critical. Prices from source to source, along with quality, will differ. It's essential to reserve several suppliers and discuss the quality of the products received. Then, setting up rotating purchase orders with the suppliers selected ensures that there will be no supply chain issues in the future. Inherent Risk Two The second inherent risk would appeal to the public. What is famous in one demographic may be outside of another, let alone in other countries. The initial product launch must have the same quality that other products are known for. Public opinion is why market research is crucial when considering demographics and competitors' overall quality. A successful product launch would determine general product acceptance and similar demographics. Customer Relationship Management Customer relationship management (CRM) software helps businesses easily track communication and build relationships with leads and clients. This CRM would allow Chick-fil- A to see how successful the launch is going. There are countless CRM software options available for deployment; however, after much research, Zendesk Sell would best fit the needs of Chick- fil-A.

6 CRM Information The chosen CRM software is Zendesk Sell. Zendesk is a scalable software that many organizations use to track their customers. This CRM is the best option for Chick-fil-A because the software is robust and cloud, which means real-time data for offsite managers. With its prospecting functionality, Chick-fil-A can exploit an untapped market of over 2 million professionals. Zendesk even has a mobile app that synchronizes with the desktop to account for real-time drive-through orders. Chick-fil-A can take advantage of Zendesk's email intelligence tool, allowing them to track emails and push real-time notifications. Lastly, Giv with several reports generated at a click from daily sales volumes, served daily, repeat customers, etc. Distribution Channels Chick-fil-A we'll use its current restaurants to distribute its two new products. They will use its current distribution when possible and source others when needed. Their distribution channel already utilizes a global market, with the first key consideration being sociocultural forces. They need to consider cultural differences in other countries and demographics. Some countries perceive fast food as unhealthy and have more concerns for personal health; this would hurt the introduction of Chick-fil-A's new products. Chick-fil-A is a US based company, and the United States government sometimes has conflicts with other nations and instates trade embargoes and sanctions preventing imports and exports. If this was to happen in a country that Chick-fil-A operates in it would shutdown their whole business and render their supply chain until these polices were lifted. A second consideration when entering a global market would be economic forces. A distribution channel exists to get a product into the hands of the customer. Understanding the

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7 financial stability of a nation, as well as trade barriers that may exist, is crucial for new product rollouts. An example is an economic recession in Spain that caused high unemployment. If a country that Chick-fil-A operates in had an economic recession that would cause an instability in demand and the price affecting labor cost and make it impossible for them to plan their investment in that countries market. An Economic downturn would affect sales in, therefore, product acceptance. Chick-fil-A must closely analyze these key considerations when entering a global market and determine if it can budget for these potential disruptions. There needs to be a synergy throughout their supply chain to execute timely deliveries on account of the considerations mentioned and other external factors. A disruption in the supply chain could lead to a lack of customer interest and affect the new product acceptance. Pricing Strategy Chick-fil-A should use a non-price-compete method, which attracts customers and increases sales by focusing on quality ingredients. A non-price-compete will set them apart from their competitors. The advantage often increases customer loyalty to a particular brand by creating quality products. The cost associated with the launch will be wide-ranging and must include concept, market research, business plan, production, marketing, and distribution. Pricing of new products will be identified from feedback received from consumer feedback during the research stage. For example, a consumer Advisory Board may suggest that the chicken wing meal fall in line with the four-piece chicken tender meal that retails for $8.99. The onion rings would fall in line with the current price of the waffle fries, but would be a $0.50 upcharge to substitute them in any combo meal.

8 Chick-fil-A must be sensitive about its competitor's price. So they can adjust to maintain a competitive advantage. The price should be high enough to recoup the development cost when they first introduced the product. Price skimming “setting a high price results in higher profit margins for the company but encourages competitors to introduce the same product at a lower price to penetrate the market.” (Kotler, P. and Armstrong, G. 2008) Chick-fil-A's competitors include Lee Fried Chicken, Wing Stop, Popeyes, and KFC, which already offer chicken wings and onion rings. A chicken wing combo from KFC is $9.99, more expensive than the meal from Chick-fil-A at $8.99. An additional offering, onion rings, can be substituted for fries on any combo meal for an upcharge of $0.75 versus $0.50 at Chick-fil-A. Their pricing structure gives Chick-fil-A a price advantage in its already established market. Overall pricing is a similar finding amongst the remaining competitors. Promotional Strategy Chick-fil-A's promotional strategy could use social media and ads through Instagram, X, formerly Twitter, and YouTube. Verbiage for AD can be as follows: fly high with wings and let your taste buds soar! Top it off with a sweet treat without sugar with our new onion rings. Now available for a limited time at Chick-fil-A. Target ads in select demographics can be used on YouTube, sling, and other streaming platforms for the initial rollout, followed by a whole rollout campaign throughout the country in Chick-fil-A. This form of media has an extensive reach, with more people than ever cutting the cord with cable. The advertisement should be short and show the new offering. The verbiage of this ad can be used on the radio during the hours of 4:00 to 6:00 PM when most people are on their way home from work looking for a quick and convenient meal.

9 In addition, social media campaigns on Facebook, X, formerly known as Twitter, Instagram, and TickTock. These social media sites were selected due to the amount of market penetration they offer and the age demographics that they appeal to which alien with Chick-fil- A’s current customer base. These ads would promote Chick-fil-A's new offering through target ads. With these ads, they would select an area to use as a test market and send information about the latest offerings and a coupon for a free dessert with purchase. For repeat customers of Chick-fil-A, a coupon could be printed at the bottom of the receipt, offering a discount of 20% on their purchase of the new chicken wing combo. The coupon would incentivize customers to come back within a designated period. Another promotional activity would be a survey on how customers enjoy these new products—offering an incentive coupon when the survey has been completed for a free upgrade to onion rings with the purchase of any combo meal. This reward will keep the customers coming back to use these coupons.

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10 References Today’s paper. (2023, October 9). What is marketing? Definition of marketing, marketing meaning . The Economic Times. https://economictimes.indiatimes.com/definition/marketing Dulock HL. Research Design: Descriptive Research. Journal of Pediatric Oncology Nursing. 1993;10(4):154-157. doi:10.1177/104345429301000406 De Langhe, R., & Schliesser, E. (2017). Evaluating philosophy as exploratory research. Metaphilosophy , 48 (3), 227-244. Kotler, P. and Armstrong, G., Principles of Marketing, Pearson Prentice Hall (2008)

Chick-fil-A New Product Evaluation

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