Introduction

Background of Donut King (DK)

            Donut King’s first store was opened up in Sydney in 1981, since then it has been able to open up 320 stores all over Australia with around 4,600 staff and serves over 30 million donuts yearly over the last 31 years. This has made Donut King to be the best and largest donut store across the country.  Donut King has also gone global as it entered into a master license agreement with Shanghai-based Mak Brands in 2008; this marks the Australian brand’s first foray into the China market. Donut King has since expanded and currently has 7 stores in China. This expansion to china market will assist the company to grow and to also understand the Chinese customers.

            It has always evolved its tastes and created new products over the years in order to satisfy the various and emergence of customer’s needs and preferences. Currently, it is not only serving the traditional favorites but also has added a list to its servings and serves a gourmet range of hotdogs, low fat ice cream, various drinks and beverages such as; coffee, tea, soft drinks, frozen carbonated drinks, healthy smoothies and milkshakes.  As it normally keeps to its promise, Donut King makes sure that the donuts, hotdogs and hotdogs are fresh day in, day out, well decorated donuts, delicious food to customers and they also make sure that the food quality and services is remarkable. This is possible by making sure that the franchisees go to training and learning for weeks at the Retail Food Group Training Academy. In 2007, Donut King celebrated the ‘The Simpson Movie’s DVD’ release by creating the world’s largest Doughnut. It was created out of 90,000 doughnuts, half a tone pink icing and 30kg sprinkles. It was created by 40 people for over nine hours and it measured six metres and weighed 3.5 tonnes. The donut was donated to Oz Harvest, a Sydney-based charity that collects excess food for organizations that feed the disadvantaged men, women and children. Apart from giving the customers delicious snacks and beverages, Donut King also provides jobs for the individuals in the surrounding neighborhood. The company has greatly helped in major cities by reducing unemployment and keeping most teenagers and other young people out of trouble by offering jobs that pay.

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Secondary research

            The management team was at liberty to search for secondary data whereby they found that in most websites regarding donuts, Donut King is highly praised by the residents of Australia and they are in support of all their products.

Problem statement

            We want all of our products to be of benefit to the consumer in terms of health and as well as satisfaction. In recent years, Donut King is losing market since more and more competitors are emerging in the retail food industry. Health, some individuals who are on diet and diabetics are not in support of the retail foods offered by the Donut King. To make matters worse, since the economic crash in 2010, more and more people now prefer home cooked meals as it saves them a little money that would have been spent eating out. Donut King has to come up with ways to retain its customers and cater for all the changing tastes and preferences of the customers, those that are dieting and those who have diabetics. We will use both the qualitative and quantitative research methods in evaluating the issue.

Research objectives

This research will focus on the following research objectives;

Interview action:

To identify the eating habits of the customers who frequent Donut King Stores.

Information Needed:

Find out how they eat, average quantity and time of eating.

Information use:

Product managers will use the findings to know the time and quantity that donuts are mostly sold.

Interview action:

To establish the various tastes and preferences of the customers of all ages and beliefs

Information Needed:

Find out what the consumers prefer as well as their tastes in the retail food industry.

Information use:

This information will be used to know what exactly the consumers want and will help the product managers to come up with products and services that suit the consumer needs.

Interview action:

To determine the various budgets of the customers of the Donut King

Information Needed:

Information on how much the customers are willing to spend on the retail foods.

Information use:

This information will help to develop a budget friendly pack for those who are willing to spend but do not have enough money to spend on a particular donut or any of the products of Donut King.

            Sampling

The management team saw it to be cost effective and time saving to take a sample of the population so as to get the various respondents who are required to answer the various questions. The team ensured that the sample was representative to avoid misrepresentations and drawing wrong conclusions.  The team made three decisions regarding sampling.

Sampling unit

The management team defined the target population that will be sampled, since it needed information from the industry in general as well as information regarding Donut King, the team went for individuals who loved donuts from various parts of the country.

Sample size

The number of people to be surveyed was established. Since the team wanted a commercial sample, they settled for a sample size that was between 100-1000 respondents per a given population.

Sampling procedure

To determine how the respondents will be chosen, the team drew a probability or random sampling of the population. Probability sampling allows the calculations of confidence limits for sampling errors hence it is more reliable and accurate.

            Research method used

There are two major research methods to be used in this report. They include; qualitative research and quantitative research.

            Qualitative research

Some of the qualitative methods that were used include;

• Focus group

About two dozen current or potential customers both young and old, women and men, dieting and not dieting were paid to come into the Donut King stores to discuss generally the stores in Retail foods industry Donut King included and its competitors. Later in the interviews the discussion was directed specifically to Donut King (DK) in particular. The management team found the results interesting. The major qualitative findings included the following;

The older people saw the Retail foods store as unhealthy for human consumption as it led to all obese related complications.

The washrooms at Donut King Stores were believed to be the most clean as compared to other Retail Foods Stores in the country. “Awesome” was the most common description- mostly by the younger generation and that perception permeated everything that the customers felt about Donut King in general.

Donut King was seen as the best among the various Retail Food Stores in the country. “It is a great place to take a family for breakfast or snacks, it is a reward you can give your friends as you catch up on the good old days and their tastes evolve with time.”

 Donut King’s donuts were referred to as addictive among all the retail foods stores. “the brightly colored donuts with ham or cream bouncing on the conveyer belt is very irresistible every time my kids see that and one cannot get enough of it”

• Market research in depth interviews

The management team interviewed a single respondent via the telephone on the quality of the donuts and service offered by the Donut King stores. The findings were as follows;

-          Good quality donuts. “Your donuts are out of this world, I have never found tasty donuts like the ones in Donut King.”

-          Average service. “ on a god day, I get served well and other days the staff are slow”

• Market research observation

The management team gathered a few respondents in our stores and observed them in their “natural” environment.

Quantitative research

            Once the management team had an understanding of what issues they faced with the customers, they felt that they needed to understand how broadly these beliefs were held. There was a need to get some hard numbers and that meant that a quantitative market research had to be done. The team constructed questionnaires and scales to give to respondents to complete the survey. Some of the questions the team came up with in the questionnaires include;

1. What do you think of the quality of the products of Donut King especially the donuts?
2. What about the services offered by our staff?
3. How is the sanitation in Donut King Stores?
4. If given a choice, would you come to our stores 7days a week? WHY?
5. Any reason why you can or cannot be an ambassador of our store to the rest of the country?
6. If you were to command Donut King to change anything about their products what will that be?
7. Are the products sold in Donut King healthy for your kids?
8. If you are diabetic, can you eat any of the food that is served at Donut King Stores? If yes, which ones?

The management team came up with measurement scales that they used to measure the attributes. They used the following;

• Nominal

They used numbers as identifiers

• Ordinal

They used this scale so as the respondents can rank them against their competitors. This was more productive as the team could see where the respondents placed them and know their popularity among the individuals.

Other attitude scales that were used are;

Equal appearing interval scaling

Here, the team assembled a set of statements and selected according to their position on an interval scale. Statements are chosen that has a small degree of dispersion.

The likert method of summated ratings

The team makes a statement and the respondents indicate their degree of agreement or disagreement on a scale of 5 point. Terms such as, strongly agree, disagree, neither agree nor strongly agree are used.

Various types of quantitative research methods were used. They include;

• Face-to-face interviewing

This was done by the Donut King staff whereby they went to the streets and offered questionnaires and scales so as the customers could rate them and answers the various questions in the questionnaires.

• Online survey

            Panels of respondents were purchased and invited to take part in our online survey. The management team found this method very cost effective and quick way of obtaining data.

• Telephone interviewing

            The respondents were interviewed by use of the telephone whereby our staff asked those questions from the questionnaire and they could write down the respondents’ answers and they were also asked to scale the company as well. This method was found to be very effective and quick in getting information as well as great flexibility

• Postal and self-completions market research

            Here, we sent the questionnaires and scales to the correspondent respondents to their postal addresses and they were required to complete the questionnaires and send the back. This method proved to be time consuming to get the required data but it was cheap and a lot of information was collected.

• Personal interviewing

            The respondents were invited to our stores to talk with a trained interviewer about Donut King’s products and services. This method was found to bring a lot of information as well as the trained interviewer could hold the respondents’ attention for long and explain the questions well.

Main findings

            The management team came up with the following findings regarding Donut King as conducted in the research. It was found that Donut King is highly rated in the various cities that samples were taken from making it an empire of donuts in the country. The service at Donut King was said to be average since some of the days the staff tend to be slow.

            Sanitation in Donut King was found to be sparkling and this is a plus to the stores’ image since most of the dining places were said to be good and the washrooms were also in good state. Most of the parents and diabetics were however skeptical on Donut King. The parents said that they would not allow their children to go to Donut King very often since it was not healthy and most of the diabetics were adamant about even setting foot in the Donuts King Stores (n.a, 2007).

Ethical considerations

            The research of Donut King was under law, all the results were drawn by using legal methods without deceptions, fraud and the data was collected by the team themselves. The data in this report is not fabricated as it was carried out by very responsible Donut King Researchers. Finally, the respondents agreed to do the interview and were not at all coerced or made to say anything against their will.

Time table

            The table below indicates the timeframe for the market research report. In the time table there are overlapping periods, this was done to ensure that the report’s deadline was attained.

The budget

The fees quoted in this budget are inclusive of VAT and are subject to the standard terms and conditions which have been provided. These fees are subject to the facts contained in this report and no adjustments whatsoever was made on them.

Limitations

            This marketing research has been prepared with diligence and care and with great knowledge of the industry. However, even the best marketing research is not perfect. There were factors that influenced the findings and were out of my control. Time constraints, budget constraints, market changes and procedural errors such as the questionnaire sent by mail did not reach the respondent. My market research is not perfect but the degree of accuracy with which the results were drawn is very high and all the interviewers were well trained and supervised.

Conclusions and recommendations

            The report was based on the fact that sales volume in Donut King was declining because of emergence of competitors as well as beliefs that eating donuts was unhealthy as most parents were keeping their kids from eating any products that was made in Donut King and the diabetics as well are not in support of any products that Donuts King are offering. From the report it is quite clear that Donut King still has its place in the market as most of the customers are well satisfied with the way Donuts King products are. There are however, a few drawbacks for Donuts King since not everyone can take a lot of sugar it is widely not preferred by those who are diabetic, most parents as well are skeptical for the sugar that is used, some of the customers also complained of the lack of apple fritters that has been a common occurrence every time they go to visit, other customers also said they drive long hours to visit the nearest Donut King store and this is tedious and therefore I recommend that Donuts King should come up with healthy friendly drinks such as healthy smoothies and low fat ice-cream. The Store can also try out sugarless donuts to accommodate the tastes of the diabetics and also to get in a certain market niche (Palmer, 2008). Donuts King should also penetrate other markets as it did in China to expand its market and reach, this will in return increase the sales volume of the company as a whole. The company should also include health professional in its campaigns while launching the new products such as low fat ice cream and sugar free donuts to make a huge impact on the customers. Donut King should consider opening up in remote areas so that other individuals can also experience the delicious donuts that they only hear about or just see in TV adverts. The company should also increase its advertising as there are people who do not know the location of other stores in different cities when they visit new places.