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Research Outline

Prepared for Katie | Delivered July 26, 2019

Quick Service/Fast Food Restaurants

Goals

You would like information about the quick service restaurant industry (i.e. fast food) in the United States. Specifically, you would like an overview of the industry (including an analysis of forces that are impacting company priorities), a trends analysis, a best practice analysis, and a competitive landscape of McDonalds, Starbucks, Dunkin, Chick-Fil-A, Taco Bell, Subway, and Burger King. For the competitive landscape, it should include an analysis of each company's promotional strategies and loyalty strategies. When looking at promotional tactics, you would like us to focus on the types of coupons/offers they are providing (i.e. bogo, $ off, freebies, etc), an analysis of their app content, an analysis of their SMS promotions, an analysis of geo-specific deals (local vs. national), and any delivery options or services they provide (including the use of thid-party delivery services such as GrubHub or Doordash). When looking at loyalty programs, you would like us to focus on how their loyalty programs are structured, specifically what the program structure and levels are, how users can earn points and rewards, and an overview of the point per dollar spend.

Early Findings

INDUSTRY OVERVIEW

  • As of 2018, the fast food industry in the United States had a market size of $256 billion, growing at a rate of 3.9% between 2013 and 2018.
  • The industry has over 290,450 businesses and employs over 4.4 million people, according to IBISWorld.
  • Some challenges currently facing the industry are: consumers' shifting preferences away from unhealthy food options and market saturation. These challenges are causing fast food restaurants to keep their prices down.
  • Despite challenges, the industry is maintaining steady growth due to low prices and convenience.

TRENDS

  • Some trends currently affecting the fast food industry are: quick payment methods, revamped menus, and automation.
  • Fast food companies are aiming to make their services even faster by coming up with creative payment solutions that reduce wait times. These payment solutions include mobile in-store payment (or payment via app), acceptance of digital currencies, the use of eWallets, and social media payments.

BEST PRACTICES (FOR PROMOTIONS AND LOYALTY)

  • Some best practices for promoting fast food restaurants include creating viral content (done by Pizza Hut) and offering treats and food for pets (done by Shake Shack).
  • Some best practices for quick service restaurant loyalty programs include: offering member-only experiences such as event invitations (done by Chick-Fil-A), and allowing loyalty members to earn points outside of the resutrant--for example, earning points when they share certain social media content (done by Quiznos).

STARBUCKS

Promotional Tactics:
  • Starbucks announced in July 2019 that they will be offering recyclable strawless lids in Los Angeles, San Francisco, Seattle, Washington D.C., Indianapolis, San Diego, and Toronto.
  • As of July 2019, Starbucks announced they will be expanding their delivery services by partnering with UberEats.
  • Starbucks offers free brewed coffee and tea refills to loyalty members.
Loyalty Program:
  • Structure and Levels: Prior to April 2019, users could only earn free rewards once they reached the gold level (surpassed 300 Stars/points). However, as of April 16th, 2019, Starbucks moved to a single-level program that allows all members to earn free rewards.
  • Earning Points and Rewards: Users earn stars on things they buy at Starbucks. They can also earn bonus tars by playing games and participating in in-app offers.
  • Point Per Dollar Spend: Users can earn 2 Stars (i.e. points) for every dollar they spend.