Sunday, June 14, 2009

A New Logo for Wendy's?

Wendy’s is an international fast food chain that ranks third in hamburger joints behind McDonald’s and Burger King (Hoover’s, 2009, p 1). It has over 6,500 locations in the United States and more than 20 countries worldwide. Management is considering changing the Wendy logo and brand character to keep it current. There is a concern that changing the well-known logo could have adverse repercussions. To study consumer opinion a series of personal interviews will be conducted.

According to Keller (pp 156-159), logos and brand characters are an easily recognizable way to identify a company and product. They are central to advertising campaigns and packaging. He says they can “create perceptions of the brand as fund and interesting.” However, (p. 158) he also notes they must be changed from time to time. Betty Crocker spent over $1M to update its tired brand character (pp 164-5). This $1M price tag is also the case for updating a logo (p. 157).

Sampling Method
The background information shows the importance of correctly updating a brand character, and that an appropriate budget must be allocated to this important task. Having an accurate cross-section that is representative of Wendy’s customers outweighs cost. We do not want to draw incorrect conclusions by using a sampling method known to be inaccurate.

The life-cycle of a sampling plan is to define the population, choose a data-collection method, identify a sampling frame, select a sampling method, determine sample size, develop operational procedures, execute the plan (see McDaniel and Gates, 2008, p330). This specific assignment is to select and justify a sampling method. Our first decision is between probability samples and non-probability samples. McDaniel and Gates (p. 334) note that probability samples are better for obtaining a representative cross section of our population. Given the importance of the logo or brand character, we need to have the best representation we can get. The trade-off is cost but we should have a budget commensurate with the task.

Next, we must decide among the several probability sampling methods. I like the stratified sample because it has a smaller sampling error than the other methods (see McDaniel and Gates, 2008, p. 341). It is more efficient because it eliminates one of more sources of variation through the stratification process. The researcher is making the “sample be more representative by making sure that important dimensions of the population are represented in their true population proportion.”

Wendy's should stratify on country. According to Hawkins, et al (2007, p 40) cultural factors that like language, demographics, values and nonverbal communications can impact marketing communications. A cultural faux pas with a brand character or logo can make Wendy’s appear like confused Martians. Using country to stratify, I can also avoid the main drawback on stratified sampling – we usually don’t know in advance the proportions of the strata (see McDaniel and Gates, 2008, p. 342). However, Wendy's consolidated financial statements do have that information.

Finally, should the method be proportional allocation or disproportional allocation? In this case, the method should be proportional because it is easy to calculate the relative number of locations in each country to the total number of locations (p 342). Within each country (strata), do simple random sampling with a sample size proportional to the relative percentage for the country.

To collect the data, the store intercept survey type can be used (see McDaniel and Gates, 2008, p. 150). As a style of mall-intercept survey, it would share many of the same advantages and disadvantages. The interviewer can show proposed Wendy’s logos, explain and probe (p. 171). On the other hand, the respondent may be distracted, or in a hurry. Further, there is a greater opportunity for interviewers to select the people to interview in a non-probabilistic manner. Strict operational procedures should be defined.

Hawkins, Del, David Mothersbaugh and Roger Best (2007). Consumer Behavior. McGraw-Hill/Irwin.

Hoovers (2009). Hoover's Profile: Wendy's International, Inc. Retrieved on June 7, 2009 from

Johnson, E. (2009). Quantitative Research: Surveys & Sampling. Retrieved on June 7, 2009 from

Keller, K (2008), Strategic Brand Management. Pearson/Prentice-Hall.

McDaniels, C and R Gates (2008). Marketing Research Essentials. John Wiley.

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