Prepare a recommendation report

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Reference no: EM131265513

Research Data for Various Report Types: Exploring Alternative Ordering Methods for Gino's Pizza (Obj. 1) eBuyer Group, a leading consumer and research firm, has been asked to study alternative ordering methods for Gino's Pizza, a 30-unit delivery and takeout chain. Fast-food franchises across the nation have become increasingly interested in using the Internet to supplement traditional takeout and delivery options.

In fact, several prominent national pizza chains have already adopted, or are testing, online ordering. Well-known examples include Papa John's, Pizza Hut, and Domino's. Another more recently explored option is interactive television (iTV). Gino Vanilli, CEO of Gino's Pizza, wants to know whether the chain should continue using its conventional phone-ordering/delivery method or adopt one of the two alternatives. The following represents your preliminary research. The Online Consumer

? Approximately 50 percent of American adults have shopped online (Scarborough Research).

? Currently, about 80 percent of the online population over age 13 shops online (eMarketer).

? Thirteen percent of online shoppers have made food or drink purchases (Ernst & Young).

? By 2010, 85 percent of U.S. homes will be online. Approximately 75 percent will use a computer for access (Strategy Analysis).

? The composition of online shoppers is 56 percent male, 39 percent of whom are between the ages of 18 and 34 (Scarborough Research). Online Ordering The most common method involves using an intermediary that accepts orders for the restaurant. For example, Food.Com licenses its ROSY (Restaurant Ordering System) to Papa John's. The intermediary's Web site contains the interactive menus of its client restaurants.

After consumers join Food.Com, they are able to access participating restaurants' menus and place orders; then, Food.Com sends the completed order by fax to the restaurant. A percentage of each sale, roughly 3 percent, is billed monthly to the restaurant. Advantages of Online Ordering

? The intermediary handles most technological aspects of the process.

? The restaurant does not spend as much on computer technology and training.

? Most restaurants already use fax machines to conduct business with suppliers and main offices.

? Capital expenditures are minimal.

? Many pizza takeout and delivery restaurants and chains have created a Web presence. Disadvantages of Online Ordering

? Because of current technology, ordering by phone takes less time.

? Consumers are still concerned about online security issues.

? One Pizza Hut operator reported receiving 5 Internet orders per day compared with a typical 140 telephone orders.

? The Pizza Time delivery and restaurant chain reported sales expectations of 10 to 12 percent of total sales based on a recent online ordering survey it conducted. In a recent survey, the Pizza Time delivery and restaurant chain learned that online ordering would account for only 10 to 12 percent of its total sales. This is not significant enough to justify the costs. In addition to the previous information, several Internet-based grocery and food delivery ventures have disappeared (e.g., WebVan, Home Grocer, and Publix Direct) or struggled with expansion and had to downsize to survive (Pink Dot). The iTV Consumer ? Satellite TV subscribers as of the end of last year totaled 9.39 million (OpenTV.com).

? Approximately 95 percent of U.S. households receive digital TV via a direct-to-home satellite service (OpenTV.com).

? Within three years, 117 million homes worldwide will be receiving digital TV from cable operators, and 145 million households will be receiving it from satellite services (OpenTV.com).

? Approximately 85 percent of homes in the country have cable access (Strategy Analysis).

? Roughly 6 percent of U.S. homes have iTV (Strategy Analysis). iTV Ordering iTV can be delivered in a number of ways. TV sets with integrated interactive receivers are on the market. However, trends suggest that some consumers will use iTV through set-top boxes for some time. Set-top boxes, such as those provided by WebTV or DirectTV, are available at local retail stores and have a street price of about $200. The most prominent player in the iTV market is OpenTV. Pizza Hut and Time Warner test marketed ordering by cable TV in Hawaii using digital cable boxes. Domino's teamed with RespondTV, a San Francisco-based software firm, to offer pizza delivery through WebTV. Finally, iTV is popular in Europe, and ordering pizza is one of its most popular uses. Advantages of iTV

? A significant number of consumers already have cable TV.

? It eliminates the need for the consumer to input name and address repeatedly.

? It creates a secure channel for passing charge account information.

? The interface is intuitive and user friendly. Disadvantages of iTV

? Conversion to digital cable and satellite TV has been slow.

? Arguments over technical standards have delayed a massmarket rollout in the United States.

? The viability of marketing restaurant food is unproven.

? Costs are relatively high for businesses. Consumer Survey Following are the results of a telephone survey obtained from a random sample of Americans from across the nation:

Questions	Yes	NO
1. Have you ordered pizza for delivery within	Yes	NO
the last month?	799	226
2. Would you consider ordering pizza online
as opposed to calling?	133	892
3. Would you consider ordering pizza using
your television set as opposed to calling?	665	360

Task:- As a consultant for eBuyer Group, study the preceding information. You have several options for the type of report you could prepare, based on the research data. Choose from among the following options, and address your report to Mr. Gino Vanilli, CEO of Gino's Pizza. Use at least one visual aid.

a. You could write a yardstick report establishing criteria and then comparing and contrasting the various forms of pizza ordering and delivery. You should recommend the most efficient and costeffective solution. Decide whether to organize the report directly or indirectly.

b. You have heard from a reliable Gino's Pizza company insider that Mr. Vanilli privately strongly favors the iTV option. However, you find this option risky because iTV is still in its infancy and its future reception by consumers seems shaky. Prepare a feasibility report discussing the viability of the iTV option for Gino's Pizza. As an ethical consultant, you are beholden to the truth. If you disagree with the client, you need to find a way to dish out the unpleasant findings gently. If iTV is an appropriate option in your view, then your approach could be direct.

c. Prepare a justification/recommendation report that studies the several ordering options and proposes the most appropriate one for Mr. Vanilli's business. Although you cannot discuss the specific costs of each proposal, you can draw conclusions and make practical recommendations based on the facts presented here. What items are most important to show visually?

Reference no: EM131265513

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