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Competing on the Value Playing Field

If there was a single lesson from 2009 for foodservice operators, it was that meal value — as perceived by the customer — was central to most successful foodservice promotions. At the same time, analysts at NPD Group, a leading international provider of consumer research, point out that consumers tend to define value differently in different meal occasion contexts, a tendency underscored in some recently completed NPD research, Consumers Speak Out About Value.

5,351 adults who had a food/snack away from home in the past three months were surveyed “to find out what value means to consumers once you go beyond price,” says Bonnie Riggs, NPD's restaurant industry analyst. Each was given 100 points to use in scoring ten value-related attributes of their visit and were also asked the type of location where it had occurred.

(If a respondent scored each of the ten attributes equally, he or she would assign ten points to each. In fact, however, respondents demonstrated clear differences in which attributes they found most important, and also scored them differently depending on the location).

“We found clearly that in the context of perceived value, ‘price of a meal’ doesn't necessarily mean cheapest,” says Riggs. “It means an affordable price that is seen as reasonable given how the food's quality and other attributes of value are perceived.”

Another finding: “We know that, with the exception of fine dining, convenience always plays a key role in how value is perceived,” adds Kyle Olund, the senior product manager for NPD's CREST OnDite data service. “But there is no other segment where convenience shows up with the prominence you find in onsite dining.

“That means restaurant concepts outside of onsite have created value propositions in which other components of value become more significant than convenience in the context of the choice to visit them. Convenience will always be core to onsite, but it doesn't have to overshadow the other aspects.”

Olund acknowledges that “onsite operators sometimes are challenged to convince customers of their value proposition when those customers, consciously or unconsciously, expect the food to cost less than it would in a comparable street envrionment. The answer is better communication of multiple messages: the quality of the food; the value of convenience; the freshness of ingredients and so on.”

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