Case Study: Friendly Market Versus Circle K

Case Study: Friendly Market Versus Circle K

Source: Adapted from Burns, A. C and R. F Bush (2005),Marketing Research.Upper Saddle River, N.J.: Prentice-Hall.

Friendly Market is a convenience store located directly across the street from a Circle K convenience store. Circle K is a national chain, and its stores enjoy the benefits of national advertising campaigns, particularly the high visibility these campaigns bring. All circle K stores have large red-and-white store signs, identical merchandise assortments, standardised floor plans, and they are open around the clock. Friendly market, in contrast, is a one-of-a-kind “mom-and-pop” variety convenience store owned and managed by Bobby James. Bobby’s parents cane to the United States from Palestine when Bobby was 15 years old. The family members became American citizens and adopted the last name of James. Bobby had difficulty making the transition to U.S. schools, and he dropped out without finishing high school. For the next 10 years of his life, Bobby worked in a variety of jobs, both full-and-part-time, and for most of the past 10 years, Bobby has been a Circle K store employee.

In 1999, Bobby made a bold move to open his own convenience store. Don’s Market, a mom-and-pop convenience store across the street from the Circle K where Bobby was working at the time, had closed six months before, and Bobby watched it month after month as it remained boarded up with a for sale sign on the front door with no apparent interested parties. Bobby gathered up his life savings and borrowed as much money as he could from friends, relatives, and his bank. He bought the old Don’s Market building and equipment, renamed it Friendly Market, and opened its door for business in November 1999. Bobby’s core business philosophy was to greet everyone who came in and to get to know all his customers on a first-name basis. He also watched Circle K’s prices closely and sought to have lower prices on at least 50 percent of the merchandise sold by both stores.

To the surprise of the manager of the Circle K across the street, Friendly Market prospered. In 2001, Bobby’s younger sister, who had gone on to college and earned an M.B.A. degree at Indiana University, conducted a survey of Bobby’s target market to gain a better understanding of why Friendly Market was successful. She drafted a simple questionnaire and did the telephone interviewing herself. She used the local telephone book and called a random sample of over 150 respondents whose residents were listed within three miles of Friendly Market. She then created an SPSS data set with the following variable names and values.

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