Creating Value Beyond Price

Understanding how consumers perceive value

By Jenna Greenfield, Research Analyst

A strong value equation is communicated in a number of ways, since the

definition of value often varies from one consumer base to another.
Consumers do not limit their definitions of value solely to low prices. If
they did, restaurants that heavily advertise value or combo meals would
dominate consumer rankings for perceived value. As a result, restaurants
would drive menu prices even lower.

But there is a different dynamic at play across restaurant segments.

Consumer Brand Metrics (CBM) ranked major restaurant chains by a
Composite Value Score, which comprises not only competitive prices, but
also brands’ ability to create value through service, the menu and the
restaurant’s atmosphere. The latter attributes give a holistic look at all of
the elements that make up a memorable dining experience for guests—
beyond what they pay.

Many brands strive to create this “emotional connection” with their

guests, through strategic promotion of quality food, as well as hospitable
team members and a welcoming environment. Consumers’ positive
perception of these traits has paid off more than seeing how low prices
can go.

To learn more about the Consumer Brand Metrics program or to sign up for future
Spotlight by Consumer Brand Metrics white papers, please contact Cassie Vedros,
Senior Associate Marketing and Events, at cvedros@technomic.com.

Consumer Brand Metrics Q4 2015

Key Takeaways
Restaurant consumers seek value in more ways than just paying
the lowest price. They perceive value in brands that provide high
levels of food quality, hospitality and attention to ambiance.

Food quality, not innovation, drives perceptions of value

Consumers tend to perceive value from food quality, taste

and availability of healthy options. Unique and craveable
offerings get a brand credit for innovation, but not
necessarily value.

‘Limited service’ in name only

Limited-service restaurants were on par full-service chains

on perceptions of value created via service, despite the
absence of table service.

Atmosphere influences full-service chains’ value scores

High ratings for atmosphere and ambiance boost the full-

service chains’ value perceptions, despite much higher
average checks than LSRs.

Consumer Brand Metrics Q4 2015

Importance of Value
The majority of consumers say it is vital for restaurants to provide a good value to
guests in ways that are unrelated to price. The importance of value, through service
and food quality, plays a prominent role in justifying the prices on the menu.

But providing value through a comfortable atmosphere or ambience is seen as more

important for full-service brands than for limited-service chains. In every case, women
rate these attributes as more important than men do.

Offers good
value through…
Top two box = important
And very important

Service
LSR 81% 89% 85%
FSR 81 88 85
Menu Items
LSR 83% 89% 87%
FSR 84 90 87
Atmosphere
LSR 62% 70% 66%
FSR 72 79 77

Consumer Brand Metrics Q4 2015

Best in Class Overall
Rankings for the Value Composite Score among limited- and full-service restaurants
would look quite different if consumers only equated value with the lowest prices. But
among the 10 highest-scoring brands listed below, the attributes that deal with
creating value through the menu, service and atmosphere were more closely
associated with the composite value score than price, illustrating the importance of
these attributes to the overall value equation.

The average Value Composite Score for the full-service segment is just slightly higher
than that for limited-service brands. The segments and their leading chains had
comparable ratings for Ability to provide value through high-quality menu items and
Ability to provide value through service. But full-service chains garnered high ratings
for their lively, themed or upscale designs and décor, helping the full-service segment
differentiate from limited service on Ability to provide value through
atmosphere/ambiance.

Value composite score

% top box (very good); top 10 brands

Scores Rotisserie & Ribs 42%

Limited Service
Average St-Hubert 41%
Baton Rouge Restaurant & Bar 40%
32% Swiss Chalet
Booster Juice
39%
39%
Full Service MR. SUB 38%
Average The Keg Steakhouse & Bar 38%

34% Little Caesars

Panago Pizza
38%
37%
East Side Mario's 37%

Consumer Brand Metrics Q4 2015

Value Through Menu Items
Brands’ Ability to provide value through high-quality menu items revolved around the
“high-quality” facet of the description, as top-scoring chains tended to have some of
the highest attribute ratings for Food quality, Taste and flavor and Availability of
healthy options.

Craveable items or Unique items were less indicative of driving consumers’ value
perceptions of brands. Booster Juice, Score’s and The Keg excelled broadly across
most food and beverage attributes.

Ability to provide value through high-quality menu items

% very good; top five brands per segment

Limited service Full service Most improved

45% 43% +6

39% 42% +5

39% 40% +5

39% 40% +4

37% 40% +4
Average 32% Average 35% Average -2

Consumer Brand Metrics Q4 2015

Value Through Service
Guests rate limited- or full-service brands high for value if they perceive a high level of
service for the price paid. Mr. Sub, Booster Juice, St. Hubert and Score’s scored at or
near the top for Pleasant and Friendly Service, Payment Handling, Order Accuracy,
Staff Knowledge, and This place treats me like a valued customer.

Surprisingly, Staff attention to fundamentals was not indicative of providing value

through service. Only Score’s and Swiss Chalet ranked among top five for providing
very good attention to fundamentals.

Ability to provide value through high-quality service

% very good; top five brands per segment

Limited service Full service Most improved

44% 45% +4

43% 45% +4

43% 43% +3

43% 42% +3

42% 41% +2
Average 36% Average 36% Average -2

Consumer Brand Metrics Q4 2015

Value Through Atmosphere
Perhaps unsurprisingly, on the attribute of Ability to provide value through ambiance or
atmosphere, full-service chains outperformed limited-service peers.

Some ambiance attributes were more influential in limited-service rankings than in

full-service rankings and vice versa, but all top-scoring brands had the highest marks for
Warm and welcoming atmosphere. The Keg and St. Hubert led all full-service brands in
Music selection, as well as several cleanliness attributes.

Ability to provide value through atmosphere/ambiance

% very good; top five brands per segment

Limited service Full service Most improved

37% 44% +6

36% 43% +6

33% 43% +5

33% 43% +4

33% 39% +3
Average 29% Average 36% Average -2

Consumer Brand Metrics Q4 2015