Muskoka Lakehouse Restaurants Inc.
Comprehensive Case Supplement for
Marketing Research Essentials, Canadian Edition
McDaniel, Gates, and Sivaramakrishnan
©2009 John Wiley and Sons Canada, Ltd.
Author: Bradley MacMaster, BSc, MBA, PhD (in progress), CA, CMC
Adjunct Lecturer in Accounting, Finance, Leadership, and Marketing Research
for Universities of Waterloo, Ryerson, Guelph-Humber
Contents
C1. Introduction and Background .......................................................................................................................... 2
C2. Identifying and Clarifying Problems and Opportunities .................................................................................... 9
C3. Secondary Data Collection and Analysis ......................................................................................................... 11
C4. Qualitative Research ...................................................................................................................................... 15
C5. Primary Data Collection ................................................................................................................................. 19
C7. Survey Research ............................................................................................................................................. 20
C8. Questionnaire Design ..................................................................................................................................... 21
C10. Basic Sampling Issues ................................................................................................................................... 22
C11. Sample Size Determination .......................................................................................................................... 23
Appendix 1: Selected Internal Secondary Data .................................................................................................... 25
Appendix 2: Links for External Secondary Data .................................................................................................... 28
*Note: Section numbers correlate to text chapter numbers. So there is no C6 or C9 section, because there is no case requirement that links
specifically to Chapters 6 or 9 in the text.
Case: Muskoka Lakehouse Restaurants Inc.
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The Case: Muskoka Lakehouse Restaurants Inc.
C1. Introduction and Background
Background and Formation of Muskoka Lakehouse Restaurants
Muskoka Lakehouse Restaurants (MLR) was established in early 2005 by three brothers—Max, Lance, and Andrew
Radford.
The brothers grew up in North York, Ontario, attending local primary and secondary schools. During their teen
years in the 1970s and 1980s, the brothers vacationed with their parents in Ontario cottage country, renting
various cottages between Gravenhurst in the Muskokas and Georgian Bay near Pointe Au Baril. Summers were a
blast and they often recalled how much fun it was for children and adults alike, and everyone was always so
relaxed. Max attended the University of Toronto in a general arts program, but dropped out after two years,
feeling that the university gig was not for him. He had an entrepreneurial bug and intended to start his own
business one day. Neither of the other brothers attended university. In their early careers, the brothers each held
various jobs in commercial sales, manufacturing, and retail, usually progressing into management roles. They all
lived and worked in and around Barrie, Ontario, and participated in seasonal team sports such as baseball and
hockey, usually getting together to ‘quaff a few’ after the game.
Andrew had been working in the foodservices and hospitality sector for about three years when he was promoted
to assistant manager of the Kelsey’s Restaurant in Barrie, Ontario. As a result, he attended various management
training programs and learned a few things about restaurant operations. Max and Lance noticed that Andrew
seemed to be very excited and enthusiastic about working in the restaurant industry, and with their
entrepreneurial dispositions, they began discussing the possibility of starting a restaurant of their own.
Did they want to own a franchise, like Tim Horton’s (they seemed to be doing well)? Or did they want to operate a
full-service restaurant like Kelsey’s? With their extroverted natures and love of food, beer, and hospitality, they
preferred the latter. But should it be owned or franchised? If owned, how would they differentiate it from the
competition, such as Kelsey’s, Boston Pizza, Moose Winooski’s, and the Crock ‘n Block? What food would they
specialize in and what would the place look like? After three months of discussions amongst themselves, friends,
and parents, and after numerous financial scenarios and organizational charts were worked out on various pads of
paper, they decided to create a concept called The Muskoka Lakehouse Restaurant and open their first restaurant
in the rapidly growing city of Mississauga, Ontario.
They pooled their savings, borrowed some additional start-up capital from their parents, and visited their lawyer to
incorporate a company. After listening to their plans, the lawyer actually advised them to set up two
corporations—one holding company (Muskoka Lakehouse Restaurants Inc.) and one operating company to run
their first restaurant in Mississauga, the legal name of which was MLR Mississauga South (Port Credit) Inc. In
addition, the lawyer registered the name and logo design of Muskoka Lakehouse Restaurant as a trademark.
The MLR Concept
The Radford brothers’ objective was to build a chain of casual, full-service restaurants catering to a relaxed, funloving crowd who enjoyed socializing and hospitality. However, they intended that their new concept would avoid
being perceived as a pub, sports bar, or other drinking establishment. Instead, after reflecting on Andrew’s
Case: Muskoka Lakehouse Restaurants Inc.
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experience with Kelsey’s and their teenage experiences, they conceived of the idea of a restaurant that reflected
the slightly upscale décor of a cottage on the Muskoka Lakes—casual, relaxed, natural wood interiors, big woodframed windows, Muskoka chairs in the lounge, wood plank floors—and catered to groups of friends. This didn’t
exclude families or sports teams, but the focus was on friendship and camaraderie in comfortable, casual
surroundings. The dress code included “Jeans encouraged! Bathing suits permitted (under your jeans). Please
check fishing rods at the door!”
Food-wise, they decided it would be essential to include many of the high-volume favourites that Andrew had
learned of during his time at Kelsey’s. These included chicken wings, burgers, and a selection of pasta dishes,
steaks and chops, fajitas, and salads. But to distinguish themselves from the competition, they needed a special
dish. Consistent with their theme, their ‘signature items’ would be fresh lake trout or pickerel (depending on
availability), pan-fried or grilled to order, with a selection of succulent sauces/chutneys/salsas, a choice of
fingerling potatoes or basmati rice, with Ontario-grown vegetables from the Holland Marsh area, and a garnish of
fresh herbs. The brothers believed that not only would their signature dish be a point of differentiation, but it
would also be in line with the growing consumer preferences for healthier diets and more locally sourced foods.
Management Organization
As with many new businesses, the Radford brothers encountered numerous challenges with arranging financing to
build their restaurants, recruiting and training staff, licensing and regulatory compliance, establishing supplier
relationships, selecting and setting up information systems, and other general management issues. To divide
responsibilities and accountabilities, they decided to organize themselves with Max as President, Andrew as VP of
Operations, and Lance as VP of Purchasing (which included restaurant food and beverages, and other supplies and
construction). Max’s focus was on chain growth and Andrew’s was on profitable restaurant operations. They also
hired an accountant to ensure they received monthly financial and operating reports on a timely basis.
The brothers meet every Monday morning to review the previous week’s sales results and progress on any
construction projects, and to deal with any critical or urgent issues. They also follow this up with a meeting on the
second Monday of every month to review the financial results and to discuss other longer-term issues. Their
accountant prepares a number of reports including a Statement of Restaurant Operations for each operating
restaurant and sometimes some special analyses.
Development History
The brothers opened their first restaurant in Mississauga on May 1, 2005, and selected April 30 as their fiscal yearend. They decided to put all of their focus and combined efforts on this single restaurant for the first year, to prove
the concept from both a market acceptance and profitability perspective, before investing in additional
restaurants. MLR Mississauga South (Port Credit) met their initial expectations for success. As a result, one year
later they opened their second MLR restaurant in Burlington, and four months after that, the third MLR was
opened in Newmarket. Subsequently, their development schedule continued unabated until September 2008, with
the opening of their twelfth restaurant in Oakville. Exhibit 1 provides a historical schedule of restaurant openings,
all of which have been in Ontario.
The first three restaurants performed consistently well from the outset, and the siblings attributed this to a
combination of good timing for market entry and a design/menu combination that was right for the times.
However, not every location has been a stellar success.
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Muskoka Lakehouse Restaurants Inc.
Exhibit 1: Schedule of Restaurant Openings
Order
1
2
3
4
5
6
7
8
9
10
11
12
Date
1-May-05
1-May-06
1-Sep-06
1-May-07
1-Jul-07
1-Sep-07
1-Oct-07
1-Apr-08
1-May-08
1-Jun-08
1-Jul-08
1-Sep-08
Location
Mississauga South (Port Credit)
Burlington
Newmarket
Toronto South (Wellington)
Mississauga North (Streetsville)
Scarborough
Markham
Pickering
Barrie
Rosseau
Huntsville
Oakville
Initial Marketing Efforts
Although Max, Lance, and Andrew each had sales experience, none of them had any education or experience
about marketing per se, let alone marketing research. And up until recently, there had been little if any discussion
about target markets and segmentation. As Max was responsible for chain growth, he spent considerable time
investigating locations for new restaurants. This was not done by any scientific or rigorous quantitative
management method, nor by any sophisticated market assessments. As Max puts it,
I mostly rely on my gut instinct about a place. I read the papers and talk to people—friends, bankers,
customers. I listen for stuff like ‘what communities are growing,’ ‘what businesses are opening new plants
where’ and such. Then I drive around, trying to get a feel for the town to see if its character kind of matches the
theme of MLR. If not, I drive to the next town. If it seems to feel right, then I start looking for a site. I speak to
real estate agents, find out what new developments are underway, check out their lease rates and whether the
landlord is offering any improvement allowances. Oh, and I also keep an eye out for the competition. I think
I’ve decided that for best sales results, it doesn’t make sense for our restaurants to be out in the boonies. After
all, we do a pretty decent lunch business so we need to be reasonably close to the commercial districts for the
benefit of people who only have an hour for lunch. On the other hand, I don’t think it makes sense to be in the
midst of all those fast food joints ... that’s not really our competition. For the supper and evening business, I
figure we need to be within 5–10 kilometres of the bedroom communities. This will help capture family dinner
business—both the active/gotta get to soccer types and the more leisurely minded who just want to chill at the
end of the day—as well as the after dinner crowd … don’t want them drivin’ too far. Sometimes I’ll decide to
locate a MLR right in the middle of a bunch of our competitors if I think it’s a sweet property. If I’m right, the
general traffic to the area usually results in some trial or impulse visits.
When a restaurant is about to open, Andrew gets involved in the marketing and places advertisements in the local
weekly paper for three weeks running, announcing the ‘Grand Opening’ of the new restaurant. For the opening of
the Scarborough MLR, he even rented a huge inflatable trout which he flew high above the top of the restaurant.
No one specifically measured whether the trout had any differential impact on initial occupancy rates, but Andrew
seemed to think not, and they didn’t try it again. Other advertising and promotion efforts that they have tried
include the following:
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 Sponsoring one local youth sports team and one adult sports team per restaurant
 Participating in the local Chamber of Commerce and Business Improvement Association
 Promoting various menu items (both food and beverage specials) using printed ‘table talkers’
 Training service staff to round out customer orders by offering them appropriate sides, drinks, and desserts
and empowering them to provide complimentary food or beverage ‘when it is paramount to leave a
favourable impression on a customer in a recovery situation’
 Periodic direct mail drops in 2008, both to residences and business, with a 2-4-1 entrée special on Tuesdays to
try to stimulate business on that day
 Development of a corporate website that lists locations, hours, menus, and announces new items and events
No attempts have been made to measure the marketing effectiveness of any of these activities. The website has
mostly been used for information dissemination—no visitor or customer information has been solicited nor
captured. Muskoka Lakehouse Restaurants Inc. has advertised regionally for enhancing brand awareness or for any
other reason.
Since inception, total expenditures on advertising and promotion as a percentage of system sales have been 1.4%,
1.5%, 1.3% and 1.0% for the 2005 through 2009 fiscal years, respectively, and approximately 1.0% for the current
year-to-date.
Restaurant Performance—Sales
Exhibit 2 provides a special summary of historical sales that MLR’s internal accountant, Jessica Denali, prepared for
a recent management meeting. The table and graph were circulated amongst everyone in advance of the meeting,
and at the start of the meeting the general reaction seemed very positive. The text of some of management’s
related discussion follows.
Muskoka Lakehouse Restaurants Inc.
Exhibit 2: Annual Sales
Fiscal year
ended/ing
April 30,
2006
2007
2008
2009
2010*
System Sales
(all stores,
000s omitted)
$
$
$
$
$
1,472
4,021
9,607
17,222
22,329
*2010 results have been annualized by multiplying the
results for 5-months YTD by 12/5.
Case: Muskoka Lakehouse Restaurants Inc.
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Lance:
Hey guys, not bad eh?
Max:
Yeah, look at that chart showing our annual growth – 1 … 4… 9 … 17 … 22.
Andrew:
Encouraging … but what’s that 23 million figure for 2010? We’re only 5 months into the year.
Jessica
(accountant):
That’s right Andrew. To provide a number just for comparison—so we can see how we’re trending—I
took our 5-month year-to-date results and grossed them up to an annual equivalent, like it says
below the table.
Andrew:
I see. Well, it certainly feels like we had a better summer this year than last.
Lance:
Nice report, Jessica. Looks good! So guys, what’s next?
Jessica:
Just a minute, gentlemen. The reason I prepared this is because we’re starting to experience some
challenges with our cash resources and cash flow. With all the restaurants you’ve built—seven in
about the last two years—we’ve accumulated a fairly significant debt load and making the
payments is taking a big bite out of our cash flow.
Max:
Well, I’m at a bit of a loss here and I’ve got to confess, more than a little frustrated. My
responsibility is to build this business into a competitive chain, on a scale like Kelsey’s, Jack Astor’s,
and East Side Mario’s. But we haven’t added a single new restaurant in over a year. Jess—you just
showed us this great-looking graph, where sales appear to be growing quite significantly, yet you’re
telling us we’ve got problems? You’ve been telling us cash has been tight for the last year and to
slow down our expansion. But I can’t continue to sit still indefinitely—I need to know what’s going
on.
Jessica:
I understand Max. I’m only reporting the actual results. You’ve got to remember, too, that with our
economy having suffered the most significant recession in two generations, many businesses are
challenged at this time and the banks are unwilling to lend money to us to finance any part of the
cost of new restaurants.
Lance:
Wait a minute … I read an article in the Globe and Mail a month or so ago that says the recession’s
over … we’re out of it.
Andrew:
What? You can read?
Lance:
Knock it off!
Max:
Seriously Jess—what’s the issue here?
Jessica:
Well, I can’t say I really know yet. Look—I’m just the accountant here. I know you guys have worked
hard to build MLR to this point and that you have a lot at risk. I just don’t want to see you lose this—
MLR has the potential to be a great restaurant chain. So I just started to prepare this sales summary
from our information system because I know that cash has become an issue and I thought I should
bring it to management’s attention before we get any rude surprises. I thought a sales analysis
would be the place to start. It seems to me that our sales aren’t keeping up with our cost increases.
We need to look into this. Also, I’m no marketing expert, so my ability to help you solve these issues
is limited.
Andrew:
Hmmm … I have an idea. I need to calculate a couple of ratios.
Lance:
I have a calculator.
Andrew:
Whoa—you can calculate too?
Lance:
[makes hand gestures unbecoming of a professional]
Andrew:
Kidding! Thanks. Ok, Jess, you said we opened seven stores in the last two years. Do you have
accurate data on the number of restaurants that were open and operating throughout each year?
Jessica:
We have detailed data in our information system, but, with me, I only have these two charts
showing total sales by quarter and the number of stores in operation at the end of each quarter that
Case: Muskoka Lakehouse Restaurants Inc.
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I also prepared for this meeting—it’s just a start, mind you. [Distributes copies of Exhibits 3 and 4]
Muskoka Lakehouse Restaurants Inc.
Exhibit 3: Quarterly Sales
System Sales (all stores, 000s omitted)
Fiscal
Year
2006
2007
2008
2009
2010
Q1
$
$
$
$
$
418
862
2,008
4,574
5,484
Q2
$
$
$
$
415
1,158
2,623
4,986
Q3
$
$
$
$
339
1,076
2,615
4,067
Q4
$
$
$
$
300
926
2,361
3,596
Muskoka Lakehouse Restaurants Inc.
Exhibit 4: No. Stores Operating at Qtr-end
Fiscal
Year
Q1
Q2
Q3
Q4
2006
2007
2008
2009
2010
1
2
5
11
12
1
3
7
12
1
3
7
12
1
3
8
12
Andrew:
Thanks. Just eyeballing Jess’s charts … looks like we had an average of three restaurants operating in
our second year, seven in our third year, and 12 in our fourth year. If we take the first chart that Jess
gave us today and divide those annual sales by the number of restaurants, what do we get? Let’s
see, roughly …
4,021 thousand, right? [Jessica nods] by 3 = $1,340,000 per store for 2007.
9,607 over 7 = $1,372,000 for 2008—that was the worst part of the recession, right?
Jessica:
Well no, not really … when we indicate 2008, that’s our fiscal year that ends in April. I think the
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worst part was yet to come.
Andrew:
Right. So for the 12-month period ending in April 2009, which I think includes the bad part of
recession …
Lance:
Like there’s a good part of the recession?
Andrew:
Touché!
17,222 divided by 12 = $1,435,000.
I dunno Jess, I don’t see a sales problem here. To me, it looks like average sales per store have grown
every year.
Jessica:
I can appreciate what you’re saying Andrew, based on your own calculation. But look at the graphs
in Exhibits 3 and 4. You see how the number of stores is constant throughout the last four quarters?
Andrew,
Lance, and
Max:
Yeah.
Jessica:
Well, look at the pattern of total sales by quarter in Exhibit 3. And compare the pattern for last year
with the previous year.
Max:
What the …? Ok. I’m no rocket scientist, but even I can appreciate what this looks like. But what the
heck does this mean? I eat in the original restaurant every day and I don’t sense anything like what
this chart is implying. Who is the marketing expert here?
Group:
[silence, shrugging shoulders, etc.]
Max:
Alright. Jess—thanks for bringing this to our attention. Everyone, we need to get to the bottom of
this, so …
Jess—can you prepare some analyses for us that dig deeper into this issue and will hopefully reveal
something I can get may arms around?
Andrew—with your experience in the restaurant industry, and maybe Lance with your sales
experience, perhaps we should look into getting a marketing consultant in here.
Lance—I also want you to work with Jess on this other issue she raised about our costs increasing
more than sales.
Let’s reconvene in a week and see what we’ve got.
Additional Information
See Appendix 1—Selected Internal Secondary Data. Working copies of the data files may be found in the
accompanying Excel worksheet identified as Appendix 1—Internal Secondary Data.
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C2. Identifying and Clarifying Problems and Opportunities
Requirements
[These requirements presume that, as a minimum, students have read, learned, and understand Chapters 1 and 2
of the textbook, and that instructors have addressed at least these chapters in class to the extent proposed in their
respective syllabi. In addition, since the critical activity of identifying and clarifying management issues (be they
problems or opportunities) is often contingent on analyses of secondary data, it is recommended that students also
have read Chapter 3 in the textbook. It is suggested that these requirements be addressed in groups, working
collaboratively. Marks are suggested guidelines. Check with your instructor for specific mark allocations.]
Read subsection C1—Introduction and Background, and review the Additional Information referenced therein. As
you do, try to relate the situation in this young and emerging business to any of your personal experiences in
business, including this or a similar industry. Also, try to relate the scenario to your studies and knowledge of
business and marketing generally.
1.
Instructor’s Choice (either (a) or (b)): From a general business perspective, what challenges are MLR and its
management team facing? More particularly:
(a) Prepare a bulleted list of business management shortcomings in this Case and highlight your top 3. Be
prepared to discuss in class. [5 marks]
OR,
(b) Prepare a table identifying management issues in the Case—that is, issues that the Radford brothers
and other members of the management team will need to address for the survival, health, and future
growth of MLR. Indicate whether your issues are marketing related and whether management is
aware of them or not. Be prepared to discuss in class. [10 marks]
2.
Taking on the role of the management group that has been charged by Max Radford to assess what is really
going on in the development/growth of the business of Muskoka Lakehouse Restaurants [25 marks]:
(a) Review and analyze MLR’s internal data (part of the domain of secondary data) and other information
presented in this Case so far, and on a preliminary basis, identify and/or clarify/describe what real
management issues Muskoka Lakehouse Restaurants needs to address. Document your analysis.
(b) On the basis of your analysis in (a), prepare a memo to Max Radford identifying your preliminary
findings for discussion at the next management meeting. Prioritize any issues in terms of importance
and/or urgency and propose next steps. In this part, incorporate into your memo your considerations
for any additional information requirements to resolve these issues and specifically how these may
generate a need for marketing research.
Hints and Suggestions
You may wish to consider the following (please consult your instructor for additional hints and suggestions in
analyzing this Case):
 Approaches to digesting and organizing significant volumes of data and information
 Approaches to analyzing data
 Review Exhibit 2.1 in the textbook for guidance on an approach
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 What has management done well? What have they not succeeded at? What objectives have they articulated?
What are they frustrated about?
 There may be more than a single issue/problem/opportunity; not all ‘issues’ may be problems (that is, new
opportunities also represent management ‘issues’)
 What evidence exists to support the issues/problems/opportunities you believe you have identified?
 What is the quality of the supporting data/information? Is it reliable, or is additional data/information
required? If so, what type/source of information do you need?
 Remember to evaluate all data for quality (relevance, reliability, etc.), including the data provided to you in
various forms throughout this Case. Things may not always be what they seem, and not all managers in
business have MBAs or other relevant training and experience
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C3. Secondary Data Collection and Analysis
Discussion at the subsequent management meeting:
Max:
Alright team, what have we found out?
Jessica:
Ok. Well, I did as you suggested and revisited the information I presented to you all last week.
Rather than rely on summaries, I dug deeper into the details and I believe I have uncovered some
issues that we need to address as a team. I reviewed all of the information with Andrew, and parts
of it with Lance and also our external accountants. Everyone had some useful considerations and
advice, so let me summarize:
First, our business has seasonal highs and lows, so I perhaps did not make the most accurate
projection of 2010’s annual sales last week at $22.3 million; a more accurate figure would more
likely be $19.2 million, although that does not take into consideration any specific economic factors
or changes in marketing; so I have prepared a revised Exhibit 2 and I’ll ask you to shred the one I
handed out last week and replace it with this one. [distributes Exhibit 2(Rev.1)]
Muskoka Lakehouse Restaurants Inc.
Exhibit 2 [Rev.1]: Annual Sales
Fiscal year System Sales
ended/ing (all stores,
April 30, 000s omitted)
2006
2007
2008
2009
2010*
$
$
$
$
$
1,472
4,021
9,607
17,222
19,183
Yr / yr
%D
173%
139%
79%
11%
* annualized based on seasonality
Max:
Hmmm. That’s a bit of a different picture, isn’t it?
Jessica:
Yes, certainly in terms of outlook, and it does reflect to some extent the slowing of our growth in
total sales as a result of not opening any restaurants in the past year. Having said that, I think the
following findings are likely to influence our approach to new openings. So let’s continue.
As you can see from the extra column I added to the revision of Exhibit 2, although total sales have
grown to a significant amount, the rate of growth has slowed considerably and we are staring at a
potential increase this year of only 11% for our entire chain.
Max:
I don’t understand that. If we haven’t opened any restaurants in a year, and I know we haven’t put
our prices up in a while, how can we have any growth?
Jessica:
Good question. There are a few reasons or possible explanations for that, like the fact that in our
2010 fiscal year, all of our 12 restaurants will be operating for a full year, resulting in sales within
our chain for 12 x 12 = 144 store operating periods or store months, which represents about a 5%
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increase over 2009.
Max:
Wait, what the heck is a store month?
Jessica:
Yeah, I learned about this from our accountants, actually … it’s a good idea, I think, and one we
should incorporate into our regular management reports. Basically, it is a unit of capacity for our
business. Every restaurant that is open and operating for a month, has the capacity to generate food
and beverage sales for the chain. If one restaurant operates for the entire year, its capacity is 12
store months. If we open one halfway through the year, its capacity will only be six store months.
This is important because in the following year, total sales from the two restaurants may look like
they’ve increased by about 33%, but that magnitude of increase would be entirely because of a
combined capacity of 24 store months, whereas the preceding year’s capacity was only 18 store
months.
Max:
Makes sense. Ok, I understand. Carry on.
Andrew:
May I, Jess?
Jessica:
Sure Andrew.
Andrew:
Guys, Jess and I examined the sales reports for each restaurant and compared them month-bymonth. And we found some significant variations that we need to address. For example:
• two of our restaurants, Scarborough and Pickering, have noticeably lower-than-average revenues;
• two others, Rosseau and Huntsville, have significant seasonal variations in their monthly pattern of
sales.
Lance:
May I add something?
Andrew:
Go for it.
Lance:
All four of the restaurants Andrew has identified, plus Toronto, have higher-than-average operating
costs measured as a percentage of sales.
Max:
So what are you saying?
Lance:
Last week, you asked me to look into Jess’s claim that costs were increasing more than sales.
Although I haven’t completed my analysis, because I think I need some other kind of info, I believe
that these five restaurants seem to have higher costs, and therefore lower profits, mostly because of
the sales problems that Andrew and Jess identified.
Max:
What kind of additional information do you need?
Lance:
Well, I was thinking that perhaps we should get some economic data and some data focused on our
industry as a whole and our competitors so we have some benchmarks to compare ourselves to.
Right now, we’re just comparing our own performance over time and it isn’t pretty. But we don’t
really have an idea of what was possible.
Max:
Excellent point. On that note, what progress have we made searching for a marketing consultant to
help us out?
Andrew:
I made a few calls and two of them made similar recommendations—they suggested we complete
the exercise we’ve been doing, including a comparison to the industry as Lance suggested, and when
we feel we have identified our key concerns, they’ll visit with us to explore how they can help.
Max:
I see. So what was the nature of the issues with Scarborough, Pickering, Rosseau, and Hunstville?
Rosseau and Huntsville, darn! I thought those locations would be dead-ringers for success! After all,
those environments are what we built our concept on.
Andrew:
Right. Well it seems there are two different problems:
• Scarborough and Pickering just have lower-than-average sales in nearly every month (except in
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some cases in comparison to Rosseau and Huntsville).
Lance:
Why is that?
Andrew:
I dunno … different markets I guess.
Lance:
Do we know what menu items are selling and which ones aren’t?
Andrew:
I don’t know off the top of my head.
Jess:
We may be able to get that kind of data … I believe our information system archives that kind of
detail.
Max:
And Rosseau and Huntsville? What’s the situation there?
Andrew:
Yeah, well … it seems we do a booming business there in the summer months. Patios are hummin’.
Then when September rolls around, I guess with kids going back to school, sales start to taper off
and the winter months are … well … bleak.
Max:
Bleak? What do you mean … how bad is it?
Andrew:
Well, the worst is in January and February when monthly sales for each location were in the range of
$27,000 to $40,000.
Max:
What?!?!? We’ll go broke there! How can this happen?
Andrew:
Hey Max—you chose the locations!
Max:
Don’t I know it.
Jess:
Gentlemen, look. At least we’re becoming aware of these challenges, assessing the symptoms, and
diagnosing the possible causes.
Max:
You’re right, Jess. Thanks everyone. This news just makes me feel worse. I think we need to stay on
top of this process so we can get our business back on track. Let’s make this our top priority. Lance,
Andrew, and Jess, let’s get our hands on that other information that Lance suggested. Let me check
my notes here. Andrew—check with your consulting contacts and get their suggestions, especially
for industry performance and outlook. Jess—you check with our accountants and get their
suggestions for data on the economy and outlook. Also, see if they can get us some info for
competitive chains.
Let’s get the data in-house within the next week. Circulate copies so we can all read it. And I’ll expect
some comparative analysis the week after that. Let me know how I can help. In the meantime, I’m
going to visit with our bankers and see if they have some suggestions.
Additional Information
See Appendix 2—Links for External Secondary Data.
Requirements
1.
Using the Internet and resources at your university’s library, investigate at least three external sources of
secondary data that you believe will represent a useful resource for completing your group’s assessment of
management issues (both opportunities and/or problems) for MLR by providing some benchmarks for
comparison or reference. The external sources should include at least one dealing with the economy, one on
the restaurant/food service industry, and one on competitive information. In this part, evaluate the relevance
and quality of each source. Then actually use some of their publicly available data for supporting this
management exercise. [25 marks]
Case: Muskoka Lakehouse Restaurants Inc.
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2.
Taking on the role of the management group that has been charged by Max Radford to assess “what is really
going on” in the development/growth of Muskoka Lakehouse Restaurants, extract and summarize some
critical highlights from your selected external secondary data sources and compare MLR’s performance to
them. Based on this additional analysis, update your previous memo to Max Radford. In this memo, be sure to
draw conclusions about the real management issues Muskoka Lakehouse Restaurants needs to address, and
formulate recommendations for approaching their resolution. In particular, show how your recommendations
may generate a need for marketing research (that is, identify the related marketing research objective; a
recommended marketing research solution is not required yet). [25 marks]
Case: Muskoka Lakehouse Restaurants Inc.
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C4. Qualitative Research
Over the next couple of weeks, all members of the MLR management team were diligently involved in gathering
and reviewing external secondary data from various sources, including the Canadian Restaurant and Foodservices
Association (CRFA), Statistics Canada, their bankers, and the publicly available annual reports of larger competitive
chains. They compared their findings to the performance of their own chain, both in total and on a store-by-store
basis. Several small work sessions were held throughout this period. What follows is part of the conversation from
the next management meeting:
Max:
I know we’ve all been working diligently on numerous business issues that are really important for
the future of MLR and I just want to take this chance to personally thank each of you for your efforts.
I’m starting to feel better about this. I guess this exercise was long overdue … something we should
have done at the outset perhaps. Fortunately, the strength and appeal of our core concept was
robust enough to get us through the recession and Jess had the foresight to bring our current
condition to our attention. So let’s recap where we stand, what we’ve discovered, and where we go
from here.
Andrew:
In our various get-togethers over the past two weeks, it seems we have identified six issues we need
to make some decisions on. I have made notes on all of these, and we have shared our various
research and supporting data. To focus our attention and to ensure we get our other managers
thinking along the same lines, let me put them on our white board … [Andrew writes the bold-faced
items for all to see]:
1. Chain expansion/growth – When and where should we open our next restaurant/restaurants?
2. Underperforming restaurants – What to do about Rosseau and Huntsville in the winter, and how
do we determine or confirm why sales are so low at our Scarborough and Pickering stores?
3. Menu Prices – How much of a price increase can we pass onto our customers immediately?
Should it be an across-the-board percentage, or applied in some other way?
4. Getting to know our customers – Who are they? What do they like about our restaurant concept
and what don’t they like? Where do we find more of them? This is related to #1, obviously.
5. Current Menu Offering – Which menu items are our top sellers and which do not seem to be in
high demand? Which ones are profitably priced and which are not? Do we need to add any new
items to satisfy customer preferences? This is related to #4. If we’re going to add menu items, how
do we pick winners?
6. Marketing Plan – Based on the decisions we make on the preceding items, let’s get some
professional help and pull together a proper marketing plan to help achieve some specific results.
Lance:
Good summary, Andrew. That’s pretty consistent with my thoughts. I would add ‘Are there any items
which, if added, might draw in new customers?’ to your point #5. What do you think?
Andrew:
Makes sense … sure, I see your point.
Max:
I agree with Lance … nice work. Are we all on board with this? Anyone have anything else to add?
Jessica:
I don’t really have any issues to add to Andrew’s list. At this point, I think we should run through the
list, discuss those ideas we think we can make some reasonable decisions on internally and
immediately, and then identify those issues we need some assistance with, or need to get some
additional information on.
Max:
Alright Jess, why don’t you walk us through this?
Jessica:
Sure … [Jess leads the team through a discussion, and they arrive at the determinations indicated in
the solution to Requirement 3-2 (which you can obtain from your instructor)].
Case: Muskoka Lakehouse Restaurants Inc.
P a g e | 15
Max:
Is that everything, Jess?
Jessica:
Yes, I think that about covers it.
Max:
So, I jotted down some additional notes during our discussion and it seems clear that we need to
conduct some real marketing research that will give us some answers specifically related to our
business. But how do we get this information? Do we conduct a customer survey? Do we hold some
focus groups?
Lance:
I know most of us have been involved in sales, but isn’t this somewhat specialized? Don’t you think
we need to get one of Andrew’s marketing research gurus in here to give us some professional
assistance with this?
Jessica:
I think you’re right, Lance. Besides, there’s plenty of other decisions we can attend to in the shortterm without this custom-tailored information—like an immediate price increase, which will provide
some needed cash flow! We can get our principal beverage supplier to pay for the cost of printing
new menus if we continue to advertise their brand on it.
Andrew:
I agree—we do need to get some professional help, somebody with experience in marketing
research and who can coach us through the development of our marketing plan. These may be two
different folks. Fortunately, I’m a step ahead on this. I got some references from the CRFA on
specialists in marketing research for the restaurant industry. And I have invited Alan MacInnes from
Insight Marketing Research to join us today. He should be here now; let me go check.
[Andrew meets Alan in the lobby, brings him to the boardroom and makes introductions, including
Alan’s assistant, Yolanda Marshall.]
Andrew:
So Alan, as I was explaining to you earlier this week, MLR has enjoyed some moderate success in
developing our 12-store chain over the last 4½ years. But our growth has been curtailed, partly
because of the recession and partly because we have encountered various growing pains that need
our immediate attention. In addition, we all feel we could be doing a better job of marketing to our
customers, but we’re not sure how to go about that. Our management group has been investigating
these over the better part of the last month and the six issues you see listed up on the white board
are the ones we have determined are most important or urgent for us to address right now.
Alan:
I see that a number of your decision points could potentially benefit from some quality marketing
research.
Max:
That’s right. Andrew tells us that your firm has done marketing research for other restaurant clients.
Have you worked for any of the major firms in our industry that I would recognize? Have you tackled
projects like these before? And what were the results?
Alan:
Those are all good questions, Max. Let me address them in order.
First, here is our firm brochure [Alan distributes a copy to each member of the team]. On the third
page from the back, we list some the restaurant brands we have done work for. I think you might
recognize many of these—Boston Pizza, Kelsey’s, Swiss Chalet, Jack Astor’s, Second Cup. Yolanda
and I have both worked on each of these accounts.
Lance:
Cool. These are some of the better quality competitors.
Alan:
Yes, they’re great firms, all of them. And you may be interested to know that they all continue to
have a need for marketing research because markets are always changing. Even today, MLR is not
alone in facing challenges brought on by the recession. I’d be pleased to provide you with a contact
at any of these firms if you would like to get a reference on Insight. I think you’ll find they are quite
satisfied with our services and the information we provide them. So, to your second point Max—yes,
we have tackled projects like these before, although I do not think you need marketing research to
help with all of the decisions you are facing.
Jessica:
I like this guy already—he’s not trying to sell us something we don’t need!
Case: Muskoka Lakehouse Restaurants Inc.
P a g e | 16
Max:
Jess is our accountant and she keeps us very value-conscious!
[group laughs]
Alan:
Good for you, Jess! It is important to always keep value uppermost in our minds in both our
industries. So, on that note, let me suggest the following:
Over the next week, why don’t you focus on addressing Issues [ … ] and I’ll develop a proposal for
how we can help you conduct suitable marketing research to support making decisions on the rest.
Jessica:
Thanks, Alan and Yolanda. Your proposal—will it include cost estimates?
Yolanda:
Yes, of course. And, where appropriate, we’ll note alternatives that may have different advantages
and costs.
Max:
Sounds like a plan! Let’s meet here at 11:00 next Wednesday. Why don’t you email a copy of your
proposal first thing that morning? We’ll review it before we meet. You can run us through it during
the meeting and do a Q and A, then we’ll introduce you to one of our Muskoka Lakehouse
Restaurants for lunch.
Alan:
Works for me, Max. But you won’t be introducing me … I take my family out for dinner to your
Streetsville restaurant about once a month.
Max:
Well that’s good news! So what do you think of our famous Pickerel?
Alan:
Hey, it doesn’t matter what I think … we’re interested in the tendencies of attitudes and opinions of
the thousands of other customers you have served and will continue to serve.
One other thing: By the end of the day, I’ll send you a confidentiality document that conveys our
assurance that we will treat your internal data as confidential and safeguard it appropriately. Only
Yolanda and I will have access to it. After you receive this, and assuming it is acceptable, could I ask
you, Andrew, to provide me with copies of the research your team has already done with respect to
analyzing secondary data, both internal and external? That way we won’t duplicate the effort you
have already put in and we’ll get up to speed faster.
Andrew:
No problem, Alan.
Alan:
Great. Thanks for this opportunity … see you all next week!
Requirements
1.
Assume the professional role of Alan MacInnes and Yolanda Marshall—the consulting team from Insight
Marketing Research that specializes in the restaurant industry. As a group, prepare a brief, professional
marketing research proposal to address the appropriate points from the MLR management team’s list of
issues (you will need to select all appropriate issues and exclude those that management ought to be able to
resolve most efficiently through decision making based on their extensive analysis of secondary data). Prepare
the proposal in a slide-presentation format using bullets or point-form for brevity. Clearly identify the
marketing research objectives. Specify alternate approaches to obtaining information to address each
objective, if you believe there are suitable alternatives. You are not required to include data analysis methods
nor cost any approach/method. Select three methods of primary data collection and indicate your reasons for
including them in the research design, presenting them in a manner appropriate for your client. Assume
urgency is important to the client, who wants the project to start not later than two months from now. [50–70
marks]
Case: Muskoka Lakehouse Restaurants Inc.
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Hints and Suggestions
 Check with your instructor on the marks available for this requirement; marks will be proportional to your
instructor’s expectations for detail.
 Review the sections of Chapter 2 in the textbook dealing with marketing objectives, the marketing research
process, and the marketing research proposal.
 Learn and review the various forms of qualitative research in Chapter 4 to assess which methods may have
application to MLR’s issues.
 Students may find it appropriate to also read Chapter 5 and to scan Chapter 7 for relevant ideas for the
proposal. Consider ‘exploring’ subsequent relevant chapters of the textbook as a reference for content in this
requirement (to make it more sensible to you), without having to learn it completely at this point.
Case: Muskoka Lakehouse Restaurants Inc.
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C5. Primary Data Collection
Review the suggested solution for the slide-presentation proposal. This is one solution – it is not necessarily the
only solution. Students and their instructors may well have created feasible alternative approaches to generating
key information essential to MLR’s management to support the critical decisions they must make. Let’s assume
that:
 the suggested slide presentation is the one that Insight Marketing Research presented at the meeting
scheduled for the following Wednesday;
 MLR management understood and agreed with the objectives, and how the design process will flow from
phase to phase;
 MLR management understands and agrees with the need and potential benefits of the Focus Group and the
Customer Survey, although they recognize that certain attributes of the Survey (sampling plan and sample size
are yet to be determined);
 But MLR management doesn’t quite understand the need for or rationale with respect to the “Observation”
techniques for generating qualitative research data.
Requirements
1.
Assume the professional role of Alan MacInnes or Yolanda Marshall, from Insight Marketing Research. You
need to get the client ‘on side’ with the research design and approach in order to get them to sign back the
proposal contract so your team can start the project as soon as possible to preserve the timeline. Collaborate
in your groups to prepare an e-mail to the MLR management team, distinguishing observation from other
methods of primary data collection, explaining why it’s appropriate and how your research team expects to
conduct it in MLR’s case, and identifying the benefits that will accrue to MLR as a result. [ 10 or 20 marks, at
your instructor’s discretion.]
Case: Muskoka Lakehouse Restaurants Inc.
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C7. Survey Research
The fundamental advantages and disadvantages of survey research (particularly using an on-line medium) were
highlighted in the proposal and design requirement. The intention of the following requirements is for students to
delve more deeply into these issues and to think more critically about the effective application of survey research
to meet the client’s needs in this Case.
Requirements
Submit responses on behalf of your group to the following:
1.
Do you think it would be best to present survey respondents with their incentive / reward of a certificate or
coupon for a free entrée on their next visit to any MLR restaurant before or after they complete their survey?
Explain your reasoning. Consider the pros and cons of each. Can you devise a mechanism by which the pros of
both approaches are realized and the cons minimized and the disadvantage of unrestricted samples in on-line
surveys neutralized? [ 10 marks]
2.
Explain why Insight Marketing Research most likely declined to use in-store-intercept interviews, selfadministered questionnaires, or mail or telephone interviews. [5 marks]
3.
Assuming that single incentive coupons are issued randomly for each cheque, that the average number of
persons dining per cheque is 3, that the weighted average cheque size per person across all day-parts is
$14.87, and that entrées account for 57% of this and that Insight Marketing Research has made a preliminary
rough estimate of sample size for the Customer Survey of 1,200, with a redemption rate of 2 out of every 3
coupons issued, estimate the cost to MLR of the incentive, excluding printing and assuming the incremental
cost of all labour for these complementary entrées is nil. [5 marks]
Case: Muskoka Lakehouse Restaurants Inc.
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C8. Questionnaire Design
Max Radford appreciated the detailed response on the issue of ‘Observations’ and in the process, developed a
greater appreciation not just for the complexity of the survey design process, but also for the care and
professionalism exhibited by Insight Marketing Research towards this project so far. Now it’s time to get to
designing the survey.
Requirements
1.
Assuming the role of Yolanda Marshall, and based on the research objectives for the Customer Survey,
develop two sample questions for the subject questionnaire in this Case, for each of the categories (location
and type) of questions identified in Exhibit 8.6 in the Textbook. It is not necessary here that you provide the
answers or list of possible answers (although you may provide the latter if it helps elucidate the nature / intent
of your question). Include at least one question likely to have a dichotomous answer set, and at least one
question likely to require a single selection from a list of multiple choices. Assume the rationale is the same as
indicated in Exhibit 8.6. [10 marks]
2.
Both MLR management and their team of researchers are interested in enhancing customers’ dining
experiences at any Muskoka Lakehouse Restaurant by learning directly from their customers what they can do
better. Craft a simple open-ended question intended to provide valuable information for this purpose. If you
were one of the Radford brothers, what business reasons would you have for insisting on the inclusion of one
or more questions like this in your first survey? Can you identify a processing challenge with the type of data
generated by responses to your question? [10 marks]
3.
MLR management is interested in exploring the ethnicity of its customers in order to determine whether their
concept does not appeal to some (particularly where it has already located, or potentially to avoid such
challenges in the future if this turns out be a factor). What are the challenges about asking questions of this
nature? Can you suggest how these be effectively addressed? [3 marks]
4.
From where should Insight Marketing Research select respondents to pre-test the questionnaire and why? [3
marks]
Case: Muskoka Lakehouse Restaurants Inc.
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C10. Basic Sampling Issues
Requirements
1.
For the marketing research survey contemplated in the MLR Case, identify the population of interest and the
sampling frame. What principal short-coming can you think of about the population of interest and sampling
frame in the design of this project that may be a source of potential error? How might this be overcome? [5
marks]
2.
Devise an appropriate sampling method for this research design. [5 marks]
3.
Administratively, how can the researchers best manage the accuracy and completeness of collecting survey
responses using the on-line survey method? [3 marks]
Case: Muskoka Lakehouse Restaurants Inc.
P a g e | 22
C11. Sample Size Determination
Assume that:
 MLR management and Insight Marketing Research have agreed to proceed with the survey using the twodimensional sampling plan included in the suggested solution (see subsection M11) – i.e. the two-dimensional
stratified sample is based on locations and day-parts;
 Most of the statistics anticipated to be generated from the survey will be proportions as opposed to the
estimate of mean values (e.g. the proportion of customers dining during the lunch hour that rated meal
selection as ‘very healthy’); and,
 The Central Limit Theorem holds for the sample proportions we will be investigating.
Requirements
1.
The Insight project team and the MLR management group met to discuss the determination of sample size for
the survey. They considered the factors of cost, confidence, and acceptable errors. It was collectively
determined that sample size determination would be based on achieving a planned confidence level of 95%
(for which the corresponding Z-value looked up by Yolanda Marshall in a table is 1.960). They also agreed that,
given the number and range of possible proportions to be estimated, management is willing to accept a
margin of error of 5% in the estimate of any proportion.
(a) For the purposes of this exercise, and ignoring for the moment the additional statistical sophistication
required for determined sizes of stratified samples, use the formula for the determination of sample sizes
for simple random sampling to determine a base sample size for the whole survey. [4 marks]
(b) Modify the base sample size using the guidance for subgroups on p.339 of the textbook, and determine a
revised sample size to suit the sampling plan in this Case, with an allocation of the sample to each major
subgroup (consider locations to be major) and each minor subgroup (consider day-parts to be minor). [5
marks]
(c) Revise the total sample size one more time, reversing the major / minor classification of subgroups. [4
marks]
2.
In order to reduce costs (remember, MLR is currently suffering some cash flow challenges), management and
the research team are considering reducing the desired confidence level to 90% and increasing the acceptable
margin of error to 10% in the estimate of any proportion. What would be the impact on the total sample size
determined as if this were a simple random sample? Should they do this – why/why not? [7 marks]
3.
Optional: A Simple Modification of Sample Sizes for Stratification (not covered by textbook):
(a) Using the method called “proportionate stratification”, and being mindful of the cost factors associated
with on-line surveys, design a sampling plan to give consideration to our stratification design. [17 marks]
(b) Is it necessary to apply any “Finite Correction Factor” to any of the cells in the revised sample size
allocation in (a)? [3 marks]
Hints and Suggestions
 Do not attempt this exercise without first learning the content of Ch.10 in the Textbook.
 Review guidance in the Textbook on sample size determination based on the number of subgroups to be
analyzed, the sampling distribution of proportions, and the formula for sample sizes involving proportions.
Case: Muskoka Lakehouse Restaurants Inc.
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 Remember that MLR has not previously done any surveying of its customers.
 Find missing information using an internet search.
Case: Muskoka Lakehouse Restaurants Inc.
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Appendix 1: Selected Internal Secondary Data
All data in this Appendix is also reproduced in an accompanying Excel Worksheet.
Schedule C1-1: Restaurant Size / Capacity, by Location (2009F)
Order
1
2
3
4
5
6
7
8
9
10
11
12
Avg
Location
Mississauga South (Port Credit)
Burlington
Newmarket
Toronto South (Wellington)
Mississauga North (Streetsville)
Scarborough
Markham
Pickering
Barrie
Rosseau
Huntsville
Oakville
№ Seats
Patio
Indoors
40
174
42
182
42
175
24
188
38
190
40
181
42
182
42
175
34
174
48
174
48
174
38
183
Size* (sq. ft.)
Patio
Indoors
800
4,500
900
4,680
850
4,500
500
4,750
750
4,800
800
4,600
900
4,680
850
4,500
700
4,500
1,000
4,500
1,000
4,500
750
4,650
4,597
All Stores
40
179
817
* All restaurants have a standard format kitchen comprising …
1,000 sq. ft.
Schedule C1-2: Restaurant Average Annual Occupancy Rates, by Location (2009F)
Location
Mississauga South (Port Credit)
Burlington
Newmarket
Toronto South (Wellington)
Mississauga North (Streetsville)
Scarborough
Markham
Pickering
Barrie
Rosseau
Huntsville
Oakville
Average, All Stores
Lunch
Indoors
Patio
60%
90%
55%
86%
55%
90%
60%
93%
59%
90%
50%
70%
56%
80%
54%
75%
55%
84%
60%
92%
60%
90%
60%
84%
57%
Case: Muskoka Lakehouse Restaurants Inc.
85%
Supper
Indoors
Patio
70%
70%
67%
70%
65%
75%
67%
66%
68%
72%
60%
44%
70%
50%
62%
47%
67%
75%
70%
78%
65%
75%
70%
65%
67%
66%
Late Evening
Indoors
Patio
25%
64%
25%
56%
25%
40%
25%
32%
25%
50%
25%
28%
25%
40%
25%
30%
25%
36%
25%
30%
25%
24%
25%
50%
25%
40%
P a g e | 25
Schedule C1-3: Total Actual Food & Beverage Sales, by Location, by Fiscal Period
Actual Sales for FY, by Location
Location
Mississauga South (Port Credit)
Burlington
Newmarket
Toronto South (Wellington)
Mississauga North (Streetsville)
Scarborough
Markham
Pickering
Barrie
Rosseau
Huntsville
Oakville
2006
1,472,295
-
$
$
$
$
$
$
$
$
$
$
$
$
Total, All Stores
$ 1,472,295 $ 4,020,837 $ 9,607,464 $ 17,221,884 $ 9,303,668
$
$
$
$
$
$
$
$
$
$
$
$
2007
1,565,050
1,546,802
908,985
-
$
$
$
$
$
$
$
$
$
$
$
$
2008
1,621,392
1,613,315
1,537,145
1,602,235
1,393,127
879,127
846,304
114,819
-
$
$
$
$
$
$
$
$
$
$
$
$
2009
1,626,256
1,616,542
1,535,608
1,624,666
1,711,606
1,420,797
1,625,751
1,445,547
1,513,532
1,127,258
933,248
1,041,073
2010ytd *
$
789,969
$
784,389
$
748,149
$
815,504
$
845,903
$
677,976
$
821,645
$
689,089
$
750,357
$
775,909
$
765,487
$
839,291
* Represents cumulative sales for the 5-months' ending September 30, 2009
Note to Students: A month-by-month detailed breakdown of each restaurant’s sales in the foregoing table is also
available in the Excel Worksheet (refer to Schedule C1-3s).
Schedule C1-4: Key Operating Ratios, by Location (last 12 months) *
Location
Mississauga South (Port Credit)
Burlington
Newmarket
Toronto South (Wellington)
Mississauga North (Streetsville)
Scarborough
Markham
Pickering
Barrie
Rosseau
Huntsville
Oakville
Average, All Stores
Cost, as a % of Total Food & Bev Sales
Food & Bev
Labour
Combined
34.8%
33.7%
68.5%
34.6%
33.4%
68.0%
35.0%
33.2%
68.2%
36.0%
34.1%
70.1%
35.5%
33.2%
68.7%
36.8%
34.9%
71.7%
34.7%
33.7%
68.4%
36.5%
34.2%
70.7%
35.2%
32.6%
67.8%
35.9%
34.3%
70.2%
36.4%
33.7%
70.1%
35.7%
33.7%
69.4%
35.6%
33.7%
69.3%
* Last updated: September, 2009
Case: Muskoka Lakehouse Restaurants Inc.
P a g e | 26
Schedule C1-5: Selected Historical Customer Counts, by Location
1
2
3
4
5
6
7
8
9
10
11
12
Mississauga South (Port Credit)
Burlington
Newmarket
Toronto South (Wellington)
Mississauga North (Streetsville)
Scarborough
Markham
Pickering
Barrie
Rosseau
Huntsville
Oakville
Lunch
2,582
2,523
2,272
2,546
2,457
2,052
2,352
2,159
2,170
1,401
1,450
2,577
26,541
Case: Muskoka Lakehouse Restaurants Inc.
Nov-08
Supper Late Ev'g
3,013
1,076
3,074
1,147
2,685
1,033
2,843
1,061
2,832
1,041
2,463
1,026
2,940
1,050
2,479
999
2,644
986
1,634
584
1,571
604
3,007
1,074
31,185
11,681
Total
6,671
6,744
5,990
6,450
6,330
5,541
6,342
5,637
5,800
3,619
3,625
6,658
69,407
Lunch
4,402
4,355
4,191
4,359
4,870
3,821
4,055
4,094
3,922
2,947
2,577
4,587
48,180
Dec-08
Supper Late Ev'g
5,136
1,834
5,305
1,979
4,953
1,905
4,867
1,816
5,613
2,064
4,585
1,911
5,069
1,810
4,701
1,895
4,777
1,783
3,438
1,228
2,792
1,074
5,351
1,911
56,587
21,210
Total
11,372
11,639
11,049
11,042
12,547
10,317
10,934
10,690
10,482
7,613
6,443
11,849
125,977
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Appendix 2: Links for External Secondary Data
This Appendix lists links to various sources which may be relevant for the MLR Case. Links have been categorized
by nature of information (i.e. Economy, Industry, Competition), and within those categories by source.
Economic Data and News
Statistics Canada
http://www.statcan.gc.ca/search-recherche/index-eng.htm
(Stats Canada’s generic search engine) - consult university library for access to greater details in CANSIM, if
desired; there are many other insightful reports here that students should review and consider their relevance for
themselves. For example, search for ‘Consumer Spending’ – 302 results; check # 2 [‘Market Research Handbook’
(2008-04-08)], #3 [‘Spending Patterns in Canada and the U.S.’ (2007-09-24)].
Other
http://www.theglobeandmail.com/report-on-business/recession-over-growth-resumes-bank-ofcanada/article1228484/
(Recent news article regarding economic recovery)
Industry Data
Canadian Restaurant and Foodservices Association
http://www.crfa.ca/research/
(Annual changes in sales growth and operating costs as a percentage of sales have been volatile during the recent
period of economic uncertainty (2007-2009), which has been characterized by recession, job losses, low consumer
confidence)
http://www.crfa.ca/research/statistics/default.asp#units
(Understanding the industry – numbers of units or establishments)
http://www.crfa.ca/research/statistics/default.asp#definitions
(Understanding the industry – definition of segments)
http://www.crfa.ca/research/statistics/default.asp#provincial
(Understanding the industry – provincial / regional comparisons of number of units, sales, growth, and
profitability)
http://www.crfa.ca/research/statistics/default.asp#profit
(Understanding the industry – overview of profit margins)
http://www.crfa.ca/research/statistics/default.asp#consumer
(Understanding the industry – overview of consumer spending on foodservice)
http://www.crfa.ca/research/statistics/sales.asp
(2009 Foodservice Forecast with links to previous years’ actual sales data by year for comparison)
http://crfa.ca/research/2008/crfas_outlook_for_2009_foodservice_sales_to_drop.asp
(2009 outlook; descriptive)
Case: Muskoka Lakehouse Restaurants Inc.
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Note: Due to the volume of requests, CRFA is unable to assist students with foodservice industry projects. Students
are invited to browse the CRFA website for information, and also consider doing the following:

Purchase a copy of Foodservice Facts magazine at a special student price of $15 per copy (regular price is $30 per
copy). Online orders are not eligible for the student discount. To receive the discount on this publication, you must
place your order by calling 1-800-387-5649, ext. 4215, faxing your order to 416-923-1450 or emailing
research@crfa.ca.

Purchase commercial foodservice data directly from the CANSIM database on the Statistics Canada website, Tables
355-0006 and 355-0005.

Visit your school or community library and search industry periodicals such as Foodservice and Hospitality
magazine, Canada’s Foodservice News and Food in Canada.
Special Free Downloadable Reports from CRFA:
http://www.crfa.ca/research/2008/rising_costs_reflected_in_higher_menu_prices.pdf
(Rising Commodity Prices and the Outlook for Canada’s Foodservice Industry; 9/09 (PDF))
http://www.crfa.ca/products/pdf/labourshortage.pdf
(Help Wanted: Labour Shortage Crisis and Canada’s Foodservice Industry; 6/06 (PDF))
NPD Group / CREST 
http://www.npd.com/corpServlet?nextpage=food-beverage-categories_s.html
http://www.npd.com/corpServlet?nextpage=food-beverage-eating-patterns-canada_s.html
http://www.npd.com/corpServlet?nextpage=press-releases-food_s.html
(NPD is a marketing research company and considers itself “the leading provider of reliable and comprehensive
consumer and retail information for a wide range of industries”, including foodservice; like all good quality
information, their publications containing details are not free; however, consult Press Releases for accessible data
to establish familiarity with direction and magnitude of key consumer spending trends in the USA, and make some
judgemental comparison based on economic relationships between the two countries; for example http://www.npd.com/press/releases/press_090720.html)
Statistics Canada
http://www40.statcan.gc.ca/l01/cst01/trad55-eng.htm and
http://www40.statcan.gc.ca/l01/cst01/trad52-eng.htm
(Recent Retail Sales by sector – scroll to ‘Food and beverage’; visit school library for more details available through
university library subscriptions)
http://cansim2.statcan.gc.ca/cgi-win/cnsmcgi.pgm?Lang=E andArrayId=800019 andArray_Pick=1 andRootDir=CII/
andResultTemplate=CII/CII___
(Select desired detailed data from CANSIM database at moderate cost e.g. $3, or use university library access)
http://www.statcan.gc.ca/search-recherche/index-eng.htm
(Stats Canada’s generic search engine; search for ‘Food Service’ – 816 results; check #2 [‘Food services and drinking
places – Full-service restaurants by province and territory’] for an overview; click on province in left navigation /
link panel e.g. ‘Ontario’; observe trends and regional differences; again consult university library for access to
greater details in CANSIM if desired; there are many other insightful reports [e.g. #5, 6, 7 on the search results list]
that students should review and consider the relevance for themselves – for example, the following two links
provide:
Case: Muskoka Lakehouse Restaurants Inc.
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[a] some insight into sales trends both by segment and region
http://www.statcan.gc.ca/daily-quotidien/090429/t090429c1-eng.htm ; and
[b] highlights and detailed information on sales, operating expenses, profitability, by province, etc
http://www.statcan.gc.ca/pub/63-243-x/63-243-x2009001-eng.htm ;
click on ‘Statistical Tables’ which is the source of much of the information reported by the CRFA; choose Statistical
Tables 2, 6 and 7 for this Case)
Marketing Research Aggregators
http://www.marketresearch.com/
(search for purchasable reports that may be relevant [e.g. links for ‘Food Service and Hospitality’, or ‘Restaurants’];
mostly about USA restaurants; but, refine search to ‘Last Year’, ‘Canada’, which should yield 4 results)
Competitors’ Information
Google
www.google.ca
(Investigate the results of thoughtful searches such as:
 ‘Canada’s Top Restaurant Chains’ … http://www.canadianmade.com/restaurant.htm
 Holding companies / multi-brand organizations owning significant restaurant chains in Canada include: Cara
Operations Limited {whose concepts include: Kelsey’s, Montana’s, Milestone’s, Swiss Chalet, Harvey’s}, Prime
Restaurants {whose concepts include: Casey’s, East Side Mario’s, and various pubs} and SIRCorp {whose
concepts include: Jack Astor’s, Canyon Creek, Alice Fazooli’s, and various individual ‘Signature’ fine dining
restaurants})
Restaurant Chains’ Annual Reports and Related Information
SEDAR Filings (http://www.sedar.com/search/search_form_pc_en.htm ):
 Prime Restaurants’ Royalty Income Fund 2008 Annual Information Form (AIF, 3/11/09, English –
http://www.sedar.com/GetFile.do?lang=EN anddocClass=2 andissuerNo=00017997
andfileName=/csfsprod/data97/filings/01403873/00000001/i%3A\SEDAR\Prime\2009AGM\2008AnnualRepor
t.pdf )
 Prime Restaurants’ Royalty Income Fund 2008 Annual Report (AR, 4/13/09, English http://www.sedar.com/GetFile.do?lang=EN anddocClass=2 andissuerNo=00017997
andfileName=/csfsprod/data97/filings/01403873/00000001/i%3A\SEDAR\Prime\2009AGM\2008AnnualRepor
t.pdf )
 SIR Royalty Income Fund 2008 Annual Information Form (AIF, 3/31/09, English –
http://www.sedar.com/GetFile.do?lang=EN anddocClass=1 andissuerNo=00020914
andfileName=/csfsprod/data96/filings/01398597/00000001/k%3A\filings\livework\wkout\24152\aif.pdf )
 SIR Royalty Income Fund 2008 Annual Report (AR, 5/21/09, English http://www.sedar.com/GetFile.do?lang=EN anddocClass=2 andissuerNo=00020914
andfileName=/csfsprod/data98/filings/01424642/00000001/k%3A\filings\livework\wkout\24789\AR.pdf )
Case: Muskoka Lakehouse Restaurants Inc.
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