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8/13/2019 CSEC June 2012 Economics SBA2
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S co nom ic s
S
T itle of P ro jec t
A com pa rati ve stu d y o f th e d em and for K FC a nd Ja ps at a p art icu lar h igh sch o ol be twe en thep eri od S ep tem ber 5 and 26, 2
Co mm en ts
T he T it le
Th e titl e o f the pr o je c t was c lea rl y sta ted It was a mi cro ec ono mi c top ic an d was a p p ro p ri at e
fo r this leve l. Th e fu ll tw o m ark s we re aw ar d ed .
Pu ios e of the P ro je c tT hr ee o b je c tiv e s w er e ad eq ua te a lt ho u g h seve n were listed . T he full th ree m arks we reaw ar d ed .
C o lle c ti o n o f Da ta
F ive sou rce s o f da ta co llec tio n we re used. T h e fu ll th r ee m ar k s we re aw ard ed.
P re sen tatio n
of D ataA co mb ina tion o f tab les gra p hs cha rt s and d iag ram s w er e used. we re accu rat e ly n am ed
and lab el l ed Th e full se v en m arks were awa rde d .
re t tio n n d p lsisA n ex cel len t an al y si s of d at a u sin g re lev a nt eco no mic th eo ry was done. T he fu ll ten ma rkswe re aw ard ed.
F ind ing s
S e v en f in d in g s re lat ing to the o b je ct iv es w er e p re sen ted . T he full six m ar k s were aw a rd e d.
R eco mm en dat ion s
T h e sev en reco mm en d ati ons liste d were b as ed on the fin d in g s and were link ed to the sta tedob jec ti ve s. Th e fu ll four m ark s we re aw arde d .
C om mu nic atio n o f In fo rm atio n
E xc e lle n t u se o f la n gu ag e an d re po rtin g sk i lls w ere e v id e nt thr o ug h ou t th e rep o rt . T h e fu llfive ma rks w er e aw ar de d .
T h is S B A sc or e d the ma xim um fo rty 4 0 m a rk s
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Economics School Based Assessment 2 1 2 11
Name:
Subject: Economics
Teacher:
Title: comparative study of the demand for KFCand Japs at ig i Schoolbetween the period September 2 11 t
September 2 1
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TABLE OF CONTENTS
TITLE
Iiitrc: cjiictjon
AimsandObjectives
Methods of Investigation
Pz esentat ion of Data
Anaiysis and Interpretation of a ta
F i n d i n g s a n d O b s e r v a t i o n s
Recorrir iencIations
Concli ision
Bibliogzaphy
Appendices
PAGE
4
5
6 8
92
22
23
24
25
263
2
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INTRODUCTION
With the increasing desire to satisfy ones appetite spend less time cooking and more time
accomplishing tasks and enjoying friends an d family the fast food industry is dynamicquick and ever growing Fried chicken and chips sandwiches breakfast. lunch or dinner
cultural foods or even light snacks can be bought and consumed in under 10 or even
minutes. in a world where people ea t firstly with their eyes there is a food shop for
evervone Thus have decided to investigate the Fried Chicken industry with referencespecifically to Japs and KFC.
would like to thank everyone who would have contributed to the completion of thisSchool Based Assessment:
God firstly for the opportunity to do such a projectMy teacher for her constant advice and willing guiding handMy fellow group member for working on the SB with me ll those who answered the questionnaires distributedMy family for helping and supporting me during the execution of this project.
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.:tivesofresearch
The aims of this investigation are:
I To establish the type of relationship there is between price and quant itydemanded for fried chicken t KFC an d ps
2 Todetermine if the demand for fried chicken t KFC and ps is normal or
perverse 3 To examine the principal factors affecting the demand of KFC or p s 4 To examine the joint demand of fried chicken and its complements 5 To examine the price elasticity of demand of fried chicken t KFC an d ps 6 To briefly examine the market structure for fried chicken in Trinidad an d Tobago 7 To briefly examine the market conditions affecting the supply of fried chicken at
KFC an d ps
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M e t : The SBA was conducted on the compound of St. AugustineGirls High School
j rce s
gn n a jr e One hundred and twenty questionnaires were shared out to students ofthe S.A.G.H.S. body. This was geared towards gaining demand information and trends forfried chicken an d its complements at KFC and Japs outlets.
2. n teJjps Managers of KFC and Japs outlets in St. Helena were interviewed to obtainsupply information such as the factors affecting supply and methods used to attractcustomers.
o ur ces
Textbooks Economics textbooks were used to have a clear understanding of the Laws ofDemand and Supply
2. Internet. The websites listed in the bibliography were used to further clarir economicconcepts to enhance the schooIbased assessment
3. Jpca i fews ciers These were used to obtain fried chicken advertisements as evidence ofthe methods used to persuade customers to buy from KFC or Japs
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t
u e s ti on C A ll s tu d en t s te fr ied c h ic k e n t le s t o nc e pe r e r M ore th n h lf of ths t u d e n ts su r v e y ed t e fr ied c h ic k e n m o n th ly
ee kly 7 ont hly 7Y ea rly
of Stu den ts an d ho w o ft e nth ey e at f ri c hi c ke n
o f S tud e n ts a n d h o w of te n th e y e a t f r ie d c h ic k e n
6 7
8
6
5
W eek ly M o nt h ly V ea rly
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u st io n O f the 20 st u de n ts 4 3 23 sai d t ha t they w ou ld u y 2 pi e ce s t 1 L0 0 ee cp iec e .
p ie c e sJk S
s 8 s
jp i e e s
of S tud e nt s an d h ow m uc h pie ces of ch ick en bo u gh tat 11 00 /pi e ce
5
52
5
of S tud e nts an d how m uc hpie ces of chi cke n bo ug h t at 1 1 0 O /p ie ce
I I
pieces I piece pe es pie es 4 pieces 5 pieces 7 pieces pieces
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u s ti o n 5 of the s tu en t s ag ree d t h t th ey w ou ld b uy th e sam e m o u nt of frie dc h ick en ev en th ou g h th er e w as a s ma ll in cre a se in pri ce
of stu d en ts n d ho w mu h fri e d hi k n th e yw ou ld uy
t n b f lO O t o O O
um be r o f s tu en t s w h o w o ul d
Bu y le ss f rie d c h ic k en u y m ore f rie d c h ic ke nB uy the sa m e m ou n t
a b
Buy less fried chicken
a Buy more fried chicken
Buy same amount
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Question 4 With a price increase of 200 to 100, the mrjority said that they wouldbuy 2 pieces of fried chicken at 1100/piece and piece at 1 400/ j iece .
At 1100 pernieee:At At400 per piece:
O f pieces f e n
L Q _ i l_J 432 363 104
5 2
How much fried chicken students would buy at specific prices
hi At 1100/piece
At 14M0/pece
of students0 13 252 5
4 [
_______J _ _ _ _
60
5050
40
30
10
0 pieces 1 pie ce 2 pieces
9
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Question 60 of the students preferred KFC while 40 preferred aps
w h o r f r
aps 8
KFc 72
of students and preferred choice of friedchicken
: laps
KFc
1
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u e sti o n O f a l l th e fA c to r s c o ns ide re d i n th e pr ev i o us qu esti on T as te w a s a s the m o s tim po r ta nt fa ct o r aff e cti ng ch oic e
Nu mb er o f s tu n t s ran e a c h _ a s th e o s ti m p f tta c to fg ff e e t in c l o c e
T as te
A dv e rti s in g
L oc a tio n
N u m b er o f o ut lets
Sp e ci a l o ffer s/d isc o un t s 2
C o m p le m en ts 2
o f st ud e n ts r nk ing e h f ct s mo s t im po r t n t
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u est ion 8 Th e m a jor i ty o f st u en ts s ur v ey e d 8 0 sa id th t ev e n th o ug h p ricein c re as e s th e y wo uld re m in lo y al to th e ir c hoi ce o f so u rc e fo r fr ie d chi cke n
j o st u e n ts w h o co n tin ue buy ing .from pr e fe rr ed so u r ce
s w i t so u rc e
oy a lt yto s ou r
s of st u de n ts w ho ont inu e uy ingf rom the ir pre fer red s o ur e
of st u de n ts w ho sw it h sou r e
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u st i on 9J 2 of students said th t their purch se of fried chicken also encouragesthem to buy complementary goods.
ption of students
Encouraged to buy I hPEP lcm.cntary goodsNot encouraged to bu t 10ccmpjgmentary s
of st ude nts n d o m p le m e nt ry go o d s
encouraged to ycomplements
4 not encouraged to butcorn p emen ts
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u s tio n 1 63 o r 76 st u e n ts s a id th t th e y pr efe r to b uy om plem en t r y goo dsfro m KFC
ps
K F C 7 6
re fe ren c e of so u rc e fo r c om pl e m en t r yg oo d s
laps
K
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S
I
Li
I
M
.
I
t
pI
C I
4
3
I I s I
c
bZWCG
WO
I
a
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Q u e sti o n 12 M o s t s tu d en t s 6 7 st u d e n ts o r 5 9 ) s aid th t the y w o n t bu y m o re fr iedch ic k e n if n or e co m p lem en ts w e re av a ila b le
B uy m o r e fri ed c h i c k e n T o f s tu d n ts t s j
f fe c t o f o mp lem en t ry good s on fr i
ch ick en
of s tu d e nt s b uy ingmo re
st ude nts n ot u ying m ar e
u s tio n 13 O f th e v a rie d re s po n se in thi s q u es t ion m ost st u d en ts su e ge s ted th tle ss fres h o il he use d to f r c h ic k en
a _ _ _ _e iin i t l t can th e c h ck en b et te rS e as o n th e c hi c ke n be tte r 18Se m o v e e xc e ss fa t fro m c hick en
i k chi c ke n b e te r 2 0
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SUPPLY INFORMATION
Response o interview conducted in St Helena at K and Japs outlet
1 What methods o you employ to attract customers
KFC Japs
dvertisements X
Spedal combos V V
p c sV x
Promotkns V X
Other
2 What factors affect your supply o fried chicken
_Quality o Chicken V V
Cost o Production V V
Puce of Substitutes V
Puce of Complements V
Use of technology V
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Analysis and Interpretation of Data
120 questionnaires were given to students from all forms in the S . A G H S . community. Twc
interviews were conducted with the managers of KFC and Japs outlets in St. Helena,
In Trinidad, fried chicken falls under the fast food industry and this industry is one of amonopolistic market structure. Thus, there are many firms eg KFC, Japs, Royal Castle,Popeyes and Mac Donalds) product differentiation and many buyers. As such, there are
good competition levels which ideally lead to customer satisfaction and welfare. TheMonopolistic nature of the industry is also shown by customer and brand loyalty. 80 ofthe students surve ed said that even though price increases, they would continue buying
from their original choice for fried chicken.
Of the 120 students, 2, 47, 67 and 4 students ea t fried chicken Daily, Weekly, Monthly and
Yearly respectively. This difference in consumption rate may be due to heal th purposes ,addiction or personal preference
N
N
S
IN
c
0
4.
\\
a \
Sa, \\
j
1
0 03. iz o ZzzZEZIE
a c Q - c Q d de, , ,dpd a
L d cN / r/3 Qj
Figure 1: Price increase of frted chicken from Figure2: Price increase of fried chicken fromSi L00/ piece to S 1300/piece demand for 2 pieces SI LOU/piece to 31400/piece demand for 2 pieces)
P E i j t U 2
P E D =nO t p a ide 1
S Pce Q u a n t i t y S Przce Q u a n t i t yi 22
4 32 2
021 -L2119
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43.4 of the students showed willingness to purchase 2 pieces of fried chicken at 11.00/piece. As price of 2 pieces increases from 11.00/piece to 13.00/piece, thequantity demanded decreased thus, the law of demand stands. The P.E.D was calculated as-0.2 1 indicating price inelasticity. As the price increases from 1 1.00/piece to 14.00/piece, demand also decreases and the Law of demand is also obeyed. The P.E.D. inthis case was -1.12, thus, indicating price elasticity.
4
SL U
a w d anaa.aet01 9e44. tJ
I v in it o i
ChLCI&tfl lan
Figure3: Price increase of fried chicken from 11.00 Figure4: Price increase of fried chicken fromto 13.00/piece (demand for piece) 1 1.00/piece to 14.00/piece (demand for piece)
E D= Quantity demanded Price
E I)= A Quantity demanded Price
A Price Quantity A Price Quantity 11 11
2 33 3 33
-1.33 1.11
As the price of fried chicken changes from St 1.00/piece to 13.00/piece to 14.00/piece,the demand trend obeys both Perverse and Normal demand. With the first abovementionedincrease in price ( 11.00 to 13.00), the demand goes from 33 to 25 and thus, demandh e n is Normal. The P.E.D. here is -1.33 which shows Normal demand and price elasticityof demand. As price increases from 11.00 to 14.00 however, demand goes from 33 to 43.The P.E.D. in this case is 1.11 and thus, there is a Perverse Relationship. This perverserelationship could be due to price akticipation.
20
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M an y fac tor s a ff ec t the d em an d for a sp e ci fi c b ra n d o f fr ied ch ick en su ch a s P r ic e T a stean d C o mp lem en ts O f the ra nge of fa c to r s aff ect ing d em and st u de nts sa id T ast eaff e ct e d th e ir c ho ice an d of the 67 st ud e n ts ra n ke d T a st e a s th e m os t im p or tan tfa cto r T his is so b eca use sin c e fri e d c h ic k en is a fo o d pro du c t p e op le w o u ld ge n er a lly ra n ktas t e a pp e a l a s th e d ec idin g fa cto r w ith p ri c e a n d co m pl e m e nt s fol low ing su it
T h u s 6 0 of the s tu d en t s p refe rre d KFC w h il e 40 p r ef e rre d Ja ps Th e fa ct t h at mo restu d en ts p r efe rre d KFC sho ws th a t KFC i s e m p lo y in g som e m et h od of at t r ac ti ng cu s to m er sth a t Ja p s is lac k in g T h es e m et h od s inc lud e Ad ve r tis ing S pe c ia l P rom oti ons a nd Sp ec ialCo mb os J ap s o nl y u se s the la tte r KFC im p le m e nt s a m a r ke t ing s tr t e w h er e th ey tar g etth e e n ti re fa m ily si n ce th e f a st food s er v ic e o f fer s a s u bs t itu t e for c oo k in g w h ile the d em andfor KFC c a n be li nk e d to th e de sire to p u rc h as e to ys for ch i ld r en E ffe c tiv e u se of the sem eth od s ca n in cre ase th e d em and for f rie d ch ic ke n lo w e r p rod uc t ion co s t r e su lt in ari gh tw ar d sh ift of th e s u pp ly c u rv e d e cr ea s e co s t p ri c e an d le ad to an ex ten s io n o f dem an dal l of w h ic h inc r ea s es a firms pr ofi ts KFC h a s a lso be en in b u si n es s for mu c h long er tha n
Jap s an d wo uld h ave a b et t er g ra s p on h o w to o p er a te u nd e r the c o m p eti tion or e se n t in th eind u st ry an d ho w to e ffe c tiv ely ma rke t th ei r p rod u c t
T he c o nc e pt of Jo in t d em an d h o lds for f rie d c h ic k en a nd it co mp lem en ts bu t in a b ia s edma nne r T his is b e ca u se e ve n th ou g h 9 2 of the sur v ey ed s t ud e nt pop ula tion sa id th a tthe ir pur cha se of f ri ed ch ic k e n e n co u ra g es the m to b u y c o m p le m e n tar y go o ds 59 o f th estu den ts s tate d th at b uyi ng mo re co mp lem en ts do e s n o t en c o ur a ge th e m to bu y m o re f rie dch icke n 6 3 of the s tu d en t s pr e fer red c o m p le m e nt s f rom KFC wi th Ch ips b ein g th estu den ts fa vou rit e T hi s w a s m ad e ba s ed o n th e fa cto r s a ffe c tin g de ma nd w it h T as tep oss ibly ha v e th e g re at e st in f lu e nc e
M a n y fa cto rs wo u ld a ffe c t the abi lity of KFC an d Ja p s to a ch iev e p rod uc t ion a n d a llo c at iv eef f ic ie nc y in pr o du c ti on T he s e fa c to r s w hic h ar e e s se n tia lly the f ac tor s a f fec tin g su p pl y inc lud e the u l i o f c hi c ke n o st of P rod u ct io n . P ri ce of S u bs t itu t es P r ic e ofC o m p le m en ts the U se o f T ec hno log y B o th KFC a nd J a ps im pl e m e nt all th es eH ow e ve r th e ex t en t o f im p le m e nt a tio n o f e a ch f a ct o r wo u ld a cc o un t for th e sup plyd i ffe r en c e b e tw e e n KFC a nd J a ps an d th us th e co st pr ice of f rie d c h ic k en As f irm se xp a n d in cre a si n g pr o du c ti on the y c ou ld b en e fi t f ro m e c on om ies of sc a le s a nd p ro d uc e atth e Min im um E ffic ien t Sc ale o n th e A v er a e C o s t C ur ve. In thi s ma nn e r th e re c oul d he a
r ig h tw a rd sh ift of the s u pp ly cu r ve an d c o ns u m e rs co uld b en e fit f rom low pr ic es
W it h h ea l th and d ise ase aw are nes s o n th e rise we se e th at th e m o s t pr e va le n t s u gg e st ionto im pr ove frie d c h ic k en is to u s e le ss oil In the C ar ibb e an w h ere we h ave a s p ec ial f lav o u rto o u r po ts su g ge sti o ns we re m a de c o ok an d se a so n the f r ied ch ick e n b et te r
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Findings and Observations
The main factor affecting demand for fried chicken and its consumptionrate is that of Taste.
Fried Chicken is generally price elastic possibly due to the variednumber of substitutes avsi eb e However there are cases of a perverserelationship for fried chicken possibly due to price anticipation.
The Joint Demand for fried chicken and its complements is biased sincethe majority of students are encouraged to buy complements with theirpurchase of fried chicken but not to but fried chicken with theirpurchase of complements.
The existence of foreign firms in the local economy can create goodcompetition and result in higher consumer satisfaction.
Observing the demand and supply trends for KFC and Japs KFC wouldgenerate more revenue from sales but Japs would have a lower Cost ofProduction than KFC
KFC is in a better financial position than Japs since they have bettermarketing strategies than Japs and they also have a larger consumermarket.
Both factors affecting the demand and supply of fried chicken in turnimpact the profitability of KFC and Japs.
22
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ec o m m e n d t io n s
B o th K F C a n d p s can en dea vou r in to im p ro v in g in th e fo llo win g a rea s ifth e y ha v e n t alr ead y d on e so o rd e r to bo o st s al es a n d ha v e be tt erco mp e ti ti ve st a nc e :
Inc rea sin g th e ir pot ent ial co n su m e r m ar k et by h av ing m o r e ou tle tsn ati o nw ide
Incr eas e ad v ert isin g U se m or e S pe c ia l G ifts co m b o s an d p rom ot io n s to at t rac t m or e
c u st om er s Cl ean a n d s e as o n th e c h ick e n b ett e r
U se less oi l to fry c hi ck e n Co o k the ch ick e n be t ter U se su g g es ti on b ox e s to g et fee d ba ck fr o m c u sto me rs
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o n c lu s io n
n th i s in ve s tig a ti on b e tw e e n K G a n d a p s h a v e c o m e t o r ea li z e th e m a joro le t h a t e c o n o m ic s p la y s in th e o p e ra ti o n o f a b u s in e s s I t w a s d e d u c e d K F is in a m u c h b e t te r f in a n ci al p os it io n t h a n a p s s in c e th e y h av e a b ig gc o n s u m e r m a rke t o n s u m e r s m a d e m a n y s u g g e s t io n s t o h e lp im p ro v e th eq u a lity o f f ri e d c h ick e n a n d im p le m e n ta t io n s o f th e s e r e c o m m e n d a ti o n s c o uh o ld th e g e n e ra l im p ro v em e n t o f th e i n d u s t r y in th e f u tu r e
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Bibliography
Books: Bahaw Edward and Wajid Mollick.Comprehensive economics for CSEC. San
Fernando Trinidad: Caribbean Educational Publishers 2008.
Harvey Jack. Modem economics: an introduction for business and professionalstudents. 7th ed. London: Macmillan 1998.
. Hosein Roger and 0. F. Stanlake.Longman economics for CXC. Harlow: Longman2005.
> L.ipsey Richard 0.. An introduction to positive economics. 6th ed. London:Weidenfeld and Nicolson 1983.
4 Whitehead Geoffrey. Economics: made simple. 13. ed. London: Heinemann 1986.
Websites: 4 hL.ix / w w w tr r ;o i Retrieved
on September 15th 2011.. n t r _ / v . : .de n. vc i zn nd Retrieved on
September 19th 2011.
Interviews: Manager of KFC St. Helena September 10th 2011 at 4:30 pm . Manager of Japs St Helena September 10th 2011 at 5:00 pm
25
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Appendicesflrnleuesflonnaire
M name is Renee Voisin. As part of my investigation for my school-basedassessment., this questionnaire is prepared for any volunteers to fill out. Yourresponses will be deeply ajpreeated.
A c: 10-13 14-16 Z.17 and overForm class:
On average, how often do ye u eat fried chicken?
Daily
Li Wee:kly
Li Monthly
H Yearly
a 2. If one piece of fried chicken cost 11.00. how mneh pieces would yon purchase?
rieces of chicken
-a 3 if this price increased Lv S2.00 to 300 wb ch oftbon woven sot choose
Buy less fried chicken
hue more fried chicken
Plea so 1Odi wcfl1Li 1 117 0.1 each p5 3 1 oice:es 01 rr oh chicken
11
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5 W h os e fr ie d h i k en d o y ou pr efe r
Ja p s
KFC
6 W h at f to rs aff ec t y ou r c ho ice in qu e st i o n
P ric e
T as te Fas hio n
Li A d v er t isi n g
H L o ca t ion
N um be r o f O u t lets
S pe c ia l O f fe rs D is co u n ts
C om pl em e n ts eg C hip s b e ve rag e s
7 In o rd e r o f imp or t a nc e be ing th e m o s t im p ort ant ra n k th e o ptio ns yo u cho se in
q u es t io n 6
Pr ic e
Li T as te F as h io n
Advertisii g
L o ca t ion
N u m be r of O u tl e ts
So c ci a l O flb r s/ D isc ou n ts
Co mnlcn cu t s
8 if o nc e n cn c as c s w o u ld vo n r e m a in Iovai to y o ur c h o ic e of so u rc e on f ri ed
ch ick e n?
L :Y c s
2?
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9. Does your purch se of fried chicken encoursge yc u to buy complementary goods
chips, beverages, salads also?
10. If yes to question 7, from whom do you prefer?
Li ps
I. What complementary goods do you prefer most?
Beverages
12. Would you buy more fried chicken if more complements were available?
13. V/hat do you think can be done to improve the quality of fried chicken?
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T he P r in ci p al
S t A u gu s tin e G irls H ig h Sc h oo l
Ev an s Str eet C u re pe
t h u n e 2 0 11
D ea r Mi ss
th e be are r of thi s lett e r ism e m b er of the Fo rm S s t ud e nt b ody in S t A u gu s tin e G ir ls H ig h S c ho o lSh e is in th e p roc ess of co lle c tin g re sea rch for he r Eco no m ic s S BA ent i tle d A c o mp ara t iv e st u dy of th e d em a n d fo r K FC an d p s in S t Au gu s tin eG ir I s H igh S c ho o l b etw een th e pe r iod S e pt e mb er 5 th 2 1 1 to S e pte mb er2 6th 2 1 S he re q ue sts p e rm iss ion to sur v e pe rso n s in th e for m o f aq u es t ion n a ir e a s p ar t o f the r ese a rc h p ro c es s
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DI GR MS showing KF using dvertising as a Marketing Strategey
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