Case Assignment: CEC Entertainment, Inc (Chuck E. Cheese’s) For more than 35 yea

Question

Case Assignment: CEC Entertainment, Inc (Chuck E. Cheese’s)

For more than 35 years, Chuck E. Cheese’s has been one of the nation’s go-to venues for children’s birthday parties and rainy afternoon outings. Operating under the slogan “Where a kid can be a kid,” there are more than 575 Chuck E. Cheese’s locations in 47 states and 10 foreign countries or territories. Their goal is to provide a fun and safe environment for children to play and families to create memories, but in 2015 Chuck E. Cheese’s made improvements not for the children, but for the parents.

            “Your average kid who comes to Chuck E. wants to come 11 times a year; they come three times a year. The difference between that and the 11 times a year they want to come is the mom and dad veto,” said Tom Leverton, CEO of CEC Entertainment, Inc. “What we’ve been doing over the past couple of years especially is trying to address the mom and dad needs.”

To that end, Chuck E. Cheese’s expanded their menu to include items geared to more advanced culinary tastes. Two new signature pizzas have been added to the lineup. The Cali Alfredo pizza is made with Alfredo sauce, fresh spinach, freshly grated mozzarella, chicken, sliced mushrooms, and sausage. The BBQ Chicken Pizza features a smoky BBQ sauce topped with strips of roasted chicken breast, red onions, green peppers, and crispy onions. In a blind taste test of 308 respondents, 59 percent preferred thin and crispy Chuck E. Cheese's pizza to Pizza Hut and Dominos combined.

            The expanded menu also features Caesar and Club whole-wheat wraps, BBQ Chicken Ciabatta sandwiches, BBQ and Sweet Chili boneless and bone-in chicken wings, soft parmesan breadsticks, and Buffalo Chicken cheesy bread. Wraps and sandwiches are served with choice of fresh fruit, oven-baked French fries, or carrot slims with lite ranch dressing. They also added dessert churros served with salted caramel and white chocolate icing.

"Kids are at the heart of everything we do at Chuck E. Cheese's, but kids don't come alone, and we want to make sure parents have just as enjoyable an experience as the kids do, especially when it comes to the food," said Leverton.

"The new menu boasts a wide variety of options and flavor combinations, and I'm most excited about the new pizza crust and pizza options. The crust is crisp and delicious, and the dough we use is made fresh, never frozen and hand-stretched to order," said Chef Gregory Casale, corporate chef at CEC Entertainment, Inc. "The feedback so far has been extremely positive. I think parents will be surprised and impressed with the quality of the new menu."

The new adult menu has been promising for Chuck E. Cheese’s, but they aren’t stopping there. In 2016, they began testing additional menu items in select markets. The Orlando, Florida market has seen the addition of giant chocolate chip cookies to the menu. They are also testing a Honey Mustard-bourbon wing sauce, multigrain Italian Chicken and Chicken Caesar flatbreads, and gluten-free pizza dough.

In March 2016, Chuck E. Cheese’s debuted a lunchtime all-you-can-eat buffet to address the issue of customer frequency. The buffet is $3.99 for children and $5.99 for adults. They are also testing half-priced games on Tuesday evenings in the Dallas market.

For the parents who haven’t been to a location recently, Chuck E. Cheese’s aired a new commercial in July 2016 inviting parents to come in and try the new adult-friendly menu and enjoy the free Wi-Fi while their kids can just be kids.

Sources: “Adult Friendly Menu – Chuck E. Cheese’s TV Commercial,” YouTube, July 8, 2016, accessed October 22, 2016, https://www.youtube.com/watch?v=Nx7tO9ge3pM; “Chuck E. Cheese’s Unveils New Menu with Parents in Mind,” PR Newswire, April 9, 2015, accessed October 22, 2016, http://www.prnewswire.com/news-releases/chuck-e-cheeses-unveils-new-menu-with-parents-in-mind-300063607.html; R. Ruggless, “Check E. Cheese’s hones menu strategy and value,” Nation’s Restaurant News, June 21, 2016, accessed October 22, 2016, http://nrn.com/family-dining/chuck-e-cheese-s-hones-menu-strategy-and-value.

Who is Chuck E Cheese’s target market(s)? What are they trying to do to satisfy that market? Why were the changes to the menu so important to Chuck E Cheese? Who does Chuck E Cheese compete with for their target market(s)? (20 points)

Explanation / Answer

Q1) Chuck E Cheese's target markets include -

1. Children

2. Parents

Q2) The restaurant chain is expanding to include new items in its menu to expand their target market from children to their parents.

Q3) The changes to the menu were so important to Chuck E Cheese due to the below reasons -

Though the target market for the restaurant chain was children, they were currently being restricted to coming to restaurant by their parents. This requires a change in menu to even attract the parents/adults to ensure they increase the consumers as well as the number of times they visit the restaurants. Not only does the expansion of menu result in new customers in the form of parents but also increases the sales from existing consumers who can frequently visit the restaurants with their parents.

Q4) Chuck E Cheese competes with the various restaurants for both adults and chidren especially Italian to the likes of Pizza Hut, Dominos etc. It also competes with the speciality destinations for celebrating various ocassions for children.

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