January, 2009

1. Focus Groups Report Consumer Insights: Families and Fast Food Restaurants January, 2009 1

2. INTRODUCTION At the request of YUM! International Restaurants CID/Gallup conducted the study “Consumer Insights: Families and Fast Food Restaurants,” in order to develop a base of consumer knowledge that allows designing consumer insight platforms. To accomplish the goals, twelve focus groups among mothers between 25 and 45 years of age were carried out in January 8-13th, 2009 at CID Gallup’s facilities in San Jose, as well as in Lima and Port-au-Spain, using a base moderation guide for the graphic analysis presented in this document. CID/Gallup is grateful for having been selected to conduct this research and stands ready to respond to any questions the client may have about the way it was carried out or the contents of this particular document. Information contained in this document is considered confidential and subject to professional secrecy. It has been exclusively developed to be used by the individual, entity or others authorized to receive it. If you are not authorized to evaluate this information, we hereby notify you that any dissemination, copy, distribution or action taken based on the contents of this document, is strictly prohibited and could be accounted illegal.

3. TABLE OF CONTENTS Introduction 2 Table of Contents____ __________ 3 Methodology ________ 4 General Overview 5 Principal Findings 6 Graphic Analysis of Results 15 Lifestyles________________ _________ 16 Eating habits 19 Marketable emotions and experiences_________________ 22 JOBS_____23 Fast Food__________ _________ 51 Fast Food Restaurants___ 52 Specific Conclusion per Country 60 Appendix 63

4. METHODOLOGY SUMMARY • Informants: 6-10 per session • Mothers, 25-45 years-old, Heavy Users of QSR, Heavy users of KFC, SEL Medium, With at least one kid no older than 12 years old. • Mothers, 25-45 years-old, Heavy Users of QSR, regular users of KFC, SEL Medium, With at least one kid no older than 12 years old. • Mothers, 36-45 years-old, Heavy Users of QSR, Heavy users of KFC, SEL Medium, With at least one kid no older than 12 years old. • Mothers, 36-45 years-old, Heavy Users of QSR, regular users of KFC, SEL Medium, With at least one kid no older than 12 years old. • Note: This document presents regional results • Methodology: Qualitative • Technique: Focus groups • Countries: Costa Rica, Peru, and Trinidad & Tobago • Moderation Guide: Designed by CID and approved by YUM! Executives • Approximate duration of each session: 90 minutes • Dates of sessions: • Costa Rica: January 8th and 13th, 2009 • Peru: January 12th and 13th, 2009 • Trinidad & Tobago: January 12th and 13th, 2009 GENERAL OBJECTIVE

5. GENERAL OVERVIEW Housewives often visit fast-food or quick service restaurants (QSR) with their families, specially on weekends, since they declare themselves “on strike and won´t cook.” Usually, it is their children who decide where to go, although special offers, playground areas, adequate portions, and variety of menus are considered important drivers to choose a restaurant. Informants mention how KFC allows family sharing while feeling calmed and relaxed. One of the main aspects is not having to cook and being able to sit on the table with the family without worrying about serving them. The most important celebrations are Mother’s Day, Christmas, and wedding anniversaries. The one most often celebrated at QSR´s are children’s birthday parties (who select where they want to eat). Nevertheless, some informants mentioned going for lunch on Christmas Day or having dinner on New Year’s Eve at KFC. Housewives perceive fast food as a solution when they are short on time and cannot cook a whole meal. For this reason, it is common that while shopping or going out, they decide to purchase something at a QSR. This action intensifies during December. When informants want to treat or reward their children, it is common to take them to the restaurant on their own, without other family members. Children express their happiness non-verbally, and mothers consider it a moment of togetherness and celebration of their children’s achievements. KFC is very well perceived by informants, since chicken is seen as healthier in comparison to beef burgers or pizza. In addition, this restaurant has a very diverse menu (chicken pieces, biscuits, burgers, mashed potatoes, deserts, etc.). Main KFC’s advantages over its competitors include: food quality, special offers and size of portions.

6. Principal Findings

7. PRINCIPAL FINDINGS • Consumers’ Lifestyles –Trinidad y Tobago • Participants in the study have fast-paced lifestyles, so they must distribute time between numerous work and family activities. They mention how it is common to have two jobs in order to face the difficult economic situation; however, none of them report significant changes in their fast-food consumption habits. • Main concerns of mothers are the fast increase in the price of food, and crime threatening family security. Therefore, special offers that adapt to family budgetary changes and security inside and outside the restaurant are given special importance. • Eating Habits • Consumption of fast-food is common throughout the week. During weekdays, mothers often call delivery service during their lunch hour. Family dinners are generally fat food purchased on their way from work to home. This kind of food is not common for breakfast; however, most participants highlight that they feed their families with sandwiches and/or cereal and tea. Children do not eat fast food during the day. • Fast-food consumption increases during the weekend among regular and frequent users. Some mothers point out that they take advantage of the days when they go out with their families and forget about housework. In general, they visit shopping malls, stores, supermarkets, move theaters, etc. on Saturdays, and they stay at home on Sundays.

8. PRINCIPAL FINDINGS • JOBS – Celebrate Special Occasions • The main celebrations mentioned were the following: Mother’s Day, birthdays, Christmas, and wedding anniversaries. • Special dates to visit fast-food restaurants are children’s’ birthdays and Mother’s Day. Still, few people have eaten at KFC for Christmas or New Year’s Day (mostly because their tradition is to meet with their relatives where each family is in charge of one part of the meal). • Mother’s Day. It is perceived as a date in which restaurants are full of people, so it is better to ask for take-out and have dinner at home with the family. “For Mother’s Day, we all put some money and go buy something…for example, chicken, and we all meet at home.” On this date, people thank God for having their mothers alive and the family gathering is usually big: “All siblings make the most out of this day to meet.” • Many informants consider Mother’s Day as a very special date for them; but the most formal meal as a family is Christmas (“That day one makes her hair and nails, it is a special day…one deserves it”; “That day one feels spoiled and important…”). Husbands do things they normally would not do: some cook (“We are six siblings, two women and four men…and they have to cook for us women”; “It is the only day of the year in which males devote some time to us”), and others take women out to dance and eat. • Children also attempt to demonstrate love in different ways: “Once, my children made me breakfast… and left a mess in the kitchen”, “My children took me to KFC and paid with their savings…that day there was a special offer and I won it”. • Associated images, emotions and feelings: tenderness, love, happiness, thankfulness, hugs, spoiling, gifts (“When I wake up and my kids are there…waiting for me to get up to give me what they did at school”)

9. PRINCIPAL FINDINGS • JOBS – Celebrate Special Occasions • Christmas. It is the time of the year when fast-food is most consumed, since people go out shopping: “Christmas is about going out, out, out.” • The most mentioned family tradition for the night of December 24th is to meet their relatives and having each family bring part of the dinner (usually fresh pork ham is eaten) • Many families pray before eating and go to mass on Christmas Eve. • Associated images, emotions and feelings: hope, happiness, lights, trees, adornments, “getting fat”, tamales, decorations (decorating with their children), and gifts. • Children’s Birthdays. It is common to eat at a fast-food restaurant and then go back home to eat cake with their closest relatives. “It is a special time because I can see my daughter’s joy, the excitement that her birthday is coming up”, “For his birthday, he tells me: ‘Give me this…but first take me out to eat without my sister.’” • Birthdays celebrated at Pizza Hut are remembered with affection, since staff takes time to sing and give the child a personal-size pizza and a cake. This does not happens at McDonald’s where “parties are in a rush” and very expensive. • On this date, moms usually remember giving birth to their children.

10. PRINCIPAL FINDINGS • JOBS – Enjoy family time • Families share on Saturdays, so it is common to play board games, go out, and watch movies while eating popcorn. On Sundays, some informants go visit their parents or meet their siblings for a meal, and talk about what happened during the week. • “During the weekdays there are very few family activities…everyone is in a hurry.” • Fast-food restaurants are excellent places to share with the family, since mothers do not have to cook or serve others, but are able to sit down and eat with the family. • Some informants remember their childhood and having their parents take them to KFC. This creates emotional closeness with the restaurant, so they carry on the tradition. • Mothers are “on strike” (decide not to cook) during the weekends, and make the most out of these days by going to the mall, movie theaters, parks, fast-food restaurants, and/or one-day beach trips. On the latest, they mentioned useful to take a chicken bucket to the family trip. • Associated images, emotions and feelings: tranquility, relaxation, and “tasty food.”

11. PRINCIPAL FINDINGS • JOBS – Provide a quick meal • Occasions in which this KFC JOB is most often accomplished is when informants are shopping and “it is late to go home and prepare a meal”, particularly when they are with their children. • Many informants tend to buy food (for example, a KFC bucket) on their way home, and once home they would add rice, beans, and salad to it. In this way, they incorporate fast-food to the traditional “casado” (typical Costa Rican dish). • In the case of Trinitarian families, providing a quick meal is the most important driver to consume this type of food, given that mothers’ lifestyles do not allow them to invest time in preparing meals. Fast food might be mothers’ lunch all week long, as well as families’ lunches and dinners on weekends. • “I don’t wait to get home. If I’m hungry and have the money, I eat.” • “I do not eat if I’m alone, but I eat out if I’m with my little daughter.” • Anecdote: “This weekend I told my husband, ‘It is late, what would you like to eat? There’s rice and a can of tuna’…So he said, ‘No, let’s order something.’ And we ended up ordering a pizza.”

12. PRINCIPAL FINDINGS • JOBS – Treat the kids • Fast-food is one of the main stimulants selected by parents to reward their children. • When parents decide on an incentive for any of their children, they allow the kid to choose a place to eat, and mom takes him/her but does not take his/her siblings. • KFC is seen as a place to reward children; however, it not only motivates the child but also the parent – “I go with my child, but end up taking out food for the entire family.” • In addition to “reward” children, housewives consider they reward themselves with fast-food. So, we can derive an additional “Treat the parent” JOB from this one. • Mothers indicate that, in general, they spoil their children with cash for their savings, toys, and/or fast-food. They mention making an effort to purchase what their children want, and try to look for new ways to reward and stimulate their behavior. • “I don’t like fast-food that much…but we go to please our children.” • In Costa Rica, some informants mentioned they allow their children to take a shower and watch TV later on weekends than during the rest of the week, so they are used to ask for delivery service (particularly Pizza Hut since KFC does not provide this service). “Sometimes we don’t eat at KFC because we get lazy, are not showered, or the kids are watching a movie…and it doesn’t have express service.”

13. Graphic Analysis

14. LYFESTYLES • Most are single-mother households TRINIDAD &TOBAGO • Mothers have very busy lives to keep their current lifestyles, even though food costs have increased • It is common that housewives work and study to secure their children a better future • Almost all of them work. Some even have two jobs in order to face current economy • Leisure time is enjoyed as a family. They visit malls, beaches, restaurants, etc.

15. EATING HABITS TRINIDAD & TOBAGO Younger mothers in this study tend to devote less time to cooking, and their consumption of fast-food is considerably higher than that of older mothers. - THE CULT TO FAST FOOD… WORKDAYS WEEKENDS

16. MARKETABLE EMOTIONS AND EXPERIENCES -Theoretical Framework- Expected reations when using Emotional Marketing to promote brand-clients links New Client Frequent Client Loyal Client All fast-food restaurant clients can be classified in a basic category according to how often they visit the place and their loyalty regarding a specific brand. In the case of KFC, a client that starts feeling curiosity and desire can visit some of their restaurants; however, only when feelings are associated to trust and pleasure (as a result of positive past experiences) in that restaurant, the client will go regularly. In the case of clients who feel love or hope about KFC, it is expected the brand would be associated to superior branding against competition, and that the restaurant will be recommended to their acquaintances. “When eating chicken, it has to be there” 16

17. JOBS-Celebrate special occasions- Most important ocassion, Trinidad and Tobago Birthdays RELATIVE IMPORTANCE “I can meet relatives I rarely see” “That is the only day I am not in charge of everything” “I love seeing that they make a plan for me”

18. JOBS-Celebrate special occasions- CHRISTMAS – General Aspects

19. JOBS-Celebrate special occasions- CHRISTMAS – Emotional relation, according to country Sharing Hope • Peruvian housewives tend to be more pessimist during the Christmas season Spirituality Thankfulness Melancholy Nostalgia Mourning Happiness Anticipation Armony Peace Sadness Togetherness Solidarity

20. JOBS-Celebrate special occasions- BIRTHDAYS – General Aspects • Children are the main objective of celebrating birthdays as a family • Both were mentioned as essential for birthdays. They are presented as symbols in this celebration • Participants argue their greatest satisfaction is being able to give their children what they ask for • Children’s birthdays celebrations generate many feelings in mothers: they remember their children’s birth and are amazed at how fast they have grown • These are celebrated at home and/or fast-food restaurants. Mothers are concerned about being creative and vary children’s parties

21. JOBS-Celebrate special occasions- • BIRTHDAYS – Children’s parties

22. JOBS-Celebrate special occasions- BIRTHDAYS – Emotional relation, according to country Tenderness Melancholy Caring Vulnerability Love Enthusiasm • Mothers mentioned children’s birthdays tend to generate sentimentality: “I remember the day he/she was born and tears come out” Happiness

23. JOBS-Celebrate special occasions- • MOTHER’S DAY – General Aspects

24. JOBS-Celebrate special occasions- MOTHER’S DAY – Personal Insights They want to be served and attended, be able to sit at the table at the same time as everyone else, feel spoiled and special that day, be the center of attention Mothers tend to project their happiness in terms of their family’s happiness. On that day, they expect to receive love and joy from their families What do mothers expect on this day? Daily preparation of meals has become an obligation that mothers do not enjoy. Their greatest expectation is to be able to make a pause in their house chores That day is a good excuse to go to the beauty parlor, doing their nails and hair, get some new clothes and wear them. Mothers look for feeling good physically

25. JOBS-Celebrate special occasions- MOTHER’S DAY – Emotional relation, according to country Thankfulness Happiness Normality Satisfaction Love Tenderness Melancholy Enthusiasm • In Trinidad, it is common for mothers to prepare the meals on Mother’s Day, so it does not represent a very special occasion for them

26. JOBS-Enjoy family time- ENJOY FAMILY TIME– General Aspects • JOB most accomplished in Costa Rica. Sharing as a family tends to be the highest expression of satisfaction among mothers • Usually, family takes advantage to eat out, so consumption of fast food increases considerably • “Enjoying family time” is perceived as synonym of weekend and need to do activities outside of the house • Mothers tend to use the expression “I’m on strike” to illustrate their determination about not cooking or doing housechores on weekends, so they can spend time with their families • While in Costa Rica people make the most of it by visiting grandparents, in Peru and Trinidad family activitites take place with the closest family members

27. JOBS-Enjoy family time- ENJOY FAMILY TIME – Emotional relation, according to country • There are no negative emotions, feelings or images associated to this JOB. Enjoying family time relates to a pleasant state derived from enjoying intrafamily relationships Sharing Enthusiasm Harmony Relaxation Happiness Satisfaction Tranquility Calm • “On Sundays we go to the beach and try to make the most out of it. When going to the beach, we have junk food”

28. JOBS-Enjoy family time- ENJOY FAMILY TIME – Visual and Living Relation- • Children play in the playground until they sweat • Children with red cheeks after playing for so long • Childrens’ laughters as they share with others • Relaxing in the beach • Movie teather • Malls • Park • Camping • “Liming” (Trinidad) • Fast food • Chifa (Peru) • Chinese food • In Costa Rica and Trinidad KFC relates to relaxation and“liming” (Trinitarian jargon for “having a good time”) • Living room at grandparents’ house

29. JOBS-Enjoy family time- ENJOY FAMILY TIME – Personal Insights - • Special attention is given to places that, in spite of being crowded, they are kept visibly clean and well kept • A place that allows resting, physically and mentally, without being boring What do families look for these days? • Specially in Costa Rica and Trinidad, where perception of insecurity tends to be a major concern for families • Families look for spaces that allow them to “catch up” and relate to each other, places that welcome all family members

30. JOBS -Provide a quick meal- PROVIDE A QUICK MEAL – General Aspects- 30

31. JOBS -Provide a quick meal- PROVIDE A QUICK MEAL –Emotional relation, according to country - • KFC is spontaneously mentioned in Trinidad under this category Satiety Stress KFC Laziness Ansiety Craving Relief • Due to a very agitated lifestyle, Trinitarian mothers relate main causes for providing fast food to their families to negative emotions Nevertheless, once this need is satisfied, emotions turn into more positive ones Relaxation 31

32. JOBS -Treat the kids- TREAT THE KIDS – General Aspects- 32

33. JOBS -Treat the kids- TREAT THE KIDS – Reward versus Punishment- Drivers that determine the selection of a playground 33

34. JOBS -Treat the kids- TREAT THE KIDS - Emotional relation, according to country - • We may infer that by pleasing their children and demonstrating their love for them, participants feel they fulfill their utmost fulfillment: being a good mother Realization Caring Enthusiasm Pride Love Gratifying Satisfaction 34

35. JOBS -Another JOB: Treat the parents- TREAT THE PARENTS – General Aspects- 35

36. JOBS -Summary- JOBS –Summary of Main Emotions • Thankfulness • Anticipation • Hope • Spirituality • Caring • Love • Nostalgia • Sadness • Mourning • Ansiety • Satisfaction • Pride • Caring • Realization • Tranquility • Relaxation • Rest • Share • Relief • Satisfaction • Satiety • Craving • Stress • Ansiety • Laziness 36

37. FAST FOOD – Insights- Emotions related to fast food • Some participants spontaneously linked fast food to life experiences and emotions. “Satiety” ranked the highest, transcending the physiological need to answer an intrinsic requirement of food • It is important to notice that sometimes social and media pressure influence housewives’ rationalization on negative fast food aspects. This partly explains their guilt in relation to this kind of food 37

38. FAST FOOD RESTAURANTS – Consumers Insights- Functional drivers for consumption Relative significance of drivers • Price and closeness do not represent significant stimulants for consumption. In Peru, cleanliness is one of the most fundamental and differentiating factors. 38

39. FAST FOOD RESTAURANTS – Competition consumption- Ranking of fast food restaurants most visited by participants, Trinidad & Tobago 39

40. KFC- -Positioning- Rationalization of KFC consumption decision among housewives “We eat ‘junk food’ on weekends with some concern…now that worrying about trans fat is in vogue…but sometimes cravings win the battle” • It is common for mothers to try to justify their personal fast food desires, especially KFC, through a rationalization process in which they want the best for their family 40

41. KFC- -Positioning- • KFC is very well positioned in the three countries, to the extend that no other fast food restaurant selling chicken is considered direct competition. • Many informants mentioned going to KFC since they were children and that the chicken has always had a very special taste (some try to imitate it at home). • Prices in this restaurant are considered similar or slightly higher to its competition; however, quality is seen as superior. “When I think about chicken, I think about KFC” 41

42. FAST FOOD RESTAURANTS ADVERTISING -Recall- Advertising recall – Trinidad and Tobago “I’ve seen changes in KFC’s advertising…now their ads are more related to family” 42

43. SPECIAL FEATURES PER COUNTRY – Trinidad & Tobago

44. Appendix