Fast food chain in India

A project submitted to
University of Mumbai for partial completion of the degree of
Bachelor of Management Studies
Under the Faculty of Commerce

By

Jayesh Datta Gharat

Under the Guidance of

Prof Chirag Pagaria

V.E.S College of Arts, Science & Commerce,

Sindhi Society, Chembur East,
Mumbai - 400071

2019

1
 Acknowledgement

To list who all have helped me is difficult because they are so numerous and the depth is
so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.

I would like to thank my Principal, Dr Anita Kanwar for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Coordinator Dr. Mahalakshmi Sankar, for her moral
support and guidance.

I would also like to express my sincere gratitude towards my project guide Prof Chirag
Pagaria whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me
in the completion of the project especially my Parents and Peers who supported me
throughout my project.

2
 V.E.S College of Arts, Science & Commerce,
Sindhi Society, Chembur East,
Mumbai - 400071

Certificate

This is to certify that Mr. Jayesh Gharat has worked and duly completed his Project Work
for the degree of Bachelor of Management Studies under the faculty of commerce in the
subject of management and his project is entitled, “Fast Food Chain in India” under my
supervision.
I further certify that the entire work has been done by the learner under my guidance and
that no part of it has been submitted previously for nay Degree or Diploma of any
University.
It is his own work and facts reported by his personal feelings and investigations.

Name and Signature of

Guiding
Teacher

External Examiner

Date of submission:

3
 Declaration

I the undersigned Mr. Jayesh Datta Gharat, here by, declare that the work embodied in
this project work titled “Fast food chain in India”, forms my own contribution to the
project work carried out under the guidance of Prof Chirag Pagaria is a result of my
own internship work and has not been previously submitted to any other University for
any Degree/Diploma to this or any other University.
Wherever reference has been made to previous work of others, it has been clearly
indicated as such and included in the bibliography.
I, Here by further declare that all the information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of the learner

Certified by
Name and signature of the Guiding Teacher

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 Index

CHAPTERS INDEX PAGE NO

1.INTRODUCTION 1.1 BACKGROUND 7

1.2 FAST FOOD CHAIN IN 9

INDIA
1.3 REASONS FOR 11
EMERGING FAST FOOD
CHAIN
1.4 MACRO ECONOMIC 13
FACTORS
1.5 CHALLENGES FACED BY 15
FAST FOOD CHAINS
1.6 PROBLEMS FACED BY 17
INDUSTRY
1.7 FATS FOOD CHAIN IN 18
ECONOMIC DEVELOPMENT
1.8 SUCCESS DRIVERS OF 22
FAST FOOD CHAINS
1.9 CUSTOMER 26
SATISFACTION IN FAST
FOOD CHAIN
1.10 BRAND LOYALTY IN 29
FAST FOOD CHAIN
1.11 PRICING IN FAST FOOD 32
CHAIN
2. RESEARCH 2.1 OBJECTIVES OF THE 37
MEHTOLOGY RESEARCH
2.2 INDUSTRY RESPONSE TO 38
PROBLEMS
2.3 SCOPE OF THE STUDY 41

2.4 DATA COLLECTION 42

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 2.5 SAMPLE DESIGN 43

2.6 HYPOTHESIS 43

2.7 LIMITATIONS OF THE 44

STUDY
3. LITERATURE 3.1 REVIEW OF LITERATURE 45
REVIEW
3.2 RESEARCH GAPS 50

4.ORGANISATONAL 4.1 KFC 52

PROFILE
4.2 DOMINO’s PIZZA 54

4.3 SUBWAY 56

4.4 BURGER KING 59

4.5 MAD OVER DONUTS 61

5. DATA ANALYSIS 5.1 DATA ANALSYIS AND 62

INTERPRETATION
6. CONCLUSIONS 6.1 CONCLUSION 76
AND SUGGESTION
6.2 SUGGESTION 79

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7
 1) INTRODUCTION

1.1 BACKGROUND

 India is one of the fastest growing economies in the world. Driven by the changing
demographics, stable government, favorable economic policies and a positive
sentiment, the country’s Gross Domestic Product (GDP) is projected to grow at 7.4
percent, as estimated by the International Monetary Fund (IMF), over the Fiscal Year
2017 (FY17) and FY18. Relatively, the world economy is expected to grow at 3.1 per
cent over 2016, assuming unaffected trade ties between the European Union (EU) and
the United Kingdom (U.K.).
 The fast food industry in India has evolved with the changing lifestyles of the young
Indian population. The sheer variety of gastronomic preferences across the regions,
hereditary or acquired, has brought about different modules across the country. It may
take some time for the local enterprise to mature to the level of international players in
the field.
 Many of the traditional dishes have been adapted to suit the emerging fast food outlets.
The basic adaptation is to decrease the processing and serving time. For example, the
typical meal which called for being served by an ever alert attendant is now offered as
a Mini-Meal across the counter. In its traditional version, a plate or a banana leaf was
first laid down on the floor or table. Several helpers then waited on the diner, doling
out different dishes and refilling as they got over in the plate.
 These projections make India the fastest growing large economy globally. Similarly,
India’s growth ratings by the ‘Big three’ credit rating agencies depict a positive
outlook.
 The Indian Food and Beverage (F&B) services industry is one of the most vibrant
industries to witness rapid and unprecedented growth over the recent past. The industry
contributes significantly to the nation’s economy and has been the frontrunner in terms
of attracting investments.

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 The Gross Value Added (GVA) by hotels and restaurants has witnessed an annual
increase in both absolute and relative terms. It grew from INR1,084.2 billion in FY14
to INR1,211.7 billion in FY15, growing its contribution in country’s overall GVA from
1 per cent in FY14 to 1.1 per cent in FY15
 According to the National Restaurant Association of India (NRAI), the restaurant
industry is expected to contribute about 2.1 per cent to the total GDP of India by 2021
 Food expenditures constitute a majority of population’s consumption basket and the
share is expected to grow further in the coming years as organised food service retail
penetrates.
 Factors such as growth in consumption of food in terms of frequency of eating out,
increasing trend of experimenting new cuisines, and greater brand and value
consciousness, are expected to create a direct employment opportunity for 5.8 million
people in 2016 and contribute INR224 billion by way of taxes to the Indian economy.
 In terms of mode of retail, the Indian food services industry is dominated by offline or
physical sales, accounting for almost 98 per cent of the total retail sales value of the
industry. Online sales mode constitutes the remaining 2 per cent of the total retail sales.
However, the online sales value is increasing constantly as the industry progresses
toward organised retail with increasing penetration of internet in the country.
 Similarly, consumers prefer to eat their food when it is still hot and fresh.
Approximately 81 per cent of diners prefer to eat-in, as compared with 19 per cent who
either tend to get it delivered or prefer takeaway.

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1.2 FAST FOOD CHAIN IN INDIA

 The fast food, or QSR, format took off in India about 20 years ago after liberalization
policy that came in force in 1991. Fast food industry has grown in India as
multinational fast food players such as McDonalds, KFC, Domino’s Pizza and Pizza
Hut have set up their business either jointly with Indian partners or independently.
These players initially had a tough time understanding the Indian consumer, as their
home-market models did not work well in India.
 Over the last decade, though, many of these players have got their act together
through a better understanding of the Indian market in the form of Indianised menus,
breakfast menus, sit-and-eat formats and positioning their outlets as destinations for
family outings. Indian fast food market is expected to grow at a CAGR of 18% by 2020
due to changing consumer behavior and demography. Fast food market in India is
expected to be worth US$ 27.57 billion by 2020. About 10% of the fast food market in
India is organized. It is estimated that the organized fast food market in India is
expected to grow at a CAGR of 27% by 2020.
 Vegetarian fast food constitutes of around 45% of the whole fast food market in India
and is expected to grow at a CAGR of 18% by 2020.
 Fast food Casual dining restaurants (CDRs) market in organized fast food sector in
India is projected to grow at a CAGR of 27% by 2019-20.
 Non casual dining restaurants (NCDR) or fast casual dining restaurants have gained
tremendous market share in the last 10-15 years. Non-Casual dining restaurants
(CDRs) market in organized fast food sector in India is also projected to grow at a CAGR
of 27% in next 5 years.
 Quick Service Restaurants (QSRs) market in organized fast food sector in India is
projected to grow at a CAGR of 20% by 2019-20.

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 Ethnic fast food market in India is projected to grow at a CAGR of 31.95% by 2019-20.
Millions of people eat ethnic fast food every-day from pani-puri to vada pav to dosa.
To leverage the growth of ethnic fast food market many players are entering this
market in an organised way.

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1.3 REASONS FOR EMERGENCE OF FAST FOOD CHAIN

The following are some of the reasons for the emergence of fast food restaurants in India:

1. Gender Roles
Gender roles are now changing. Females have started working outside. So, they have no
time for their home and cooking food. Fast food is an easy way out because these can be
prepared easily. This has been seen as the major reason for the growth of fast food industry.
Gone are the days when women prepare food for their family. As women also take up jobs
their preferences changes for something quick and cheap.

2. Consumer Sophistication And Confidence

Consumers are becoming more sophisticated now. They do not want to prepare food and
spend their time and energy in house hold works. Qin, Zhao (2010). They are building
their confidence more on „ready to eat and easy to serve‟ kind of foods. All the fast food
brands have created a confidence in the consumers mind as healthy and hygienic.
Consumers start seeing fast food restaurants as social symbol for prestige and status.
3. Paucity of Time
People have no time for cooking. Because of emergence of working women and also
number of other entertainment items. Most of the time either people work or want to enjoy
with their family. Fast food restaurants satisfy their appetite in a quick and cheap manner
which has increased the growth of fast food restaurants.
4. Double Income Group
Emergence of double income group leads to increase in disposable income. Now people
have more disposable income so they can spend easily in fast food and other activities. As
people start earning more and more income they are willing to spend time and money on
more recreation and entertainment.

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5. Working Women

Working women have no time for cooking, and if they have then also they don’t want to
cook, because they want to come out of the traditionally defined gender roles. They do not
want to confine themselves to household work and upbringing of children’s. Working
women bring up their children in a more relaxed way which increases their preference
towards more of fast foods. All the families who have a working women in home have less
preference for homemade foods and fast food restaurants comes in handy for their
consumption.

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1.4 MACRO ECONOMIC FACTORS

Some of the major factors affecting the economy are:

1. Increase in per capita income

There is continuous increase in the per capita income of the Indian citizens. More income
in hand results into more spending in comforts and entertainment and thus results into more
and more spending on fast and ready to serve kind of foods. Fast food industries which are
seen as luxury commodity are accessible to every person because of the increase in per
capita income in the hands of every individual.

2. Economic growth

With economic liberalization of 1991, more foreign and private industries entered the
Indian market that result into income generation of the Indian residents. More income in
the hands of the citizens results into more savings and more savings means more
investment which helps in the overall growth of the economy. The increasing growth in
the economy attracts foreign retailers to set up their outlets in the country.

3. Large population

India being a second largest country in terms of population possesses large potential market
for all the products/services. The composition of the population consists of younger
generation and people with high earning group. This results into entry of large number of
fast food players in the country.

4. Relaxation in rules and regulations

With the economic liberalization of 1991, most of the tariff and non-tariff barriers from the
Indian boundaries are either removed or minimized. This helped significantly the MNC‟s
to enter in the country. Recently the country is allowing 100% relaxation in FDI limits for
food processing industries.

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5. Growth in number of women's in the work force

There is increase in the number of women work force in the recent years because of the
improvement in the literacy rate and also because of the large number of jobs are now
available because of the entry of foreign and private players in the Indian market

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1.5 CHALLENGES FACED BY FAST FOOD CHAIN

1. Social and cultural implications of Indians switching to western breakfast food

Generally, Hindus avoid all foods that are believed to inhibit physical and spiritual
development. Eating meat is not explicitly prohibited, but many Hindus are vegetarian
because they adhere to the concept of ahimsa. Those seeking spiritual unity may avoid
garlic and onions. The concept of purity influences Hindu food practices. Products from
cows (e.g., milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can improve
the purity of impure foods when they are prepared together. Some foods, such as beef or
alcohol, are innately polluted and can never be made pure. But now, Indians are switching
to fast food that contain all those things that are considered impure or against their beliefs.
Some traditional and fundamentalist are against this transformation of food habit and
number of times they provoke their counterparts to revolt against such foods. And that is
what happened when McDonald’s decided to enter the complexity of Indian business
landscape, counting only on its “fast food global formula”, without any apparent previous
cultural training.

2. Emphasis on the usage of bio-degradable products

Glasses, silverware, plates and cloth napkins are never provided with fast food. Instead,
paper plates and napkins, polyurethane containers, plastic cups and tableware, drinking
cartons or PET (polyethylene terephthalate) bottles are used, and these are all disposable.
Many of these items are tossed in the garbage instead of being recycled, or even worse,
merely thrown on the ground. This burdens nature unnecessarily and squanders raw
materials. Nowadays, government emphasis more on the usage of bio-degradable products
in order to reduce soil and water pollution.

3. Retrenchment of employees

Most of new industries will be capital intensive and may drive local competitors, which
have more workers, out of business. This poses an ethical consent for the global fast food
retailers willing to set up their business in India. It gives a major threat to the employees
engaged in the Indian restaurants and other related service industries.

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4. Profit repatriation

Repatriation of profits is another area of concern for Indian economy. As when

multinational enters any of the countries, people and government hope that it will increase
the employment rate and result in economic growth. However, with the multinational
operation, host country experiences these benefits for a short time period.

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1.6 PROBLEMS FACED BY INDUSTRY

The following are some of the problems which hinders the growth of the fast food
industries in India:

1) Environmental friendly products cost high

Government is legislating laws in order to keep check on the fast food industry and it is
emphasizing more on the usage of bio-degradable and environment friendly products. But
associated with this issue is the problem that fast food player faces - the cost associated
with the environment friendly product. They cost much higher than the normal products
that companies uses for packaging or wrapping their products.

2) Balance between societal expectation and companies economic objectives

To balance a society’s expectation regarding environment with the economic burden of

protecting the environment. Thus, one can see that one side pushes for higher standards
and other side tries to beat the standard back, thereby making it an arm wrestling and mind
boggling exercise.

3) Health related issues

Studies have shown that a typical fast food has very high density and food with high density
causes people to eat more then they usually need. In most of the countries Fast foods are
the major problems for obesity and other related diseases which is directly affecting the
growing economy. It is constantly faced with the criticism that it is taking the major toll of
the health of the society. Foods cooked in these industries are high in fat content and the
ingredients are unhealthy which leads to many health issues when taken on a regular basis.

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1.7 FAST FOOD CHAIN IN ECONOMIC ENVIRONMENT

 Fast food chain industry has shown phenomenal growth because of innovation, quality
control and competitive pricing. Fast food restaurants represent one of the largest
segments of the food industry. In 2006, the global fast food market grew by 4.8 percent
reaching a value of 102.4 billion Pound and a volume of 80.3 billion transactions
(Wikipedia, 2012). In 2011, estimated total revenue of the food industry was
approximately $185 billion USD. However, in 2012 this industry is estimated to
account for revenue of $706.7 billion USD (IBIS World, 2012). This colossal amount
accounts for about 36.5 percent of the total global food service sub-sector.
 In order to analyze such rampant growth in fast food industry a worldwide study was
conducted to count the number of fast food restaurants per person. United Kingdom
has claimed this title with Australia at second position and the United States at third
position (QSR News, 2011). Moreover, according to Brewis and Jack as the people
become richer, they have less time for their social life and this proclamation is
consistent with the idea that, better off families may be time poor (Brewis and Jack,
2005). The consistent fact was unearth by the study conducted by Gan and Vernon who
advocates that, the families with higher income have elevated probability to purchase
take away food rather than taking the less expensive option of preparing the food at
home (Gan and Vernon’s, 2003). As colossal percentage of people in metros are not
having enough time to cook food for themselves regularly. They prefer to eat out at fast
food restaurants and this behavioural pattern of metro dwellers has led to the
employment of large numbers of people in the Fast Food Industry.
 As the employability went up, so did the demand of the fast food. Consequently, there
was an urgent need for the fast food companies to expand faster and reduce their
administrative burden. Hence, they came out with the idea of franchising and in order
to best maximize their profits, the big fast food giants created the franchise system.
Franchising was introduced by A&W Root Beer in 1921. However, the restaurant
concept was first franchised by Howard Johnson in the mid-1930s. The franchise
system

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 Allows the companies to maintain overall control of the product and give them a
guaranteed rate of return. Franchise system also allowed the local owners to create a
low wage work force best suited to local conditions. The growing business and the
enormous circulation of financial resources in the market helped the fast food and
beverage industry to gain a prominent place in the Indian economy. The Indian
economy has shown encouraging statistics in past three decades. Indian economy is
growing at 9 percent per annum the fastest after China (Nanjundaiya Ramesh, 2011).
India ranks 12th among the largest global economy and third largest in Asia Just behind
China and Japan. In India, the per capita disposable income has increased by 8 percent
over last five years, which has led to an increase in the per capita consumption
expenditure on food by 20 percent. During 2004 to 2008, there was soaring growth
recorded in the Indian food industry from 141 billion USD to 181 billion USD, a
compounded annual growth rate of 6.4 percent. According to Kochi, the consumer
spending on processed food has increased at an average rate of 7.6 percent annually
from 2008 to 2010 and this is expected to rise at an average of around 8.6 percent till
2012 (Kochi, 2011). Additionally, by 2015 the Indian food industry is expected to reach
258 billion USD. Total domestic food spending is expected to reach 318 billion USD
by 2020. This growth is expected to be sustained till 2020, where the industry size is
expected to touch 318 billion USD (Ganesan Sathish, 2012).
 This enormous increase in the industry size has led the Indian current per capita
expenditure on food to be 1/6th that of China and 1/16th that of US (Wikipedia, 2012).
If other outside foods like restaurant meals are also included with the fast food
consumed outside the house, then on an average an Indian consumer spends around 77
USD (Rs 4,389) per month on eating outside. Moreover, as the demand for food is on
rise so is the spending of the customers. Food is the biggest consumption category in
India with spending amounting to about 21 percent of India’s GDP. Along with the
strong fundamental growth of the economy which provided a push to consumption,
there was an increased market penetration by domestic and international food players
which resulted in availability of products and provided the required impetus for
consumption.

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 Moreover, the size of the consumer base is also increasing by manifolds. It is estimated
that the middle class, upper middle class and the rich class is projected to increase at
more than 300 percent between 2005 and 2015. During the same period the youth
population (age group 15 – 25 years) in India is expected to grow by 11 percent
(http://www.twnside.org.sg). This will lead to an increasing demand for the food
products. The principal factors that drive the demand for fast food restaurants is the
increasing disposable incomes among the target groups, increase in the number of
working women, urbanization, globalization, the consequent changes in life styles and
the brand pull which will make Indian Tier one and Tier two cities a hot spot for the
fast food companies in the near future.
 Recent researchers reveal that out of the total Indian consumer spending on food 26
percent is on tertiary value-added processed products, which accounts for
approximately 47 billion USD. Out of these spending beverages, oils and oilseeds
accounts for more than a 50 percent share, since these products are mostly consumed
in the tertiary processed from in India there is large potential for tertiary processed food
products. The traditional habit of Indian consumer is to buy products in the basic or
primary from and then process them at home. This is largely due to the fact that Indian
women or the available domestic help have time at home to cook and freshness of food
item is considered an important element of the Indian diet. The processed food industry
in India is at an early stage with low penetration and high potential. Currently, the
echelon of food processing is low across the product categories and only 2.2 percent of
the total food and vegetable production of India is processed as compared to 65 percent
in the US and 23 percent in China (Awasthi, Jaggi Raman, Padmanand V, 2006). The
potential lies not only in the processed food sector but also in the food tourism. The
tourists play a pivotal role in spreading of the fast food industry at global level. Many
tourists spend a lot of money on their tour trips, this spending and word of mouth
advertisement helps fast food industry to distend at global level. Tourist spending on
food can constitute up to one-third of the total tourist expenditure (Hall & Sharples,
2003). Furthermore, eating is a unique from of tourist activity that gratifies all five
senses that is vision, tactile, auditory, taste, and olfaction (Kivela & Crotts, 2006).
According to Rajendra, Indians would spend close

21
 To Rs 4,449 crore in a year (approx. €767 million) at fast-food joints (Chaudhari. G.
Rajendra, 2012). The fast food market would be growing at a rate of 40 percent per
year. Even if the researcher assumes a modest growth of 30 percent per annum only,
the business potential for fast food restaurants in India may be reckoned approximately
at Rs 13,580 crore by 2016. Hence it is not surprising to see that India is a hot spot for
fast food companies and they are penetrating the Indian food market with the help of
franchising. Franchising is a good strategy because it not only provides job opportunity
to the local population but also utilises the limited resources in the best possible way.
Moreover, as franchising involves mass participation, it is more inclined towards the
local culture ultimately leading to the increased number of satisfied customers. This
has led to the expansion of the franchise market in India.
 The franchise market in India is estimated to be worth 3.3 billion USD and is growing
at a rate of 30 percent per annum (Wadhawan Nisha, (2012). Yum Brands, which owns
the KFC, Taco Bell and Pizza Hut chains, runs about 108 Kentucky Fried Chicken
outlets in India. McDonald's Corporation has 211 restaurants in India with over 2,
50,000 customers visiting their franchise outlets every day. Indian fast-food operator
Jubilant Food works Ltd. runs the Domino’s Pizza chain in the country. Domino's Pizza
in India has grown into a country wide network of more than 300 franchise stores with
a team of over 9,000 people. Subway Systems India Pvt. Ltd, part of the U.S. sandwich
chain Subway has also entered into the franchise competition by opening its first
franchise restaurant in India in 2001. Now, Subway has grown its operations to 183
franchise outlets in 26 cities. Another Pizza chain, Papa John's International Inc. has
opened 25 franchise outlets in India. Pizza Hut runs more franchise stores as compared
to company administered stores. This indicates that franchise business is booming in
India and this inflow of western chains does not pose a threat to the local players
because the Indian market is big enough for both, local and foreign companies to grow.
India caps foreign ownership in single brand retail at 51 percent only forcing all other
foreign chains to seek partnerships to do business in Asia's third largest economy.

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1.8 SUCCESS DRIVERS OF FAST FOOD CHAINS

 Success is often the result of hard work, effective planning and combination of several
key elements that go into developing a successful matrix for any company. These
elements vary according to the environmental milieu and the nature of the organisation.
Interestingly, the fast food companies are conscious about the combination of these
elements to device the appropriate strategy in the light of ever changing business
environment. To grow and survive in the present competitive and dynamic market
environment over the period of time, the fast food companies have adopted different
marketing strategies to suit the global and regional economic fluctuations. Sometimes,
during recession fast food chains merge together in order to grab a bigger market share
and increase their profits. Mergers also facilitate the fast food restaurants to increase
their revenue and customer base by expanding the choices available to their customers
and also by increasing the hours of operation. For example, a restaurant chain that
doesn’t serve breakfast merged with a chain that does. A burger making food chain
merged with a Pizza making food chain to tap both kinds of customers. A classic
example of the above mentioned concept is the merger of Arby and Wendy in the year
2008. In Australia Coke has devised a contract with Mc Donald’s and they sell Diet
coke at Mc Donald’s outlets. This strategy has helped both the companies to entice
more customers to their products and eventually the customers perceived this as a value
for money bargain. Additionally, price formulates as one of the most important inputs
for strategy formulation especially in the product category which is have service
dominance like fast food sector. Price of the food products fluctuates in accordance
with the external and internal environments. As soon as slow economies begin to
recover low meal prices were of less concern for the consumers and quality became the
new imperative factor. Although these new healthier food items were more expensive
as compared to the other items on the menu list, still they attract the educated and
economically sound customers because of their health benefits. According to the
“QSR” magazine when the McDonald’s included fruit smoothes and other new
healthier but relatively more expensive food items on its menu, the 2011 sales of the
company outpaced the 2009 sales by 1.5 billion USD (QSR, 2011).

23
 Almost all big players in the fast food industry are implying strategies to ensure least
amount of commodity pricing. By gaining access to low prices meats, vegetables and
other commodities fast food restaurants reduce meal prices without losing profits. This
is achieved by complying with strategies like bulk buying, having contract with the
farmers who are producing vegetables, establishing variable financial relations with
slaughter houses, transport organisations etc. This strategy plays a pivotal role in
outperforming the competition especially in developing economies like India. As a
result of this, there is a price war among the fast food companies in India which are
running on thin profit margins. In this commercial environment functioning efficiently
is critical for the endurance of the restaurant. Focusing on minimizing food waste,
hiring assistance at minimum wage and accruing benefits from economies of scale.
 Moreover, developing unique value proposition having distinction from the
competition is of grave importance for enticing potential customers. While applying
the concept the fast food industry has created a unique, innovative, entertaining menu
cum gift item that can differentiate them from the rest of the competition. Many fast
food restaurants in order to stand apart from the competition and allure customers
started emphasizing on the fifth P of the marketing mix i.e. physical evidence by
providing some recallable souvenirs to the customers visiting their outlets.
Additionally, fast food companies have started driving customer traffic through
collectibles particularly those that are enjoyed by the young customers. According to
this strategy, a fast food company selects a movie or a popular animated film and
determines other companies who sell dolls, glasses or other mementos that are related
to the movie. Then, the company offer four to six characters related to the movie and
distributes one free item with one purchase. This fast food marketing strategy
magnetizes the people to come back until they have earned all the collectibles. Big
players in fast food industry choose a popular theme for their collectibles which other
fast food companies are not marketing.
 Companies are also segmenting their market by various activities, attitudes and
customer usage patterns. For example, if majority of a fast food restaurant’s customers
are between the age group of 18 to 24 years and earn less than Rs. 10,000 per month
then the company can locate clusters of this demographic group within 10 km radius

24
 of its restaurant. Then, they retrieve the addresses of the potential customers’ residence
and mail them the coupons. There are many more direct marketing techniques which
companies are employing now a days to magnetize the attention of the potential
customers. Understanding the relevance of distribution, accessibility and income
majority of the fast food restaurants have identified the market clusters and have opened
business outlets keeping distribution, accessibility and income in view. Another
example is that of KFC which is now targeting college students in India by launching
products which are cheap and easily accessible to Indian students.
 Further, another marketing strategy practiced by leading fast food restaurants is
attracting and retaining right customers and developing long term relationships by
offering loyalty and reward programmers to retain the old customers. Frequency card
programs are a popular type of loyalty programs for fast food restaurants. These
programmes help in increasing the revisit incidence of the customers by rewarding their
repeat behaviour in conjugation to their enhanced loyalty towards the organisation. For
example, many fast food companies are offering its customers a free drink after their
first four visits and free French fries after their next four visits. Ultimately, a customer
can earn a free meal after twelve visits. Fast food companies keep on repeating this
cycle for six, eight or ten weeks according to their preferences and requirements.
 Another input factor exploited for expanding services, especially pertaining to fast food
restaurant is the time factor. Time is the most valued resources which helps to elevate
the efficiency of the organisation as it is precious and every growing organisation wants
to utilize it in the best possible way. One of the most important reasons for quick service
in the fast food restaurants is to annihilate the cognition caused by the presence of
excessive customers in the restaurant at the same time. The fast food restaurants want
that the customers must come, eat and go so that the operational efficiency of the
restaurant is increased. Additionally, in restaurants operations production time,
convenience and short service time are major success drivers for fast food chains. This
coinciding with the faster pace of life in the modern world places fast food as a regular
dining choice for time conscious people. Majority of the fast food chains also offer
drive thru services where a customer while driving to work or school in a hurry can
grab food item easily without wasting much of their precious time by driving through

25
a strip specially designed by the restaurant where the customer can give order while
sitting in their cars and instantly the ordered food is served. However, apart from
demographic considerations the knowledge of market and consumer behaviour acts as
a decisive element in the success of any fast food company. In fact the change in
consumer preferences have produced new consumption patterns towards this food
sector. Therefore, consumer behaviour is a subset of human behaviour which is
important to understand in view of the behaviour displayed in obtaining, consuming
and disposing off the fast food products.

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1.9 CUSTOMER SATISFACTION IN FAST FOOD INDUSTRY

 In the present business scenario there is no industry which can work efficiently by
ignoring customer satisfaction. Customer’s access to a lot of variety and cutthroat
competition has turned the tables and put the customer in the dominant position. It is
well established fact that satisfied customers play crucial role in long term business
success (McColl-Kennedy and Schneider, 2000). The importance of customer
satisfaction is ostensible from the research conducted by Shoultz which advocates that
out of 700 top executives, 64 percent agreed that customer satisfaction was their
number one priority and the remaining 36 percent revealed that it was one of their top
priorities (Donald. Shoultz, 1989). Classification of the customers on the basis of
satisfaction has been studied by number of researchers. Jones and Suh have suggested
two distinct categories of customer satisfaction which are transaction specific and
overall satisfaction (Jones and Suh, 2000). Here transaction specific satisfaction is
associated with a definite encounter pertaining to the organisation, whereas overall
satisfaction is a cumulative construct figuring up satisfaction with specific products or
services of the organisation by means of various other facets of the company. The
overall rating epitomizes a more broad-spectrum attitude of the customer towards a
specific product or service provided by the organisation. Further as per Jones and
Sasser, on the basis of the satisfaction customers behave in one of the four basic ways
as loyalist, defectors, missionaries and hostages. Within the loyalist category, the
individuals are so satisfied that their experience exceeds their expectation and they
share a strong positive feeling with others. Defector rank includes those customers who
are neutral or merely satisfied and not all defectors need to be retained by the company
because most dangerous defectors are also referred to as terrorists. Another customer
category is referred to as missionary, which encompasses those customers who are
completely satisfied but exhibit almost no loyalty due to their sheer interest in the
financial gains. Whereas, the hostages are such individuals who experience the product
the company has to offer largely due to monopolistic environment and would revere to
shift if competitive environment exists.

27
 Thomas Jones and Sasser Jr. have suggested that as the market shifts towards saturation
the organisation shrinks and strives to elevate the customer satisfaction level by
retaining affirmative existing customers rather than devoting additional resources to
entice potential new customers. As a result understanding and tracking satisfaction
level has become of paramount import for sustaining business success relationships.
Most important customer satisfaction is viewed as a means rather than an end pertaining
to a cycle of continuous improvement in service delivery system (Thomas Jones and
Sasser .Jr, 1995).

 One of the most popular and extensively employed methods to measure customer
satisfaction in the business world is the confirmation-disconfirmation method. This is
based on comparison of the customers’ expectations with the customers’ current
experiences (Yu ksel and Rimmington, 1998). A tool devised to be effective in this
particular note is the customer satisfaction index (CSI) which was developed by
University of Michigan's Ross School of Business in 1944. The CSI method is
predestined on predictive model that comprises of preceding customers’ expectations,
perceived quality based on the customers’ post service assessments and the customers’
perceived value which leads to the conception of customer satisfaction index (CSI)
score assorting from 0-100. This technique is widely applied in the USA (ACSI) and
Europe (ECSI). According to Eugene W, Anderson and Fornell the customer
satisfaction index scores pertaining to customers’ satisfaction operates as a intangible
economic indicator and is used to monitor the financial viability of the companies,
industries and international trade unions. They work as momentous assessments of the
feasibility of large economic federations operational in Europe and USA. The post
service assessments are completed by telephone and are comprised of the customers’
ratings on three criteria: overall quality, reliability, and meeting the customers’ needs.
The national CSI measures the quality of goods and services knowledgeable by the
consumers. An individual firm’s CSI rating represents its served market’s overall
evaluation of the total purchase and consumption experience, both actual and

28
anticipated (Eugene.W, Anderson and Fornell, 2000). The national index is updated
each quarter. According to the latest ACSI rating, pizza makers are riding on the top of
the wave. Papa John’s leads the fast food category by jumping to 7 percent increase as
compared to the previous year ACSI ratings, followed by Pizza Hut which increased
by 5 percent. KFC is the other big gainer, by ceasing an increment of 9 percent as
compared to previous year. Despite rolling out new ingredients and reinventing the
Domino’s pizzas from the crust up, Domino’s is still stuck at the same level. It is
surprising to recognize that McDonald’s ACSI rating has dropped by 4 percent as
compared to the previous year (American Customer Satisfaction Index, 2012).

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1.10 BRAND LOYALTY IN FAST FOOD CHAIN INDUSTRY

 Modern marketing era witness a significant thrust on developing brand loyalty

relationship. Wherein, brand loyalty refers to consumers’ consistent preference and
purchase of the same brand in specific product or service. Within the domain of loyalty
Neal opinioned that customer loyalty is the preference of consumer’s choosing the
same product of service building loyalty in a sum total of three components of
perceived loyalty, emotional loyalty and action loyalty (Neal, 1999). Emotional loyalty
approach explores emotional, cognitive, general and transactional dimensions of
customer’s satisfaction and loyalty process in multichannel customer relations. It aims
at improving the customers experience associated with every first encounter with the
company. Action loyalty pertaining to communication with customers has three sub-
dimensions which are acquisition, selection and transmission of Information. The
degree of these dimensions enhance with the increase in the levels of loyalty. Further,
different pattern of communicative action would be observable among individuals with
different levels of behavioural and attitudinal loyalty. Perceived loyalty refers to the
perceived value of the customer associated with the loyalty programme. It takes into
consideration the economic value and special treatment provided to the customer.
However, apart from the above mentioned loyalty components, the process of
developing loyalty also varies subjected to the nature of product, brand and the
industry.
 Taking into consideration the fast food industry the cost of accruing a new customer is
approximately five to nine times more as compared to the cost to maintain an old
customer. Previous researchers reveals that if the customer loyalty is be increased by
five percent effectively, then the profit can be increased by 25 to 85 percent. Therefore,
if the service industry wants to reduce the cost on money and time it must focus on
retaining customers than attracting new customers. This will result into a large pool of
satisfied customers with a strong sense of trust as also building long term loyalty.
 Brand loyalty, is consumer's commitment to continue using the same brand and this
phenomenon can be demonstrated by repeated buying of a product or service or other
positive behaviours, such as word of mouth advocacy. For companies in food industry

30
 it is of great importance that the concept of brand and perception should not be ignored
for the reason that the consumers associate product categories with brands and
countries (Roth and Romeo, 1992). Therefore, fast food chains like Mc Donald's,
Burger King and Wendy's have developed extremely successful fast food branding
strategies. Their signs, logos and slogans are recognizable around the world.
 Fast food companies endeavour to access high traffic shopping malls near the target
markets where brand and image plays a decisive role in attracting the customers to the
fast food restaurants. These two ingredients are the main drivers in marketing
communication. According to the website customer service zone, fans of fast food like
clear communication and predictability as they want to know exactly what they are
going to get before they go through the doors. By providing consistent, easily
recognizable and simple brand messages a fast food restaurant reassures the customers
that nothing has changed.
 Simple slogans that lodge themselves into the brains of the customers are repeated
endlessly on television and radio commercials, ensuring that when customers see the
fast food outlet, they are already primed to respond positively because by now the brand
is inside them. This enables the fast food companies to acquire increased level of
customer traffic ultimately elevating the profits. Company like Mc Donald always
reveals a happy person after eating their product. Moreover, punch lines like “I am
loving it”, illustrates that the product is giving more ant required satisfaction to the
consumer. Additionally, the body language and the facial expression of the people
consuming the product on commercials are extremely positive. All their actions result
in affirmative interpretation of the message and develop an optimistic impact on the
potential customers.
 Many researchers have found that consumers develop associations between brands and
perceived benefits from the brands (Krishnan, 1996). This effect can be observed in
fast food industry as well, where brands like KFC and Subway has developed a
perception in the mind of the customers that the products of their brand are hygienic
and tasty. As a result these brands have been able to attract those customers who are
looking for quality and hygiene. Moreover, recent research has also found that the
customers associate quality with KFC, price value with Pizza Hut, availability with

31
 McDonalds and the delivery service with Dominos. Additionally, when the customer
develops value associations with the brand the customer is inclined towards developing
some degree of positive attitude with the brand as well. Recent researches have
revealed that customers having long term association with the company were less
sensitive to price increases in comparison to the other customers. Brand loyalty is
viewed as a multidimensional construct which is determined by several distinct
psychological processes and entails multivariate measurements. Customer’s perceived
value, brand trust, customer’s satisfaction, repeat purchase behaviour and commitment
are found to be the key influencing factors of brand loyalty.
 Philip Kotler has segmented the loyal customer into four categories which are hard core
loyal, split loyal, shifting loyal and switchers (Kotler Philip, 2002). Hard core loyal are
those customers who are very particular about the brand they are buying. These
customers will travel longer distances in order to get the product of their brand. Hard
core loyal are asset for every company because these customers will buy only from one
company and in addition to that they also spread good word of mouth and draw new
customers to the company resulting in the expansion of the customer base. Therefore,
every company wants to retain and develop large number of hard core loyal customers.
Split loyal customers are very tricky to handle because they are not loyal to any one
particular company. Their loyalty changes with the change in external factors like price
of the product, features of the product, availability of the product, after sales service of
the product and many other external factors. Split loyal customers are difficult to keep
with the company as they do not mind shifting from the company if they get a better
deal. It is a tedious task to predict the behaviour of the split loyal customers. However,
the companies try their level best to retain as much split as loyal customers as possible
because they are just like extra bonus for the company and they may or may not spread
good word of mouth in lieu of the company. Hence, the fast food companies try to keep
them happy and contented by providing unique and customised services and products.
Shifting loyal customers are to some extent similar to split loyal customers. The only
difference lies in the proportion and frequency of shifting from one company to
another.

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 On the contrary, switchers are those customers who are not at all loyal to any company.
These types of customers are very difficult to envisage because their buying behaviour
is erratic and unpredictable. Moreover, non-loyal customers constitute the majority of
the customers’ base and therefore all the companies squander a fortune to attract these
non-loyal customers. However, researchers conducted on non-loyal customers have
illustrated that just like other customers they also like to revisit restaurants which are
hygienic, beautiful, calm and attractive. Additionally, the recent researchers have also
revealed that ergonomics and internal design of the restaurant has a tremendous impact
on the cognitive abilities of the customers. Keeping this in view Mc Donald's is also
changing its look and attire for re-establishing its brand with a new get up. It is
projecting itself as a brand meant for the young and happening through a Wi-Fi look.
Mc Donald's has brought change in its traditional colour composition for re-inventing
its brand image. The dominant yellow color is being replaced with golden and red with
terracotta. Besides this the colour combination would also include sage green and olive.
Restructuring would include prevalence of wood along with bricks lessening the earlier
plastic texture. Mc Donald's is attiring its restaurants with lights having mild touch for
a soothing ambience. Further, keeping in view the target audience the restaurants are
specifically re-designed into three segments. The first zone is the linger zone where the
young techno savvy generation could access technologically advanced equipments and
linger around on sofas and armchairs. The second segment is flexible zone which is
meant for families, where a person could relax with his or her family. Last but not the
least is the grab and go zone. This part of the Mc Donald joint caters to the lone diners
and its characteristic features include bar stools, tall counters and plasma televisions.
All these improvisations help in increasing the longitiviety of the relationship between
the customer and the fast food companies resulting in enhanced loyalty. Developing
economies like India which are well known for their price sensitive markets, where
every rupee counts and can dramatically alter the decision of the customers. It is
imperative for the companies to continuously audit and maintain an appropriate price
for their offerings in order to sustain and grow in this extremely competitive market.

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1.11 PRICING IN FAST FOOD CHAIN INDUSTRY

 Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the
marketing mix. The other three aspects are product, promotion, and place. Price is the
only revenue generating element amongst the four Ps as the rest are cost centric.
Without appropriate money generation, no organisation can work and expand
effectively because the wealth is generated from the customers and therefore, it is
imperative that the customer should be willing and have the capacity to purchase the
product or service. Moreover, the needs of the consumer can be converted into demand
only if the customers feel that the price charged is genuine and to achieve this purpose
the management looks forward to the pricing factors. Factors affecting the price
determination are known as pricing factors which are manufacturing cost, market place,
competition, market condition, and quality of product. Due to the above mentioned
reasons many fast food companies are devising strategies to influence these factors for
their own benefits. Like McDonald has launched low priced products to reduce the
manufacturing costs, KFC has started to offer both halal and jhatka meat to the
customers, Domino’s has started free home delivery services in order to entice the
customers of even those areas which are far from Domino’s restaurant and other food
options are available to them in their nearby vicinity. The price of the Pizza Hut food
products vary according to the quality associated with them. This helps them to provide
options for customers bellowing to different economic strata hence, increasing their
overall customer base.

 Unfortunately, the pricing factors and the associated pricing strategy differs depending
upon the product, brand and nature of the market plus economy. Unorganized markets
in less developed economies have shown the evidence of unfair and unhealthy pricing
practices which not only deteriorates the image of the organisations but also motivates
the customers to look for other options. That is why price fairness is very important for
any company. According to researchers Price fairness refers to consumer’s assessments
of whether a seller’s price is reasonable, acceptable or justifiable (Xia et al., 2004). The
history of the business world has proved that only those companies have been

34
 successful who have provided products and services at fair prices. In order to gain
repeat customers, it is essential for the business organisations to satisfy the customers
from monetary point of view. In another study conducted by Herrmann, it was
concluded that customer satisfaction is directly influenced by price perceptions while
indirectly through the perception of price fairness. The researcher accepts the fact that
the price does plays a pivotal role in the overall revenue generation process of the
company (Herrmann et al., 2007). The relevance of the statement further increases by
the fact that there is a strong consensus within the literature, supporting the fact that
price promotions do have a significant impact on short term sales (Hawkes, 2009).

 Many fast food and beverage companies have taken into consideration the laws that
influence a consumer’s perceives at a given price and how price sensitivity influences
their purchase decisions. These laws also referred to as “effects” are reference pricing
effect, switching cost effect, price quality effect, expenditure effect and shared cost
effect. The reference price effect advocates that buyer’s price sensitivity for a given
product increases in proportion to the product’s price relative to perceived alternatives.
Switching costs effect puts light on the fact that the higher the product specific
investment, a buyer must make to switch suppliers, the less price sensitive that buyer
is when choosing between alternatives. Price quality effect advocates that the buyers
are less sensitive to price if higher prices signal higher quality. Products on which this
effect is applicable includes image products, exclusive products and products with
minimal cues for quality. Further, according to the expenditure effect, the buyers are
more price sensitive when the expense accounts for a large percentage of buyer’s
budget. According to Shared cost effect, the smaller the portion of the purchase price
the buyers must pay the fewer prices sensitive he/she will be Keeping in view the above
information, the fast food companies utilize different pricing strategies but the most
common strategies includes skimming pricing, limit pricing, value pricing, penetration
pricing, customary pricing and bundle pricing strategies. Skimming Pricing strategy is
very popular pricing strategy in which business organisations sell a product at a high
price, sacrificing high sales to gain a high profit. This pricing strategy is usually
employed to reimburse the cost of investment of the original research into the product.

35
 In other words, extract from the buyer as much as much possible. Many times when
the fast food companies launch a new food item or a beverage company a new drink,
they usually price it employing the skimming pricing strategy and cater depending upon
the customers’ response, they change the pricing strategy to best suit the scenario.

 Further, Value pricing strategy is a process of offering products and services to the
customers at a fair and reasonable price with the assumption that the customers observe
price as a primary indicator of a service value. According to this strategy, the company
decreases the prices of the products without reducing the size or maintains the present
cost of the product and reasonably increase the size of the product. An example of the
value pricing is the value meal known as medium meal combo offered by Mc Donald
which consists of burger, fries and Coke priced much lower than the sum of
individualized product costing. Whereas penetration pricing is most commonly
associated with a marketing objective of increasing market share or sales volume rather
than to make profit in the short run. Penetration pricing is the act of setting a relatively
low initial entry price, often lower than the present market price, to attract new
customers. The strategy works on the expectation that customers will switch to the new
brand because of lower brand. Fast-food restaurants often utilize penetration pricing
when introducing a new menu item. On the other hand, customary pricing is a practice
of determining the price based on the customers’ perceived expectations. Customary
pricing is established by tradition or competition and fast-food restaurants employ
customary pricing on a regular basis. For example, if the majority of fast-food
restaurants are selling cheeseburgers for Rs. 50 then mainstream fast-food restaurants
will be selling its cheeseburgers Rs. 50 as well for the reason that, they do not want to
bear the risk of losing sales to the competition. Bundle Pricing as a strategic pricing
practice in the fast food sector, is an act of marketing and selling two or more products
as a single package with the intention of saving the customer money. Fast-food
restaurants engage in bundle pricing quite frequently as they may call it a value meal
or a meal deal. A customer can purchase a sandwich, fries and a drink as a value meal
for far less than the price of purchasing each item separately. On the other hand the
limit pricing strategy is a tool in the hands of a monopolist to discourage economic

36
 entry of the other business organisations into the market. The limit price is often lower
than the average cost of production or just low enough to make entering into the market
not profitable. This strategy discourages new entrants in the business because they will
not be able to achieve the breakeven point in near future. This strategy is declared
illegal in many countries.

 Another pricing strategy known as premium pricing approach is the practice of keeping
the price of a product or service artificially high in order to encourage favorable
perceptions among the buyers based solely on the price. Food items in seven star hotels
are priced keeping in mind the same pricing strategy. Target pricing strategy, is a
pricing method whereby the selling price of a product is calculated to produce a
particular rate of return on investment for a specific volume of production. As the
market trends and scenario change so does the pricing strategy of the fast food
companies. They many times execute permutation and combination of these strategies
pertaining to their preferences in response to changing business environment. However,
customers persistently associate price with quality. Therefore, it is imperative for the
fast food and beverage companies to provide high service quality and charge
appropriate price in order to attain desired customer traffic and higher stratum of
customer satisfaction.

37
 2) RESEARCH METHOLOGY

2.1 OBJECTIVES OF THE RESEARCH

The overall objective of the study is to analyze the food consumption lifestyle behavior of
consumers segment for developing new marketing strategies in fast food sector and also
was to determine if fast food restaurants target vulnerable populations.

 The specific objectives of the study are:

1. To identify the influence of demographic factors on consumption of fast food by the

sample respondents.

2. To identify the problems in consumption of fast food items and the services provided
by the fast food restaurants.

 Moreover, it is possible that many teenagers will have their dinner meal at home with
their family, while at lunch they are more prone to eating fast food. It could also be the
case that in lower income areas, families may also be more prone to eating fast food
for dinner, due to monetary and time constraints. For this reason we also examined the
socioeconomic characteristics.
 Furthermore, we explored the proportion of fast food restaurants across Mumbai to
determine if there is a higher accessibility to fast food locations in more vulnerable
populations. The basis for vulnerable populations will be viewed through
socioeconomic demographics such as average household income and age.

38
2.2 INDUSTRY RESPONSE TO PROBLEMS

Though the industry is facing many challenges and problems it has been constantly fighting
with these issues which are evident from the increase in the growth of the fast food
restaurants in India. Some of their strategies are as follows.

1. Healthier options

Franchise concepts based on healthier ingredients and meal choices continue to pop up,
and the old stalwarts continue to add healthy options to their menus. Locally sourced
ingredients - something that has been counter too much of the fast food industry
distribution model - are on the rise. Major chains are promising to source fresher
ingredients with less additives, free-range chicken is showing up on more menus, and some
restaurants are offering vegetables as a main course or the primary side. A recent report
claims that almost 50% of restaurants with organic options have an average check size of
$5-7: that is fast food.

2. Higher prices and more efficient operations

Labor concerns are a stickier problem. Some of the increased costs can be passed on to the
consumer - but not all. Fast food is desirable in part for the low price, and consumers are
price sensitive. Some franchises are working to reduce their labor costs. In other words,
figuring out creative ways to employ fewer people, primarily by leveraging technology.
Self- serve kiosks and mobile apps for ordering and paying are the primary examples seen
in newer franchises.

3. Non-traditional locations

Drive-thru and stand-alone stores still dominate the fast food landscape, but some chains
are exploring new options such as counter service within larger stores, catering and even
delivery. This is the most successful strategy followed by the fast food restaurants to suit
the Indian tastes as drive-ins are less popular in India. The best example is McDonalds
which is a successful drive in restaurant in the US, modified its format as franchise
restaurant in the major cities and popular areas like malls. But as they have set up their

39
business and gained popularity they are looking to spread into other formats as consumers
are changing and adapting to new and modern recreations.

4. Marketing to children's needs

Fast food outlets in India target children as their major customers. They introduce varieties
of things that will attract the children‟s attention and by targeting children‟s they
automatically target their parents because Children‟s are always accompanied by their
parents. This is becoming popular as many outlets are constantly giving exciting gifts and
conducting games for children which attracts them to these restaurants.

5. Low level customer commitment

Because of the large number of food retail outlets and also because of the tendency of
customer to switch from one product to other (as food is one areas where customer wants
to try everything new that comes to the market), this industry faces low level customer
commitment. This has become a major advantage for the fast food retailers as they attract
customers whenever they provide something new and innovative.

6. Value added technology services

There is continuous improvement in the technology as far as fast food market in India is
considered. The reason behind that is food is a perishable item and in order to ensure that
it remain fresh for a longer period of time, there is a need for continuous up gradation in
technology. Earlier, Indian people prefer eating at home but now with the change in trend
there is also need for improvement and up gradation of technology in food sector. The food
are preserved for a long time using latest technology and they are served by reheating and
processing whenever the customer demands. Also many apps which help in ordering the
food from home are increasing as many consumers prefer to eat fast foods from their home
environment also. Home deliveries are made possible with advanced heat retaining options
when delivered to the customers.

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7. Attracting different segments of the market

Fast food outlets are introducing varieties of products in order to cater the demands of each
and every segment of the market. They are introducing all categories of product so that
people of all age, sex, class, income group etc. can come and become a customer of their
food line. Though the fast foods are targeted exclusively to children and youngsters many
Indianised varieties are constantly introduced to have a mass marketing approach.
Anything offered in an innovative way with new tastes excited and delights the consumers
who prefer to revisit the restaurants again and again.

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2.3 SCOPE OF THE STUDY

 In terms of research the scope of the study refers to the parameters of the study within
which the study will be operating. In other words scope defines specific boundaries
where the objectives, knowledge, instructions or outcome of activities are found.
 This also determines the accepted range of the study around which the method of
investigation should be centered.
 In the present context to understand the consumer behaviour in fast food industry, the
fast food companies like KFC, McDonald, Pizza Hut and Dominos were studied. The
area of the study comprises of suburbs of Mumbai.
 The study focus on the effect of branding, pricing and service quality on the customer
satisfaction of the customers of the above mentioned fast food companies.
 The scope also includes the effect of demographics on the customer satisfaction.
 This work will help in understanding the behaviour of the customers of the fast food
restaurants to predict about their specific choices.

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2.4 DATA COLLECTION

The intention of the study is to observe consumer behaviour pertaining to the fast food
industry in Mumbai suburbs. The study is based on the following dimensions; customer
satisfaction, service quality, brand loyalty, Pricing policy and demographics of the
customers. For the above mentioned reasons, the study is based on both primary data as
well as secondary data.

 PRIMARY DATA

The primary data was amassed by personally distributing the questionnaire to the
customers of the fast food restaurants i.e. Mad Over Donuts, KFC, Burger King,
Dominos and Pizza Hut which are positioned in Mumbai suburbs. From each of the
fast food restaurant chains approximately 50 respondents were requested to fill the
questionnaire by selecting the alternate choices available in the questionnaire.

 SECONDARY DATA

The secondary data has been taken in the form of various websites, doctoral thesis,
research papers, books and research articles related to the topic.

43
2.5 SAMPLE DESIGN

 The sampling method used by the researcher in this study is stratified random sampling.
Where the data was collected from the customers of the fast food restaurant chains like
Mad over donuts, KFC, Burger King, Dominos and Pizza Hut situated in Mumbai
region.

2.6 HYPOTHESIS

 H1: The more is the brand loyalty, the more is the customer satisfaction.
 H2: Perceived service quality is directly proportional to customer satisfaction.

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2.7 LIMITATIONS OF THE STUDY

 Low awareness level of customers regarding the various products and services offered
by other fast food companies might have influenced their responses.
 The study is limited to KFC, Mad over Donuts, Pizza Hut, Burger King and Dominos
of Mumbai region only, but before generalizing the recommendations of the study,
various socio economical, cultural and geo political aspects of the other regions have
to be considered as well.
 Sample size, cost and time limitations and the particularized nature of the study has
lead the researcher to restrict the scope of the study.

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 3) LITERATURE REVIEW

During the past two decades, growing number of fast food companies in an increased
competitive scenario have undertaken a number of methodical endeavors to reshape the
consumers’ behaviour for influencing favorable decision towards themselves. Therefore,
high customer satisfaction is of pivotal importance for the success of the whole fast food
and beverage industry, especially for the financial and economic sustenance of these fast
food restaurants. However, existing literature and research indicates that there is
inadequacy of the delivery of the required customer satisfaction level in this industry. Due
to the vast scope of the relationship matrix between customer satisfaction, brand loyalty,
pricing policy and service quality, it is an arduous task for the researcher to address all the
related research work. However, through this chapter an effort has been endeavored to
provide a comprehensive account of the findings of the various studies related to the subject
matter of the present study, so as to provide a basis for the formation of an outline of the
research design to be adopted for the study.

 Goyal Anita, Singh N.P (2007) have analyzed the effect of hygiene and nutritional
values on the level of satisfaction of young Indian consumers of fast food restaurants.
The researchers have used multivariate statistical tools to answer the research
questions. The study reveals that that hygiene and nutritional values have positive effect
on the satisfaction level of the Indian consumers. Moreover, the study shows that the
young Indian consumers have passion for visiting fast food outlets for fun and change
but their first choice is homemade food. They feel homemade food is much better than
food served at fast food outlets. They have the highest value for taste and quality
followed by nutritional value and hygiene. The study suggests that fast food providers
need to focus on hygiene and nutritional values to increase the customer satisfaction.
There is need to communicate the information about hygiene and nutritional value of
fast food to the customers which will help in building the trust in the food providers.

46
 Culp Jennifer, Bell. A. Robert and Cassady Diana (2010) have observed the food
industries web sites which are targeting children to assess the strategies used by the
food companies in order to prolong children’s visits and foster their brand loyalty
towards their food products. The researchers have conducted a content analysis of the
web sites advertised on 2 children's networks that is, Cartoon Network and
Nickelodeon. The study examined a total of 290 web pages and 247 unique games on
19 internet sites. The study reveals that games found on 81% of the web sites were
supporting the most predominant promotional strategy used by the companies.
Moreover, all the games had at least 1 brand identifier with logo being frequently used.
Usually the web sites contained 1 healthful message for every 45 exposures to brand
identifiers. Additionally, the study found that the companies are using the web sites to
extend their television advertising to promote brand loyalty among children. These sites
almost exclusively promoted food items high in sugar and fat. The study suggests that
health professionals need to monitor food industry marketing practices used in new
media.

 Ebster Claus, Wagner Udo and Valis Sabine (2006) have evaluated the effect of
suggestive selling on the purchase decision of fast food customers. The researchers
have used logistic regression and descriptive statistics on the data collected from the
customers of fast food restaurants. The study shows that in all the conditions suggestive
selling lead to the increase in sales turnover. Moreover, the study reveals that the
demand for side dish increased when used in conjunction with the main dish. The study
suggests that in order to increase the revenue and sales turnover, the restaurants need
to train their staff to provide suggestions to the customers when they are in the process
of deciding the food items from the menu list.

47
 Emma J. Boyland and Jason G. Halford (2011) have evaluated the effect of
television advertisements of food products on the food choices in children. The
researchers have used primary data from in-depth interviews conducted with the
children and secondary data from the medical establishments situated in the vicinity of
the research area in United Kingdom. The study reveals that despite government
regulations, the children in United Kingdom are exposed to considerable numbers of
food advertisements on television. Moreover, these advertisements are predominantly
for foods high in fats, salt and sugar which are marketed to children using promotional
characters and fun themes. Such advertisements have caused significant increase in the
intake of food items which are far beyond the permissible limit of healthy foods,
particularly in overweight and obese children. The study advocates that the government
needs to take prompt action to curb the exposure of children to these misleading
advertisements on the television and ensure that the laid down norms and rules are
strictly complied with.

 Jooyeon Ha and Soo Cheong Jang (2010) have empirically examined the relationship
among perceived service quality, satisfaction and loyalty in the Korean ethnic
restaurant segment. The researchers have used hierarchical regression analysis to
investigate the direct effects of service and food quality on customer satisfaction and
loyalty. The study also highlights the significance of the customer perception of
atmosphere on the success of the ethnic restaurants. The study points out that the
service and food quality has positive and significant effect on customer satisfaction and
loyalty. The study suggests that employees service and food quality are of immense
importance for ethnic restaurants. Additionally, this study found that employee service
together with ideal restaurant atmosphere effectively increases the satisfaction and
loyalty of customers. The study makes important contribution towards understanding
the formation of satisfaction and loyalty. From a practical prospective, the quality of
physical environment is a critical tool for overall success of the organization.

48
 M.Omer Azabagaoglua and Yasemin Oramana (2011) have analysed customer
expectations in food sector in the province of Istanbul, Ankara and Izmir after 2008
world economic crisis. The researcher has applied theory of reasoned behaviour. The
measurement of customer attitude towards food products have taken into consideration
the product features, effect of preference group, past behaviour and behavioural
intention variables. The Variables which influencing consumers’ purchase intention
have been tested with the help of GLM model. The research model for the study
indicates that respondents’ attitude towards the particular food product has influence
on their purchase intention. With other variables in the model, price was not statistically
significant as a determinant of purchase intention. After the 2008 global economic
crisis, surveys on food shopping behaviour indicates that the consumer intend to
decrease food expenditure, prefers cheaper brands and cheaper retailers.
 Farhana Nadia and Islam Shohana (2011) while conducting the study “Exploring
Consumer Behaviour in the Context of Fast Food Industry in Dhaka City” have
examined the relationship between customers’ attributes, quality, value and
convenience related perception with income. The study reveals that quality and value
related perception is strongly and positively influenced by income. The study highlights
that there is a strong and positive relationship between overall customer service and
attributes related to the quality and value. Moreover, the study reveals that the
customers are interested to travel distances for their favourite restaurants. In order to
increase the customers’ satisfaction with regards to customer service, the fast food
restaurants must focus their strategies to increase the attributes related to the quality.
Additionally, the study suggests that the people are loyal to their favourite fast food
restaurants without having any effect of price variance.
 Joon David and Wuk Kwun (2011) have examined the relationships among campus
food service dimensions, perceived value and the satisfaction level of the patrons of the
fast food industry. The study also analysis the effects of perceived value and campus
food service attributes on consumers’ attitude. The study also evaluates the roles of
gender differences in the process of attitude fromation. The researchers have used
general linear model, multiple regression and descriptive statistics in order to find the
answers to the research questions. The results of the study point out that the campus

49
 food service attributes and perceived value positively influence the satisfaction level of
the customers. Moreover, perceived value and campus food service attributes have
direct and positive effect on the consumers’ attitude. The study also reveals that the
attitude fromation process differ notably between male and female consumers. The
study suggests that in order to increase the customers’ satisfaction level, management
should direct their resources towards the strategies which can elevate the campus food
service attributes and perceived value of the customers.
 Riadh Ladhari, Isabelle Brun and Miguel Morales (2008) have analysed the effect
of restaurants services on dining satisfaction of customers in the fast food industry. The
data was collected from the students of University of Moncton and University Saint
Mary's situated in Canada. The study reveals that positive emotions, perceived service
quality and negative emotions are the three sources of customer’s satisfaction vis-a-vis
restaurant services. Moreover, the study shows that emotions mediate the impact of
perceived service quality on dining satisfaction wherein positive emotions have more
impact on customers’ satisfaction than negative emotions. Dining satisfaction has a
significant impact on recommendation, customer loyalty and willingness to pay more.
Furthermore, the study suggests that fast food restaurants in Canada need to enhance
the positive perception of the customers related to the restaurants’ service in order to
increase the overall dining satisfaction.

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3.1 RESEARCH GAPS

 The literature review is an examination of the past researches that helps in identifying
the gap in the research which the proposed study attempts to address.
 The effective evaluation of the related research work also provides valid rationale for
conducting the study.
 The above discussion on the literature review points out that consumer behaviour in
service encounters especially in context of the fast food and beverage industry is one
of the most important phenomenon that necessitates its relevance and greater attention
while incorporating a right mixture of success drivers.
 The discussed literature within the domain of the scope of the study as well as the
conceptualizations and understanding of the analytical models signifies the relationship
between brand loyalty, customer satisfaction, service quality and pricing.
 Therefore, it can be assumed that customer satisfaction, pricing, service quality and
brand loyalty are mutually interrelated in context to fast food service encounters.
Hence, there is a need for careful investigation of these dimensions within the preview
of the fast food industry in India.
 Furthermore, the study holds importance due to its empirical nature in the area of
consumer behaviour pertaining to the fast food industry, as a little has been done in this
regards.
 This study is also a contribution to the literature on consumer behaviour in service
environments. Additionally, it also has favourable implications for academicians,
industry people and students.

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 4) ORGANAISATIONAL PROFILE

 This chapter reveals the central, indispensable information pertaining to the four
companies that is Subway, KFC, Domino’s, Burger King and Mad over Donuts
which are covered in the scope of the study.
 The chapter enlightens the reader with a few interesting facts and figures concerning
the introduction, growth pattern, product mix and finally the marketing mix of these
business organisations.
 This chapter endeavors to facilitate the acquaintance of the reader with the history,
marketing approach, innovations and management subterfuge pertaining to these four
companies.

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4.1 KENTUCKTY FRIED CHICKEN (KFC)

1. INTRODUCTION

 Kentucky Fried Chicken (KFC) was established by Colonel Harland Sanders in 1952
by opening his first fast food restaurant in Louisville Kentucky, in United States.
Sanders initially served his fried chicken in the midst of the great depression at a petrol
pump which was owned by him and situated in North Corbin, Kentucky. The dining
area of the fast food restaurant was named Sanders Court & Café and it became instant
hit among the customers. It was so successful that in 1936 Kentucky Governor Ruby
Laffoon, granted Sanders the title of honorary Kentucky Colonel in recognition of his
contribution to the state's cuisine and creating employment for the local population.
Observing such marvelous response from the customers Sanders expanded his
restaurant to 142 seats and bought another motel across the street.
 Now Kentucky Fried Chicken (KFC) is the world's largest fried chicken fast food
restaurant chain with over 17,000 outlets in 105 countries and territories, their
headquarter is situated in Louisville, Kentucky in the United States.
 Colonel Sanders sturdily believed that restaurant franchising will bring in new
dexterous minds and eventually increase the growth rate of the company in long run.
Therefore, he espoused the concept of franchising his restaurant outlets throughout the
world. His first "Kentucky Fried Chicken" franchise opened in Utah in 1950.

53
 As expected by colonel Sanders, intelligent people started associating themselves with
the company and one of them who left a momentous mark on the history of the
company was Dave Thomas. He was a franchisee owner of KFC and in 1962 he created
the rotating bucket sign that was extensively used at almost all KFC locations. Thomas
encouraged Sanders to appear in all of the KFC television commercials and also
assisted him to simplify the company’s menu from over 100 items to just a few, which
concentrated on the fried chicken and salads. Meanwhile, by the end of 1967 KFC had
become the sixth largest restaurant chain by volume in the United States of America
and in 1968 it was listed on the New York Stock Exchange. Thomas was observing
these developments very closely. He had an eye on the stock value of KFC shares.
 Instantaneously, he realized the direction of the stock trend and sold his shares in 1969,
becoming a millionaire in this process. With this huge financial resource, he set out to
conquer his dream of establishing his own fast food restaurant chain and very soon he
opened the Wendy's fast food restaurant chain. Another person who left his mark on
the KFC was Harman, who devised the company's first training manual and product
guide. He also played a pivotal role in conceiving the phrase that became the company's
slogan "It is finger licking good" and trademarked it. Subsequently, it was in 1957 when
he came up with the concept of 14 bundled pieces of chicken, five rolls and a pint of
gravy in a paper bucket to offer families for $3.50 USD. This strategy enticed huge
number of customers and helped the company to combat the competition engendered
by other non-vegetarian fast food restaurants. Throughout the 1970s and 1980s, KFC
had mixed success in the US market as the company went through a series of corporate
owners who had little experience in the restaurant business. Ironically, the following
period after 1980s the core strategies and policies repeatedly fluctuated resulting in
inappropriate management of resources and dwindling the overall efficiency of the
company. However, once the company was taken up by the jubilant foods, it witnessed
healthy growth throughout the globe.

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4.2 DOMINO’S PIZZA

1. INTRODUCTION

 Today Domino’s Pizza is the second largest franchised pizza chain in the world.
Approximately, 8,500 corporate and franchised stores are owned by the Domino’s
which are operational in 55 countries.
 However, surprisingly the inception of this renowned fast food restaurant was very
humble. In 1960, two brothers started Domino’s Pizza with borrowed equity. Soon,
Tom Monaghan the owner of the company comprehended the potential of
franchising and started franchising the Domino’s Pizza to other business
organisations in the USA.
 The operational locations of Domino’s Pizza grew quickly from Ypsilanti,
Michigan, USA where it was initially incepted to all sorts of diverse places,
countries and continents. Despite Domino's Pizza springing up at diverse locations,
the company was still sticking to its traditional working pattern. The companies
menu was been kept very simple and streamlined, the organisation sold only one
type of pizza crust which was named the regular pizza. Domino's Pizza base which
is also known as dough was bowed by tossing and pulling it into shape physically
by the cook.
 No specific technology was available to measure or standardize the circular base
and the density of the toppings sprung on the Pizza. Earlier the pizza menu included
just two sizes of dough that is small and big. However, under tremendous
competition Domino’s had to induct medium and extra-large sized dough as well.

55
 Previously the company was not offering side order that is some complimentary
eatables with the main course. But when it came to beverages the customer had the
only option to order Coke.
 However, confronted with competition and with the passage of time, Domino’s has
adapted and incorporated many virtuous changes in itself to improve the overall
competitiveness of the organisation.
 One of the prominent changes incorporated by the company was in 1992, when
company introduced its first non-pizza item that is bread sticks to their menu list
and also offered some side dishes or eatables coupled with a variety of beverages.
Domino's Pizza entered the Indian food market in 1996 and by now there are nearly
274 outlets spread out in 55 cities of India.
 It is estimated that nearly 70 percent of the company’s revenue is generated from
home delivery service and around 30 percent is generated over the counter sales.
 Additionally, the procurement of the raw materials like wheat, baby corn, tomatoes
and spices are bought in from Jalandhar and then sent to the commissaries in
refrigerated trucks. 4 commissaries of the company are located in Delhi, Bangalore,
Kolkata and Mumbai. Thus, successfully implementing a right mix of product and
its distribution strategies, Domino’s has been able to remain a cut above the
competition.

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4.3 SUBWAY

1. INTRODUCTION

 Subway is an American privately held fast food restaurant franchise that primarily sells
submarine sandwiches (subs) and salads. Subway is one of the fastest-growing
franchises in the world and, as of June 2017, had approximately 42,000 stores located
in more than 100 countries. More than half of the stores are located in the United States.
It is the largest single-brand restaurant chain, and the largest restaurant operator, in the
world.
 As of 2017, the Subway Group of companies was organized as follows: Subway IP Inc.
is the owner of the intellectual property for the restaurant system.
 Franchise World Headquarters, LLC leads franchising operations. FWH Technologies,
LLC owns and licenses Subway's point of sale software.
 Franchisors include Doctor's Associates Inc. in the U.S.; Subway International B.V.;
Subway Franchise Systems of Canada, Ltd.; etc.
 Advertising affiliates include Subway Franchisee Advertising Fund Trust, Ltd.;
Subway Franchisee Advertising Fund Trust, B.V.; Subway Franchisee Canadian
Advertising Trust; Subway's international headquarters are in Milford, Connecticut,
with five regional centers supporting the company's international operations.
 The regional offices for European franchises are located in Amsterdam (Netherlands);
the Australian and New Zealand locations are supported from Brisbane (Australia); the
Asian locations are supported from offices in Beirut (Lebanon) and Singapore; and the
Latin American support center is in Miami.

57
 The first Subway on the West Coast was opened in Fresno, California, in 1978. The
first Subway outside of North America opened in Bahrain in December 1984.The first
Subway in the United Kingdom was opened in Brighton in 1996. In 2004, Subway
began opening stores in Walmart supercenters and surpassed the number of
McDonald's locations inside U.S. Walmart stores in 2007.
 Since 2007, Subway has consistently ranked in Entrepreneur magazine's Top 500
Franchises list. In 2015, it ranked #3 on the "Top Global Franchises" list and #1 as the
"Fastest Growing Franchise". At the end of 2010, Subway became the largest fast food
chain worldwide, with 33,749 restaurants – 1,012 more than McDonald's.

 In January 2015, Suzanne Greco took over the running of Subway from her brother
Fred DeLuca, who had been CEO, but had been ill with leukemia for two years (he
died in September 2015), and became president and CEO.
 In 2016, Subway closed hundreds of restaurants in the U.S., experiencing a net loss in
locations for the first time. However, with 26,744 locations, it remained the most
ubiquitous restaurant chain in the U.S. (with McDonald's in the #2 spot).
 Also in 2016, Subway announced a new logo for the franchise, to be implemented in
2017.On July 17, 2017, Subway unveiled redesigned restaurants, dubbed "Fresh
Forward." Features include self-order kiosks; USB charging ports at tables; and new
menu items, including additional condiments, and bread made without gluten. The
company is piloting the changes at 12 locations across the United States, Canada, and
the United Kingdom, with many features expected to be implemented into stores
worldwide by the end of 2017.
 In 2017, the chain closed more than 800 of its U.S. locations. In April 2018, the chain
announced it would close about 500 more that year. According Abha Bhattarai of The
Washington Post, this is a result of three consecutive years of falling profits, and foot
traffic in Subway stores reduced by 25 percent since 2012.
 Franchisees also complained that the company's deep promotions further ate away at
profits. Industry analysts like Bob Phibbs, chief executive of the New York-based
consulting firm Retail Doctor, say changing tastes on the part of consumers, who more

58
 frequently prefer locally sourced produce and hormone-free meat served by regional
start-ups like Sweetgreen, especially in metropolitan areas, are the cause of the drop in
Subway's sales, as well as loss of market share to competitors.
 These include fast-casual eateries and sandwich shops like Panera Bread, Au Bon Pain
and Firehouse Subs, as well as food trucks, and grocery stores that offer freshly made
meals at competitive prices. In January 2018, Subway invested $25 million in a re-
branding campaign targeted at young consumers in order to revitalize its image and
boost sales.

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4.4 BURGER KING

1. INTRODUCTION

 Burger King (BK) is an American global chain of hamburger fast food restaurants.
Headquartered in the unincorporated area of Miami-Dade County, Florida, the
company was founded in 1953 as Insta-Burger King, a Jacksonville, Florida–based
restaurant chain. After Insta-Burger King ran into financial difficulties in 1954, its two
Miami-based franchisees David Edgerton and James McLamore purchased the
company and renamed it "Burger King". Over the next half-century, the company
would change hands four times, with its third set of owners, a partnership of TPG
Capital, Bain Capital, and Goldman Sachs Capital Partners, taking it public in 2002. In
late 2010, 3G Capital of Brazil acquired a majority stake in the company, in a deal
valued at US$3.26 billion.
 The new owners promptly initiated a restructuring of the company to reverse its
fortunes. 3G, along with partner Berkshire Hathaway, eventually merged the company
with the Canadian-based doughnut chain Tim Hortons, under the auspices of a new
Canadian-based parent company named Restaurant Brands International.
 The 1970s were the "Golden Age" of the company's advertising, but beginning in the
early-1980s, Burger King Advertising began losing focus. A series of less successful
advertising campaigns created by a procession of advertising agencies continued for
the next two decades. In 2003, Burger King hired the Miami-based advertising agency
Crispin Porter + Bogusly (CP+B), which completely reorganized its advertising with a
series of new campaigns centered on a redesigned Burger King character nicknamed
"The King", accompanied by a new online presence. While highly successful, some of

60
 CP+B's commercials were derided for perceived sexism or cultural insensitivity.
Burger King's new owner, 3G Capital, later terminated the relationship with CP+B in
2011 and moved its advertising to McGarryBowen, to begin a new product-oriented
campaign with expanded demographic targeting.
 Burger King's menu has expanded from a basic offering of burgers, French fries, sodas,
and milkshakes to a larger and more diverse set of products. In 1957, the "Whopper"
became the first major addition to the menu, and it has become Burger King's signature
product since. Conversely, BK has introduced many products which failed to catch hold
in the marketplace. Some of these failures in the United States have seen success in
foreign markets, where BK has also tailored its menu for regional tastes. From 2002 to
2010, Burger King aggressively targeted the 18–34 male demographic with larger
products that often carried correspondingly large amounts of unhealthy fats and trans-
fats.
 This tactic would eventually damage the company's financial underpinnings, and cast
a negative pall on its earnings. Beginning in 2011, the company began to move away
from its previous male-oriented menu and introduce new menu items, product
reformulations and packaging, as part of its current owner 3G Capital's restructuring
plans of the company.
 As of September 30, 2016, Burger King reported it had 15,243 outlets in 100 countries.
Of these, nearly half are located in the United States, and 99.5% are privately owned
and operated, with its new owners moving to an almost entirely franchised model in
2013.
 BK has historically used several variations of franchising to expand its operations. The
manner in which the company licenses its franchisees varies depending on the region,
with some regional franchises, known as master franchises, responsible for selling
franchise sub-licenses on the company's behalf. Burger King's relationship with its
franchises has not always been harmonious. Occasional spats between the two have
caused numerous issues, and in several instances, the company's and its licensees'
relations have degenerated into precedent-setting court cases. Burger King's Australian
franchise Hungry Jack's is the only franchise to operate under a different name, due to
a trademark dispute and a series of legal cases between the two.

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4.5 MAD OVER DONUTS

1. INTRODUCTION

 When Mad Over Donuts (M.O.D.) made its appearance in India, a few years back,
doughnuts as a food category were largely alien to Indians. The only form of doughnuts
which we would have eaten was the sugar-sprinkled bun that was sold in packs of two
at the local bakery.
 Mad Over Donuts started off as a tiny donut brand in Singapore with big plans to make
the world go, well…Mad Over Donuts.Their mission is to serve the best donuts this
planet has ever known.

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 5) DATA ANALYSIS AND INTERPRETATION

1. QUESTIONAIRE

I. What is your age?

II. How often do you eat fast food?
III. Rate SUBWAY?
IV. Rate KFC?
V. Rate MAD OVER DONUTS?
VI. Rate DOMINO’s PIZZA?
VII. Rate BURGER KING?
VIII. On what basis do you have rated the brands?
IX. Which you will choose?
X. Reason why do you prefer eating fast food?
XI. Due to emerging fast food chain, do you think it has a negative impact on street
food?
XII. Are you happy with emerging fast food chains in India?
XIII. How much do you spend on fast food?

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2. AGE GROUP

 The majority age group is between 18-20

 It includes college students post graduates, graduates and also employees.
 50% of the Age group of 20 followed by age group of 21 which compromises around
20%.

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3. SPENDINGS ON FAST FOOD

 This includes the monthly expenditure of costumers on fast food outlets.

 Majority of people nearly spend about 1000 to 2000 on fast food outlets on monthly
basis.
 Followed by 21% of population which spends nearly 3000 to 4000 on monthly basis.

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4. RATINGS OF SUBWAY

 Majority of peoples rated subway 3 out of 5 which is good indication of brand loyalty
and customer preferences.

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5. RATINGS OF KFC

 KFC has good ratings compared to SUBWAY, people think that KFC has better
customer satisfaction and rated almost 4 out of 5.

67
6. RATINGS OF DOMINO’s PIZZA

 Majority of People rated DOMINO’s nearly 4 out of 5 which is good indication of

brand value and brand recognition.

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7. RATINGS OF BURGER KING

 BURGER KING has comparatively low ratings than DOMINO’s and SUBWAY.
 Average rating of BK is 3 out of .

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8. RATINGS FOR MAD OVER DONUTS

 The majority of people have rated mad over donuts as 3 out of 5.

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9. CRITERIA FOR RATINGS

 The criteria for ratings were TASTE, VARIETIES AVAILABLE, COST and
SERVICES.
 People feel that taste and varieties are more important rather than other two factors.
 84% people think that they will prefer brand who offers them taste and varieties.

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10. CONSUMPTION OF FAST FOOD

 While filling questionnaire 56% of people told that they consume fast food as in once
in a week.
 24% people told that they consume fast food on daily basis and 20% people told that
they consume as in once in a month.

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11. SELECTION BETWEEN HOME FOOD AND FAST FOOD

 While asked this question people answered that they will prefer HOME FOOD over
FAST FOOD.
 72% of people felt that they will choose home food over fast food.

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12. REASONS FOR PREFERING FAST FOOD

 Most people told that they will prefer fast food when they crave out of hunger compare
to other two reasons.
 83% of people told that reason, followed by 15% of people who told that they will
prefer fast food when there mom is not at home.

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13. NEGATIVE IMPACT OF FAST FOOD CHAINS ON STREET FOOD

 Most people feel that there maybe negative impact of fast food chains on street food.
 44% of people told that maybe there is negative impact followed by 30% of people that
thinks there is no negative impact.

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14. CUSTOMER SATISFACTION

 63% of people is satisfied with all these fast food chains followed by 35% of people
who think they are somewhat satisfied.

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 6) CONCLUSIONS AND SUGGSTIONS

6.1 CONCLUSION

 This chapter concludes the research work substantiated by the summary of the
findings associated with the study.
 Additionally, this chapter makes an attempt to insinuate a range of suggestions in
the milieu of the findings.
 The concept of consumer behaviour has attracted huge attention both by academia
and the industry especially in the service industry due to its qualities associated
with intangibility, perishability, variability and inseparability from the fast food
industry.
 Conventional education system and the practice of consumer behaviour have been
confronted by industry at many forums.
 This has resulted in a gap between the academia and the industry, as a result of
which, there is an urgent need for further research work to bridge this widening gap
and therefore, approaches based on the consumer behaviour in fast food and
beverage industry have been acknowledged as a solution to the problem of archaic
concepts and their diligence in the vibrant modern era of developing global and
technical business environment.
 The fast food industry consumption pattern has gone through a series of paramount
transformations, as a result of which, the customers have become more conscious
about the options available in the market and their purchasing decision is inclined
towards the best possible option.
 Moreover, the belligerent competition has cornered the business organisations
working in the preview of fast food industry and left them with no other option
except to amend their ways of operations and embrace a new modal based on
quality Vis –a Vis competitive advantage.

77
 The Fast Food Market experiences various growth drivers and is therefore expected
to rise in the future as well.
 As per the study it is analyzed that consumers in today’s market are more fascinated
to western culture.
 The increase in the facilities offered by fast food services is driving the growth of
the industry.
 Consumer acceptance of food served by fast food outlets is critically important for
the future growth of fast food outlets in any economy.
 The changing demographic pattern and an increase in the standard of living are the
major growth drivers for the global fast food retailers.
 At the same time they have to look into the challenges and overcome those by
designing a proper marketing strategy to reap in more profits by satisfying and
serving the Indian Customers.
 It has been realized that alterations are expected in the pricing system, branding,
quality regulations and the availability of the product in conjugation with the
dynamics of the market environment. Collective pricing, personalized
advertisements, total quality management (TQM), incorporation of electronic
communication systems, mobile restaurants, advertisements flying in air with the
help of gigantic helium balloons are a few of the jubilant strategies assimilated by
the business organisation operational in the fast food industry.
 Moreover, in order to earn revenue and work effectively in close proximity with
the public outside the business organisation, it is imperative for the company to
comprehend the customers’ mind and their attributes.
 Consumer behaviour assists in this tedious task and enables the business
organisations to adapt strategies in conjugation with the major individual
determinants of consumer behaviour which in turn influences the way consumers
proceed through decision making process regarding products and services offered
by fast food restaurants.
 In India, there are numerous fast food vendors which have evolved over many years
to align themselves with the native demands and requirements of the customers.

78
 These small, mobile and highly price competitive food vendors confront big
challenge for foreign fast food companies like Burger king, KFC, Subway, Mad
over donuts and Dominos which are new to the Indian food market and face
numerous legal and political resections.
 Therefore, to overcome these constraints and threats understanding consumer
behaviour in fast food and beverage industry is imperative. Hence, the present study
has been taken up to address these issues proficiently.

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 6.2 SUGGESTIONS

 It is revealed by the study that brand loyalty positively influences customer

satisfaction, therefore the companies need to adapt strategies to increase brand
loyalty.
 The pricing of the fast food products need to be appropriate as pricing inversely
affects the customer satisfaction. For that reason, the fast food companies could
keep prices as low as possible.
 The study highlights that behaviour of staff towards customers has got the least
satisfaction score. Therefore, the business organisations need to focus their efforts
to improve the behaviour of staff towards customers by providing individualized
training programmes and connected appraisal policy for the employee.
 The customer satisfaction is affected by the location and the ergonomics of the
restaurant outlet. Hence, the companies can open their outlets at the right places
and maintain good ergonomics.
 Service quality directly affects the customer satisfaction. Hence, the companies
need to put in sincere efforts to increase and maintain high level of service quality.
The fast food companies need to conduct regular audits and surveys in order to
enhance their abilities to deliver better services to their customers.
 Companies in the fast food industry can reduce the service quality gap by the
induction of technology and tension reducing ergonomics.
 As the study highlights that tasty but unhealthy food items confers more financial
gains to the business organisations as compared to less tasty but healthy food items.
The government need to ensure that the fast food restaurants use healthy food items
so that the health problems resulting from unhealthy eating can be reduced to bear
minimum.

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 The companies need to develop food items which are more tasty and healthy for
the customers.
 The study reveals that individual attention got the least satisfaction score.
Therefore, the companies need to concentrate their efforts on providing more
individualized attention to the customers.

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