EXECUTIVE SUMMARY

The purpose of the study is to research the fast-food industry in India and identify both

global and domestic food trends. Responses from independent and fast-food joints in India

provided the statistical basis for analysis of operations and financials of the existing

restaurant industry in the country.

The meaning of service and service quality has been discussed elaborately. Market research

study has been conducted in order to know about the customers’ preferences and hospitality that

they want from the fast food joints.

After this a comparative analysis along with diagrams and charts has been made to bring forward

the overall picture of the market research. The study also deals the service quality level provided

by the fast food joint McDonald's and its main competitors. The survey was conducted so as to

analyze the service level prevailing in the fast food centre and the improvement that can be made

upon it.

Survey has been done with the help of self prepare questionnaires. Segmentation targeting

positioning customer relationship management, 7P's of marketing mix and completes SWOT

analysis has been done and explained in detail in all the chapters.

CHAPTER.1 INTRODUCTION

1.1 Background of the study: Some of the emerging culinary trends internationally include

the popularity of health foods, use of fresh and authentic ingredients acceptance of new

fusion concepts and establishing of the chef entrepreneur. In India multinational restaurant

chains had to make a downward price revision and offer more vegetarian toppings to increase

sales volume. This led to dramatic improvement in their performance. They are also adding

more spicy items in their menus to satisfy Indian taste buds. International and domestic

multi-unit restaurant groups are expected to drive the expansion in the restaurant industry in

India. Among the leading trends in this regard would be the expansion of quick service Asian

restaurants, fusion concepts, restaurants with a focus on entertainment, and ethnic and

regional cuisine restaurants.

1.2 The Indian fast food market- An overview: Up to the year 1995 Indian food market was

predominantly dominated by the traditional food centres, potential restaurants in the customer’s

colony and some restaurants in a five star hotel. Having fast food i.e., burgers, pizzas etc., was

considered to be an option for eating out. It was not at all synonymous with the American

concept of fast food as a quick takeaway bite or a substitute for lunch. Apart from fast food being

available at the local colony restaurants and at some five star restaurants, Nirulas was the only

fast food chain existing in the country with its restaurants expanding with every passing year

since its inception. It has been almost 50 years now since its set up and there is hardly any one

who doesn’t know that Nirulas exists.

Nirulas was the first one to bring fast food to India back in the 50’s since then it has evolved into

an eating place with tremendous brand equity and brand recognition. It proved to be a perfect

eating place for an average middle class who wants to eat out at an affordable price that can’t

afford the five-star restaurants and would not want to go to the local food centres. Nirulas almost

had a monopoly for decades due to the way it has been placed. It is a place where a person from

an average middle class group to upper class group can go to eat out. Its popularity has increased

over the decades. With the trends changing and the incomes rising almost anybody who can

afford to eat out could go for a snack at Nirulas. However the year 1995-96 witnessed a drastic

change. 1996 is considered to be the year of India’s entry into the world food market.

International giants such as McDonalds, KFC, TGIF, Dominos and Pizza Hut all bombarded the

Indian food market. Before these, UK-based joint called Wimpy’s had established its chain in the

country in 1990. By year 1996 it had about three to four joints established in Delhi. However it

did not pose much of a threat to Nirulas reason being lack of variety and that Wimpy’s was

looked at more of a hangout place rather than eating out with the family.

However, restaurant business is such that it is surrounded by competitors from all sides, be it

Indian joints or foreign joints. Each of the foreign food joints that have come into the country

have their own strategy lined up to differ from the rest. Each of these studied the Indian tastes

and style and thereby targeted the Indian customer. An average Indian restaurant goes is no

convenience eater, unlike the Americans. If he is paying, he is paying for food that tastes good,

not for how pleasantly the stuff is served or how spotless the windows are. He wants food for

that can make him come back to the restaurant. An Indian food joint owner would definitely

understand this but an American company which comes and places itself directly without

knowing the customer is definitely in for trouble. Customer loyalty in a restaurant business is

essentially low.

A customer when he comes to a restaurant usually looks at the quality of food, variety,

ambience, speed of delivery and the location. The variety would influence the frequency of visits

since taste is a dominating factor to the Indian customers. Almost all the fast food chains both

Indian i.e., Nirulas and foreign i.e., McDonalds etc., are targeting the families. This serves to be

an advantage because the turnaround time is short and family has higher propensity to spend

because different members order larger variety of dishes. Each of these restaurants delivers

quality, value and services in its own way through its line of strategies. The emphasis is on the

value that the restaurant is delivering to the customers.

1.3 Purpose of the study: Basically, the purpose of the study is to research the fast-food

industry in India and identify both global and domestic food trends. Further more, to check

the trend of taste and preference in India after globalization and liberalization.

1.4 Research questions:

Which type of service quality McDonald’s provide?

Does McDonald’s service quality better than others?

Is McDonalds improving service quality?

1.5 Research objectives: The objective of the study is divided into two parts, which are:

1.5.1 Major Research Objectives:

The service quality prevailing in McDonald's

To find out the service quality of McDonalds in the various areas and finding out the

deficiencies.

Service quality of other players vis-a-vis McDonalds:

Comparing the service quality of McDonald along with that of Nirulas’, Pizza Hut and

others.

To find out the ways by which McDonald’s can improve upon its service quality and

bring more satisfaction to customers and thus add value to its bottom-line.

1.5.2 Major Research Objectives:

The service quality prevailing in McDonald's.

To find out the service quality of McDonalds in the various areas and finding out the

deficiencies.

Service quality of other players vis-a-vis McDonalds.

Comparing the service quality of McDonald along with that of Nirulas’, Pizza Hut and

others.

To find out the ways by which McDonald’s can improve upon its service quality and

bring more satisfaction to customers and thus add value to its bottom-line.

1.6 Significance of the study: This study will help to consumer; entrepreneurs related to this

sector that how consumers taste and preference are changing. Based on these trends, owners can

make a strategy and serve better.

1.7 Limitations of the study: In this study, have many limitations. Here some of these:

100% response rate was not found from the respondents. Some extent of biasness was

found because of Brand loyalty while answering the questions.

Potential biases such as reluctance of consumers, executives etc.

Unauthenticated information of the target sample.

Lack of interest of the respondent was one of the major problems.

Sample size is limited.

Only some other fast food restaurants are considered for the study

1.8 Structure of the Dissertation: Henceforth, this dissertation will entail five major parts;

introduction, literature review, research methodology, data analysis and lastly a conclusion with

findings & recommendations.

Chapter I- The initial part of the dissertation discussed basically introduce the Indian fast food

industry and its major players.

Chapter II - The literature review part of this dissertation start with some introductory part and

further that discusses about some research work done previously.

Chapter III - The methodology part will give both detailed accounts of how this study was

conducted as well as explain as to why the chosen methods were of the greatest use.

Chapter IV – The Analysis and Interpretation of data will give the empirical results and data

analysis linking it to the theoretical framework provided in the literature review.

Chapter V – Conclusions, findings and Recommendations will be the concluding chapter with a

discussion concerning the empirical results, in turn, leading to this study’s conclusions and

recommendations by this study.

CHAPTER.2 LITRATURE REVIEW

2.1 Introduction: A fast-food industry in a primarily a service sector emphasis in given on the

role-played by relationship marketing. It is imperative to develop proactive methods for

understanding what customers like and dislike. Customer satisfaction is an ultimate goal of any

service industry. There is no higher achievement than to satisfy the customer which an organization has

committed itself to serving. This doesn’t mean that the organization become a not for profit industry.

Profits and revenues are nothing more than the outcomes of fulfilling customer’s needs and expectations

(Dick, A.S. and K. Basu 1994). Customer loyalty describes the tendency of a customer to choose

one business or product over another for a particular need. (Buttle, F 1996) Companies invest in

retention rather than attracting new customers. It’s really hard for companies to make customers

and then retain them; the one’s who do it pose major threat to rest of their competitors. (Caruana,

2002).

According to Vavra Customer satisfaction is the leading criterion for determining the quality that

is actually delivered to customers through the product/ service and by the accompanying

servicing. (Alexandris et al, 2002) In simple terms customer satisfaction is essential for corporate

survival. As mentioned above several studies have found that it costs about five times as much in

time, money and resources to attract a new customer as it does to retain an existing customer

This creates the challenge of maintaining high levels of service, awareness of customer

expectations and improvement in services and product. (Buttle, F 1996)

Furthermore, customer satisfaction is recognized as of great importance to all commercial firms

because of its influence on repeat purchases and word-of mouth. It reinforces positive attitudes

towards the brand, leading to a greater likelihood that the same brand will be purchased again.

While this research provides some perspectives to the field of service quality, it is believed that

there are a number of things that should be done to confirm the verified methodologies as well as

to develop the use of service quality in design and improvement of quality services. There are

number of problems with the instrument that are mentioned in the literature.

The evidence suggests that differential scores of perception minus expectation tend to exhibit

reduced reliability, poor discriminant validity, spurious correlation’s, and restricted variance

problems (Alexandris et al, 2002). Also, inconsistent definitions and/ or interpretations of the

‘expectation’ might lead to a number of problems. In addition, since expectations and

perceptions are based on experience, its temporary nature might lead to question marks on the

reliability of service quality difference scores. As for customer loyalty, one thing that Is felt

important is that firms are good at attracting customers for the first time but they can’t actually

retain them which is most important as It costs between three and seven times as much as to win

a new customer as it does to hang on to an existing one.

Also, there is a close link that exists among learning, habit and loyalty. It is a result of consumers

learning that one brand can satisfy their needs and develop a favorable attitude towards it which

results in consistent purchase over time. Based on Coyne (1989), there are two critical thresholds

affecting the link between satisfaction and loyalty. On the high side, when satisfaction reaches a

certain level, loyalty increases dramatically; at the same time, when satisfaction declined to a

certain point, loyalty dropped equally dramatically. As per the Rama, (2005), Managers should

realize that having satisfied customers is not good enough; they must extremely satisfied

customers. Moreover, a small increase in customer satisfaction boosts customer loyalty

dramatically. In addition to benefiting from the extremely satisfied customers' repeat patronage,

the fast-food can save their marketing expenses.

Customer loyalty is concerned with customer satisfaction because of the benefits of retaining

customers, and the activities involved in it are aimed at developing long-term, cost-effective

links between an organization and its customers. Now day’s fast-food companies have stepped

up their promotions of frequent guest programmes to compete in the market.

2.2 Customer Loyalty: Customer loyalty describes the tendency of a customer to choose one

business or product over another for a particular need. Companies invest in retention rather than

attracting new customers. It’s really hard for companies to make customers and then retain them;

the one’s who do it pose major threat to rest of their competitors.

Customer retention has a direct impact on profitability and past research has claimed that it can

be five times more expensive to obtain a new customer than to retain one. Naturally then,

considerable time and money is being spent in many organizations to develop strategies to retain

customers.

Its commonly known to everyone that typically about 80 percent of revenue comes from

only 20 percent of customers therefore It would make sense to concentrate most

marketing resources on this 20 percent, but the problem for managers is that the most

financially rewarding 20 percent are not necessarily the loyal customers (Dowling and

Uncles, 1997).

Customer loyalty is a customer’s commitment to a brand or a store or a service or a

supplier based on a strong favourable attitude (N.Seth, Mittal, I.Newman, 1999).

On the flip side of the coin, as said above not all consumers are loyal to any one product or

service, nor is any one customer loyal to everything he or she buys and uses. There are some

products, stores and services that command little or no loyalty from their customers. Service

quality is a critical element of customers’ perceptions that compliments loyalty. In the case of

pure services, service quality will be the dominant element in customers’ valuations.

The quality of the services may be judged by the customers on the basis of their perceptions of

the technical outcomes provided, process by which the outcome was delivered and the quality of

the service surroundings where the actual service was delivered. Customer loyalty includes both

attitude and behaviour towards the service or product. Ratings, commitments, satisfaction, trust

are various forms of attitudes that could be measured by survey presumed to guide behaviour. On

the other hand behaviour which includes retention and share-of-category loyalty could be

measured with panel data or survey which would indicate the possibility of purchase and

generally applies to service organizations like groceries, hotels, airlines, stores, etc.

A fast-food might want to measure its loyalty on the basis of repeat patronage and repeat

behaviour. Repeat loyalty, Latent loyalty, spurious loyalty and no loyalty are the 4 constituents

of same which are represented in a model known as Alexandris et al, (2002) typology.

When both behaviour and attitude are weak, no loyalty exists. Weak attitude means

customers don’t have a liking or preference for the brand and weak behaviour means that

the same brand is not purchased consistently.

When both behaviour and attitude are strong, strong loyalty exists. In this case the

attitude towards the brand is favourable and the purchasing is done consistently for same

brand.

When behaviour is high but attitude is low, the customer has spurious loyalty which

means loyalty that is incidental and not well founded. In this case the customer buys the

same brand or shops at the same store regularly, but has no preferential attitude or liking

towards it. May be because this brand or store happens to be the only one affordable or

convenient but if he is given choice they might shift towards another brand or store.

Finally, in the typology it’s the latent loyalty which evolves strong attitude and weak

behaviour. Perhaps the customer favours or likes the brand but is not able to buy it

because of certain barriers which could be high price or lack in access to the brand or the

store. Here, marketers can tap into the hidden potential market by diminishing the

barriers that prevent customers from buying their desired brands. (Rama, 2005)

Now, every company would want their customers to be converted into a partner, which is on the

top level of the loyalty ladder designed by Paine (1995). It is the strongest form of supplier-

customer relationship, which is sustained because both parties see it as mutually beneficial.

Customers on the other hand are typical purchasers who have no feeling of loyalty towards your

organization. Value, Personality, attention, involvement and personal relationship are 5 major

factors that would help a company generate customer loyalty. All these factors are very

important factors as they focus on benefits offered, ability of customer to relate with the brand,

paying attention to the customer, involving the customer in creating the service and having a

personal relationship with the customer through all communicational activities and touch-points.

Customer loyalty is also the basis of relationship marketing because retaining customers for life

contributes to enhanced profitability. The relationship between the customer and the service

provider should be maintained at all times and personal interest should be shown towards each

customer. Companies have to learn continuously about their customers' needs and expectations,

which are ever changing and often unpredictable. For example, hotels are beginning to customize

service, and regular guests are given the same room, their table is booked for dinner at their

regular time and newspapers can be ordered and delivered. This is just a simple example of

building customer loyalty by taking personal care of loyal customers and satisfying them. (Rama,

2005).

2.3 Customer Satisfaction: Customer satisfaction is an important concept to consider when

developing a customer loyalty programmes. It is the measure of how well the customer’s

expectations are met. Whereas if we compare customer loyalty with customer expectation,

customer loyalty is a measure of how likely a customer is to repurchase and engage in

relationship activities. Loyalty is vulnerable because even if customers are satisfied with the

service they will continue to defect if they believe they can get better value, convenience or

quality elsewhere. Therefore, customer satisfaction may not be an accurate indicator of customer

loyalty. Satisfaction is a necessary but not a sufficient condition for loyalty. A customer

travelling away from home may be very satisfied with a hotel in which they stay, but they will

not necessarily stay in the same hotel when they visit that area again. Other variables impact on

the customer's choice including price, location and convenience. Loyalty is established when the

customer makes a commitment to the brand and returns to the same hotel whenever they are in

the area. In other words, we can have satisfaction without loyalty, but it is hard to have loyalty

without satisfaction (Alexandris, 2002). While there is no guarantee that a satisfied customer will

return it is almost certain that a dissatisfied customer will not return (Rama, 2005).

There is a link between customer retention and satisfaction, loyalty and profitability and this is

illustrated by Orr (1995), who states that the best way to get the repeat business that you need to

be profitable is by loyal programmes, frequent-buyer clubs, good service and fair prices.

2.3.1 What is customer satisfaction?

Customer satisfaction can be defined as satisfaction based on an outcome or a process. Vavra's

(1997, p. 4) outcome definition of customer satisfaction characterizes satisfaction as the end-state

resulting from the experience of consumption. This end state may be a cognitive state of reward,

an emotional response to an experience or a comparison of rewards and costs to the anticipated

consequences. Social psychologists, marketing researchers, and students of consumer behaviour,

have extensively studied the concepts of customer satisfaction and dissatisfaction

The increasing importance of quality in both service and manufacturing industries has also

created a proliferation of research, the result of all this research has been the development of nine

distinct theories of customer satisfaction. The majority of these theories are based on cognitive

psychology; some have received moderate attention, while other theories have been introduced

without any empirical research. A minority of researchers perceives the satisfaction process to be

subjective in expectations but objective in the perceptions of the product attributes, or outcome.

Thus, Klaus (1985, p. 21) defines satisfaction as ``the customer's subjective evaluation of a

consumption experience, based on some relationship between the customer's perceptions and

objective attributes of the product''. Others point out that both what is perceived (outcome) and

what is expected are subjective and therefore psychological phenomena - not reality (Dick, et al,

1994).

Since both expectations and perceptions are psychological phenomena, they are both vulnerable

to external influences and manipulation. As an illustration of how expectations can be explicitly

manipulated Sasser et al. (1979, p. 89) note that: ``some restaurants follow the practice of

promising guests a waiting time in excess of the ``expected time''. If people are willing to agree

to wait this length of time, they are quite pleased to be seated earlier, thus starting the meal with

a more positive feeling'' (Dick, et al, 1994).

2.3.2 Service quality via Customer satisfaction: According to Vavra (1997) Customer

satisfaction is the leading criterion for determining the quality that is actually delivered to

customers through the product/ service and by the accompanying servicing. In simple terms

customer satisfaction is essential for corporate survival. As mentioned above several studies have

found that it costs about five times as much in time, money and resources to attract a new

customer as it do to retain an existing customer (Ingram and Daskalakis, 1999). This creates the

challenge of maintaining high levels of service, awareness of customer expectations and

improvement in services and product. Furthermore, customer satisfaction is recognized as of

great importance to all-commercial firms because of its influence on repeat purchases and word-

of mouth Recommendations (Berkman and Gilson, 1986).

It reinforces positive attitudes towards the brand, leading to a greater likelihood that the same

brand will be purchased again. To assess the quality of services and customer satisfaction there

are several ways i.e. through subjective, or soft, measures of quality, which focus on perceptions

and attitudes of the customer rather than more concrete objective criteria. These soft measures

include customer satisfaction surveys and questionnaires to determine customer attitudes and

perceptions of the quality of the service they are receiving (Ingram and Daskalakis 1999).

Customers' perceptions of service is vital in identifying customer needs and satisfaction because

the extent to which goods or services meet the customer's needs and requirements is the index by

which quality is determined

Finding a strong relationship between satisfaction scores and performance does not ensure

economic success. In the long run the level of satisfaction may decline; customers' attitudes and

desires change, and new competition may emerge.

2.3.3 Components of customer satisfaction: Unlike material products or pure services, most

hospitality experiences are a fusion of products and services. Therefore it is possible to say that

satisfaction with a hospitality experience such as a hotel stay or a restaurant meal is a sum total

of satisfactions with the individual elements or attributes of all the products and services that

make up the experience. There is no uniformity of opinion among marketing experts as to the

classification of the elements in service encounters. As per the, Reuland et al. (1985, p. 142)

suggest that hospitality services consist of a harmonious mixture of three elements: the material

product in a narrow sense which in the case of a restaurant is the food and beverages; the

behaviour and attitude of the employees which are responsible for hosting the guest, serving the

meal and beverages and who come in direct contact with the guests, and the environment, such

as the building, the layout, the furnishing, the lighting in the restaurant, etc. Czepiel et al. (1985)

on the other hand, suggests that satisfaction with a service is a function of satisfaction with two

independent elements.

The functional element, delivery element, to prove the independence of the two elements from

each other, the authors claim that restaurant clients are quite capable of having responses to each

element that differ one from the other: ``The service was great, the food poor''. Davis and Stone

(1985, p.29) divide the service encounter into two elements: direct and indirect services. For

example, direct services may be the actual check-in/checkout process in hotels, while the indirect

services include the provision of parking facilities, concierge, public telephones for guests' use,

etc. Lovelock (2002) divides the service attributes into two groups: core and secondary. In a

restaurant situation Lovelock's core will be composed of the food and beverage, while his

secondary will be composed of everything else, including service, environment, etc.

Alexandris, (2002) classifies the service encounter attributes in two groups: essential and

subsidiary. The essential attributes are identical to Czepiel's functional, Davis and Stone's direct,

Reuland and colleagues' product, and Lovelock's core, i.e. the food and beverage in the meal

experience. The subsidiary attributes are more comprehensive than Davis and Stone's indirect,

Czepiel's performance delivery, or Lovelock's secondary, and include such factors as:

accessibility, convenience of location, availability and timing and flexibility, as well as

interactions.

2.3.3.1 What is service quality?

Service quality is considered a critical determinant of competitiveness. Attention to “service

quality” can help an organization to differentiate itself from other organizations and through it

gain a lasting competitive advantage. High quality of service is considered an essential

determinant of the long-term profitability not only of service organizations, but also of

manufacturing organizations.

Service quality has been discussed in only a handful of writings (Rama, 2005). Examination of

these writings and other literature on service suggest three underlying themes:

Service quality is more difficult for the consumer to evaluate than goods quality.

Service quality perceptions result from a comparison of consumer expectations with

actual service performance.

Quality evaluations are not made solely on the outcome of a service: they also involve

evaluations of the process of service delivery.

When purchasing goods, the consumer employs many tangible cues to judge quality: style,

hardness, colour, label, feel, packaging etc. But while purchasing services fewer tangible cues

exist. In most cases tangible evidence is limited to the service provider’s physical facilities,

equipment, and personnel. Study done by the Kandampully (2000) revealed that service quality

is crucial to the success of any service organization. As the customers participate in the

production and consumption of services, they interact closely with various aspects of the

organization. This inside knowledge gives them the opportunity to assess critically the services

provided in particular the quality of service. Customers will assess service quality by comparing

the service they get with the service they desire. Hence, service quality plays a critical role in

adding value to the overall service experience. Since superior quality is one of the crucial factors

within the control of the hospitality service provider, Lee, Barker, & Kandampully (2003)

suggested that enhancing the quality of service at all levels of service delivery has therefore

become mandatory for organization survival.

“Service quality” affects the repurchase intentions of both existing and potential customers.

Market research has shown that customers dissatisfied with a service will divulge their

experiences to more than three other people. Thus, it is reasonable to conclude that poor service

will reduce the potential customer base. According to the Technical Assistance Research Project

(TARP), the research indicates that six times more people hear about a negative customer service

experience than hear about the positive one. Although Johns (1996) asserts that service quality is

both ephemeral and personal, it needs to be defined and characterized in order to be specified

and delivered reliably in hotels. Many authors have tried to identify the tangible and intangible

components of service quality, which may affect guest satisfaction either selectively or by their

absence, in the same way as Herzberg’s (1959) hygiene factors or Maslow’s (1954) hierarchy of

needs operate at different levels.

Balmer and Baum (1993), remark that these ingredients change over time and are not likely to be

the same in hotels of different star ratings. Lee-Mortimer and Buxton (1991) contend that hotel

star ratings tend to measure tangible quality, and this is reflected in the current interest in quality

accreditation frameworks.

2.3.3.1.1 Service quality dimensions: In service organizations, the assessment of the quality of

a service is made during the actual delivery of the service ± usually an encounter between the

customer and a service contact person. Exploratory research of Parasuraman, Zeithml and Berry

(1985) revealed that the consumers used 10 potentially overlapping dimensions in assessing

service quality fit. These dimensions were tangibles, reliability, security, competence, courtesy,

understanding/ knowing the customer, access, responsiveness, communications and credibility.

These dimensions were derived for SERQUAL scale to serve as the basic structure of service

quality domain and further reduced to just five generic dimensions of service quality

(SERVQUAL) that must be present in the service delivery in order for it to result in customer

satisfaction.

Reliability which shows the ability to perform the promised service, Responsiveness which

shows the willingness to help customers and provide prompt services, Assurance which shows

employees knowledge and courtesy and their ability to inspire trust and confidence, Empathy

which shows caring and individualized attention given to customers and finally tangibles which

includes appearance of physical facilities, equipment, personnel, and written materials.

The service quality (SERVQUAL): Much of the contemporary theory considers service

quality from the viewpoints of both provider and customer, and Parasuraman et al. (1985)

propose a model which enables perceptual gaps to be identified. In 1991, these authors

developed this framework into the SERVQUAL scale which enables actual service

delivery to be measured. Zeithaml et al. (1990) suggest that the criteria used by

customers in moulding their expectations and perceptions fit five dimensions of service

quality which have been already discussed above.

2.4 GAPS model of service quality: SERVQUAL as an effective approach has been studied

which analysis the difference between customer expectations and perceptions. Outcomes of the

study outline the fact that although SERVQUAL could close one of the important service quality

gaps associated with external customer services; it could be extended to close other major gaps

and therefore, it could be developed in order to be applied for internal customers, i.e. employees

and service providers. While there has been an effort to study service quality, but still there is no

general agreement on the measurement of the concept. The majority of the work to date has

attempted to use the SERVQUAL methodology in an effort to measure service quality.

According to Brown and Bond (1995), "the gap model is one of the best received and most

heuristically valuable contributions to the services literature". The SERVQUAL approach is the

most common method for measuring Service quality. There are seven major gaps in the service

quality concept. The model is an extension of Parasuraman et al. (1985) which discusses 7 major

gaps below:

Gap1: Customers’ expectations versus management perceptions: as a result of the lack of a

marketing research orientation, inadequate upward communication and too many layers of

management.

Gap2: Management perceptions versus service specifications: as a result of inadequate

commitment to service quality, a perception of unfeasibility, inadequate task standardization and

an absence of goal setting.

Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict,

poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems,

lack of perceived control and lack of teamwork.

Gap4: Service delivery versus external communication: as a result of inadequate horizontal

communications and propensity to over-promise.

Gap5: The discrepancy between customer expectations and their perceptions of the service

delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps)

on the part of the service provider. In this case, customer expectations are influenced by the

extent of personal needs, word of mouth recommendation and past service experiences.

Gap6: The discrepancy between customer expectations and employees’ perceptions: as a

result of the differences in the understanding of customer expectations by front-line service

providers.

Gap7: The discrepancy between employee’s perceptions and management perceptions: as a

result of the differences in the understanding of customer expectations between managers and

service providers.

2.4.1 Measuring Service Quality Gaps: Alexandris (2002) suggested that what can be

measured are the differences between the abstractions. So, it is the logic that if we can measure

the difference between expectations and perceptions, which is defined as perceived quality, we

can therefore determine the level of satisfaction. This concept is quite similar with

Parasuraman’s (1985) service quality model, which applied the expectancy-disconfirmation

theory. As discussed above Parasuraman (1985) defined service quality in ten major dimensions

that consumers use in forming expectations about and perceptions of services. In a later research,

Parasuraman (1988) revised and defined the service quality in five dimensions, again- reliability,

responsiveness, assurance, empathy, and tangibles. The model suggested service quality as the

gap between customer’s expectations (E) and their perception of the service provider’s

performance (P). Hence, the service qualities score (Q) can be measured by subtracting

customer’s perception score from customer’s expectations score:

Quality score (Q) = P - E

Zeithaml and Bitner (2003) stated that in order to manage service quality, it is important to

manage the gaps between expectations and perceptions on the part of management, employers

and customers. The most important gap (Gap 5) is that between customer’s expectation of

service and their perception of the service actually delivered. Hence by referring to the gap

model, it states that a service marketer must close the customer gap (Gap 5). In order to do so,

the service provider must close the four other gaps (Gap 1, 2 3, and 4) within the organization

that inhibit delivery of quality service. Serious action must be taken because how the customers,

in these case fast-food joint customers, perceive the level of service performance that meets their

expectations will reflect on the quality of service provided by the organization.

According to Alexandris (2002), the gaps measurement may be a significant marketing tool. It

also has the advantage of being less abstract, even though not completely. It also considerably

eases the task of measuring service quality. Without question, SERVQUAL has been widely

applied and is highly valued. Any critique of SERVQUAL, therefore, must be seen within this

broader context of strong endorsement.

2.4.2 Priority Marketing: Priority Marketing focuses on what’s important to the customer.

Consider the varying demand placed on a hotel: An airline stewardess may find the 24 hour

room-service extremely valuable, a retired couple may need dietary menu options, a tour

wholesaler may favor low prices, and a young female executive considers a security a priority

(Swift, 2001). Hotels should break down their services and ask customers what is important to

them. This approach can field very valuable insight about changing customer preferences.

Identifying groups of customers who have similar preferences or even similar tastes (such as

sharing common perceptions of quality or states), hotels can target promotions to capitalize on

known characteristics and individualize the presentation. It is important that hotels involve their

guests and stay in touch with customer perceptions of current services.

2.4.3 Other researches similar to this topic: As the service sector of the global economy

grows, the study of services and innovation are becoming increasingly important. Service

products distributed regionally, nationally, and globally have become larger portions of company

revenue streams; knowledge-intensive business services aimed at enhancing performance require

reliable methods of measurement, assessment, and improvement (Spohrer & Maglio, 2008). As a

result, accurate and reliable instruments that assess service quality are of great interest to

companies whose revenues come from service delivery. Perhaps the most popular and widely

used service quality instrument is SERVQUAL.

2.4.3.1 Service Quality: In 1988 Parasuraman, Zeithaml, and Berry developed a generic

instrument called SERVQUAL to measure service quality based on input from focus groups.

Although SERVQUAL was developed within the marketing sector, it also is used in a variety of

organizational settings, including libraries and information centers (Kettinger & Lee, 1994;

Nitecki, 1996). Since 1988 Parasuraman, Zeithaml, and Berry have made numerous changes to

SERVQUAL, some in response to problems identified by other researchers. For instance, in

1994 they reported on three different SERVQUAL formats; they recommended that researchers

use a format that separated customer expectation scores into tolerance zones. Researchers have

continued to use SERVQUAL instruments. In 1997, Van Dyke, Kappelman, and Prybutok

employed SERVQUAL in an IS context, while in 2002 Banwet and Datta measured IT service

quality in a library service, as did Landrum and Prybutok in 2004. Still, some researchers

question the appropriateness of using SERVQUAL in an IS or IT context; others disagree about

whether the service quality should be the difference between expected and perceived service.

Parasuraman, Zeithaml, and Berry (1988) stated that since service quality depends on the

relationship of customer expectations with customer perceptions, it is appropriate to calculate

service quality by subtracting expected from perceived service. One then achieves an overall

measure of service quality by averaging the scores of all items (Brown, Churchill, & Peter,

1992). However, this procedure gives also rise to two issues: the first is disagreement over what

really is being measured in SERVQUAL with expectations and the second is the problematic

nature of the resulting difference scores. These two issues are resolved if one follows Cronin and

Taylor (1992), and Teas (1993), who recommended that expectation ratings be eliminated

altogether. In addition, Liljander (1994) states that there is more support for performance only

models than for the disconfirmation model of service quality. Bolton and Drew (1991) stated that

assessments of overall service quality are affected only by perceptions of performance levels.

They suggested that direct measures of disconfirmation are more important than expectations.

Boulding, Kalra, Staelin, and Zeithaml (1993) also suggested that perceptions alone influence

overall service quality. Furthermore, other studies suggested that SERVQUAL has unstable

dimensions. For example, Jiang, Klein, and Carr (2002) used four dimensions in their study,

while Landrum and Prybutok (2004) used five. Nitecki (1996) proposed a three-dimensional

SERVQUAL model, as opposed the five dimensions proposed by Zeithaml, Parasuraman, and

Berry in 1990. As we have noted, these issues are all resolved if customer expectations are

eliminated from the model. The performance only approach to service quality utilizes the five of

the seven SERVQUAL dimensions— the five performance dimensions. Cronin and Taylor

(1992), called this performance only subset instrument SERVPERF. When Cronin and Taylor

(1992) compared SERVPERF to SERVQUAL, their results supported the dissenters:

performance scores alone account for more variation in service quality than performance minus

expectations. Performance alone provides better predictive validity than SERVQUAL which is

gap-based (Brady, Cronin, & Brand, 2002; Cronin & Taylor 1992) and other studies show that

performance scores alone exhibit better reliability and validity than difference scores (Babakus &

Boller 1992; Brady et al., 2002; Landrum & Prybutok 2004; Landrum, Prybutok, Strutton, &

Zhang, 2008). Based upon these findings, we used only performance scores to perform analysis

on the five SERVQUAL service quality dimensions. We next discuss adapting the SERVQUAL

instrument to library information services because the test facilities were designated by the US

Army Corps of Engineers as “libraries.” Cook and Thompson (2000) investigated the reliability

and validity of SERVQUAL instrument in the context of library service. They found that

SERVQUAL displayed three responsive dimensions, rather than the five dimensions originally

proposed by Parasuraman et al. (1988). As a result, they concluded that responsive, empathy, and

assurance dimensions overlapped in this particular service domain. Nitecki and Hernon (2000)

used SERVQUAL to assess library services at Yale University and found that among the five

dimensions of SERVQUAL, respondents considered reliability the most important and empathy

least important among the five quality dimensions (Landrum, Prybutok, Kappelman, & Zhang,

2008).

2.5 The start of fast food culture: The concept of fast food pops up during 1920s.The 1950s

first witnessed their rapid proliferation. Several factors that contributed to this explosive growth

in 50’s were:

America’s love affair with the automobiles.

The construction of a major new highway system.

The development of sub-urban communities.

The baby boom subsequent to world war second.

“Fast-food chains initially catered to automobile owners in suburbia. The notion of "fast" food

reflected American culture in which speed and efficiency are highly prized.”

2.6 A brief review of fast-foods: Food diversity in India is an implicit characteristic of India’s

diversified culture consisting of different regions and states within. Traditionally, Indians like to

have home-cooked meals – a concept supported religiously as well as individually. However,

with times due to increasing awareness and influence of western culture, there is a slight shift in

food consumption patterns among urban Indian families. It started with eating outside and moved

on to accepting a wide variety of delicacies from world-over. Liberalization of the Indian

economy in the early 1990s and the subsequent entry of new players set a significant change in

lifestyles and the food tastes of Indians. Fast food is one which gained acceptance of Indian

palate after the multinational fast food players adapted the basic Indian food requirements viz.

vegetarian meals and selected non-vegetarian options excluding beef and pork totally from their

menu. Multinational fast food outlets initially faced protests and non-acceptance from Indian

consumers. This was due to primary perception that these fast food players serve only chicken

and do not serve vegetarian meals. In addition, fast food is perceived expensive besides being

out-of-way meals in Indian culture. Today, fast food industry is getting adapted to Indian food

requirements and is growing in India. It is gaining acceptance primarily from Indian youth and

younger generations and is becoming part of life. Keeping in view the Indian habits and

changing preferences towards food consumption, this study has its focus to understand the

factors affecting the perception of Indian youth, in the age group of 20-30 years, towards

consumption of fast food as well as towards making choice of fast food outlets.

2.5.1 What is Fast food?: The term "fast food" means just that. However, the boundary between

fast foods and traditional dishes is fluid. In particular, it's difficult to provide a qualitative

distinction because fast foods can also include salads and fruit in addition to classic offerings

such as hamburgers, hot dogs, sandwiches, patties, French-fries, fish and chips, etc. The best way

to distinguish fast foods is to use formal characteristics:

Time required - those who eat fast foods do not want to spend a lot of time selecting and

eating, and if necessary will eat standing or walking, on the bus, park bench, or at work.

The variety of foods and beverages is usually very limited

Fast food frequently does not come with knives and forks, making it "finger food."

When silverware, cups and plates are necessary, they are disposable.

The characteristics of fast food, therefore, are that they require little time, offer a limited

selection, are finger food, and the silverware and plates are disposable. These characteristics

readily illustrate the difference from traditional dining culture. Many people equate fast foods

with convenience foods. This is incorrect since convenience products are often eaten at home.

They require active participation because they must be heated, stirred, baked, thawed, etc., and

are supplemented with other foods.

There are three general categories of fast food businesses:

Self-service restaurants with a fast-food palette.

Take-out businesses that sell ready-to-eat foods and beverages "on the street corner" Hot-

dog stands and snack stands with counters or a pair of stand-up tables.

From onion rings to double cheeseburgers, fast food is one of the worlds fastest Growing food

types. Fast foods are quick, reasonably priced, and readily available alternatives to home cooked

food. While convenient and economical for a busy lifestyle, fast foods are typically high in

calories, fat, saturated fat, sugar, and salt. Many other definitions are proposed for fast foods in

the literature. A few of these are mentioned below:

Fast food have been defined by Bender and Bender (1995) as a “general term used for a

limited menu of foods that lend themselves to production-line techniques; suppliers tend

to specialize in products such as hamburgers, pizzas, chicken, or sandwiches”.

In Data Monitor’s (2005) survey the fast food market is defined as the sale of food and

drinks for immediate consumption either on the premises or in designated eating areas

shared with other foodservice operators, or for consumption elsewhere.

As per “the free dictionary” fast food is “inexpensive food, such as hamburgers and fried

chicken, prepared and served quickly”.

According to Merriam-Webster online dictionary fast food is “designed for ready

availability, use, or consumption and with little consideration given to quality or

significance”.

Fast food is a very fast growing industry in world as well as in India especially in urban areas

(small and large cities). However, not much research literature is available on fast food

preferences of consumers’ especially young consumers in India.

Organization prospective (Fast food industry)

2.6 Fast food industry in India: According to worldwatch.org, India’s fast-food industry is

growing by 40 percent a year and supposed to generate over a billion dollars in sales in 2005 as

per their estimates. Before the entry of multinational fast food outlets, Nirula’s was a popular

domestic fast food provider for eating-out. Nirula’s started with ice-cream parlours and later

moved on the range of fast food including burgers, pizzas, sandwiches etc. Established in 1934,

Nirula’s today is a diversified group having a chain of Elegant Business Hotels, Waiter Service

Restaurants, Family Style Restaurants, Ice Cream Parlours, Pastry Shops and Food Processing

Plants in India. The chain with over 60 outlets operating in five states successfully caters to the

Indian palate of over 50,000 guest everyday for over 70 years. Wimpy was another fast food

provider besides Nirula’s in Indian market. Wimpy was the only multinational fast food outlet in

India before 1990s with one outlet in New Delhi. In the initial years of its operations, Wimpy

used to be visited by foreigners in India. Indians were occasional visitors. Today Wimpy has 8

outlets in the capital city New Delhi and it is expanding its menu with Indian dishes with a view

to attract.

The percentage share held by foodservice of total consumer expenditure on food has increased

from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in

Indian culture and changes in eating habits are very slow moving with barriers to eating out

entrenched in certain sectors of Indian society. Traditionally, eating out was looked down upon

in Indian society. The growth in nuclear families, particularly in urban India, exposure to global

media and Western cuisine and an increasing number of women joining the workforce have had

an impact on eating out trends. Increasingly, eating out is becoming synonymous with

entertainment. And very often, it is preferred as a time-saving option to cooking. Not

surprisingly, takeaways are becoming increasingly popular India is among the top three countries

globally having highest number of people in the spending capacities in the age group of 25-49

yrs.

India is placed at the second rank in the 2004 global retail development index an annual ranking

of retail investment attractiveness among 30 emerging markets. The lack of consolidation and

model retail concepts in India presents better opportunity to global players. Over 400 shopping

malls, multiplexes, fast food giants, restaurants etc. are in planning or construction stage across

the country.

The percentage share held by foodservice of total consumer expenditure on food has increased

from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in

Indian culture and changes in eating habits are very slow moving with barriers to eating out

entrenched in certain sectors of Indian society. Traditionally, eating out was looked down upon

in Indian society. The growth in nuclear families, particularly in urban India, exposure to global

media and Western cuisine and an increasing number of women joining the workforce have had

an impact on eating out trends. Increasingly, eating out is becoming synonymous with

entertainment. And very often, it is preferred as a time-saving option to cooking. Not

surprisingly, takeaways are becoming increasingly popular

India is among the top three countries globally having highest number of people in the spending

capacities in the age group of 25-49 yrs.

India is placed at the second rank in the 2004 global retail development index an annual ranking

of retail investment attractiveness among 30 emerging markets. The lack of consolidation and

model retail concepts in India presents better opportunity to global players. Over 400 shopping

malls, multiplexes, fast food giants, restaurants etc.are in planning or construction stage across

the country

Facts & figures:

Fast food is one of the worlds largest growing food type. India’s fast food industry is growing by

40% a year and is expected to generate a billion dollars in sales by 2005.The multinational

segment of Indian fast food industry is up to Rs. 6 bn, a figure expected to zoom to Rs.70 bn by

2005. By 2005, the value of Indian dairy products is expected to be Rs.1, 00,000 million. In last

6 years, foreign investment in this sector stood at Rs. 3600 million which is about one-fourth of

total investment made in this sector. Because of the availability of raw material for fast food,

Global chains are flooding into the country.

Market size & major players:

Dominated by McDonalds having as many as 75 outlets.

Domino’s pizza is present in around 100 locations.

Pizza hut is also catching up and it has planned to establish 125 outlets at the end of

2005.

Subways has established around 40 outlets

Nirulas is established at Delhi and Noida only. However, it claims to cater 50,000 guests

everyday.

Major players in fast food are:

MCDONALDS

NIRULAS

PIZZA HUT

DOMINOS PIZZA

Multinational fast-food companies have given domestic competition a run for its money. While

McDonalds sells more than Nirulas, Pizza Hut and Dominos are doing more business than Pizza

Corner. Within nine

years of their existence in India since 1996, the multinationals have grown at a faster pace than

their Indian counterparts. According to industry estimates, in 2001, while McDonald's clocked a

turnover of about Rs 125 crore (Rs 1.25 billion), the home-grown Nirulas, which has been

present in the country since 1934, could only garner Rs 100 crore (Rs 1 billion) turnover. Also,

both Dominos Pizza Hut and Dominos clocked a turnover of about Rs 60 crore (Rs 600 million)

but Pizza Corner lagged behind with a turnover of Rs 25-30 crore (Rs 250-300 million).

The main reason behind the success of the multinational chains is their expertise in product

development, sourcing practices, quality standards, service levels and standardized operating

procedures in their restaurants, a strength that they have developed over years of experience

around the world. The home grown chains have in the past few years of competition with the

MNCs, learnt a few things but there is still a lot of scope for improvement.

We have applied our learning experience from other countries in all the processes including

consistency, marketing, distribution and training to the local market conditions.

It's now that the domestic chains have realized the importance of such practices. Nirulas is thus

beefing up its organizational structure. Another key reason behind the success of multinationals

is the ability to attract youngsters.

While McDonalds has been able to attract people below 30, Dominos is targeting the

'convenience-seeker.'

Nirulas, on the other hand, is known to appeal more to the 30-plus consumer. Small wonder,

Nirulas has launched its '21' range if ice cream cafes to attract the younger lot. The challenge for

the home grown chains is also to reinvent themselves to appeal to the younger consumer.

However, the domestic chains are at an advantage since they understand the Indian consumer

behaviour and eating habits and their product offerings have been tailored accordingly.

Multinational chains like McDonalds and Pizza Hut are still on a learning curve trying to

customize their menu to the Indian taste and food preferences. Pizza Hut, for example, launched

its masala range of

pizzas and also opened the world's first 100 per cent vegetarian outlet in India.

Domino, on the other hand, has launched its peppy paneer pizza keeping in mind the Indian taste

buds. The food service market in India is estimated to be around Rs 36,000 crore (Rs 360

billion), of which the urban fast food quick service restaurants is around Rs 1,000 crore (Rs 10

billion). This segment is witnessing high growth of around 25-30 per cent per annum so the

market has a lot of potential to grow.

2.6 Indian consumer: After the liberalization policy that came in force in 1991, fast food

industry grown in India as multinational fast food providers have set up their business either

jointly with Indian partners or independently. McDonald’s signed two joint ventures – one with

Amit Jatia and another one with Vikram Bakshi in April 1995. The first outlet was opened in

New Delhi. It has 50 outlets in North India and 76 in total all over India. It aims for 100 outlets

by the end of 2006. In 1995, Kentucky Fried Chicken (KFC) also entered the Indian market and

opened its first outlet in Delhi. In 1996, Domino’s set up base in India by entering into a long-

term franchisee agreement with the Bhartia Brothers who had businesses in chemicals and

fertilizers. By 2000, Domino’s had presence in all the major cities and towns in India. Domino’s

had grown from one outlet in 1995 to 101 outlets in April 2001. Pizza Hut entered India in June

1996 with its first outlet in Bangalore. Initially, the company operated company-owned outlets

and then moved on the franchisee owned restaurants. McDonald’s, Domino’s, Pizza Hut and

Nirula’s are the most popular and frequently visited fast food outlets. KFC has limited outlets

and has faced number of problems since entry in India. Besides these, there are Pizza Express

and Pizza Corner of which are not so popular. With changing life style and aggressive marketing

by fast food outlets, fast food is also becoming popular in small towns; therefore, success of

existing fast food outlets and entry of more is inevitable (Gupta, 2003).

Fast food consumption patterns: According to the findings of the recent online survey from

AC Nielson (India) being at the seventh place, is among the top ten markets for weekly fast food

consumption among the countries of Asia-Pacific region. Over 70 per cent of urban Indians

consume food from take-away restaurants once a month or more frequently. Survey indicates

that Pizza Hut is the most preferred fast food outlet in India. Identifying the drivers for

preference of one-brand over another, the survey results indicate that Indians (66 percent) are

amongsts the consumers who consider hygiene and cleanliness their most important criterion for

selection. A total of 24 per cent of Indians use the quality of service as a decision making

criterion to purchase a fast food brand’s offering and 22 percent rely on their perception of

whether a take-away brand offers them healthy food options.

Kara et al. (1995) has presented the consumers’ perceptions of and preferences for fast-food

restaurants in the US and Canada. According to their study, the consumers in the age of 12 to 24

years look for variety, price, delivery service and location in America and for price and novelties

in Canada. In the age group of 46 years to above 55 years cleanliness, nutritional value, quality

and taste are considered by Americans and preference is given to nutritional value and seating

capacity by Canadians in identifying fast food restaurants. In the middle age group of 25 to 45

years, Americans preferred for speed and friendly personnel whereas Canadians looked for

speed, quality and service. Brown et al. (2000) emphasized the need for nutritional awareness

and fast food preferences of young consumers during adolescent years. Davies and Smith (2004)

have analysed the importance of nutritional values of fast food and also information

printed/disclosed by the fast food providers in London. In addition to the factors considered for

choosing a fast food outlet, there are research studies towards the nutritional value of fast food. A

survey of more than 9,000 consumers nationwide in US has shown that about 25 percent of those

who eat fast foods and drink sugary, carbonated soft drinks generally consume more calories,

fats, carbohydrates, added sugars and proteins than those who do not (Bowman, 2005).

According to the study of McNeal et al. (1980), respondents felt that meals were moderately

nutritious and a good food buy, but they were fattening and contained harmful additives. These

findings further indicate that although the consumers perceive the nutritional aspects of fast food

meals to be important, they often ignore the aspects in practice. Adams’ (2005) paper outlines

the bases for establishing fast food industry responsible for obesity as articulated in litigation

against fast food chains in US. In Indian context, there is high concern towards health in twenty-

first century. There are health related articles in daily newspapers, and health shows on

television. There are special health related magazines that are now very popular. Health related

articles do mention to consume more fruits, vegetables, water and to consume less or nil of junk

food including fast food being high on fat and calories. Recent news article by Barker (2006)

indicates that Indians are facing the problem of obesity and among kinds of food – fast food is

one of the reasons for the same. However, there is gap of a particular research in Indian context

to have a link between the health problems and fast food consumption. In future, genetically

modified food may take the place of fast food of today (Onyango et al., 2004; Sharma, 2005).

CHAPTER.3 RESEARCH METHODOLOGY

3.1 Introduction: This chapter includes data sources, sample selection procedure, models,

research hypothesis and a review of the chosen research approach. The meaning of service and

service quality has been discussed elaborately. Market research study has been conducted in

order to know about the customers’ preferences and hospitality that they want from the fast food

joints.

3.2 Research Design: After having defined the marketing research problem and developed a

suitable approach, attention must be given to the formulation of a detailed research design, which

will provide pertinent information. According to (C.R. Kothari, 2004) when defining research

design, he presents it simply as the framework for a study used in order to guide the collection

and analysis of data.

According to Kothari (2003), there are two major types of research design: Exploratory research,

which is concerned with the development of initial hunches or insights and conclusive research

which intends to verify insights and help decision makers to select a specific course of action.

Even though exploratory and conclusive research has distinct purposes, they both consist of the

same research components.

3.3 Research process: The research process is carried out according to a designated series of

steps, which are required to be taken in a chronological order. Fundamental to the success of any

research project is sound research design. It is the framework or plan for a study that guides the

collection and analysis of data. In this section I have first explained about research philosophy

and approaches. In the later part of the chapter a brief and detailed overview of the research

design and methodology used by me for this dissertation are provided. There are several ways to

assess the quality of services and customer satisfaction through subjective, or soft, measures of

quality, which focus on perceptions and attitudes of the customer rather than more concrete

objective criteria. These soft measures include customer satisfaction surveys and questionnaires

to determine customer attitudes and perceptions of the quality of the service they are receiving

(Hayes, 1997, p. 2) which have been undertaken as a primary research in this project. Because

the extent to which goods or services meet the customer's needs and requirements is the index by

which quality is determined, customers' perceptions of service is vital in identifying customer

needs and satisfaction.

It has been noticed that measuring customer satisfaction has become increasingly difficult, and

levels of quality offered within service industries, as all customers have different perceptions

about what contributes to good “quality”. It is true to say that all guests within a fast-food chain

have different perceptions on the quality of their stay, but fast-food joints are continually

determined to monitor customer feedback in the light of improving service.

3.4 Nature of the study: This study is exploratory.

Exploratory Research: According to Kothari (2003), the primary purpose of exploratory

research is to shed light on the nature of situation and identify any specific objective or

data needs to be addressed through additional research. Exploratory research is the most

useful when a decision maker wishes to better understand situation, identify relevant

courses of action or gain additional insights before an approach can be developed. In

general, exploratory is appropriate to any a problem about which little is known. The

research design used for this project is exploratory in nature. The major emphasis is on

the discovery of ideas. The exploratory study is also used to increase the analyst

familiarity with the problem under investigation.

3.5 Data required: Basically, all data are collected by the questionnaire from different

consumers related to this study.

Sample size: 96

3.6 Data Collection: Basically, primary and some secondary data are considered for this syudy.

Primary Data: Primary data has been collected through surveyed to the consumer.

Secondary data: Secondary data has been collected from the company’s information

brochure and internet.

3.7 Location of data: Delhi (Capital of India)

CHAPTER.4 INTERPRETATION AND ANALYSIS OF DATA

4.1 Analysis of questions based on questionnaire: Based on the questionnaire filled by the 96

respondents, all data is collected and put in the proper format of analysis. Below, in sequence as

questions in questionnaire are analysing.

4.2 .1 How frequently do you go to restaurants?

Based on the table.1 given below, It is indicating that the out of 96 respondents;

maximum 44 go to restaurants in some special occasion and minimum 6 go everyday. In

holidays and weekends, 31 and 6 respondents visit in restaurants. It means, special occasions and

holidays play an important role in fast food related business in Delhi (India).

Attributes No. of Respondents Percentage (%) Holidays 31 32.3

Special occasion 44 45.8Weekends 15 15.6Everyday 6 6.3

Total 96 100.0

Table.1 Distribution of respondent’s feedback

Figure.1 Respondents feedback in Pie chart

4.2.2 Which restaurants do you go to?

The question related to choice of restaurants in Delhi asks by the respondents based on

questionnaire. Based on the table.2 and figure.2 given below, indicating that the out of total

respondents, 32 prefer to go in McDonalds, maximum 37 in Nirulas, 17 in Pizza hut and rest of

the respondents in some other fast food chain restaurants. It means, the Delhi’s consumers prefer

to go Nirulas first and McDonald comes second as per the respondent’s feedback. It may be

some other attributes / things consist in Nirulas as compare to McDonalds in Delhi.

Attributes No. of Respondents Percentage (%)

McDonalds 32 33.3

Nirulas 37 38.5

Pizza hut 17 17.7

Others 10 10.4

Total 96 100.0

Table.2 Distribution of respondent’s feedback about choice of restaurants

Figure.2 Respondents feedback shown in Pie chart

4.2.3 What drives you to go to this restaurant?

Quality is the one of the most potential driver in this business. As per the table.3 and

figure.3, out of 96 Respondents, 59.4% of Respondents prefers quality, whereas 27.1% of

Respondent wants to have a better service in the Restaurant and only 13.5% prefer a homely

atmosphere when they are in the Restaurant.

Attributes No. of Respondents Percentage (%)Quality 57 59.4

Better service 26 27.1Homely atmosphere 13 13.5

Total 96 100.0

Table.3 Distribution of respondent’s feedback about choice of restaurants

Figure.3 Respondents feedback shown in Pie chart

4.2.4 Are you satisfied with the present service provided by the Restaurant?

Based on the table given below indicating that the out of 96 respondents taken for sample, only

29 satisfied with the service quality of other restaurants except McDonalds and rest respondents

are not satisfied by the service of other. It means, the service standard set by the McDonalds is at

par as compare to other restaurants in Delhi.

Satisfaction of service of others No. of respondents

Yes 29

No 67Total 96

Table.4 Distribution of respondent’s feedback about service by other restaurants

Figure.4 In pie chart, respondent’s feedback about service provide by the other restaurants

4.2.5 What is the time taken at the counter to book your order?

From table.4 and figure.4, it can be seen that out of 32 Respondents, majority of

Respondent i.e. 68.8% thinks that restaurant’s counter takes 2 – 5 minutes to book the order whereas

according to 25% of Respondent it takes less than 2 min to place an order. However, only 3.1% of

Respondent believes that it takes 5-7 min or 7-10 min to place an order at the counter. It means, most

respondents (68.8%) give the order between 2-5 minute in McDonalds and rest of the respondents comes

above and below of this span.

Order placing time No. of Respondents Percentage (%)

<2 min 8 25.0

2-5 min 22 68.8

5-7 min 1 3.1

7-10 min 1 3.1

Total 32 100.0

Table.5 Respondents order placing time span in McDonalds

Figure.5 Bar chart of respondent feedback order placing time span

4.2.6 How much time do they take to deliver your order?

This question was asked to the Respondents to know the time taken by the

Restaurant to deliver the order. The table.6 and figure.6 shows that according to 59.4% of

Respondents, the restaurant takes less than 5 min to deliver the order whereas 34.4%, 3.1% and

3.1% of Respondent believes that it takes 5-10 min, 10-15 min and more than 15 min

respectively. Service quality of McDonalds is very good as compare to other fast food chain in

India. Here, 19 respondents said that the less than 5 minutes take to deliver the order because the

front office is managed properly for consumer’s facility.

Delivery time No. of Respondents Percentage (%)

<5 mins. 19 59.4

5-10 mins. 11 34.4

10-15 mins. 1 3.1

>15 mins. 1 3.1

Total 32 100.0

Table.6 Delivery time span answered by respondents at McDonalds

Figure. 6 Bar chart of respondent’s feedback about delivery time

4.2.7 What is your view about the hospitality provided by this Restaurant?

Feedback taken by the respondents based on the hospitality provided by the

McDonalds, It is clear from the table.7 & figure.7 that the maximum 17 respondents out of

32 are saying good. Secondly, 10 respondents said very good hospitality provide by the

McDonalds. Both total (Good & Very good) contributing 84.4% in overall respondent’s

feedback. It may due to well structured planning managed and execute by the top

management for customers. Rest out of 5 respondents, 3 said excellent and 2 said average

hospitality provide by the McDonalds to the customers.

Hospitality No. of Respondents Percentage (%)Average 2 6.3

Good 17 53.1Very good 10 31.3Excellent 3 9.4

Total 32 100.0

Table.7 Respondents view towards hospitality by McDonalds

Figure.7 Respondents view towards hospitality by McDonalds In bar chart

4.2.8 What is your satisfaction level with McDonald's?

Table.8 and figure.8 showing the satisfaction level of respondent. Out of 32

respondents, 37.5% of respondents are extremely satisfied, 21.9% are moderately satisfied and

18.8% are ok with the food, services and other attributes of McDonald’s. While 12.5% of

Respondent are moderately dissatisfied and only 9.4% are extremely dissatisfied with the food

and services of McDonald’s. At last, total 19 respondents (Including Extremely Satisfied &

Moderately satisfied) i.e. 59.4% respondents are satisfied. While 21.9 % of respondents said

dissatisfied (Moderately dissatisfied & extremely dissatisfied).

Attributes No. of Respondents Percentage (%)

Extremely Satisfied 12 37.5

Moderately satisfied 7 21.9

Moderately dissatisfied 4 12.5

Extremely dissatisfied 3 9.4

OK 6 18.8

Total 32 100.0

Table.8 Respondents view towards hospitality by McDonalds

Figure.8 Respondents view towards hospitality by McDonalds in bar chart

4.2.9 What is the level of understanding of service problems of the customers?

Level of understanding of service problems of the customers is one of the

important attributes in service industry. As per the table.9 & figure.9 given below, is indicating

that the 41.7 % of respondents i.e. 40 respondents understand the service problem and their level

of understanding is very good. 25 % of respondents or 24 respondents out of 96 have average. 18

respondents have excellent and rest 14 respondents have poor level of understanding. Finally, we

can say that the 83.5 % respondent’s level of understanding of service problem comes under

excellent to average.

Attributes No. of respondents Percentage (%)Excellent 18 18.8Very good 40 41.7Average 24 25.0

Poor 14 14.6

Total 96 100.0

Table.9 Level of understanding of respondents

Figure.9 Bar chart of level of understanding of service problem

4.2.10 Which are the combination of the factors do you thing very vital while you select a

particular fast foods?

Many, tangible and intangible factors play an important role in selection of

restaurants. Factors like service quality, price, location & promotional activity by the done/

provide by the restaurant attract/ repeal the customers. Based on the table.10 & bar chart.10, it is

indicating that the highest 48 respondents i.e. 50% of total respondents give the feedback that

they think service, price & location is an vital part in selection while 37 or 38.5 % 0f respondents

tell that the service, price, promotion & location is vital things. Rest, 11 respondents focus on

price, location & promotion activity.

Comb. of factors No. of respondents Percentage (%)Service, price & location 48 50

Service, price, promotion & 37 38.5

locationPrice, location, promotion 11 11.5

Total 96 100.0

Table.10 Combination of factors in a restaurant for customer selection

Figure.10 Bar chart of respondents feedback toward combination of factors

4.2.11 why do you prefer McDonald's?

In all arenas (Service differentiation, Product differentiation, Price &

Promotion), McDonald set itself as a dominating player in Indian fast food industry.

Respondents feedback for why the prefer to go McDonald that 17 i.e. 53.1 % of respondents

prefer for price factor, 7 for product differentiation & rest 4 each for service differentiation &

promotion done by the McDonalds. Based on the respondent’s feedback, it is clear that the price

is one of the major factor in decision making.

Preference No. of respondents Percentage (%)Service differentiation 4 12.5Product differentiation 7 21.9

Price 17 53.1Promotion 4 12.5

Total 32 100.0

Table.11 Preference factors for choosing McDonalds

Figure.11 In pie chart, Respondents preference factors for choosing McDonalds

4.2.12 How frequently do you visit any other restaurant except McDonald's?

Based on the table.12 and figure.12, it is indicating that the out of total

respondents, 49 % of respondents i.e 47 respondents frequently go to other restaurants except

McDonald, 29 respondents go occasionally, 13 go rarely and rest 7 respondents go regularly.

Based on the data given in the table tells that the respondents are not too much brand loyal and

other restaurants except McDonalds also attract customers.

Time span No. of respondents Percentage (%)Regularly 7 7.3Frequently 47 49.0

Occasionally 29 30.2Rarely 13 13.5

Total 96 100.0

Table.12 Respondents preference other than McDonalds

Figure.12 Respondents preference other than McDonalds in Pie chart

4.2.13 How do you evaluate at the various aspects of McDonald's, Nirulas and Pizza Hut?

Ambience is one of the major factors in restaurants because customers want to

feel something different while in the restaurants. Based on these factors, as cumulative score of

all respondents, highest 371 respondent’s rank Pizza Hut first after that McDonald comes second

with 330 respondents, Nirulas comes third with 262 respondents & last others come fourth with

204 respondents. Finally, it can be say that the ambience factor of Pizza Hut is most like by the

respondents.

Ambience Score (Cumulative) Respondents

McDonalds 330

Nirulas 262

Pizza Hut 371

Others 204

Table.13.1 Respondents Ambience Score (Cumulative)

Figure.13.1 Ambience Score (Cumulative) in vertical bar chart

Cleanliness is a very important factor for restaurant to attract the customers. Based on

the data of table.13.2 and figure.13.2, it can be seen that majority of respondent i.e. 374

respondent ranked McDonald’s as first for its cleanliness and second being the Pizza Hut having

364 respondent while Nirulas comes in third with 325 respondent and fourth being the Others

with 251 respondent. McDonalds come in first in cleanliness because due to this factor put in its

one of the important priority.

Cleanliness Score (Cumulative) Respondents

McDonalds 374

Nirulas' 325

Pizza Hut 364

Others 251

Table.13.2 Cleanliness Scores (Cumulative) of different restaurants

Figure.13.2 Cleanliness Scores (Cumulative) of different restaurants

Employee behaviour toward the customers is another most important factor to maintain

and retain customers. Table 13.3 and figure 13.3 showing the cumulative scores of employee

behaviour of different restaurants. McDonald’s comes in first with 379 respondent and pizza Hut

being the second with 361 respondent whereas Nirulas ranked third with 312 respondent and

Others being the fourth having 247 respondent. Mostly, it is seen that the top fast food

restaurants employee behavior is most appreciable and have much patience not for job security

but also for brand value.

Employee Behaviour Score(Cumulative)

Respondents

McDonalds 379

Nirulas' 312

Pizza Hut 361

Others 247

Table.13.3 Employee Behaviour Scores (Cumulative) of different restaurants

Figure.13.3 Employee Behaviour Scores (Cumulative) of different restaurants

As per the table.13.4 and figure.13.4, it is clearly indicating that the only Nirulas is best managed

in its space as basis on respondents feedback while McDonalds come second with 340

cumulative score and Pizz Hut stood third with 328 score. Rest other restaurants comes at fourth

with 226 score. Best space management is also an attractive and magnetic factor for customers

that focused the attention and feel more comfortable.

Space Management Score(Cumulative) Respondents

McDonalds 340

Nirulas' 372

Pizza Hut 328

Others 226

Table.13.4 Space Management Scores (Cumulative) of different restaurants

Figure.13.4 Space Management Scores (Cumulative) of different restaurants

Menu composition tells that the how much a particular restaurant is diversified in food items and

makes customers more choose. Based on customer response taken by the structured

questionnaire, it is indicating that the Nirulas comes second in menu composition with 359

cumulative score, McDonalds third with 331 cumulative score, Pizza hut fourth with 306 score.

Finally, other restaurants comes first in menu composition with highest score 374.

Menu Composition Score(Cumulative) Respondents

McDonalds 331

Nirulas' 359

Pizza Hut 306

Others 374

Table.13.5 Menu Composition Scores (Cumulative) of different restaurants

Figure.13.5 Menu Composition Scores (Cumulative) of different restaurants

4.2.14 What do you have to say for happy hours concepts in McDonalds?

The respondent feedback for the happy hour concept by the McDonalds is

highly appreciable because 41 respondents i.e. 42.7 % of respondents said excellent and 26 % of

total respondent remark as good idea. But only 18 respondents show no interest in this concept

whereas, 12 said poor concept introduce by the McDonalds.

Happy hour feedback No. of respondents Percentage (%)Excellent 41 42.7Good idea 25 26.0

Does not matter 18 18.8Poor 12 12.5Total 96 100.0

Figure.14 Respondents feedback for McDonalds happy hour concept

Figure.14 In bar chart, respondent’s feedback for McDonald’s happy hour concept

4.2.15 The suggestion asked by the respondents for improvement in service quality provided by

the McDonalds is not very satisfactory for it. Because 76% of respondents does not give any

suggestion for it due to at par service quality provided by the McDonald’s but rest 23

respondents out of 96 said yes. As per the suggestions given by the respondents want to change

the service quality because in the front counter sometimes there are a long queue for giving order

and some suggestions for proper space management.

Suggestions for service quality No. of Respondents Percentage (%)Yes 23 24.0No 73 76.0

Total 96 100.0

Table.15 Respondents suggestions for improve in service quality

Figure.15 Respondents suggestions for improve in service quality in bar chart

2.4.16 Which similar restaurant you think has the best service quality and why?

In previous question 2.4.15, only 23 respondents gave some suggestions for

improve in service quality. By asking which other restaurants except McDonalds provide good

service quality. Then out of 23 respondents, 11 said Pizza hut, 9 Nirulas and rest 3 respondents

favour for local unbranded restaurants. It means the service quality provided by the McDonalds

is not at top as compare to brand and some other local restaurants.

Restaurants No. of Respondents Percentage (%)Pizza hut 11 47.8Nirulas 9 39.1

Other (Local) 3 13.0Total 23 100

Table.16 Respondents feedback for service quality

Figure.16 In Pie chart, Respondents feedback for service quality

4.2.17 Would you recommend McDonald's to your friends and relatives?

This question was asked to the respondent whether they like to recommend

McDonald’s to their friends and relatives. The result showing in table.13 and figure.13 shows

that out of 98 respondent 60 respondents says definitely yes and 22 respondents says probably

yes that they will recommend McDonald’s to their friends and relatives, while only 14

respondent says probably no and 2 respondent definitely no that they will not recommend

McDonald’s to their friends and relatives.

Attributes No. of respondents

Definitely Yes 60

Probably Yes 22

Probably No 14

Definitely No 2

Total 98

Table.17 Recommendation of McDonald’s to Friends and Relatives

Figure.17 Recommendation of McDonald’s to Friends and Relatives

4.3 Comparative analysis of order & delivery time: 4.3 Comparative analysis of order & delivery time: Out of 32 respondents who visitOut of 32 respondents who visit

McDonalds. Based on the table.18 given below, indicating that the 5 respondents, whose orderMcDonalds. Based on the table.18 given below, indicating that the 5 respondents, whose order

time interval lies within two minutes got delivery less than 5 minutes, i respondent got within 5-time interval lies within two minutes got delivery less than 5 minutes, i respondent got within 5-

10 minutes and next 1 between 10-15 minutes. For order time span 2-5 minutes, 6 respondents10 minutes and next 1 between 10-15 minutes. For order time span 2-5 minutes, 6 respondents

got in 5-10 minutes, 13 got 10-15 minutes, 1 after 15 minutes and only one got within 5 minutes.got in 5-10 minutes, 13 got 10-15 minutes, 1 after 15 minutes and only one got within 5 minutes.

In other brackets, single respondent got delivery in 10-15 minute whose order period is lyingIn other brackets, single respondent got delivery in 10-15 minute whose order period is lying

between 5-7 minutes. Rest 1 respondents, whose order period comes in 7-10 minutes, receivebetween 5-7 minutes. Rest 1 respondents, whose order period comes in 7-10 minutes, receive

delivery more than 15 minutes.delivery more than 15 minutes.

Order placing time/ Delivery time <2 min 2-5 min 5-7 min 7-10 min Total

< 5 minutes 5 2 0 0 19

5-10 minutes 2 6 0 0 11

10-15 minutes 1 13 1 0 1

> 15 minutes 0 1 0 0 1

Total 8 22 1 1 32

Table.18 Cross -tabulation between order & delivery timeTable.18 Cross -tabulation between order & delivery time

4.4 Service GAP analysis of fast food industry based on the questionnaire: Service gap is a

factor which causes the unsuccessful delivery. These are five gap cause the

unsuccessful/delivery.

i. Gap between consumer expectation and management perception.

ii. Gap between management perception and service quality specification and service delivery.

iii. Gap between service delivery and external communication

iv. Gap between perceived service and expected service,

i. Gap between consumer expectation a management perception: While the management of

pizza hut perceives that the consumers need better quality food, but the consumers may a

clinically want better ambience, (Like, light, music) or work floor area.

ii. Gap between management perceptions Service-quality specification: The “fast” service

provided by McDonald goes very well with its customer perceptions. Here the negotiation has

perceived well what the customer wants but, the main area where at lacks is that it has not

specified its customer “how to serve “or” what quality to be served”.

iii. Gap between service quality specifications & service delivery: The delivery personnel in

McDonald are mainly fresh graduates without a personal degree in “hotel management”.

If the other person visit except the recognize restaurant like and what is in some what difference.

They find what have shown in media and what shown here in name some what difference.

iv. Gap between perceived service and expected service: The customer of McDonald and

Nirula’s are wanted free home delivery but presently there not providing. Whereas Pizza Hut is

providing home delivery to there customers.

4.5 SWOT Analysis

4.5.1 Strength:

Brand Equity world wide: McDonald's has a brand name and brand value associated

with it world wide. With its corporate vision and mission spelled out in clear terms world

wide McDonald's commands respect and belief in the minds of the people through out the

world wherever its operations are present.

Consistency of food products: McDonald's has well laid out procedures for preparing

food, checking the quality of the food items at various stages, the equipments used are

also pre calibrated to add the quantity of ingredient, etc. making the taste the food

consistent at any of its outlets.

Overseas market: Besides USA, McDonald's has its operation in 121 countries giving it

the largest overseas market and tremendous growth opportunities.

Successful items: On its menu, the company has successful food products such as

Burgers, French fries, Happy meals, McPuff, etc. and to add to this McDonald's

marketing strategy has various promotional schemes to make it more attractive during the

lean time periods, generally known as Happy hours.

4.5.2 Weakness:

One order at a time: Employees take one order at a time, making the other customers to

wait in line. This allows for accuracy and quality of the service to a high degree but

decreases the speed of the service.

Business focus: The employees seem to be more focused on the business rather than on

the customers. Therefore the element of human touch is missing in the restaurants.

Formal Communication: Only communication between the customer and the employee

is during the placement of the order.

Inflexible products: Though the variety of food items provided is large but there is still

inflexibility in terms of food products, like some people may want to have onion in their

burgers while others may not.

Serving in the Same tray: Even while McDonald's has separate production lines for the

vegetarian and non-vegetarian food products, still when it comes to serving, the

employees serves the two different products in the same tray, which is sometimes

objected by the strict vegetarians.

4.5.3 Opportunities:

Serving only one percent: McDonald's with its huge presence in more than 121

countries and serving about 45 million people every day world wide still serves less than

1 percent. So there is huge opportunity of growth.

International Exposure: McDonald's has a vast exposure and experience of operating in

different cultures and it is because of its flexibility of adopting the cultures that it has

been able to lead the fast food industry from the front.

Growing Dining-out market: with the increase in the dining out culture and trend in the

market, it is expected that the sales of McDonald¡¦s should increase.

4.5.4 Threats:

Competition: With opening up of newer fast food joints providing more options to

choose from and better service, the market has started to feel the heat because of the

competition.

Health Conscious Customers: The calories content in a vegetarian burger is 418

calories besides 10 gm of protein, 22 gm of fat and 48 gm of carbohydrate. With people

becoming more health conscious, they are already avoiding these fast foods.

4.6 Porters five forces model with reference to fast food joints4.6 Porters five forces model with reference to fast food joints:

Threat of New Entrants high

Unorganized sector has low entry barriers and low initial investment

Threat of FMCG majors entering fast food with established distribution

Success dependent on maintaining low costs

Further entry of Power of suppliers –

High Expensive, hard to

procure ingredients Pries determined by

suppliers to maintain quality

Lack of single supplier on a contract basis to ensure fixed rates

Fluctuation in supply of seasonal products offerings studied,

Intensity of rivalry high with both national (Dominos, Pizza hut, McDonalds with deep pockets and rapid expansion plans

Regional level chains (Nirulas, Pizza Corner, US. Pizza)

Industry dominated by the unorganized sector with low entry and exit barriers

Consumer – Low switching costs

Highly unpredictable consumer perceptions

Higher purchasing power

Large number of fast food options

Low brand loyalty Demand quality at a

low price Highly deal prone

customer

making Fast food suffers

competition from the well established ready to eat snack food segment

Indians most comfortable with “ghar ka khana”

Ready to cook foods category growing at a rapid pace in India

Dine in joints dominate as pizza is still not considered

Table.19 Porter five forces modelTable.19 Porter five forces model

4.7 The market environment: PEST Analysis4.7 The market environment: PEST Analysis

4.7.1 Political / Legal:

In India, where there are lots of political parties, each having their own set of policies and

each having a desire to come to power has made the government unstable. As a result of this,

the peoples and organizations are hesitant towards making FDI in India.

The government has increased the prices of Diesel as result of which the transportation costs

are bound to increase and net effect will be reduction in the profit margin of the organization.

The unexpected change in government policies has always been of great concern for the

industry.

Also with the domestic message spreading all around. It is acting as a sword which is

hanging over the head of the management of the organization.

Legislation related to manufacturing and taxation should be made more investment friendly.

The industry suffers from multiple taxes like excise, sales tax and in certain cases even local

taxes, leading to a cascading impact.

4.7.2 Economical:

It is not unrealistic to say that all companies, small or large, engaged in strategic planning

examine the economic environment. Relevant published information in usually gathered,

analyzed, and interpreted for use in planning.

With the rise in inflation, the cost of production rises due to increase in the prices of raw

materials, which have an adverse effect on the profits of the organization, if they don’t

increase the price or reduce their overheads.

4.7.3 Social:

The relevance’s of the social environment to a particular business will depend on the nature

of business. The impact of the social environment on a consumer products company is much

more than any other company.

Over 40% of all packaged goods consumed in urban India are foods and beverages, while

that in rural India is over 20%. This trend will deepen because of the changing profile of the

consumer. Education, employment and media will make the consumer more discerning and

demanding.

4.7.4 Technology:

Technology developments come out of the R&D effort.

McDonalds continuously trying to come out with new products and variants and flavors’ that

will fit in the Indian palate. The company is trying to offer better value to their customer and

also trying to deliver superior product at competitive price.

4.8 Marketing strategy for future prospective: The first step in developing a marketing

strategy is to understand the customers, reacting to their changing needs and the changing

dynamics of the market. To this end McDonald’s should conduct several stages of in-depth

customer research and audits of the McDonald's brand. The research must involve both

quantitative and qualitative research methods. This research should describe how McDonald's is

perceived and about changes that are taking place in the market. Research should also conduct

into the local area of their restaurants, into the general market environment and into specific

areas of their business. Which is considered at three distinct levels?

Total Eating out Market gives the broadest competitive context and includes all

restaurants, hotels, pubs, and any other outlet where people eat. This category contains

the entire gamut of eating outlets ranging from the “mom-&-pop outlet” to the most

exclusive five star hotels.

Quick Service Restaurant sector includes any outlet where food is served quickly and the

process is usually self-service. Example: Domino’s, Nirula’s.

Burger House Sector includes those restaurants that serve different varieties of burgers as

their primary menu item. This is the narrowest sector in consideration. Example:

Wimpy’s.

Having an in-depth understanding of all aspects related to the competition allows McDonald’s, to

monitor the competitive environment to exploit the opportunities and check threats in time. This

is achieved through the following:

Competitive Pricing: Being in touch with the pricing of their competitors allows them to

price their products correctly, balancing quality with value.

Competitive Promotion: At McDonald’s it is believed that before they communicate

with their customers, they must be aware of what the competitors are communicating so

that they can create a beneficial advantage.

Competitive Place: Distribution is the key to any retailer or brand; McDonald's prides

itself on its superior delivery process.

Competitive Product: Quick Service Restaurants are constantly expanding their menus.

This can be done on a short-term promotional basis or as a long-term expansion strategy.

CHAPTER.5 CONCLUSION & RECOMMENDATIONSCONCLUSION & RECOMMENDATIONS

5.1 Conclusion of the study: McDonald takes the share on this attribute by providing the

customer with fast and friendly services. At McDonald you get your order usually within 60-90

seconds from the time it is placed. Providing the customer fast and friendly services is the

philosophy of McDonald's. This is the big advantage McDonald's is having over the other

restaurants.

The customer satisfaction levels are better than the other competitors McDonald's is having. If

we compare the space management Nirulas is having better space management than McDonald

and Pizza Hut. The advantage McDonald having over the other restaurant is

i) Ambiance ii) employ behaviour iii) cleanness iv) price.

There is a price and service quality factor today, which the customer is looking for. It is giving

an edge to McDonald's over Nirulas and Pizza Hut.

After the detailed findings and analysis of various responses I would like to put some suggestive

points. McDonald and Pizza Hut should increase the space available inside there fast food joint.

McDonald should also restructure their menu composition to attract all kinds of customers with

different preferences. For the personnel parties McDonald's should also introduce some new

ideas to satisfy the customers and give them customized services to fulfill their social needs.

Seeing that the choice and selection of the children by and large dominate buying behaviour of

the family, therefore we suggest that McDonalds should try and capture more of this section.

From the past few years McDonald’s is doing the same by introducing meal combos, toys, and

special children day program, McDonald India has to make it presence felt, for long time as

giving a Scholarship program for students. A lasting impression in the student community would

help a long way in the Brand Recognition.

They also have to have a thorough understanding of their competition. McDonald's considers

three basic areas: the total eating out market gives the broadest competitive context and includes

all restaurants, hotels, pubs, and any other outlet where people eat. They also focus on the quick

service restaurant sector. This includes all the obvious competition and also fish and chip shops,

and sandwich shops - any outlet where food is served quickly. The final sector that they focus on

is defined as the Burger House Sector. This looks only at restaurants serving hamburgers

including Burger King, Wimpy and all independent burger bars. A useful way to gaining

knowledge of all aspects of the competition is the examination of the four Ps of the marketing

mix: Price, Promotion, Place, and Product.

All most all kind of people irrespective of the cast, creed, age, sex, class or category prefer

visiting fast food joints for the reasons discuss in the thesis in details. The increasing awareness

and popularity of fast food joint is the major reason for the growth of this industry and promises

continues growth looking at its products and price differentiation as well as services and quality

standards that are at far with any five to seven star hotels which believe in finest quality and

service. When low prices, delicious and differentiated product associated with finest quality and

service in the industry is sure to say "Sky is the limit".

New Year and festival strategies through SMS competitions: On any order above Rs. 50 the

customer gets a key against which he gets a question on his mobile after giving his number. A

right entry fetches the customer entry to the daily lucky draw of bumper prizes. McDonald’s

could also have two auto connecting, customized, and dedicated phone lines under all the

potential business giving corporate offices which automatically connect to the nearest

McDonald’s. Reintroduce the Chilly sauce as another differentiated yet standard (McDonald’s)

product. Seeing that the choice and selection of the children by and large dominate buying

behaviour of the family, therefore we suggest that McDonalds should try and capture more of

this section.

From the past few years McDonald’s is doing the same by introducing meal combos, toys, and

special children day program, but as we see at present fast food in all Asian countries except

India is a synonym for McDonalds, McDonald India has to do the same, make it presence felt,

for long time as giving a Scholarship program for students. A lasting impression in the student

community would help a long way in the Brand Recognition. Combo Options with various

movie halls like PVR, Priya, Adlabs etc. order placing compatibility on the internet for home

delivery. Verification done through a phone call from McDonald’s to the customer.

5.2 Suggestions: McDonald's has started the free home delivery service but few important

suggestions to make full use of the scheme are as follows:

Call Pickup Standard: Max time of 5 seconds before the customer attended to with

standard greeting.

Customer Identification for the customer database.

Order Details along with order time and promised order delivery time range. Verification

with customer for the same imperative.

Identification of nearest McDonald’s outlet.

Check for traffic and cost of delivery vis-à-vis the identified outlet.

Evaluate the optimal option and a go ahead with order processing.

On delivery conformation received against the order number and the outlet identification

number.

McDonald's should continuously develop a marketing strategy to understand the

customers, enabling reaction to their changing needs and the changing dynamics of the

market. McDonald's should always conduct in-depth customer research and audits of it's

brand. The research should involve both quantitative and qualitative research methods.

This research will tell us a lot about how McDonald's is perceived and about trends that

are taking place in the market.

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APPENDIX.I

CUSTOMER QUESTIONNAIRE

1. How frequently do you go to restaurants?

Only on holidays On special occasions

Weekends Everyday

2. Which restaurants do you go to?

McDonalds Pizza Hut

Nirulas’ Others (specify) ---------------------

3. What drives you to go to this restaurant?

The quality of food Better service

Homely atmosphere

4. Are you satisfied with the present service provided by the Restaurant?

Yes No

5. What is the time taken at the counter by you to book your order?

Within 2 minutes 2 - 5 minutes

5 - 7 minutes 7 - 10 minutes

6. How much time do they take to deliver your order?

Within 5 minutes 5 - 10 minutes

10 - 15 minutes More than 15 mins.

7. What is your view about the hospitality provided by this Restaurant?

Average Good

Very Good Excellent

8. What is your satisfaction level with McDonald's?

Attributes No. of Respondents Percentage

Extremely Satisfied

Moderately satisfied

Moderately dissatisfied

Extremely dissatisfied

OK

9. What is the level of understanding of service problems of the customers?

Attributes No. of respondents percentage

Excellent

Very good

Average

Poor

10. Which are the combination of the factors do you thing very vital while you select a

particular fast foods

Service price and location

Service, Price, Promotional Scheme, Location

Price, Location, Promotional Scheme

11. Why do you prefer McDonald's?

Service differentiation Price differentiation

Product differentiation Promotional Scheme

12. How frequently do you visit other restaurants except McDonald's?

Regularity Frequently

Occasionally Rarely

13. How do you evaluate at the various aspects McDonald's, Nirulas and Pizza Hut ?

Scale 1-5 (1 is the minimum, 5 is the maximum)

McDonald’s Nirulas Pizza Huts

Ambience

Cleanliness

Behaviour of employees

Space management

Menu composition

Quality of food

Service quality

14. What do you have to say for happy hours concepts in McDonalds?

Excellent Good idea

Does not matter Poor

15. Please give suggestions (If any) for improvement in service quality

16. Which similar restaurant you think has the best service quality and why?

17. Would you recommend McDonald's to your friends and relatives?

Attributes No. of respondents percentage

Definitely Yes

Probably Yes

Probably No

Definitely No

18. Any Suggestions for overall improvement of fast food joints?

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