Reasons Why Students of San Beda College – Mendiola Patronizes McDonald’s – Mendiola rather than any other Fastfood Chains nearby

A ThesisPresented to

The College of Arts and Sciences San Beda College – Mendiola

In Partial FulfilmentOf the Requirements in English 04

Bachelor of Science in Business AdministrationMajor in Marketing and Corporate Communications

By:Kristine Dianne CaballaPhilipp Gibran Cahilig

Ruth Claire PaatXavier Quizan

Daphne Valenzuela

January 2010

CERTIFICATION OF THE ADVISER

This is to certify that the thesis of Kristine Dianne Caballa, Philipp Gibran

Cahilig, Ruth Claire Paat, Xavier Quizan and Danielle Daphne Valenzuela, entitled

“Reasons Why Students of San Beda College – Mendiola Patronizes McDonald’s

Mendiola Rather Than Any Other Fastfood Chains Nearby”, has met the partial

fulfilment of the requirements in English 04.

___________________________

ADVISER

TABLE OF CONTENTS

PAGE

TITLE PAGE ---------------------------------------------------------------------------- iCERTIFICATION OF THE ADVISER ---------------------------------------------- iiTABLE OF CONTENTS ---------------------------------------------------------- iiiLIST OF GRAPHS AND ILLUSTRATION --------------------------------------- ivACKNOWLEDGEMENTS ---------------------------------------------------------- v

Chapter I: The Problem and Its BackgroundRationale -------------------------------------------------------------------Conceptual Framework -------------------------------------------------Statements of the Problem -------------------------------------------------Hypothesis -------------------------------------------------------------------Assumptions -------------------------------------------------------------------Importance of the Study -------------------------------------------------Scope and Delimitation of the Study ----------------------------------------Definition of Terms ----------------------------------------------------------

Chapter II: Review of Related Literature and StudiesConceptual Literature ----------------------------------------------------------Research Literature ----------------------------------------------------------

Chapter III: Research DesignMethods of Research to be used ----------------------------------------Research Instruments ----------------------------------------------------------Research Setting and Instruments ----------------------------------------Research Procedure ----------------------------------------------------------Statistical Treatment ----------------------------------------------------------

Chapter IV: ResultsPresentation of Data ----------------------------------------------------------Interpretation of Data ----------------------------------------------------------Data Analysis -------------------------------------------------------------------

Chapter V: Summary, Major Findings, Conclusion and RecommendationsSummary -------------------------------------------------------------------Major Findings ----------------------------------------------------------Conclusion -------------------------------------------------------------------Recommendations ----------------------------------------------------------

BIBLIOGRAPHY -------------------------------------------------------------------

APPENDICES

CHAPTER 1

The Problem and Its Background

Rationale

McDonald's brand mission is to "be our customers' favorite place and way to

eat." Their worldwide operations have been aligned around a global strategy called

the ‘Plan to Win’ centring on the five basics of an exceptional customer experience –

People, Products, Place, Price and Promotion. They are committed to improving their

operations and enhancing our customers' experience.

For over 50 years, McDonald’s has been giving opportunities to people who

share the same vision. Now, there are more than 7,000 McDonald’s franchisees in 119

countries. In the Philippines, McDonald’s started opening its doors to franchising in

1985. Since then, franchised stores in the Philippines grew to over 100 stores with

more than 60 franchisees (Most have been part of the McDonald’s Family for around

10 to 15 years!).

McDonald’s is a customer-oriented company that strives to offer Filipinos a

combination of great tasting, quality food products at value prices with excellent

service. It means to be the first to respond to the fast changing needs of the Filipino

family. The first choice when it comes to food and dining experience! And the first

mention as the ideal employer and socially responsible company. The corporation

grew to be more consumer-oriented as to they innovate in order to go with the fad of

the generation. Consumers seek more health-friendly foods that are free from bad

cholesterol and harmful ingredients.

Conceptual Framework

Figure 1: Conceptual Paradigm

Upon studying the Marketability of McDonald’s Mendiola, there are factors

that affect the variables. Among the college students of Mendiola Consortium, Bedans

are only few of the customers of this food chain. Most of their customers are from the

nearby colleges specifically La Consolacion and CEU. Often times during weekdays

between 12pm – 3pm, which means the Lunch Rush, group of students were rushing

to this food chain. This doesn’t include the passers-by customers that lived or worked

nearby the foodchain.

Independent Variables:

- Affordability- Accessibility- Quality- Service- Marketing Strategy

Dependent Variable:

The Marketability of McDonald’s Mendiola

- TimeEnvironmentFinanceCustomers

Other Factors (Secondary factors)

Statement of the Problem

As McDonald’s Mendiola continue to dominate the fastfood chain industry in

Mendiola, there are certain problems that a consumer must take importance of.

General Statement: Why do students patronize McDonald’s?

Specific Statement: 1.) How does a Fastfood Chain play a role in college students?

2.) What makes McDonald’s popular among the college students?

3.) What are the views of the college students regarding Fastfood

Chains?

Hypothesis

Fast food also known as Quick Service Restaurant or QSR within the industry

itself, is the term given to food that can be prepared and served very quickly. While

any meal with low preparation time can be considered to be fast food, typically the

term refers to food sold in a restaurant or store with low quality preparation, preheated

or precooked ingredients, and served to the customer in a packaged form for

take-out/take-away.

The concept of ready-cooked food for sale is closely connected with urban

development. Nearly from its inception, fast food has been designed to be eaten "on

the go", often does not require traditional cutlery, and is eaten as a finger food.

Common menu items at fast food outlets include fish and chips, sandwiches, pitas,

hamburgers, fried chicken, French fries, chicken nuggets, tacos, pizza, hot dogs, and

ice cream, although many fast food restaurants offer "slower" foods like chili, mashed

potatoes, and salads.

Assumptions

Traditional street food is available around the world, usually from small

operators and independent vendors operating from a cart, table, portable grill or motor

vehicle. Common examples include Vietnamese noodle vendors, New York City hot

dog carts, and taco trucks. Turo-Turo vendors are a feature of Philippine life.

Commonly, street vendors provide a colorful and varying range of options designed to

quickly captivate passers-by and attract as much attention as possible.

Depending on the locale, multiple street vendors may specialize in specific

types of food characteristic of a given cultural or ethnic tradition. In some cultures, it

is typical for street vendors to call out prices, sing or chant sales-pitches, play music,

or engage in other forms of "street theatrics" in order to engage prospective

customers. In some cases, this can garner more attention than the food itself; some

vendors represent another form of tourist attraction.

Importance of the Study

Modern commercial fast food is often highly processed and prepared in an

industrial fashion, i.e., on a large scale with standard ingredients and standardized

cooking and production methods. It is usually rapidly served in cartons or bags or in a

plastic wrapping, in a fashion which minimizes cost. In most fast food operations,

menu items are generally made from processed ingredients prepared at a central

supply facility and then shipped to individual outlets where they are reheated, cooked

(usually by microwave or deep frying) or assembled in a short amount of time. This

process ensures a consistent level of product quality, and is the key to being able to

deliver the order quickly to the customer and eliminate labor and equipment costs in

the individual stores.

Scope and Delimitation

Among other fast food chains, McDonald’s is the largest in the industry. With

over 180 company-owned branches nationwide, McDonald’s was having difficulty in

managing and maintaining the day-to-day operations of its various hardware and

software store system. This innovation of McDonald’s would cost a lot of money.

Since the Golden Arches makes its way through innovation, they started up installing

Wi-Fi devices that makes customers connect free to the internet without any charges.

As soon as this technology covers the rest of the branches, they will maximize their

profit to give customer more satisfying foods and services.

After a full and satisfying meal in McDonald’s, you will feel that your money

was worth a while. If chances that McDonald’s is far from your location, they’re just

a phone away and they will make sure that your orders are posted immediately. These

advantages of McDonald’s give its consumers great satisfaction. By doing this,

consumers will continue to patronize their product.

McDonald’s is a foreign aboriginal fastfood chain. When it came here to the

Philippines, they started crawling through the taste of the Filipinos. Its biggest rival is

when Jollibee boomed the fastfood industry. Jollibee make a way how to sink into the

Filipino taste. Hence, this threat to McDonalds’s gives them a hint on how to make

their strategy – by producing Fried Chicken Meals. From any other branches of

McDonald’s, Philippines is the only country that serves Fried Chicken Meals to their

customers. Until now, they are seeking for new way of enriching their menu to cope

up with the fad of the generation.

Separately, McDonald's began a bid to grab market share in the Philippines

from fast-food leader Jollibee Foods, by launching the first McCafé coffee unit in

Manila. The Philippines' Board of Investments recently gave approval for McDonald's

Corp. to have majority control in the Philippines operation, which the parent company

expects will help strengthen the brand's position against Jollibee.

Definition of Terms

A language is a particular kind of system for encoding and decoding

information. In trying to understand what the study is, these terminologies will

identify what is the scope of the research.

Advertising - a form of communication intended to persuade its viewers,

readers or listeners to take some action.

Chain Store - retail outlets which share a brand and central management.

Franchising – a business method that involves licensing of trademarks and

methods of doing business.

Marketability – similar to liquidity, except that liquidity implies that the value

of the security is preserved, whereas marketability simply indicates that the security

can be bought and sold easily.

Marketing - the process by which companies determine what products or

services may be of interest to customers, and the strategy to use in sales,

communications and business development.

McDonald’s - is the world's largest chain of hamburger fast food restaurants,

serving nearly 47 million customers daily.

Rival - a competing person, company, team, or other organization. Rivals are

not always similarly matched, but they are well known to each other.

CHAPTER II

Review of Related Literature & Studies

Conceptual Literature

McDonald’s commitment to its franchisees does not end with the training. It

recognises that the success and profitability of McDonald’s is inextricably linked to

the success of the franchises. A highly qualified team of professional consultants

offers continuous support on everything from human resources to accounting and IT

business controls. These field consultants can become valued business partners and

are a sounding board for ideas.

Every franchisee has to complete a full-time training programme, which they

must fund and which lasts about nine months. This training is essential and begins

with working in a restaurant, wearing the staff uniform and learning everything from

cooking and preparing food to serving customers and cleaning.

Further training at regional training centres focuses on areas such as business

management, leadership skills, team building and handling customer enquiries. The

franchisees will have to recruit, train and motivate their workforce, so they must learn

the skills of human resource management. During the final period, they learn about

stock control and ordering, profit and loss accounts and the legal side of hiring and

employing staff. Consequently, no McDonald’s franchisee would have to ask a

member of his or her staff to do something that they couldn’t do themselves. Knowing

this can also be a powerful motivator for the staff. (Smith, 2005)

A brand is a name, term, sign, symbol or design - or a combination of these -

which identifies one organisation’s products from those of its competitors. (Kroc,

2007)

Related Literature

The McDonald's brand is almost as global as Coke. The group's 32,000th

restaurant opened in 2009, and those golden arches now spread across almost 118

countries, welcoming some 58m customers every day. Not enough, the company says.

On any day McDonald's still only serves less than 1% of the world population,

leaving plenty of room for growth. However profits fell dramatically in 2002 and the

group took unprecedented steps to close under-performing outlets, even pulling out of

a few markets altogether. That move appeared to have paid off by 2004, and the group

has reported strong growth ever since, even in the face of an economic downturn. A

key factor has been the broadening of the McDonald's menu with an enhanced range

of breakfast items, chicken and salad meals and premium beverages. Advertising Age

estimated global measured advertising expenditure of $2.0bn in 2008, making

McDonald's the world's #14 advertiser (Stevenson, 2005).

Cahn (2002) stressed that as more than one billion burgers have now been

sold, Ronald McDonald is enjoying great success. This is all despite rampant

childhood obesity and the fact that Americans are, as whole, a very fat nation. We

once wondered at the stresses that McDonald’s PR agents must feel every time news

show mentions obesity. You know they realize they are certainly going to be

mentioned and debated.

While Alexander (1988) emphasized that one neat thing McDonald’s has done

is to partner with Nintendo for Wi-Fi. We are following the US market in terms of

growth, so this year, we will continue with the specific projects that have been started

last year and the consolidation of the different applications, so that the stores can

access the applications using the Internet (Yang 2008).

CHAPTER III

Research Design

Method of Research Used

Bibliometrics is a type of research method used in library and information

science. It utilizes quantitative analysis and statistics to describe patterns of

publication within a given field or body of literature. Researchers may use

bibliometric methods of evaluation to determine the influence of a single writer, for

example, or to describe the relationship between two or more writers or works.

When one author cites another author, a relationship is established. Citation

analysis uses citations in scholarly works to establish links. Many different links can

be ascertained, such as links between authors, between scholarly works, between

journals, between fields, or even between countries. Citations both from and to a

certain document may be studied. One very common use of citation analysis is to

determine the impact of a single author on a given field by counting the number of

times the author has been cited by others (Osareh, 1996)

Recently, a new growth area in Bibliometrics has been in the emerging field of

web metrics, or cyber metrics as it is often called. Web metrics can be defined as

using of bibliometric techniques in order to study the relationship of different sites on

the World Wide Web. Such techniques may also be used to map out areas of the Web

that appear to be most useful or influential, based on the number of times they are

hyperlinked to other Web sites.

The survey is a non-experimental, descriptive research method. Surveys can

be useful when a researcher wants to collect data on phenomena that cannot be

directly observed.

Surveys are used extensively in library and information science to assess

attitudes and characteristics of a wide range of subjects, from the quality of user-

system interfaces to library user reading habits.

Cross-sectional surveys are used to gather information on a population at a

single point in time. An example of a cross sectional survey would be a questionnaire

that collects data.

Research Instrument

A sample is representative when it is an accurate proportional representation

of the population under study. Questionnaires are helpful to be able to find out the

different opinions of every participant of the study. The questionnaire purely talks

about the marketability of McDonald’s and its factors that affect the good

performance of service in the food chain industry.

Interview is another instrument that is accurate and efficient. Especially, when

the person is an expert of the given field you wish to discuss. Structured interview is

one of the types of interviews that have a list of questions to be answered by the

interviewee as confident as he can.

Research Setting and Respondents

The respondents of the study are the College Students of San Beda College –

Mendiola. It is an advantage that the respondents are within the same vicinity where

the research is studied. College Students have enough knowledge of the topic. By this,

a researcher will be able to know if students took importance of the topic.

Data Gathering Procedure

The questionnaires were distributed among College Students of San Beda

College – Mendiola. There were 10 representatives for each year and the

questionnaires were given to them and all of it was answered. This amount of the

given questionnaires is enough to determine the views of the students regarding the

topic.

Statistical Treatment

The data analysis will be done through percentage and application of various

statistical methods. Percentages and ratios which are useful when comparing two or

more series of data, while statistical method for significant proportion and the mean of

grouped data which can be applied in this research.

The researchers used this formula to determine the result:

n= ___N___1 + N(e)2

The researchers used the random sampling as its method of sample selection.

This procedure is one that is based on probability considerations.

CHAPTER IVResults of Data

Presentation of Data

These are the results of the questionnaires that were distributed to 40 people in

different year levels. Every graph represents the percentage of answers for each

number.

10%

28%

47%

15%

Everyday At least once a week

At least once a month At least once every semester

Figure 2: Frequency of Students who eat at McDonald’s

The greatest number of percentage as shown in Figure 2, 47% (19

respondents), shown that, students eat at McDonald's at least once a month.

Nevertheless, 28% (11 respondents) of them eat at McDonald's least once a week.

Likewise, 15% (6 respondents) of the respondents eat at least once every semester

in McDonald’s and the least which is 10% (4 respondents) of the respondents eat

at McDonald’s everyday.

67%

33%

Yes No

Figure 3: Percentage of Respondents who says that McDonald’s is affordable

The largest percentage of respondents directed to Figure 3, which is 67% (27

respondents) said that McDonald’s is affordable and the rest doesn’t agree which

is 33% (13 respondents).

29%

18%28%

25%

Food and Promos Ambiance Service Affordable

Figure 4: The Edge of McDonald’s

29% (12 respondents) of the respondents, as shown in Figure 4, believed that

foods and promos were McDonald’s greatest edge among any other fastfood

chains. The 28% (11 respondents) of the respondents agreed that the edge of

McDonald’s is their service. Hence, the 25% (10 respondents) of the respondents

stuck to the fact that McDonald’s is affordable while the rest 18% (7 respondents)

said that the ambiance of McDonald’s is their greatest edge.

72%

28%

Yes No

20%

30%

5%

45%

Cheap Expensive Very Expensive Just Right for the Budget

Figure 5: Ratings of Value Meals in McDonald’s

The 45% (18 respondents) of the respondents, directed to Figure 5, said that

McDonald’s was just right for a students’ budget but a big number of respondents

which is 30% (12 respondents) said that McDonald’s value meals were expensive. In

the contrary, certain number of respondents which is 20% (8 respondents) defended

that McDonald’s value meals, described by the name itself, were cheap and only few

respondents which is 5% (2 respondents) stuck to their decision that McDonald’s sell

very expensive value meals which is opposite to its description.

27%

32%

23%

18%

Excellent Very Good Fair Needs Improvement

Figure 6: Satisfaction of customers to McDonald’s Meals

Majority of the respondents, as shown on Figure 6, which is 72% (29 respondents),

said that they are much satisfied with the meals served by McDonald’s while 28% (11

respondents) were not satisfied with McDonald’s meals.

30%

39%

18%

13%

Excellent Very Good Fair Needs Improvement

Figure 7: Customers rating to McDonald’s Foods

Directed to Figure 7, 39% (16 respondents) rated McDonald’s foods as very

good, 30% (12 respondents) believed that McDonald’s food was excellent, 18% (7

respondents) thought that its fair and the rest 13% (5 respondents) said that it has

needs improvement.

35%

37%

20%

8%

Excellent Very Good Fair Needs Improvement

Customers

44%

38%

13%5%

Excellent Very Good Fair Needs Improvement

Figure 8: Customers rating to McDonald’s services

As shown on Figure 8, 32% (13 respondents) of the respondents relied that

McDonald’s services were very good, positively, a big number of respondents, which

is 27% (11 respondents), believed that McDonald’s services were excellent. Knowing

the fact that certain number of people rated fair with 23% (9 respondents) and needs

improvement with 18% (7 respondents).

Figure 9: Customers rating to McDonald’s Facilities

In figure 9, 37% (15 respondents) said that McDonald’s facilities were very

good. Closely to 35% (14 respondents) which answered excellent. 20% (8

respondents) of the respondents were not really satisfied and chose fair and a least

percentage of 8% (3 respondents) wasn’t like McDonald’s facilities at all and chose

needs improvement.

25%

57%

13%5%

Excellent Very Good Fair Needs Improvement

Figure 10: Consumer’s rating to McDonald’s customers

In Figure 10, 44% (18 respondents) of respondents believed that McDonald’s

customers were very good in all aspects and a great number of respondents which is

38% (15 respondents) said that customers were excellent. 13% (5 respondents)

answered fair and 5% (2 respondents) chose needs improvement.

Figure 11: Consumers rating to McDonald’s crew

As shown in Figure 11, 57% (23 respondents) of respondents answered very

well when it comes to McDonald’s crew. Far related to 25% (10 respondents) that

answered excellent. 13% (5 respondents) of the respondents replied fair and 5% (2

respondents) was not satisfied with McDonald’s crew performance.