STUDY ON CONSUMER BEHAVIOUR

RESEARCH METHODOLOGY
ASSIGNMENT -1
MGT-516
NAME- SUBODH KUMAR SINGH
SECTION –S1003
ROLL.NO –A19
REG.NO -11003016

SUBMITTED TO :-
Manu kalia
 TOPIC:

STUDY ON CONSUMER BEHAVIOUR

What factors are currently influencing the consumer

decision-making process in the fast food restaurant industry
in India, and how are the fast food players responding to
changing environment and consumer behavior?
 Acknowledgement

First of all, I would like to take this opportunity to express my gratitude towards all
those people who had helped me in the successful completion of this term paper, dire+-
ctly or indirectly.

I extend my overwhelming gratitude to Mrs.Manu Kalia, for his valuable guidance and
meticulous supervision during the preparation of this Report.

My hearty and inevitable thanks to all the respondents who helped me to bring out the
term paper in a successful manner.

Last but not the least; I extend my gratitude towards my faculties and friends who
extended their wholehearted support towards the successful completion of this term
paper Work.
 CONTENTS :

1. CONSUMER BEHAVIOR.

2. FAST FOOD INDUSTRY IN INDIA.

 INTRODUCTION
 POPULAR FORMAT OF FAST FOOD BUSINESS.
 EMERGING MARKET FOR GLOBAL PLAYERS.
 MAJOR PLAYERS IN INDIA.

3. OBJECTIVE OF STUDY.

4. REVIEW OF LITERATURE.

5.RESEARCH METODOLOGY.
 RESEARCH PURPOSE
 RESEARCH DESIGN
 SOURCE OF DATA

6.REFERENCES
EXECUTIVE SUMMARY:

The aim of this study is to investigate the factors that are influencing consumer
decision-making process in relation to fast food restaurant industry in India. It further
aims to examine how the other major players are responding to changing environment
and consumer behavior.
This is important and at the same time interesting to observe such topic, because of the
high growth seen in these sector and also because of the rapid changing policy and
advertisement campaign adopted by the various players so as to meet up, with the
consumer expectation and demand.

A better understanding of the background and problems related to the fast food issue
and context of decision-making process is first obtained via literature review, where
various academic journals were examined. Afterwards these, qualitative focus group
can be conducted with an aim to explore and gauge consumer attitudes towards fast
food and other concerned industries. Key themes from focus group can be helpful in
forming questions for the questionnaire. This quantitative survey can be then used to
gauge whether the views of the respondents from focus group were representative of a
larger group.

Key themes from focus group can be quality of fast food, ethical aspects (animal
welfare), trust towards various players and impact of media and Government on
consumer behavior. These themes can be then tested to a larger group using
questionnaires and other research related methods.

And Most of the purchases of fast food occur, due to the result of impulse decision-
making. Since consumer’s knowledge/information acquired are the major factor forces
behind any decision making process, therefore the advertisement method adopted by
various players hold a strong importance.

Thus through this report, we can have some recommendation- so as to increase

awareness of the quality of products and hence reduce consumers perceived risk and
increase their trust with fast food industries brand and product.
Consumer Behavior
Referring to Solomon (2006, p.27) consumer behavior is the study of the processes
involved when individuals or groups select, purchase, use or dispose of products,
services, idea or experiences. Consumer behavior focuses on how individuals make
decisions to spend their available resources on consumption related items. That
includes what they buy, why they buy, when they buy, where they buy it, how often they
buy it how often they use it, how they evaluate it after they purchase and the impact of
such evaluations on future purchases, and how they dispose it. Schiff man and Kanuk
(2004, p.8)

FAST FOOD INDUSTRY IN INDIA:

Definition of the fast food industry:

The fast food industry 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.

Fast food outlets are specialized in burgers, bakery products, chicken, ice cream, fish
and pizza.

Fast food industry

The fast food industry in India has evolved with the changing lifestyles of the young
Indian population. The sheer variety of gastronomic preferences across the regions,
hereditary or acquired, has brought about different modules across the country. It may
take some time for the local enterprise to mature to the level of international players in
the field.

Many of the traditional dishes have been adapted to suit the emerging fast food outlets.
The basic adaptation is to decrease the processing and serving time. For example, the
typical meal which called for being served by an ever alert attendant is now offered as a
Mini-Meal across the counter. In its traditional version, a plate or a banana leaf was first
laid down on the floor or table. Several helpers then waited on the diner, doling out
different dishes and refilling as they got over in the plate.

In the fast food version, a plate already arranged with a variety of cooked vegetables
and curries along with a fixed quantity of rice and Indian flatbreads is handed out across
the counter against a prepaid coupon. The curries and breads vary depending on the
region and local preferences. The higher priced ones may add a sweet to the
combination. Refills are generally not offered.

The diversity of Indian cuisine poses logistical problems when it comes to handling.
Hence it is common to serve different cuisines at different counters within the same
premises. Presence of a large vegetarian population, who eschew non-vegetarian food,
has given rise to outlets which exclusively serve vegetarian fast food. Also, different
variety of food may be served depending on the times of the day. Beverages such
coffee, tea, soft drinks and fruit juices may also be served in such outlets. Some outlets
may additionally have specially designed counters for ice-cream, chaats etc.

Popular formats of fast food business in India have the following features in
common:

 Wide opening on the road side

 Easy to maintain and durable décor
 A cash counter where food coupons are sold
 A food delivery counter which invariably is granite topped
 Additional counters for Ice Creams, Chaats, Beverages etc.
 A well fitted kitchen located so as to be visible to the customers
 Tall tables, usually of stainless steel, where one can eat while standing
 A drinking water fountain adorned with a water filter
 Rust-proof and non-breakable crockery
FOOD COURT
Another concept of fast food that is becoming popular is that of Food Courts. It is like
putting together a number of Darshinis serving different cuisines under one roof. Here
also one has to purchase coupons and collect the food from one of the several
counters. Each one of these counters serves specific variety of food and may be owned
by different individuals or caterers. Food Courts are normally located on much bigger
premises and may provide seating facility in addition to the stand and eat arrangement.
Typically one entrepreneur owns or takes on lease the entire premises and promotes
the place under one name. He then lets out individual counters to different independent
operators to offer different menu. Internal competition is avoided by not allowing more

THAT ONE COUNTER OF SIMILER FOOD

Several international fast food chains like Kentucky Fried

Chicken, McDonald's and Barista Coffee have their outlets in major cities. Café
Coffee Day, again a brainchild of Bangalore based businessman, is the only
Indian chain which boasts of hundreds of outlets and is present across India. But
then it is classified more as a coffee shop than a fast food place.

INDIA – EMERGING MARKET FOR GLOBAL PLAYERS

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.. 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.

FACTS AND FIGURES

Fast food is one of the world’s 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 billion, a
figure expected to zoom to Rs.70 billion by2005. 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 chain sare
flooding into the country.

MARKET SIZE & MAJOR PLAYERS

a)Dominated by McDonalds having as many as 75 outlets.

b)Domino’s pizza is present in around 100 locations.
c)Pizza hut is also catching up and it has planned to establish 125
outlets at the end of 2005.
d)Subways have established around 40 outlets.
e)Nirulas is established at Delhi and Noida only. However, it claims to
cater 50,000 guests every day.

Major players in fast food are:

 MCDONALDS

 KFC

 PIZZA HUT

 DOMINOS PIZZA.

 COFFEE DAY

 BARISTA.

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

Objective:
The objective of these report is to study the success and emergence of Indian fast food
market and factor affecting the choice of consumer for fast food and analyze the
competitor’s position in the fast food industry.

 To investigate the factors that are influencing consumer decision-making

process in relation to fast food restaurant industry in India.

 To understand the strategies adopted by the various players in fast food

industries, so as to illustrate ,how do they responds to the changing
environment and towards vibrant consumer behavior.

 To understand the emergence and growth of fast food sector in India.

 To understand the various challenges faced by these industry

Literature review:

The following literature review will critically analyze the theories associated with the
research topic. Firstly, it looks at the issues of consumer behavior; hence it highlights
the factors, which influence the consumer decision-making process, predominantly the
consumer attitudes. The author has found a variety of academic articles, some of which
focus on food industry and public trust in food safety. Other articles examine more
generally models of consumer attitude formation, which might be useful applied to the
research question in this topic.

While the first section focuses on the aspects of consumer behavior, the second part
of the review, as already outlined in the introduction section of topic, observes the
marketing issues, particularly the marketing communication strategy within the
marketing mix. Furthermore this review will contribute towards creation of possible
marketing strategies as well as recommendations that fast food industries might
pursue in order to respond on changing environment and consumer behavior.

Therefore the following theories from consumer behavior and marketing have been
outlined:

Consumer decision-making process

Consumer attitude formation and change
The marketing mix

Consumer decision-making process

Jobbers (1995) identifies the concept of influences on consumer purchasing behaviour
among which he points out the level of purchase involvement as one of the factors that
influences the consumer decision-making process. Referring to Kim (2005) who was
investigating how product involvement and values interact with consumers, more
current research examines consumer involvement under working assumptions that
different types of product involvement trigger different behaviour.

Brown, McIlveen and Struggnel (2000) examined the nutritional awareness and food
preferences among young consumers. They suggest that young consumer decisions
regarding food preferences are influenced by nutritional awareness knowledge. This
knowledge is acquired within the home, school and social environments. They also put
forward that education plays important role regarding healthy eating.
Schiffman and Kanuk, 2004 ,The consumer decision to purchase or not to purchase
the product is crucial for marketers. It can signify whether the marketing strategy has
been wise, insightful, and effective, or whether was poorly planned and missed the
mark. Hence marketers are particularly interested in such process. Schiffman and
Kanuk, 2004

Verbeke (2005) recognizes that at any point in time throughout the decision-making
process, judgements and choices are affected by a variety of stimuli from environment
as well as by internal process and characteristics form the consumers themselves.
Based on earliest presented models of consumer behaviour towards food (Pilgrim,
1957, cited by Verbeke, 2005) and on a review of factors affecting food acceptance and
behaviour (Shepherd, 1990, Steenkamp, 1997, cited by Verbeke, 2005) proposed a
classification with three types of influencing factors: environmental factors, person-
related factors and properties of the food.

Schroeder and McEachern (2005),in these research he analysed the impact of

McDonald’s and KFC’s corporate social responsibility (CSR) on consumers purchasing
behaviour, authors propose that purchases of fast food are mostly impulsive, hence
suggesting relatively low-involvement in each case.

Lye et al. (2005), in their study of consumer decision models, advocate that the
complexity of consumer decisions is increasing. “We have limited understanding of the
decision process and the models are inadequate at predicting decision outcomes”.
Hence the current models, they argue, are out of date and insufficient in providing the
desired outcome. Nevertheless, the decision-making process model will provide the
author and the reader with general overview and understanding of factors influencing on
consumers purchasing behaviour.

Thus we attempt to identify and focus, along with the attitudes, on the socio-
cultural part of the consumer decision-making process, i.e. impact of
communication and information from mass media i.e publicity of fast food

Consumer attitude formation change

Freiden and Henderson ,(1997) investigated the impact of social values on food
related attitudes, recognize that marketers, consumer psychologists and public policy
makers have an interest in the personal and social values of consumers as these
deeply held feelings of what is important in life influence both consumer attitudes and
behaviour. Reflecting desired end states or ways of living, values might in part represent
some of the fundamental motives that drive and direct the consumer behaviour. Homer
and Kahle 1988, cited by Goldsmith, Freiden and Henderson (1997) suggest that the
influence of values may not be limited just to high- involvement areas, but may also be
relevant to less involving product fields such as food.

Nielsen, Jongen and Meulenberg (1998 ),studied understanding of the factors that
determine consumer perception/attitudes of a product’s value or cost is of crucial
importance to an industry’s product innovation, choice of marketing and communication
strategy and maintenance of competitive advantage.

Baltas (2001), acknowledge that the nature of fast food production and processing is
becoming more important to consumer.

Jobbers (2002) identifies the concept of influences on consumer purchasing behaviour

among which he points out the level of purchase involvement as one of the factors that
influences the consumer decision-making process. Identifies the concept of influences
on consumer purchasing behavior among which he points out the level of purchase
involvement as one of the factors that influences the consumer decision-making
process. (CSR) on consumers purchasing behavior , authors propose that purchases of
fast food are mostly impulsive, hence suggesting relatively low-involvem ent in each
case.

Harper and Makatouni (2002) note that ethical production in terms of animal and
human welfare and environmental protection are of greatest importance.

Mohr et al. (2002) recognize that information regarding firm’s ethical behaviour is
thought to influence product sales and consumers’ overall image of a company.

Mohsin, (2003).While it is generally accepted that a positive relationship exists between

service quality and customer satisfaction, there is debate with proposals of a causal link
from customer satisfaction to service quality, service quality to customer satisfaction

Viaene (2003) investigated consumers’ beliefs, attitudes and purchase intentions with
regards to genetically modified food. Attitudes towards GM food are determined by
perception of risk and benefits. When perceived risk is high, that influence negatively on
consumer’s purchase intention. That might be linked to fast food as well, as eating fatty
food may be risky of suffering obese related diseases.

Verbeke (2005), who examined the influences on consumer decision-making process

towards fresh meat, the hierarchy of effects indicates the different mental stages that
consumer must go through when making buying decision and responding to marketing
or non-commercial messages. In our instance, where the attitude object is fast food,
plus taking into account that fast food is considered to be low involvement product, the
low involvement hierarchy of effects would occur.

Ajzen (2009) the attitudes are the first determinant of behavior intention. In consumer
behavior context attitude is a learned predisposition to behave in a consistently
favorable or unfavorable way with respect of a given object. Most researchers agree
that attitudes consist of three components: Affect (consumers’ emotions and feelings
about the attitude object), Behavior (intention to do something with regard to an attitude
object) and Cognition (believes a consumer has with an attitude object).

The marketing mix

The concept of the marketing mix as the combination of the major tools of marketing
was first developed by Borden in the 1950s. The idea of 4Ps (Product, Place, Price and
Promotion) was later formulated by McCarthy in 1975. .

Ajzen (1998) the attitudes are the first determinant of behavior intention. In consumer
behavior context attitude is a learned predisposition to behave in a consistently
favorable or unfavorable way with respect of a given object. Most researchers agree
that attitudes consist of three components: Affect (consumers’ emotions and feelings
about the attitude object), Behavior (intention to do something with regard to an attitude
object) and Cognition (believes a consumer has with an attitude object).
Vignali (2001) acknowledges that for many years 4Ps have been used as the principal
foundation on which a marketing plan is based. However, with particular attention being
paid to services marketing in recent years, theorists have identified additional variables,
which could be added to the 4Ps. recognized the following variables as an integral part
of the marketing mix- process, physical and people.

Vignali (2001) applied 7Ps analysing the marketing mix of McDonald’s in the following
way:
1. Product – features, quality, quantity.
2. Place – location, number of outlets.
3. Price – strategy, determinants, levels
4. Promotion – advertising, sales promotion, public relations.
5. People – quantity, quality, training, promotion.
6. Process – blueprinting, automation, control procedures.
7. Physical – cleanliness, decor, ambience of the service.

In this topic, however, our focus will not be on all 7Ps; the emphasis will be on product,
promotion and physical as this links logically with the research question/objectives.

If we look further into the promotion part of the marketing mix, the promotional mix is a
direct way in which an organization attempts to communicate with various target
audiences. It consists of five main elements:

Advertising
Public relations
Sales promotion
Direct marketing
Personal selling
As mentioned earlier fast food products are purchased mainly impulsively, hence they
are considered to be low involvement products.

Kim( 2005) recognize that the degree of consumer involvement in a product category
has become a major factor relevant to advertising and promoting strategies.

Brassington, (2006) The marketing mix creates an offering for the customer.
Marketers need to ensure that the marketing mix meets their customers’ needs and
wants in addition to that all of its components need to be consistent with each other. If
not costumers will turn away to its competitors.

Solomon et al. (2006) suggests that this might be involvement paradox; the less
important is the product to consumers, the more important are many of the marketing
stimuli (e.g. packages, jingles) that must be devised to sell it.

Taking above statements into account, industries might want to employ

advertising and sales promotions, in order to attempt to change consumer
attitudes. Having said that our focus will be therefore primarily on advertising
and promotion of the promotional mix.
RESEARCH METHODOLOGY:-

Research purpose:-

This Research is going to be a descriptive in nature,so as to know about factors that

are currently influencing the consumer decision-making process in the fast food
restaurant industry in India, and how are the fast food players responding to
changing environment and consumer behavior.
The aim of the research is to explore consumer attitudes and factors that influence the
consumer decision-making process in the fast food industry and also to elucidate
industry potential responses on changing environment and consumer behaviour. From
the analysis of the market and consumer behaviour we can seek to apply established
business models such as marketing mix in order to generate a set of practical
recommendations for various related business

Research design:-Descriptive Research

Descriptive Research: - This research would include surveys and facts finding,
enquires of different kinds. The major purpose of descriptive research is that the
research can only describe the state of affairs existing at present in the organization.
The main feature of this method is that the researcher has no control over the external
variables called the respondents as they are going to interview the concerned people in
order to perform study. They can only report what happened or what is happening. In
social science and business research, we quiet often use the terms “ex-post facto
research” for descriptive research studies, the researcher can discover and describe the
causes for various situations but they cannot control the situations.

Sources Of Data :-
There are two types of data source
 Primary data
 Secondary data
The whole study is based upon secondary data .Therefore each and every
information has been collected from various magazines, journals, websites
&bulletins.
References:

 www.proquest.com
 www.srn.com
 www.jstro.com
 www.emaraldsight.com
 www.valueresearchonline.com
 www.rediff.com/business/report/fast-food-industr
 www.scribd.com/doc/19018679/fast-food-industry-in-india-a-
study
 www.scribd.com/doc/30231629/Consumer-Behaviour
 www.rediff.com/business/report/fast-food-industry.../20110125.htm 
 www.buzzle.com/.../history-of-the-fast-food-industry.html