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FAST FOOD INDUSTRY

Introduction

Fast food 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 and served to the customer in a packaged
form for take-out/take-away.

Outlets may be stands or kiosks, which may provide no shelter or seating,


or fast food restaurants (also known as quick service restaurants).
Franchise operations which are part of restaurant chains have
standardized foodstuffs shipped to each restaurant from central locations.

The capital requirements involved in opening up a fast food restaurant are


relatively low. Restaurants with much higher sit-in ratios, where customers
tend to sit and have their orders brought to them in a seemingly more
upscale atmosphere may be known in some areas as fast casual
restaurants.

History

The concept of ready-cooked food for sale is closely connected with urban
development. In Ancient Rome cities had street stands that sold bread and
wine. A fixture of East Asian cities is the noodle shop. Flatbread and falafel
are today ubiquitous in the Middle East. Popular Indian fast food dishes
include vada pav, panipuri and dahi vada. In the French-speaking nations
of West Africa, roadside stands in and around the larger cities continue to
sell—as they have done for generations—a range of ready-to-eat, char-
grilled meat sticks known locally as brochettes.

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:
(1) America’s love affair with the automobiles.
(2) The construction of a major new highway system.
(3) The development of sub-urban communities.
(4) The baby boom subsequent to world war second.
“Fast-food chains initially catered to automobile owners in suburbia.

On the go

Fast food outlets are take-away or take-out providers, often with a "drive-
through" service which allows customers to order and pick up food from
their cars; but most also have a seating area in which customers can eat
the food on the premises. People eat there more than five times a week
and often, one or more of those five times is at a fast food restaurant.

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.

Variants

Although fast food often brings to mind traditional American fast food
such as hamburgers and fries, there are many other forms of fast food
that enjoy widespread popularity in the West.

Chinese takeaways/takeout restaurants are particularly popular. They


normally offer a wide variety of Asian food which has normally been fried.
Most options are some form of noodles, rice, or meat.
Sushi has seen rapidly rising popularity in recent times. A form of fast food
created in Japan. sushi is normally cold sticky rice served with raw
fish.Pizza is a common fast food category in the United States, with chains
such as Domino's Pizza, Sbarro and Pizza Hut. Menus are more limited and
standardized than in traditional pizzerias, and pizza delivery, often with a
time commitment, is offered.

Fish and chip shops are a form of fast food popular in the United Kingdom,
Australia and New Zealand. Fish is battered and then deep fried.The Dutch
have their own types of fast food. A Dutch fast food meal often consists of
a portion of French fries .

Business

In the United States alone, consumers spent about US$110 billion on fast
food in 2000 (which increased from US$6 billion in 1970). The National
Restaurant Association forecasted that fast food restaurants in the U.S.
would reach US$142 billion in sales in 2006, a 5% increase over 2005. In
comparison, the full-service restaurant segment of the food industry is
expected to generate $173 billion in sales.

Jobs and labor issues

Today, more than 10 million workers are employed in the areas of food
preparation and food servicing including fast food in the world.

Employees are the backbone of the fast food industry. Proper training is
crucial to the orderly and quick service customers expect. Yet, employee
turnover can be as high as 200% per year. With such a turnover, owner-
operators of franchise and non-franchise restaurants have the daunting
task of constantly training an entirely new workforce. Policies and
procedures need to be explained to each new employee.

Globalization
In 2006, the global fast food market grew by 4.8% and reached a value of
102.4 billion and a volume of 80.3 billion transactions. In India alone the
fast food industry is growing by 40% a year. McDonald's is located in 120
countries and on 6 continents and operates over 31,000 restaurants
worldwide.

KFC is located in 25 countries. Subway has 29,186 restaurants located in


86 countries, Pizza Hut is located in 26 countries, Taco Bell has 278
restaurants located in 12 countries besides the United States.

Health issue

Tran’s fats which are commonly found in fast food have been shown in
many tests to have a negative health effect on the body.

The fast food consumption has been shown to increase calorie intake,
promote weight gain, and elevate risk for diabetes. The Centers for
Disease Control and Prevention ranked obesity as the number one health
threat for Americans in 2004. It is the second leading cause of preventable
death in the United States and results in 400,000 deaths each year.

FAST FOOD INDUSTRY IN INDIA

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 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


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.

REASON FOR EMERGENCE


Gender Roles: gender roles are now changing. Females have started
working outside. So, they have no time for their home and cooking food. Fast
food is an easy way out because these can be prepared easily.
Customer Sophistication and Confidence: consumers are becoming
more sophisticated now. They do not want to prepare food and spend their
time and energy in house hold works. They are building their confidence
more on ‘ready to eat and easy to serve’ kind of foods
Paucity of Time: people have no time for cooking. Because of emergence of
working women and also number of other entertainment items. Most of the
time either people work or want to enjoy with their family.
Double Income Group: emergence of double income group leads to
increase in disposable income. Now people have more disposable income so
they can spend easily in fast food and other activities.
Working Women: working women have no time for cooking, and if they
have then also they don’t want to cook. Because they want to come out of
the traditionally defined gender roles. They do not want to confine
themselves to household work and upbringing of children’s.
Large population: India being a second largest country in terms of
population possesses large potential market for all the products/services. This
results into entry of large number of fast food players in the country.
Relaxation in rules and regulations: with the economic liberalization of
1991, most of the tariff and non tariff barriers from the Indian boundaries are
either removed or minimized. This helped significantly the MNC’s to enter in
the country.
Menu diversification: increase in consumption of pizzas, burgers and other
type of fast foods.

CHALLENGES FOR THE INDUSTRY


Social and cultural implications of Indians switching to western
breakfast food: Generally, Hindus avoid all foods that are believed to inhibit
physical and spiritual development. Eating meat is not explicitly prohibited,
but many Hindus are vegetarian because they adhere to the concept of
ahimsa. Those seeking spiritual unity may avoid garlic and onions. The
concept of purity influences Hindu food practices. Products from cows (e.g.,
milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can
improve the purity of impure foods when they are prepared together. Some
foods, such as beef or alcohol, are innately polluted and can never be made
pure. But now, Indians are switching to fast food that contain all those things
that are considered impure or against there beliefs. Some traditional and
fundamentalist are against this transformation of food habit and number of
times they provoke their counterparts to revolt against such foods. And that
is what happened when McDonald’s decided to enter the complexity of Indian
business landscape, counting only on its “fast food global formula”, without
any apparent previous cultural training.
Emphasis on the usage of bio-degradable products: Glasses,
silverware, plates and cloth napkins are never provided with fast food.
Instead, paper plates and napkins, polyurethane containers, plastic cups and
tableware, drinking cartons or PET (polyethylene terephthalate) bottles are
used, and these are all disposable. Many of these items are tossed in the
garbage instead of being recycled, or even worse, merely thrown on the
ground. This burdens nature unnecessarily and squanders raw materials. In
order to reduce soil and water pollution, government now emphasis more on
the usage of bio-degradable products.
Retrenchment of employees: Most of new industries will be capital
intensive and may drive local competitors, which have more workers, out of
business.
Profit repatriation: Repatriation of profits is another area of concern for
Indian economy. As when multinational enters the any countries, people and
government hope that it will increase the employment rate and result in
economic growth. However, with the multinational operation, host country
experiences these benefits for a short time period. In long run neither
employment increases (because of capital intensive nature of MNC’s) nor it
increases the GDP or GNP because whatever MNC’s earn they repatriate that
profit back to their home country.

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

Balance between societal expectation and companies economic


objectives: To balance a society’s expectation regarding environment with
the economic burden of protecting the environment. Thus, one can see that
one side pushes for higher standards and other side tries to beat the
standard back, thereby making it a arm wrestling and mind boggling exercise.

Health related issues: obesity:


I. Studies have shown that a typical fast food has very high density and
food with high density causes people to eat more then they usually
need. \
II. Low calories food: Emphasis is now more on low calorie food. In this
line McDonald has a plan to introduce all white meat chicken
Mcnuugget with less fat and fewer calories.

TRENDS IN INDIAN MARKET


Marketing to children's: fast food outlets in India target children’s as
their major customers. They introduce varieties of things that will attract
the children’s attention and by targeting children’s they automatically
target their parents because Children’s are always accompanied by their
parents.
Low level customer commitment: Because of the large number of food
retail outlets and also because of the tendency of customer to switch from
one product to other, this industry faces low level customer commitment.
Value added technology services: There is continuous improvement in
the technology as far as fast food market in India is considered. The
reason behind that is food is a perishable item and in order to ensure that
it remain fresh for a longer period of time. Earlier, Indian people prefer
eating at home but now with the change in trend there is also need for
improvement and up gradation of technology in food sector.

Attracting different segments of the market: Fast food outlets are


introducing varieties of products in order to cater the demands of each
and every segment of the market. They are introducing all categories of
product so that people of all age, sex, class, income group etc can come
and become a customer of their food line.

The success of fast foods arose from the changes in our living conditions:
1. Many women or both parents now work
2. There are increased numbers of single-parent households
3. Long distances to school and work are common
4. Usually, lunch times are short
5. There's often not enough time or opportunity to shop carefully for
groceries, or to cook and eat with one's family. Especially on
weekdays, fast food outside the home is the only solution.

Kentucky Fried Chicken


About the Company

KFC Corporation, or KFC, founded and also known as Kentucky Fried


Chicken, is a chain of fast food restaurants based in Louisville, Kentucky.
KFC is a brand and operating segment, called a "concept" of Yum! Brands
since 1997 when that company was spun off from PepsiCo as Tricon
Global Restaurants Inc. The restaurants are known as Poulet Frit
Kentucky or PFK in the province of Quebec in Canada. In France,
however, the chain is known as KFC.

KFC primarily sells chicken in form of pieces, wraps, salads and


sandwiches. While its primary focus is fried chicken, KFC also offers a line
of roasted chicken products, side dishes and desserts. Outside North
America, KFC offers beef based products such as hamburgers or kebabs,
pork based products such as ribs and other regional fare.

The company was founded as Kentucky Fried Chicken by Colonel


Harland Sanders in 1952, though the idea of KFC's fried chicken actually
goes back to 1930. The company adopted the abbreviated form of its
name in 1991. Starting in April 2007, the company began using its original
name, Kentucky Fried Chicken, for its signage, packaging and
advertisements in the United States as part of a new corporate re-
branding program newer and remodeled restaurants will have the new
logo and name while older stores will continue to use the 1980s signage.
Additionally, Yum! Continues to use the abbreviated name freely in its
advertising.

Products

The famous paper bucket that KFC uses for its larger sized orders of chicken and
has come to signify the company was originally created by Wendy's restaurants
founder Dave Thomas. Thomas was originally a franchisee of the original
Kentucky Fried Chicken and operated several outlets in the Columbus, Ohio area.
His reasoning behind using the paper packaging was that it helped keep the
chicken crispy by wicking away excess moisture. Thomas was also responsible
for the creation of the famous rotating bucket sign that came to be used at most
KFC locations in the US.

Menu items
KFC's specialty is fried chicken served in various forms. KFC's primary product is
pressure-fried pieces of chicken made with original recipe. The other chicken
offering, extra crispy, is made using a garlic marinade and double dipping the
chicken in flour before deep frying in a standard industrial kitchen type machine.

Kentucky Grilled Chicken - This marinated grilled chicken is targeted towards


health-conscious customers. It features marinated breasts, thighs, drumsticks,
and wings that are coated with the Original Recipe seasonings before being
grilled. It has less fat, calories, and sodium than the Original Recipe fried chicken.
Introduced in April 2009.

Discontinued products
The Colonel's Rotisserie Gold – This product was introduced in the 1990s as a
response to the Boston Market chain's roasted chicken products, and a healthier
mindset of the general public avoiding fried food. Purportedly made from a "lost"
Col. Sanders recipe, it was sold as a whole roaster or a half bird.[28]

Tender Roast Chicken – This product was an off-shoot of 'The Colonel's Rotisserie
Gold'. Instead of whole and half birds, customers were given quarter roasted
chicken pieces. For a time, customers could request chicken "original", "Extra
Tasty Crispy", or "Tender Roast".

Smokey Chipotle – Introduced in April 2008. The chicken was dipped in chipotle
sauce then doubled breaded and fried. It has been discontinued since August
2008.

Nutritional value

KFC formerly used partially hydrogenated oil in its fried foods. This oil
contains relatively high levels of trans fat, which increases the risk of
heart disease. The Center for Science in the Public Interest (CSPI) filed a
court case against KFC, with the aim of making it use other types of oils or
make sure customers know about Trans fat content immediately before
they buy food.

In October 2006, KFC announced that it would begin frying its chicken in trans
fat-free oil. This would also apply to their potato wedges and other fried foods,
however, the biscuits.
Advertising

One of KFC's latest advertisements is a commercial advertising its "wicked


crunch box meal". The commercial features a fictional black metal band
called "Hellvetica" performing live, the lead singer then swallows fire. The
commercial then shows the lead singer at a KFC eating the "wicked crunch
box meal" and saying "Oh man that is hot".

In 2007, the original, non-acronymic Kentucky Fried Chicken name was


resurrected and began to reappear on company marketing literature and
food packaging, as well as some restaurant signage.

KFC Business Strategy

KFC fast-food chains are currently under the restaurant division of PepsiCo
Incorporated. Some major threats include the changing attitudes of
society toward healthier eating habits, KFC has more than 9,800 outlets
located in 77 countries. In marketing, KFC restaurants are not restricted
from locating within close proximity of other KFC restaurants. There are
two alternative strategies for KFC. The first strategy involves keeping
PepsiCo beverage division and snack foods division together, and a
divestiture of PepsiCo restaurant division; selling Taco Bell, Pizza Hut, and
KFC.

Present Situation

The organization is currently structured with two divisions under PepsiCo.


David Novak is president of KFC. John Hill is Chief Financial Officer and
Colin Moore is the head of Marketing. Peter Waller is head of franchising
while Olden Lee is head of Human Resources. KFC is part of the two
PepsiCo divisions, which are PepsiCo Worldwide Restaurants and PepsiCo
Restaurants International. Both of these divisions of PepsiCo are based in
Dallas.

Strengths

Strengths can be found internally in a company and can be used to the


company’s advantage. The strengths identified are as follows:

1. KFC's secret recipe.

The secret recipe has long been a source of advertising, and allowed KFC
to set itself apart. Also, KFC was the first chain to enter the fast-food
industry, just before McDonald's, which opened its first store a year later,
and the "secret recipe" was the initial home replacement strategy.

2. Name recognition and reputation.

KFC's early entrance into the fast-food industry in 1954 allowed KFC to
develop strong brand name recognition and a strong foothold in the
industry. The Colonel is KFC's original owner and a very recognizable
figure, both in the U.S. and internationally, in their new logo. In fact, in the
fourth annual LogoValue Survey, done by The Schecter Group, the KFC
logo was the only one which significantly enhance the brand's image .

3. PepsiCo's success with the management of fast food chains.


PepsiCo acquired Pizza Hut in 1977, and Taco Bell in 1978. PepsiCo used
many of the same promotional strategies that it has used to market soft
drinks and snack food. By the time PepsiCo bought KFC in 1986, the
company already dominated two of the four largest and fastest-growing
segments of the fast food industry.

4. Traditional employee loyalty.


"KFC's culture was built largely on Colonel Sanders' laid back approach to
management" (Wright, p.433). Before the acquisition of KFC by PepsiCo,
employees at KFC enjoyed good benefits, a pension, and could receive
help with other non-income needs. This kind of "personal" human
resources management makes for a loyal workforce.

5. Improving operating efficiencies by reducing overhead and


other operating costs can directly affect operating profit.

Due to the strong competition in the US, the fast-food chains are reluctant
to raise prices to increase profit. Many of the chains are turning to
operating efficiencies to increase profit. For many companies, operating
efficiencies are achieved through improvements in customer service,
cleaner restaurants, faster and friendlier service, and continued high-
quality products.

Weaknesses

Weaknesses are also found internally like strengths. Weaknesses,


however, can limit a company’s potential. The weaknesses for KFC are
identified as follows:

1. The many sales of KFC lead to a confusing corporate direction.

Between 1971 and 1986, KFC was sold three times. The first two sales, to
Heublein, Inc and to R.J. Reynolds, left the company largely autonomous. It
wasn't until the sale to PepsiCo in 1986 that changes in top management
started to take place. These changes happened almost immediately after
the sale.

2. KFC has a long time to market with new products.

Because of the nature of the chicken segment of the fast food industry,
innovation was never a primary strategy for KFC. However, during the late
1980's, other fast food chains, such as McDonald's, began to offer chicken
as a
Menu option. During this time, McDonald's had already introduced the
McChicken while KFC was still testing its own chicken sandwich. This delay
significantly increased the cost of developing consumer awareness for the
KFC sandwich.

3. Conflicting cultures of KFC and Pepsi Co.

While KFC's culture was largely based on the Colonel's laid back approach
to management, while PepsiCo's culture is more of a "fast track" attitude.
Employees do not have the same level of job security that they enjoyed
before the PepsiCo acquisition

Problems

Through an analysis of the strengths, weaknesses, opportunities, and


threats of KFC, the following potential problem areas were identified:

1. No defined target market.

The advertising campaign of KFC does not specifically appeal to any


segment. It does not appear to have a consistent long-term approach. The
U.S. has enormous changes in its demographics. Single-person households
have increased from 12% in 1970 to 25% in 1995. With this kind of
dramatic change, KFC does not have a proper approach to its target
market.

2. Health Conscious Consumers.

There has been a trend toward an increasingly healthy diet in America.


This put KFC at an extreme disadvantage due to its fried product offering.

3. Increased Start Up Costs.

Prime locations have increased in cost due to limited room for expansion.
New technology has increased efficiencies, but resulted in greater
increased start up costs. Restaurant and equipment packages range from
$500,000 to $1,000,000.

Achievements:
KFC is one of the most renowned world gastronomic brand names.
Kentucky Fried Chicken products are currently offered in 80 countries
worldwide and in more than 11,000 restaurants which are visited on a
daily basis by almost 8 million customers. Globally, KFC employs
approximately 290,000 people, Worldwide, a new KFC restaurant is
opened almost every day.
In 2004 the “KFC Excellent” range - three types of salad (Caesar, Garden
and Mandarin) obtained the prize for “Worldwide Best Practice Award
2004” in the category of best product and best marketing campaign and
its implementation in the restaurants. This prize is distributed each year
by YUM Restaurants International.According to the ratings for “Most
expensive world brands 2004” conducted by the American weekly
‘Business Week’, KFC was positioned 54th place; currently valued at 5.1
billion USD.

DOMINO’S

SIZE OF THE MARKET

Domino's Pizza is one of the biggest and fastest growing international


food joints in South Asia. The very first Domino's Pizza outlet in India
opened in Jan, 1996 at New Delhi. Today, Domino's Pizza India has become
a wide network of Pizza delivery and food chain. There are close to 220
outlets in 42 cities of India and the brand is the top most among the food
delivery business. Domino’s Pizza outlets can be seen at major locations
of Delhi and NCR. Their home delivery is free with a guarantee of “Thirty
Minutes Nahi to Free”. Although they are expert in delivering Pizzas on
time, their eating joints and outlets are also good. We plan to have a total
of 500 stores in 75-80 cities by 2010 to 2011. It would entail an
investment of Rs 200 million during the period

MARKET GROWTH

During last four months, dominoes have opened outlets in Jammu,


Panipat, Surat, Baroda, Nashik, Trivandum, Meerut and Patiala. While
earlier, 70 percent of our business used to be in metros and mini-metros,
now the ratio is 50:50 between big cities and smaller Tier II and III cities.
Domino’s Pizza is expanding its base in India by opening 500 outlets to
add to its current tally of 156 outlets, across 50 cities in India by 2011
with an investment of Rs.1, 000 crore.

MARKET STRATEGIES

 Promotional and Advertisement Campaigns(Coupons and discounts)


 The '30 Minutes' Promise
 Use of Technology(Digital interactive Television, Internet on the PC,
Mobile telephony)
 Premium Pricing Strategy
 Indian fast food industry and entry of multinational players
 Distribution strategies of fast food chains in India

MARKET SHARE

The organized pizza market in India is worth Rs.500 crore and Domino’s
has a substantial 45% market share, and registered a healthy growth of
60% over last year. The main target for new outlets shall be metro cities
though Tier II cities would also receive a fair amount of attention.
Currently Domino’s sells around 35,000 pizza every day, of which around
1% are given free on account of its “30 minutes or free” model. 65
percent of its revenue comes from home delivery service; around 35
percent is from sales in premise.

COMPETITORS

Fast food is one of the world's fastest growing food types. It now accounts
for roughly half of all restaurant revenues in the developed countries and
continues to expand there and in many other industrial countries in the
coming years. But some of the most rapid growth is occurring in the
developing world; where it's radically changing the way people eat. People
buy fast food because it's cheap, easy to prepare, and heavily promoted.
This paper aims at providing information about fast food industry, its
trend, reason for its emergence and several other factors that are
responsible for its growth. India is a developing country with 2 percent of
organized and 98 percent of unorganized sector. So most of the fast foods
came into Indian market as India has a high growth in every sector. Some
of the competitors of domino’s are

 McDonald's
 Pizza Hut
 Barista
 Coffee Day

MC Donald’s

McDonald's is the leading global foodservice retailer with more than


31,000 local restaurants serving more than 58 million people in 118
countries each day. More than 75% of McDonald's restaurants worldwide
are owned and operated by independent local men and women.

The strong foundation that he built continues today with McDonald's


vision and the commitment of our talented executives to keep the shine
on McDonald's Arches for years to come. To read more about McDonald's
history, vision and executives, click on their links in the left menu.

We drive our business momentum by focusing on what matters most to


customers. Our owner/operators, suppliers and employees work together
to meet customer needs in uniquely McDonald's ways. The powerful
combination of entrepreneurial spirit and System wide alignment around
our Plan to Win enables us to execute the best ideas with both large-scale
efficiency and local flair.

Products
McDonald's predominantly sells hamburgers, various types of chicken
sandwiches and products, French fries, soft drinks, breakfast items,
and desserts. In most markets, McDonald's offers salads and
vegetarian items, wraps and other localized fare. Portugal is the only
country with McDonald's restaurants serving soup. This local deviation
from the standard menu is a characteristic for which the chain is
particularly known, and one which is employed either to abide by regional
food taboos (such as the religious prohibition of beef consumption in
India) or to make available foods with which the regional market is more
familiar (such as the sale of McRice in Indonesia).

Advertising
McDonald's has for decades maintained an extensive advertising
campaign. In addition to the usual media (television, radio, and
newspaper), the company makes significant use of billboards and signage,
sponsors sporting events ranging from Little League to the Olympic
Games, and makes coolers of orange drink with their logo available for
local events of all kinds. Nonetheless, television has always played a
central role in the company's advertising strategy.

To date, McDonald's has used 23 different slogans in United States


advertising, as well as a few other slogans for select countries and
regions. At times, it has run into trouble with its campaigns.

BARISTA
Barista coffee was establishes in 1999 with the aim of identifying growth
opportunities in

the coffee business. Increasing disposable incomes and global trends in


coffee indicate

immense growth potential in one particular segment.

Barista Coffee is a chain of espresso bars in India. Headquartered in


Delhi, Barista currently has espresso bars across India, Sri Lanka and the
Middle East. It was founded in 1997 by Amit Judge and was part of his
group of companies. He sold part of the equity to first Tata Coffee. Then
after he and Tata Coffee fell apart, Sterling then bought over the firm. In
2007, Sterling divested all their stake to Lavazza. Barista Coffee Company
is currently owned by Lavazza, Italy’s largest coffee company

At Barista Lavazza, we do all we can to make every guest feel comfortable


and welcome. We serve nothing but the finest Arabica coffees and cuisine
at great value prices. We have friendly and efficient brew masters who
believe in service with a smile. And provide a cheerful, interactive
ambience that makes guests wish their coffee breaks lasted just a little bit
longer.

To share our cup of joy, we have always stuck to our Italian roots, guarding
them zealously to ensure that our espresso bars reflect the warmth and
character of traditional Italian coffee houses. And in the process, make
Barista Lavazza the place ‘where the world meets’.

Our aim is to passionately deliver the highest levels of experiential


services. Maintain consistency in serving the highest quality products and
become a globally competitive organization – one that is driven by an
insatiable thirst for excellence.
CAFÉ COFFEE DAY

Café Coffee Day is a chain of coffee shops in India having its headquarters in
Chikkamagaluru, Karnataka. A division of Amalgamated Bean Coffee Trading Company Ltd.
(ABCTCL), it is commonly known as Coffee Day or CCD. It opened its first cafe in 1996 on
Brigade Road in Bangalore, and today has the largest cafe retail chain in India – with over
800 cafes in 112 cities.

Large number of coffee day cafes are located in Bangalore. The cafe chain has had much
success riding, and to some extent creating, the cafe culture wave that swept across
metropolitan India following strong economic growth resulting in an increase in youth
spending power. It has even tied up with World Space and Micro sense to enable its cafes
with satellite radio and Wi-Fi, respectively. Its first Wi-Fi cafe was opened on Lavelle Road,
Bangalore.

Café Coffee Day sources coffee from 5000 acres of coffee estates, the second largest in Asia,
that is owned by a sister concern and from 11,000 small growers. It is one of India’s leading
coffee exporters, with clients across the USA, Middle East, Europe and Japan.

With its roots in Chikmagalur, the home to some of the best Indian coffees, Coffee Day has
its business spanning the entire value chain of coffee consumption in India. Its different
divisions include: Coffee Day Fresh 'n' Ground (which owns 450 coffee bean and powder
retail outlets), Coffee Day Xpress (which owns 730 Coffee Day kiosks), Coffee Day
Takeaway (which owns 9000 vending machines), Coffee Day Exports and Coffee Day
Perfect (FMCG Packaged Coffee) division. It is entering the European market by opening
two Cafés in Austria as well, making forays into Pakistan and Germany to set up cafes
abroad. The strategy CCD has adapted is to place a cafe in every possible location where
some business can be generated. So in Bangalore, in the main shopping district, there are six
outlets in a 2 km radius and overall 120 cafes in Bangalore alone.

Another model which CCD has adapted is to be present in educational institutions and
corporate campuses either in the form of detailed cafes or its economical model of CCD
express.
These innovative strategies have ensured that the competition is at bay and ensured CCD's
dominance in the Indian market though many of its outlets are incurring losses.

Cafe Coffee Day competitors include but are not limited to

• Barista
• Cafe Mocha
• Costa Coffee
• The Coffee Bean & Tea Leaf

LITERATURE REVIEW
Zenk, S. et al. “Neighborhood Racial Composition, Neighborhood
Poverty and the Spatial Accessibility of Fast Food Stores in
Metropolitan Detroit”. American Journal of Public (2005); 95(4).
Abstract: Residential environment is clearly related to health, specifically
dietary health. In fact, many of the most serious chronic illnesses in the
United States are associated with dietary deficiencies. Proper access to
nutritious foods is essential to decreasing dietary related chronic illness.
Supermarkets provide dietary health resources through higher quality and
lower costs of nutritious foods. This study examines the spatial
accessibility of supermarkets for 869 neighborhoods within Metropolitan
Detroit with relation to community's poverty and racial composition. The
percentage of residents below the poverty line serves as the measure of
neighborhood poverty for the study. Supermarkets are defined as either a
Supercenter such as Super Kmart or a full-line grocery store associated
with a national or regional grocery chain such as Kroger. Spatial
accessibility is equivalent to a Manhattan block. The study found that the
distance to the nearest Supermarket increased with increasing levels of
neighborhood poverty. While the distance to the nearest Supermarket was
similar among the most impoverished neighborhoods, African American
communities averaged 1.1 mile greater distance to the nearest
supermarket than predominantly white neighborhoods.

Relevant Data:
Literature now associates residence in economically disadvantaged
neighborhoods, after controlling for socioeconomic status, with a variety
of adverse diet-related health outcomes.
Disparities in Supermarket accessibility on the basis of race were evident
among the most impoverished neighborhoods: the most impoverished
neighborhoods, in which African-Americans resided, were on average were
1.1 miles farther from the nearest supermarket than the most
impoverished white neighborhoods.
Mean distance to the nearest supermarket increased with each successive
tertile of percentage poor for neighborhoods with a high proportion of
African Americans but remained approximately the same across all tertiles
of percentage poor for neighborhoods with a low proportion of African
Americans (predominantly white) .
Inadequate accessibility to supermarkets may contribute to less nutritious
diets and hence to greater risk for chronic diet related disease.
Affordable public transportation needs to be improved integrating
transportation routes with supermarket locations .

Powell, Lisa M. et al. “Food store availability and neighborhood


characteristics in the United States”. American lifestyle(2007
Mar); 44(3):189-195.

Abstract: A 2006 study of the United States linked zip codes to census
data, finding various statistics about the availability of grocery stores in
accordance to neighborhood descriptions and demographics. There are
distinct disparities between the access of blacks, whites and Hispanics to
supermarkets, with a definite correlation in location, socioeconomic
status, and race.

Relevant Data:

Low-income neighborhoods have fewer chain supermarkets with only 75%


(p < 0.01) of that available in middle-income neighborhoods .

Even after controlling for income and other covariates, the availability of
chain supermarkets in African American neighborhoods is only 52% (p <
0.01) of that in White neighborhoods with even less relative availability in
urban areas .

Hispanic neighborhoods have only 32% (p < 0.01) as many chain


supermarkets compared to non-Hispanic neighborhoods.

Larger sized food stores such as supermarkets versus smaller stores and
chain versus non-chain supermarkets have been shown to be more likely
to stock healthful foods and to offer foods at a lower cost.
Furthermore, given that low-income populations are less likely to have
private means of transportation and given that the nature of food
shopping involves either transporting multiple shopping bags or making
more frequent shopping trips, the mobility strategies for food shopping
among low-income families will exacerbate the barriers to a limited
number of available local area supermarkets, in particular chain
supermarkets. Indeed, several studies have highlighted the mobility
constraints faced by low-income households in their daily activities
including food shopping .

A recent report finds that African Americans prefer to shop in chain


supermarkets and that one of the key factors that influence these
shoppers is transportation and location. Proximity is important—37% of
African American shoppers travel one mile or less to their primary grocery
store .

Grengs, Joe. “Does Public Transit Counteract the Segregation of


Carless Households? Measuring Spatial Patterns of Accessibility”.
Transportation Research Board of the National Academies (2007);
Abstract: This study researched Geographic Information Systems,
technology that measures transit use on smaller scales, to address the
problem of urban populations that depend on public transportation but
have a lack of access to their everyday needs, including food.
Relevant Data/Quotations:
The analysis finds that over 7,500 households, representing 12 percent of
New York City's households, do not have reasonable access to
supermarkets.
The study provides statistically significant evidence that poor accessibility
is associated both with low-income neighborhoods and with
neighborhoods with disproportionately high populations of African
Americans.

Service Quality: An investigation into Malaysian Fast food consumers using DINESERV
Keang Meng Tang, University of Newcastle
Ursula Bougoure, Queensland University of Technology

As noted by Doran (2002), it is imperative that we seek to examine


commonly accepted, western-based marketing theory in the context of
different countries to see whether such concepts explain the same
phenomena in consumers from different countries. Whilst extensive
research has been conducted on service quality over the past two
decades (e.g. Bitner, 1990; Cronin and Taylor, 1992, Parasuraman,
Zeithaml and Berry, 1988), relatively little attention has been paid to
issues surrounding service quality in non-western countries, like the Asian
region and in particular, Malaysia.
Of the knowledge gained in the service quality literature, the work of
Parasuraman, Zeithaml and Berry (1988) provides an approach to defining
and measuring service quality, known as SERVQUAL. Incorporating five
service quality dimensions of tangibles, reliability, responsiveness,
assurance and empathy, SERVQUAL has been well utilised within the
literature. This being said however, it is important to note that SERVQUAL
has been found to possess certain limitations, particularly when applied
across different service industries (eg: Babakus and Boller, 1992;
Schneider and White, 2004). For example, DINESERV for restaurants was
developed by Stevens, Knutson and Patton (1995), in response to findings
that SERVQUAL was inadequate for the ‘unique’ restaurant environment
(Dube, Renaghan and Miller, 1994).

Prior research suggests that not all service quality elements (within tools
such as SERVQUAL, DINESERV) are able to predict a consumer’s overall
service quality perceptions or (OSQ) (Oliva, Oliver and MacMillan, 1992).
Therefore, it is important to identify the importance of service quality and
its dimensions in determining overall service quality (OSQ), as perceived
by customers. By addressing this issue, firms can gain an understanding
of the areas they should concentrate on when seeking to improve their
overall service quality provisions (Oliva, Oliver and MacMillan, 1992). In
the context of the fast food industry, it appears likely that service quality
dimensions from DINESERV will positively effect overall service quality
(OSQ) perceptions by Malaysian consumers. Thus,
H1: Service quality (DINESERV) will positively effect Overall Service
Quality perceptions (OSQ) for Malaysian fast food consumers.
Customer satisfaction has long been recognised as a process (Oliver,
1981) and is the difference between consumers’ perceived and expected
performance of a product or service. In other words, customer satisfaction
occurs when performance is higher than expected, while dissatisfaction
occurs when performance is lower than expected. Overall, to gain
customer satisfaction, some argue that organisations need to exceed
predictive expectations of customers, rather than just satisfy expectations
(Spreng and Mackoy, 1996).
Service quality and customer satisfaction are inarguably fundamental
concepts within services marketing theory (Spreng and Mackoy, 1996) and
their relationship has seen increasing research interest over the years
(Bitner, 1990; Dabholkar, 1995; Spreng and Taylor, 1997; Mohsin, 2003).
While it is generally accepted that a positive relationship exists between
service quality and customer satisfaction, there is debate (Shemwell,
Yavas and Bilgin, 1998) with proposals of a causal link from customer
satisfaction to service quality (Bitner, 1990), service quality to customer
satisfaction (Bolton and Drew, 1991; Spreng and Mackoy, 1996;
Parasuraman, Zeithaml and Berry, 1994); suggestions that directionality
varies according to the service situation (Dabholkar 1995) and even that
there is no relationship under particular circumstances (Parasuraman,
Zeithaml and Berry, 1985). Such contention within the literature has lead
to repeated calls for further examination of this relationship (e.g. Rust and
Oliver, 1994; Anderson and Fornell, 1994). In the case of fast food,
however, it seems likely that high service quality will lead to increased
satisfaction for consumers. Thus,
H2: Service quality (DINESERV) will positively effect customer
satisfaction for Malaysian fast food consumers.
Intention to repurchase is an individual’s judgment about re-buying a
designated service, taking into account their current situation and likely
circumstances (Hellier et al., 2003). Within the literature, repurchase
behaviour is seen as a form of loyalty, which according to Law, Hui and
Zhao, (2004) and Oliver (1997) is a deeply held commitment to
consistently repatronise a service in the future. Repurchase intentions
have a powerful effect on potential business profit with some reports
arguing as much as 95 percent of profit arises from repeat purchases
(Hoffman et al., 2003). As such, loyal customers are valuable marketing
tools, telling friends and families of their positive experiences and creating
new business and increased revenue for successful service organisations.
Service quality is tied to desirable business outcomes, such as customer
loyalty, which ultimately lead to increased profits (Schneider and White,
2004). As argued by Rust, Zahorik and Keiningham (1995), service quality
generates consumer intention to return, which can translate into actual
behaviours that may lead to increased revenues and profits. In the extant
literature however, there are mixed findings as to the relationship
between overall service quality and behaviors that are indicative of
customer loyalty. For example, while Boulding et al (1993) and Rust and
Zahorik (1993) provide empirical support that higher perceptions of
service quality increases loyalty intention, Cronin and Taylor (1992) found
that overall service quality did not effect repurchase intentions. Overall
however, results tend to support this relationship and it seems likely that
this will be the case for Malaysian consumers of the fast food industry.
Thus,
H3: Overall service quality (OSQ) will positively effect repurchase
intentions for Malaysian fast food consumers.
According to Schneider and White (2004), satisfied customers most likely
will become loyal which can then translate into higher profits
organizations. As such, the relationship between customer satisfaction
and repurchase intentions has been examined with results implying that
satisfied customers are more likely to intend to repurchase (Taylor and
Baker, 1994; Patterson and Spreng, 1997). According to such findings, it
appears likely that this will also be the case for Malaysian consumers in
the fast food industry. Thus,
H4: Customer satisfaction will positively effect repurchase intentions for
Malaysian fast food consumers.
Sample and Research design
A descriptive research design was adopted to do the survey with the help of the
questionnaire. The study used non probability convenience sampling. The
methodology of study is the interview method survey. The study is completely
based on the primary data which is collected from different Fast food stores and
the sample size taken for study is 100 people.

Tools and Methods of Data Collection:


The interview is conducted for about 15 minutes with each person and collected
the data. The tool for the collection of data is a questionnaire. The questionnaire
has 15 questions.

Data Processing and Analysis:

The data processing consists of coding the data collected in the form of
questionnaire. The data collected with the help of questionnaire is having the
closed replies. One open ended replies have been taken for that if any problems
they are facing and for the close ended the replies are measured using scales.

ANALYSIS & INTERPRETATION


1) VISIT
Frequency

Daily 14

Weekly 38

Fortnightly 19

Monthly 9

Total 100

visit

40 38

35
30
25
19
20
14
15
9
10
5
0
Daily Weekly Fortnightly Monthly

Interpretation:-

From the above table and graph, it says that majority of the customers visit the fast food
retail store weekly (i.e. 38%) and minority of them (19%) visit fortnightly

2) PRICE RANGE
Range Frequency
100-200 24

200-500 60

Above 500 16
Total 100

price range

70

60

50

40

30

20

10

0
100-200 200-500 Above 500

Interpretation:-

From the above table and graph, it says that majority of the customers are willing to spend
money of price range 200-500 (i.e. 60%) and minority of them says that they will spend
money of price range 100-200 (i.e. 24%) in the fast food retail store

3) Preference

Frequency

Brand image 21
Easy accessibility 29

Special offer 50
Total 100

preference of store

60

50

40

30

20

10

0
Brand image Easy accessibility Special offer

Interpretation:-

From the above table and graph, it says that majority of the customers (i.e. 50%) prefer
special offers in the store and minority of them (i.e. 29%) prefer easy accessibility

4) Visiting hours

Frequency
Morning 40

Afternoon 29

Evening 31
Total 100

45

40
35

30

25

20

15

10
5

0
Morning Afternoon Evening

Interpretation:-

From the above table and graph it says that majority of the customers are willing (i.e. 40% )
to visit the store on morning session and minority of them (i.e.31% ) of them visit the store
on evening session

5) Preference of store due to friendliness of staff

Response Frequency

Strongly disagree 2

Disagree 5
Neutral 44

Agree 40

Strongly agree 9

Total 100

50
45
40
35
30
25
20
15
10
5
0
Strongly agree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 44%) of them are
neutral to prefer the store for friendliness of staff and minority of them (i.e. 40% ) of them
agree that they will prefer the store for friendliness of staff

6) Preference of store due the variety of menu available in the store

Response Frequency

Strongly Disagree 5

Disagree 15
Neutral 21

Agree 39

Strongly agree 15

Total 100

preference due to variety of menu

45
40
35
30
25
20
15
10
5
0
Strongly agree Disagree Neutral Agree Strongly agree

Interpretation

From the above table and graph it says that majority of the customers ( i.e. 39%) of them
agree that they will prefer the store due to the variety of menu and minority of them (i.e. 21%
) of them neutral about the variety of menu in the store

7) Preference of store due the service speed

Response Frequency

Strongly disagree 5

Disagree 20

Neutral 39

Agree 15

Strongly agree 20
Total 100

preference due to service speed

45
40
35
30
25
20
15
10
5
0
Strongly agree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 39%) are
neutral about the preference of store due to service speed and minority of them are
disagree that (i.e. 20%) of them prefer the store due to service speed

8) Preference of store due to good calorie content exist in the food

Response Frequency

Strongly disagree 9

Disagree 33

Neutral 19

Agree 31

Strongly agree 20
Total 100

preference for calorie content

35

30

25

20

15

10

0
Strongly agree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 33%) of them
disagree that they will prefer the store due to the calorie content in the food and minority of
them (i.e. 31%) agree that they will prefer the store due to the calorie content in the food

9) Preference of store due to the cleanliness and store atmosphere

Response Frequency

Strongly disagree 2

Disagree 7

Neutral 25

Agree 40

Strongly agree 26

Total 100
preference due to ambience

45
40
35
30
25
20
15
10
5
0
Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:

From the above table and graph it says that majority of the customers (i.e. 40% ) of them
agree that they will prefer the store for ambience provided in the store

10) Preference store due the delivery speed offer by the store

Response Frequency

Strongly disagree 4

Disagree 20

Neutral 15

Agree 41

Strongly agree 20

Total 100
preference due to delivary speed

45
40
35
30
25
20
15
10
5
0
Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 41%) of them
prefer the store due to delivery speed that is offered

11) Satisfaction with the menu offer for my family

Response Frequency

Strongly disagree 7

Disagree 16

Neutral 34

Agree 35

Strongly agree 6

Total 100
preference of menu for my family

40
35
30
25
20
15
10
5
0
Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 35% ) of them
agree that they are satisfied with the menu that was offered in the fast food store and followed
by some of them are neutral about the menu for their family

12) Preference of store due to facilities offered

Response Frequency

Strongly disagree 11

Disagree 20

Neutral 41

Agree 14

Strongly agree 14

Total 100
preference due to facilites

45
40
35
30
25
20
15
10
5
0
Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 41% ) of them
says that they are neutral about preferring the store due to the facilities

13) Preference of store due to easy accessibility and locational advantage

Response Frequency

Strongly disagree 4

Disagree 18

Neutral 15

Agree 45

Strongly agree 15

Total 100
50
45
40
35
30
25
20
15
10
5
0
Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 45%) of them
agree that they will prefer the store due to easy accessibility and locational advantage

14) advertising strategy

Response Frequency

Strongly disagree 9

Disagree 20

Neutral 33

Agree 28

Strongly agree 10

Total 100
35

30

25

20

15

10

0
Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 33%) of them
are neutral about the advertising strategy provided by the store and followed by that
customers agree the store for the advertising strategy

15) preference of store due to special offer and discounts

Response Frequency

Strongly disagree 4

Disagree 20

Neutral 15

Agree 41

Strongly agree 20

Total 100
45

40
35

30

25
20

15

10
5

0
Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:-

From the above table and graph it says that majority of the customers (i.e. 41% ) agree
that they will prefer the store because of special offers and discounts.

Major Findings
• This study indicates that majority of the customers visit the fast food retail store
weekly (i.e. 38%) and minority of them (19%) visit fortnightly

• This study indicates that majority of the customers are willing to spend money of
price range 200-500 (i.e. 60%) and minority of them says that they will spend money
of price range 100-200 (i.e. 24%) in the fast food retail store

• This study indicates that majority of the customers (i.e. 50%) prefer special offers in
the store and minority of them (i.e. 29%) prefer easy accessibility

• This study indicates that majority of the customers (i.e. 44%) of them are neutral to
prefer the store for friendliness of staff and minority of them (i.e. 40% ) of them
agree that they will prefer the store for friendliness of staff
• This study indicates that majority of the customers ( i.e. 39%) of them agree that they
will prefer the store due to the variety of menu and minority of them (i.e. 21% ) of
them neutral about the variety of menu in the store

• This study indicates that majority of the customers (i.e. 33%) of them disagree that
they will prefer the store due to the calorie content in the food and minority of them
(i.e. 31%) agree that they will prefer the store due to the calorie content in the food

• This study says that majority of the customers (i.e. 40% ) of them agree that they will
prefer the store for ambience provided in the store

• This study says that majority of the customers (i.e. 35% ) of them agree that they are
satisfied with the menu that was offered in the fast food store and followed by some
of them are neutral about the menu for their family

• This study indicates that majority of the customers (i.e. 45%) of them agree that they
will prefer the store due to easy accessibility and locational advantage

• This study indicates that majority of the customers (i.e. 33%) of them are neutral
about the advertising strategy provided by the store and followed by that customers
agree the store for the advertising strategy

• This study indicates that majority of the customers (i.e. 41% ) agree that they will
prefer the store because of special offers and discounts.

Major suggestions:
 As majority of customers (38 percent) visit the store weekly especially
weekends. So it is suggest to stores give special offers and discounts to
capture more customers and retain loyal customers.

 As study refers more customers are looking for the special offers ,so it
suggest stores to more concentrate on the special offers but no
compromise in the quality of food.

 It is found that majority of customers are not fully satisfied with the
friendliness of staff. So it is suggest that the stores should conduct soft
skill training and make them give more customer service .Regular
monitoring of the staff behavior towards customers is also suggest here.

 Customers are happy with the MENU verities available in the stores .But it
is suggested that add more customized menu and review the menu for
every 3 months.

 As study shows that customers are not aware of the calorie contents exist
in the food. So it is suggest that stores should display the calorie contents
available in a particular food.

 It is suggest the stores to concentrate on the areas of ambience and


locational strategy.

 Advertising strategy of the stores are not making attention the customers
.So it is suggest the stores to think of the design of different innovative
advertising campaigns.