Contents

ABSTRACT................................................................................................................................................ 1
INTRODUCTION ....................................................................................................................................... 1
LITERATURE REVIEW ............................................................................................................................... 2
Paper 1 ................................................................................................................................................ 2
Paper 2 ................................................................................................................................................ 4
Paper 3 ................................................................................................................................................ 4
Paper 4 ................................................................................................................................................ 4
Paper 5 ................................................................................................................................................ 5
Paper 6 ................................................................................................................................................ 6
ANALYSIS ................................................................................................................................................. 7
PERCEPTION .......................................................................................................................................... 14
IMPORTANCE OF ATTRIBUTES .............................................................................................................. 17
PREFERENCE OF MEAL .......................................................................................................................... 18
INFLUENCE OF FOOD IMAGE ON PURCHASE BEHAVIOR ...................................................................... 18

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ABSTRACT

With the increased usage of Internet, there has been a revolutionizing change within the food
industry. Although people still dine out, we do see that the there is considerable increase in
online food ordering as it has made it seamless for people to get food delivered at their doorstep.
This project shall give a brief report on the perception and attitude of people (both users and
non-users) towards online food delivery services. The project shall focus on the major factors
that influence people to order online and find out how important they are for the end-
consumers. For our analysis, we surveyed 63 people on a random basis. We then classified
them into users and non-users and asked them specific questions to understand their perception
and attitude. Our project is restricted to the area of Visakhapatnam and provides insights from
the experience of prevalent food delivery services present in Visakhapatnam currently.

INTRODUCTION

Online Food Ordering is conceptually different from other means of ordering food, as the
internet facilitates a direct communication between the seller and the end user with various
value-added services. Technology has played a pivotal role in revolutionizing the food delivery
service from phone-based applications to satisfy consumers’ ever-changing demands. Today,
the business of Online food ordering and delivery services is one of the fastest growing
segments of e-commerce. The major difference between traditional methods and online
ordering is the amount of interaction between the consumer and the seller. This interaction in
the form of FAQ’s, helpline numbers, the consumer is aware of the services that he can expect
and hence has accelerated the industry’s growth.

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LITERATURE REVIEW

Paper 1 - Consumer information search behaviour and the internet - Robert A.

Peterson and Maria C. Merino The University of Texas

Inference
Internet helps the consumers to search for information with minimal cost and effort and
facilitate the consumers for making better decisions effectively, but the conclusion can’t be
entirely warranted because the processing and use of information are more complicated.

The consumer’s information searching process is complex in nature. So, generalizing any
concept is unacceptable.

Consumer information search behaviour consists of two types

1. Internal information search – It involves memory of the consumer and occurs before
external information search
2. External information search – It includes everything except memory

However, they both can’t be explicitly distinguished because the mind will be involved
somehow in the searching process

External information search consists of two things

1. Specific information search

Mostly occurs while the consumer’s willingness to buy the product is very high. Its
characteristics are being motivated extremally, goal-directed etc.
2. General information search
It’s because of intrinsic motivation. It is focused as entertainment for consumers and
Continuous, regular or ongoing activities

Schmidt and Spreng Model provides four advantages involved in information search behaviour

1. Ability to search
2. Motivation to search
3. Costs of search
4. Benefits of search

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 Characteristics of the internet

The consumer prefers to use the internet because the information is available at any time,
stored at a minimal cost and can be shared without any trouble.

Collaborative filtering or content filtering agent have a significant impact on the consumer
purchasing decision because of the personalization that they permit in searches.

Use of internet

The characteristics of the user are entirely different from the user using the internet facility
completely. So, while researching consumer behaviour, it is better to keep in mind that
generalization of conclusion should be avoided.

Extent of search

The consumer goes for searching for information until marginal benefit is equal to marginal
cost. The use of internet does not increase the amount of pre-purchase information that the
consumer willing to gain it will be stopped once the consumer reaches the point at which
the benefits equal to cost, but the information search will increase while searches are
undirected. The internet provides the advantages of reduction in time and effort of the
consumers

Nature of search

It’s found that the consumers who use more than two sources of information search, the
internet will be the primary information source. Over time, a number of physical
information source for the consumers will be declining.

The Internet-based information search is always structured than non-internet-based

information source because of the advancement like an intelligent agent, bookmarking and
other features.

Effects of Internet-Based Search

The consideration set of the consumers who seek information through the internet will be
very narrow because consideration set is mostly driven by the memory, but the increase in
penetration of the internet will make the consumer search for information previously and
store the search anywhere and use it any time.

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 Many intelligent agents are programmed in such a way that the consumer can compare two
products simultaneously with high accuracy. So, the person going for goal-directed
searches will tend to concentrate less on brand information.

Paper 2 - Consumer Perception Towards Online Shopping Concerning Tirupattur

- Dr S. Hariharan, 2dr. N. Selvakumar
Paper 3 - Consumer Perception Towards Online Shopping In Kanchipuram -
Dr.M.Rajesh; G.Purushothaman
Inference
These two papers are studied to understand how the tests can be conducted to get consumer
perception based on the primary data obtained.
Key learnings from these papers are
1. The mathematical approach can be adopted to understand the influence of a factor towards
purchase decision of goods from the internet
2.The t-test and chi-squared analysis is used to determine whether there is a significant
difference between the means of different groups tested

Paper 4 - Internet-based e-shopping and consumer attitudes: an empirical

study - Ziqi Liaoa , Michael Tow Cheung
Inference
Regression analysis reveals that initial willingness to e-shop depended on consumer's attitudes
towards the life content of products, transactions security, retail price, service quality of
vendors, IT education, and Internet usage
Transaction Security – Transaction risks is a significant factor and imposes an adverse effect
on willingness to e-shop. It has been noted that once concerns regarding transaction risks are
overcome, Internet-based services would easily take-off.
Price –As prices of Internet services fall, a reduction in the setup outlay and communication
costs will create a positive impact on e-shopping. Also, reduction in logistics-delivery costs
can lead to lower prices, increasing willingness to e-shop.
Shopping Experience – Shoppers often prefer touch-and-feel experiences that help them to
compare and buy. In smaller geographies like Singapore, people think of shopping as an
organic experience and enjoy roaming with the family and asking for bargains. It is found that

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concerns about the life content considerations of goods sold online hurt willingness.
Consumption goods that depend heavily on senses other than sight are difficult to be sold
online.
Vendor Quality – Consumer perceptions on vendor quality has a positive effect on the
willingness to buy online. Poor vendor quality can act as a disincentive to virtual shopping.
Increased convenience dedicated after-sales service, value for money are important quality
dimensions that add to the growth and success of the e-marketplace.
IT education & Internet Usage – The study shows that the more educated about computers
people are, the more they are willing to buy online. These individuals are not deterred by
technical demands, but they see opportunities in the e-marketplace.
Network Speed – Network speed isn’t a significant determinant of willingness to buy because
people are accustomed to their computer speeds. Also, the network speeds are currently
satisfactory for the people surveyed.

Paper 5 - Effects of consumer characteristics on their acceptance of online

shopping: Comparisons among different product types - Jiunn-Woei Lian, Tzu-
Ming Lin

Inference
The study focusses on how five consumer characteristics affect the acceptance of online
shopping. It has been done with a focus on finding the effects of said consumer characteristics
on different product types. The product types were chosen based on three dimensions: cost and
purchase frequency, value proposition and degree of differentiation. The five consumer
characteristics are, and the effect of each on acceptance of online shopping are:

i. Personal Innovativeness of Information Technology (PIIT): It is defined as the

willingness of a person to try out new information technology. Individuals with
increased levels of PIIT are positively affected user attitudes to purchasing high
cost, infrequent purchased, intangible products or services online.
ii. Internet self-efficacy: It is the belief of individuals to organize and successfully
execute internet use. Higher levels of internet self-efficacy positively affect user

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 attitudes toward online shopping. However, it does not play a significant factor in
any product type. Hence it can be assumed to play an equal role in all product types.
iii. Perceived Web Security: It is described by the user’s awareness of web security
when providing and sending personal or financial information. A rise in individual
perceptions of Web security positively affects user attitudes towards purchasing
high cost, infrequent purchased products or services online
iv. Privacy concerns: In four sub-areas it was studied- data collection, unauthorized
secondary use, errors, and improper access. Increased personal privacy concerns
negatively affect user attitudes towards purchasing tangible or physical products or
services online.
v. Product Involvement: It can be defined as the individual motivation regarding an
object where the motivational state is activated by the importance or relevance of
the object in question. A high rate of such factor affects the user attitudes positively
towards shopping in the context of all products or services online.

Paper 6 - Online pricing with bundling and coupon discounts - Yuanchun Jiang,
Yezheng Liu, Hai Wang, Jennifer Shang & Shuai Ding
E-retailers generally offer discounts on products or services they offer based on the current
market demand. This article talks about how uncertainties in system parameters affect
performance. To maximize profit, e-retailers have started integrating marketing tools such as
bundling and coupon discounts. The competition among e-retailers has become increasingly
intense as the number of e-retailers increases at a rapid price. To boost sales and to acquire
new customers, the e-retailers have to constantly look for competitive edges. The internet
enables e-retailers to track customer’s online behaviour, analyze their preferences and change
price dynamically to motivate customer’s purchase. E-retailers can customize their promotion
strategies and cater to customer needs by offering bundle discounts and coupon discounts
according to customer’s preference. They can offer both customized discounts and coupon
discounts simultaneously. Customers usually have different preferences and valuations for
dynamic pricing and bundle discounts.

1. Dynamic pricing: Under dynamic pricing or time-based pricing, e-retailer prices his/
her product or service offers discounts based on competitor pricing, supply and demand,
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 and other external factors. This impacts customer acquisition and retention. The price
in the online environment can be set dynamically to match the competitor’s price and
the customer’s preference. To generate revenue and increase the sales, the quality and
price of a product or service offered should be either superior or in line with that of
competitors.

2. Coupon discounts: The demographic factors such as age, income, education,

employment, and brand loyalty affect customer’s preference. Coupon users are
generally price-sensitive. Instant coupon may enhance consumers’ perceived value,
purchase intentions and the size of the shopping basket. If a customer receives one
coupon per transaction, it may persuade the customer to purchase more.

Attracting customers and persuading them to purchase more is very important for maximizing
retailer's profit. The integration of bundle discounts and the coupon is a profitable marketing
strategy. Though there is a decrease in the unit profit, this integrated strategy brings more
benefit because it can attract more customers to purchase more products at the discount prices.

ANALYSIS
We have carried out an in-person survey to gauge the perception and attitude of the residents
of Visakhapatnam on the online food delivery. The survey included a variety of questions on
respondent’s demographics, attitude towards money, time, and technology, food ordering
behaviour, perceptions towards attributes and perceived benefits (Appendix 1).
When asked to name food delivery applications (max of 4), the respondents are aware of the
following food ordering applications:
1. Swiggy
2. Zomato
3. Food Panda
4. Uber Eats

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DEMOGRAPHIC ANALYSIS
A total of 63 completed responses were obtained and based on these responses received, we
have classified our respondents as users (50) and non-users (13) of the online food delivery
application.

CLASSIFICATION OF
RESPONDENTS
Nonusers
21%

Users
79%

The users are then segmented based on gender. 82% of them are male (41) and rest 18% are
female (9).

SEGMENTATION OF USERS
Female
18%

Male
82%

Out of the total sample size of 50 users, 50% are Gen Y (Age 25 - 39).

CLASSIFICATION ON THE BASIS OF AGE

4%

46%
50%

18 to 24 years 25 to 39 years 40+ years

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We have also classified the users based on their annual household income. 52% of our
respondents’ households (26) are earning less than Rs. 4 lakhs per annum followed by 24%
earning an annual income in the range of Rs. 4 to 8 lakhs and rest 24% earning an annual
income of above Rs. 8 lakhs.

USERS CLASSIFICATION ON
INCOME BASIS
14
12 13 13
12 12
10
8
6
4
2
0
< Rs. 2 lakhs Rs. 2 to 4 lakhs Rs. 4 to 8 lakhs > Rs. 8 lakhs

Almost 36% of users are students (18) and 36% of them are private employees (18). Out of
these, 22 users are earning an annual income of less than Rs. 4 lakhs. The rest are divided
among Govt. Employees, self-employed and public sector employees.

EMPLOYMENT STATUS OF
Govt. USERS
employee
10%

Student
36%

Private
employee
36%

Self-
Public employed
sector 16%
2%

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The respondents were asked about their place of stay and 64% of them stay at home with their
parents/relatives. 20% of them stay in hostel and 14% stay with friends. This was asked to find
out if there is any relationship between residence patterns and food ordering.

TYPE OF STAY
In hostel
20%
Alone
2%

With friends
With parents/ 14%
relatives
64%

In hostel Alone With friends With parents/ relatives

ANALYSIS OF ATTITUDE TOWARDS ONLINE FOOD ORDERING

The questionnaire had six questions to measure the attitude using perceived control on online
orders, convenience and their ease of use of technology, perceived value and usage of money.
To contrast the behaviours between the person ordering frequently and those never ordered
online, we have analysed the response of people who have never ordered online and those who
order 3 or more times in a typical week.

Perceived value for money:

M1
50.00 46.15
43.75
45.00
40.00
35.00 31.25
30.00
23.08
25.00
18.75
20.00 15.38
15.00
10.00 7.69 6.25 7.69
5.00 0
0.00
Strongly Disagree Neutral Agree Strongly agree
disagree

Never ordered online Frequent ordering

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 M2
80.00 75
70.00
60.00 53.85
50.00 46.15

40.00
30.00
20.00 12.5 12.5
10.00
0.00 0 0.00 0 0.00
0.00
Strongly Disagree Neutral Agree Strongly agree
disagree

Series1 Series2

M3
60.00 56.25

50.00
38.46
40.00
30.77
30.00 23.08
18.75
20.00
12.5
6.25 6.25 7.69
10.00
0.00
0.00
Strongly Disagree Neutral Agree Strongly agree
disagree

Series1 Series2

The first question (M1) is to understand whether the respondants are likely to spend or save
money, there is no drastic change in the attitude between the users and non users.
From the data collected for M3 it is evident that the users of online food apps spend more when
From the responses for the 3 questions it is evident that there is no significant difference in the
attitude towards money between the users and non users. However,on a comparitive scale we
can say that people who order online are a little less concerned on saving money and they tend
to spend a little extra.

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Ease with the gadgets:

T1
60.00 56.25
53.85
50.00

40.00
31.25
30.00

20.00 15.38 15.38 15.38

10.00 6.25 6.25

0.00 0
0.00
Strongly Disagree Neutral Agree Strongly agree
disagree

Series1 Series2

People who are comfortable with smartphones are the ones who tend to order frequently, and
the non-users of online food delivery apps are usually not that convenient with using
technology

Perceived Control:

C1
50.00
43.75
45.00
38.46
40.00
35.00 30.77
30.00 25
25.00
18.75
20.00 15.38 15.38
15.00 12.5
10.00
5.00 0 0.00
0.00
Strongly Disagree Neutral Agree Strongly agree
disagree

Series1 Series2

Control here refers to the feel that people experience in choosing the food they want to order
from their choice of restaurant at their choice of time. People feel that compared to a dining
out experience where timings are controlled by the availability of the restaurant, or the food is
suggested by the waiter or any other external factors that influence consumer’s food order,
online ordering gives them enough control over what they want to eat. The whole service

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happens just at the click of the consumer from home which makes them feel great command
and control.
Frequent users agree to have a higher level of control over their food when they order online
than the non-users. However we see that non-users disagree to the same.

Consumers who order 1 or 2 times in a week generally prefer to order online for dinner almost
53% of the times followed by lunch for 29% of the times. From this we can say that, people
who order once or twice a week, see ordering food as an occasion to escape monotony and as
a replacement for the mealof the day.
The frequent orderers (ie., 3 or more times a week) use online ordering of food not just as a
replacement for the meal, most of the frequent orderers (50% ) use the online food apps to
munch between the meals (chaats) or for ordering late night snacks.

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PERCEPTION

Row
Labels No of people go to eat food from restaurants in a typical week? Percentage
1 - 2 times 48 76.19%
3 - 4 times 7 11.11%
5 or more
times 4 6.35%
Never 4 6.35%
Grand
Total 63 100.00%

Row
Labels No of people order food online in a typical week? Percentage
1 - 2 times 34 53.97%
3 - 4 times 14 22.22%
5 or more
times 2 3.17%
Never 13 20.63%
Grand
Total 63 100.00%

From the data collected, we found that the number of people who never ordered online is
higher among the people who go out to restaurants. We found out that there are various
reason behind the hesitation of consumer who is willing to eat at restaurants but don’t order
online. The reasons are as below:
 Don’t know how to order online
 Loves home cooked food
 Economic reasons
 Lack of awareness
 Home-makers generally ask their husbands to order
 Love for a restaurant dining experience
 Poor quality/lack of hygiene

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  Security issues with delivery personnel
 Transaction risks with regards to payment options

Most of the people are aware of the online food delivery applications even if they have never
ordered online. However, the predominant reason among the people who never order online
is either their love for dining experience or the concern about food quality.

Next, we analysed the reason for preferring online services for the first time. Upon checking,
we found that most of the respondents selected the cash backs, discounts and referrals as the
reason. Relating the respondent’s attitude towards spending money asked previously, we found
that around 40% of them are neutral towards preference between spending and saving. It shows
us that people are trying to balance their saving and spending ratio. So whenever there is an
incentive for them to save money over spending, they prefer that option more.

Reason for 1st order

30
24
25

20 17
15
9 9
10

5
1 1 1 1 1
0

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Next, we checked the reasons for ordering the food through online services, and we found that
around 62% of the people are opting for online food delivery to save time.

Factors influencing online delivery

35
30
25
20
15
10
5
0

But after analysing the data from the survey, we found that the attitude of the people is different.
They are not concerned about the time when they are going out for food. Around 50% of the
people said they would not reserve the table when they are going out for food, and around 58%
of the people are not ordering the food in advance when they are planning for going to
restaurants. From this we can say that people are ordering food when they don’t have time to
go out, cook, etc. This finding also helps us to say that the online deliveries are not substituted
for restaurants. We can also say that people are not thought of the option.

Reserving a table online in Placing your order before going

advance to restaurant

15% 7%
34% 34%

59%
51%

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Respondents (63) of our survey were asked to evaluate the importance of six different attributes
associated with the online food delivery on a scale (1 = Not so important, 5 = Very important).
The respondents are then classified as users (50 respondents) and nonusers (13 respondents) of
the services. Variety of food/ cuisine options (4.22) is considered as the most important
attribute among the users followed by convenience (4.14) and speed of delivery (4.12).
Discounts/ cashbacks is rated as the least important attribute by the users.

Earlier when people were asked what made them first order online,

IMPORTANCE OF ATTRIBUTES
Amidst all the attributes, we see that people have more important features directly attached to
the industry that they prefer are more important than the discounts. Variety of food options is
more important as it people prefer to have control over what they order.
If given an option, people would like to save. But that is not the driving force for ordering
online in general.

Importance of Attributes
5
4.5
4 4.22
4.12 4.14 4.08
3.5 3.88
3.72
3
2.5
2
1.5
1
Speed of Discounts/ Convenience Quality of Variety of Availability of
delivery Cashbacks food food/ cuisine various
delivered options payment
options

On a typical day, the users of our survey were asked about the meal they prefer to order online.
56% (28 users) of them preferred to order online during dinner followed by 22% (11 users)
preferred to order online during lunch.

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PREFERENCE OF MEAL
Usually it seen as that is the time they have leisure time and would like to chill at home after a
tiring day. Also in the morning, there is hurry to send kids to school and spouses to office, so
they can’t afford to lose even a minute waiting for the order. People also have notions of having
healthy and home food in the morning so they tend to avoid ordering outside.

30
Preference of Meal
25 28

20

15

10
11
5
2 5 4
0
Breakfast Lunch Evening Dinner Late night

INFLUENCE OF FOOD IMAGE ON PURCHASE BEHAVIOR

When asked about the influence of the food image displayed on the purchase behavior, 16%
(8) of the users are always influenced by the image of food appeared on the application. People
are well aware that usually the food though displayed in a certain way is not delivered in the
same way at home but it might be served like that when in restaurant.

Influence of food image on purchase

behavior
16
14
12 14 14
10 12
8
6 8
4
2 2
0
Always Often Seldom Rarely Never

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In addition to these the changes/improvements that they would like to propose are also
captured. When surveyed about the areas that online food delivery services should improve to
enhance the customer experience, 25 users responded that they need to improve the guaranteed
delivery time. Using this analysis, we can say that most of the people are well-planned and
concerned about time. This can be related to the aviation and e-commerce industry where
guaranteed time delivery is used as a measuring criterion for their performance. In a nutshell,
we can say that people have started seeing this as a measure of performance in every other
industry and so in the online food delivery industry. People also suggested examples like
Dominos Pizza where the image delivery time Along with these 14 users responded that both
handling of orders and ease of payment process need improvement.

Areas of improvement
30

25
25
20

15
14 14
10
10 10
5 8

0
Guaranteed App/ Website Handling of Ease of payment Customer Availability of
delivery time user experience orders process support delivery
experience executives

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Apperndix:

REFERENCES

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