Study of the Trends in the Fast Food Industry

In todays world, Fast food and Readymade food have become an integral part of the youth in India. A major reason for the rise of this trend is due to the convenience associated with it in such a fast paced world. With the entry of new and world class fast food brands in the Indian markets, the growth prospects of the Fast food industry seem bright. The initial stage of our research into the trends in the industry involved with secondary research that had already been carried out. We found a research on the breakfast, lunch and dinnertime fast food chain preferences of urban youth (18-27 years). Based on this we decided to design our survey having two parts: Getting the fast food chain preferences of our sample set for the three meals and then further get the quality perception for these chains. The survey involving the choice of Fast food chain involved the famous chains: McDonalds, Pizza Hut, Dominos Pizza, KFC and Taco Bell. The range covered various types of fast food. Dominos and Pizza Hut were both included owing to their popularity and Pizza being a major fast food item. Subway was deliberately excluded at this stage as it involved an Open-kitchen concept and we wanted to quiz on the choice without the bias of quality. Also the second stage involving the survey on quality perception was based on the response from the sample set about their fast food eating habits. The second stage became prominently important in the light of the fact that the sample set showed a strong habit of ordering fast food for lunch and dinner and hence the secondary researchs findings about fast food eating habits could be applied to the universe set of urban youth in India. A different sample set was quizzed for the quality perception based on the observation from the first stage. Following are the results and observations from the Primary Research:

Stage 1: Three Meal Fast Food Chain Preference

A. Questionnaire
Name * Age Marital Status Single Married Location * Gross Income per month (in Rs.) Which of the following Fast Food Chains have you visited? *

McDonalds Dominos Pizza Hut KFC Taco Bell None

Breakfast Preferences
Which of the following Fast Food Chain have you visited for breakfast in the last one month? * McDonalds Dominos Pizza Hut KFC Taco Bell None Average Individual Spend on each visit (in Rs.) *Check '0' if you have not visited any of the above chains 0 1-100 101-250 >250 Total no. of visits in the last one month * 0 1-3 4-7 >7 The most visited fast food chain for breakfast in the last one month * McDonalds Dominos Pizza Hut KFC Taco Bell None

Lunch Preferences
Which of the following Fast Food Chain have you visited for Lunch in the last one month?* McDonalds Dominos Pizza Hut KFC Taco Bell None Average Individual Spend on each visit (in Rs.) *Check '0' if you have not visited any of the above chains 0 1-200 201-500 >500 Total no. of visits in the last one month * 0 1-3 4-7 >7 The most visited fast food chain for lunch in the last one month * McDonalds Dominos Pizza Hut KFC Taco Bell None

Dinner Preferences
Which of the following Fast Food Chains have you visited for Dinner in the last one month? * McDonalds Dominos Pizza Hut KFC Taco Bell None

Average Individual Spend on each visit (in Rs.) *Check '0' if you have not visited any of the above chains 0 1-200 201-500 >500 Total no. of visits in the last one month * 0 1-3 4-7 >7 The most visited fast food chain for dinner in the last one month * McDonalds Dominos Pizza Hut KFC Taco Bell None

B. Survey Findings & Interpretations The survey indicates that fast food is not actively consumed for breakfast as compared to lunch and dinner with only McDonalds having any significant patronage for its breakfast menu. So the focus clearly shifted to the consumption of fast food during lunch and dinner. For Lunch: McDonalds emerged as a clear favourite closely followed by Pizza Hut 1 in every 3 respondents visited these chains for lunch McDonalds was the most visited fast food chain On an average, the respondents had fast food 1-3 times in the month Average individual spending of Rs. 100-200 For Dinner: Pizza Hut was a clear favourite, distantly followed by Dominos 2 in every 5 respondents visited Pizza Hut in the last month On an average, the respondents had fast food 1-3 times in the month Average individual spending of Rs. 201-500 These observations are significant in the following aspects: They confirmed the fact that the target group of Urban Youth were active consumers of fast food at leading fast food chains and the further aspect of surveying the quality perception was to be carried out

 Gave a very clear idea about the preferences of the fast food chain and hence allowed us to

make changes to the list of chains for the further part of the research Taco Bell was dropped as the response to it was poor and Subway was introduced to bring in the aspect of Open kitchen as a quality parameter R TIME!!

Stage 2: Study on quality perception

A.

Questionnaire
What influences your decision to eat in a fast food restaurant like KFC etc? *Rank your choices.5 being most important 1 Ambience Brand Cleanliness Price Quality The last time when you ate food at a branded fast food chain was it of good quality? * Yes No What is your impression of good quality? *Check all applicable parameters Cleanliness Freshly prepared Nutritious Open Kitchen Value for money Rank the following on the quality of food *5 being best quality 1 McDonalds Dominos Pizza Hut 2 3 4 5 2 3 4 5

1 KFC

How often do you eat in an unorganised fast food chain in a month? * 0 1-3 4-7 >7 Do you feel Organised Fast food chains have any better quality (considering Street food has an open kitchen so you can see the ingredients)? * Yes No If no, do you feel it is worth paying the extra money to eat at branded fast food chains? * Yes No My answer to the above question was 'Yes', so I dont need to answer

D. Survey Findings and Interpretations a. The attributes that influence people to eat in restaurants are Ambience quality Cleanliness Price Brand Avg score 2.6 4 3.3 2 3 Scale: weight age given on the scale of 1 to 5, where 5: very imp and 1: less imp) Survey Findings: Quality of food is the most important factor for choosing an restaurant Price is the least important Interpretations: Interestingly 31% respondents feel that organized food chains dont necessarily have quality better than unorganized food chains, yet almost all of them are willing to pay extra to eat at organized chains. This is possibly because of high score of cleanliness and brand as compared to price as an influencer for choice of restaurant

b. Which factors do people relate with quality Nutrition 23% Cleanliness 46% Value for money 39% Freshness 69%

Score

Survey Findings: Freshness is most important for positioning as a good quality food product Surprisingly people related Nutritional value least with quality Interpretations: From (A & B): Consumers feel that quality is the most important factor for choosing and restaurant. However 39% consumers also relate value for money with quality. Hence Fast Food chains must not over price their menu Possible reason for Nutrition to score so low is that, people eating outside home are ready to compromise on nutritional value as they do not expect fast food to be nutritious c. Rank of major fast food chains based on quality
Mc Donald 4.8 Dominos 3.8 Pizza hut 3.9 KFC 2.9 Toco bell 2.7 Subway 3

Avg score

scale of 1 to 6 where 6 is highest and 1 is lowest quality Survey Findings: Consumer feel McDonalds serves best quality food KFC, Taco Bell & Subway rank poorly on quality Interpretation: Mc Donald may be perceived to have best quality because of its consistency in taste, quick delivery, policy to discard burgers after ten minutes

E. Limitation of study: Freshness is the best measure of quality. Subway still scored only 3 instead of their positioning as being eat fresh

F. Recommendations to companies So fast food chain can more concentrate on freshness rather than advertising the nutritional value in their food. As freshness is the most important quality factor. Branding is a key element in quality perception. Companies like Taco Bell and Subway must increase their footfalls and improve brand value KFC being Positioned as mainly a Non-Veg fast food chain is facing problems in quality perception. Other upcoming brands should not try positioning like KFC

G. Conclusion
A fast food consumer, on the average, patronizes a restaurant frequently (between once in two weeks to once a month), for lunch, dinner. Reasons such as cleanliness. convenience, outings and celebration of special occasions are considered important in buying fast foods. Customers eat out for a change from home prepared food but they do not believe that fast foods provide good nutritional value.

Hence, it is vital that efforts to maintain or increase a chain's market share should be tailored according to the pattern of consumer behavior. It is noted that price is given the least importance. Hence, for a fast food chain to do well, great attention should be paid to the freshness and cleanliness to enhance customers' beliefs of these attributes.

Limitations of the Study

Our survey was based on studying the Fast food eating habits of urban youths in the age group 18-27. A major limitation of the survey was that the sample size was 50 Any conclusions drawn from the observations of this survey could be misleading and even though the results seem to be conclusive, there is a possibility of bias coming through the choice of sample set The initial stage of our survey was carried out through an online form to get the response of diverse respondents across geographies; the second stage was administered in person across Bangalore and so did not have the feature of responses across geographies