ABSTRACT

Theglobalmarketshavewitnessedmajorshiftsintheconsumersbehaviourthathavebeenmuch
influenced by the change of technology, innovation, research and development. The consumers
needs thus dynamically change in order to respond to the change in the social and business
environment.Thecorporateandbusinessstrategiesofcompaniesthusbeingdevelopedinthelightof
capitalising the potential from the markets but however, how the customer would react to the
productsandservicesofcompaniesinnewandexistingmarketsremainthemajorquestion.The
analysisofconsumerbehaviour,thusbecametheinevitableandcriticalpartoftheoverallplanning
anddecisionmakingfunctionsintheorganisationthathelpedtomatchthecorecompetenciesand
capabilitiesoftheorganisationwiththeneedsofthecustomersthatarelargelyinfluencedbynumber
ofsociodemographicandpsychologicalfactors.
FastFoodIndustryinIndiabecamethefastestgrowingindustryinthelastdecadewhennumberof
international companies entered the market in order to expand their market share and area of
operations.However,themajorchallengesthatappearedamongsttheretailerswereculturalbarriers,
differenceineatinghabitsandreligiousbarrierswhereasunawareness,lowspendingpowerwere
others.However,withtheadventofglobalisationandliberalisationofeconomy,majorchangeswere
noticedintermsofeducationlevel,employment,savingsandGDPrateintheeconomy.Thisledto
morepurchasingpowerintheconsumersthatbegantotrythenewconsumerdurablesandeatout
placesinmetrocitiesandtowns.Thisalsoimpactedonthesalesandgrowthoffastfoodretailers
who developed their customer relationship strategy and marketing mix more often to gain
competitiveadvantageinthemarkets.
Asaresult,thedomesticandinternationalretailersspreadtheiroperationstomajorcitiesandtowns
acrossthecountryinashortperiodoftime,howeverstilltherewasdifferenceinthemarketing
strategy of international retailers in terms of marketing initiatives they launched in the western
countries.Theresearchstudythusfocusedonexploringtheoriesandmodelsofconsumerbehaviour,
scope of customer loyalty and customer relationship strategy and effectiveness of marketing
strategiesofdomesticandinternationalretailersinthemarket.

CHAPTER 1

INTRODUCTION

TheIntroductionpartwoulddescribetheframeworkoftheoverallprojectreport.Thechapterlays
downthefoundationoftheresearchreportbydemonstratingtheresearchpurpose,objectives,and
backgroundofthestudyandtherelatedscopeandlimitations.

1.1INTRODUCTION
ThehospitalitysectorinIndiahasseenvastdevelopmentandgrowthinfastfoodretailingoverthe
recentyears.Thevastchangesinthesocioeconomicconditions,demographicprofilesofindividuals
andopenmicroandmacroeconomicconditionshaveenabledtheretailerstomakeorganizedretail
formatstocaterthedynamicneedsoftheconsumers.
Kotler(2004)statedthatcustomerinterests,perception,awarenessandexperiencedrivethegrowth
offastfoodcompaniesinIndia.RamanathanandRamanathan(2011)statedthatconsumerbehaviour
has direct and positive relationship with the demographic features, socio economic and
psychographictraitsoftheindividualsthatquicklychangethebehaviourofconsumerstowardsfast
foodinthecountry.
Hence,recenttimeshavenoticedmajorshiftinthebehaviourofconsumers,astheynowpreferto
havefastfoodovertraditionalandhomecookedfood,unlikethetrendthatwasprevalentinIndiain
thepast.Thus,thechangesintheconsumerbehaviourenabledtheinternationalretailerstoenterthe
marketinanattempttogainmarketshareandbrandpresence.
ElliotandThrash(2002)statedthattheconsumersintentiontobuyproductsdependuponvarious
factorsincludingthedesire,perception,pastexperience,thefeaturesofgoodsandservicesamong
othertangibleandintangibletraitsconcernedwiththeindividuals.
Indianfoodhasdiversifiedrangeandvariesaccordingtodifferentregionsinthecountry.However,
westernfoodhasinfluencedtheeatinghabitsoftheIndianconsumersintherecenttimesduetothe
increasedawarenessandshiftinfoodconsumptionpatterns. Globalizationandliberalizationhave
allowedtheentryofhugemultinationalfastfoodmarketretailersinthecountry.PrasadandAryasari

(2010)statedthatdomesticplayerstoointroducedfastfoodtothelocalcustomersinaccordanceto
theprevailingeatinghabits,tastesandpreferences.
Thefastfoodretailersthuscarriedoutnumberofpromotionalstrategiesinordertogainhighmarket
shareinthesector.GoyalandSingh(2007)statedthatmostofthedomesticandinternationalplayers
werenotsuccessfulinretainingcustomers.Beldonaetal.(2010)revealedthatpoormenuoptions,
incompetentpricesforfood,absenceofeffectivecustomerrelationshipstrategyweresomeofthe
causesforthefailureofmarketingstrategiesofthefastfoodretailers.Othersincluding,Daviesand
Smith(2004)andBarker(2006)foundthatapartfromthesereasons,therewerealsosomereasons
attachedwiththedemographicfeaturesofthestoressuchasfloorspace,absenceofparkingfacilities
andentertainmentfeaturesinthestores.SinhaandKar(2007)foundthatmostofthestoresinIndia
alsolaunchednumberofcustomerloyaltyprogramsinordertoretainthecustomersbutthisadded
littleadvantagetotheperformanceandprofitabilityofthestores.
Ramanathan and Ramanathan (2011) found that irrespective of the critical findings, the sector
promisedtohaveprosperousreturnsinthefutureasthecurrentgrowthrateoffastfoodindustry
remainsover25%inthecountryandtherefore,itisoftheinterestoftheresearchertogainindepth
understandingandknowledgeofthechangesinconsumerbehaviourtowardsfastfoodinIndiaand
factorsthatcouldbeusedtoinfluencethebuyingtraitsoftheconsumers.Thecorefocusofthestudy
would also demonstrate the impact of customer experience, perception and satisfaction on the
purchasingbehaviouroftheconsumers.Theresearchwouldalsofocusontheprevailingpromotional
andcustomerloyaltystrategiesandhowtheycanbeimprovedinthepresenttime.
1.2RESEARCHRATIONALE
TheIndianfastfoodmarkethasseenwidespreadgrowthanddevelopmentintherecentyearsasthe
numberofdomesticretailersmadetheirpresenceinvariouslocationsofthecountryandmoreover,
theeaseofmarketentryallowedforeignplayerstoexpandtheirareasofoperationsinIndia.Thus,
the market gradually became more competitive as the market players developed their marketing
strategiesmoreaggressivelyinanattempttoincreasetheirmarketshare.Gupta(2003)foundthat
customerperception,satisfactiontastesandpreferencesdevelopmorefavourableconsumerbehavior
towardsparticularbrandsthananyotherfactors.Barker(2006)revealedthatIndianconsumershave
drasticallychangedtheirbehaviourtowardsfastfoodastheywereseenspendingmoreonfastfood
thantraditionalorcustomfood.

However,ithasalsobeenfoundthattherehasbeenhugegapbetweentheeffectivenessofmarketing
strategiesofthedifferentretailers andevenifsomeofthemhavedevelopedcompetitivepricing
strategyandpromotionaltechniquesbutstilltheyhavefailedtotargettheaudienceeffectively.Thus,
themarketplayersareeagerlyattemptingtogaincompetitiveadvantageinthemarketinorderto
improvetheirperformance,productivityandprofitability.
Kotler(2009)statedthatthecorepurposeofanyfastfoodretailermustberelatedtoprovidingvalue
for money to its customers andmust employ advanced marketing programs and communication
channelstostrengthentheoverallmarketingcampaign.
Moreover,Alietal.(2010)foundthatimprovingcustomerrelationshipcouldprovideanedgeforfast
foodretailersinIndiaprovidedtheyareabletomanageandformulatenewmarketingtoolsand
practicestofacilitategreatercustomersatisfactionandbetteroverallexperience.
Thus,theresearcherwouldfocusonanalyzingtheconsumerbehaviourincontexttothefastfood
industryinIndiaandassesstherelativecorecompetenciesandcapabilitiesoftheindustryplayersto
embracenewcourseofactionstoenhancethecustomerexperience.Theresearcherwouldalsolook
forwardtoassessthescopeofcustomerloyaltyprogramsintheprevailingmarketingstrategiesofthe
firms.Astrategicfocuswouldallowdemonstratingtheroleandimportanceofnewandmodern
social marketing communication channels to promote the brands among the consumers using
informalmessages.
Hence,thestudywouldattempttosummarizethevarioustheories,toolsandpracticesforidentifying
the relative buyingbehaviour traits of consumers and whether the adoption ofloyalty programs
wouldhelpcompaniestogaincompetitiveadvantageinthemarket.
1.3RESEARCHPURPOSE
Thestudywoulddealwithanalyzingtheconsumerbehaviourandtheirbuyingtraitstowardsfast
foodindustryinIndia.Thus,thepurposeoftheresearchreportistoidentifythefactorsthatcould
influencetheirbuyingbehaviourandcouldbefurtherusedinthebusinessstrategiesoftheretailers.
Acorefocushasbeengiventothescopeofcustomerloyaltyprogramandtheemergenceofeffective
marketingcommunicationchannelsinfastfoodcompaniestoimprovetheirrelationshipswiththe
customers.
1.4STATEMENTOFAIMANDOBJECTIVES

TheaimoftheprojectreportistoanalysetheconsumerbehaviourintheIndianfastfoodindustry
andinvestigatingthefactorsthatcouldinfluencetheirbuyingbehaviourtowardsparticularbrand.
Theresearchobjectivesoftheprojectreportareasfollows:

Todiscusstheexistingpromotionalmarketingstrategiesofthefastfoodretailers
Toinvestigatetheconsumerbehaviourtowardsfastfoodretailersandthefactorstoinfluence

theirbuyingbehaviour
Toassessthescopeofcustomerloyaltyprogramstoinfluencethebuyingbehaviourofthe

consumers
Toproposetheeffectiveuseofemergingmarketingcommunicationchannelstopromotethe
customerloyaltyprograms

1.5RESEARCHQUESTIONS
1. Havethepromotional marketingstrategies offastfoodretailers provedtobeeffectivein
termsofgainingmarketshare?
2. Howtheconsumerbehaviourhasbeenchangingtowardsthefastfoodbrandsandwhatare
themajorfactorsthatinfluencetheirbuyingtraits?
3. Whatisthescopeofcustomerloyaltyprogramstoinfluencethecustomerbuyingbehaviour?
4. Whatkindsofemergingmarketingcommunicationchannelscanbeintroducedtopromotethe
overallmarketingstrategyofthefirms?

1.6SCOPEANDLIMITATIONS
The research study would require the researcher to use various tools such as expertise, logical
reasoning,interpersonalskillsandanalyticalapproachtodemonstratethehighlyeffectivepieceof
work.However,theremightbeconstraintsrelatedtothestudy,whichmightbeuncontrollablebythe
researcher.Thestudyisbasedonthemarketsurveyandwouldalsopresentthetheoreticalanalysisto
reflecttheresearchfindings.Thus,itwouldrequirealotoftimetomanage,gatherandanalysethe
primaryaswellassecondarydata.Theresearcherwouldmakeeveryattempttoexhibiteffectivetime
managementandplanningactivitiestoensurethedeliveryofthereportwithinthegivenframework
oftime.Theresearcherwouldhowever,needtoincludelimitedparticipantsforthestudyincontext
totheavailabletime.Theresearchwouldalsobelimitedtoincludingfewmarketplayersfromthe

fastfoodindustry,asitwouldnotbepossiblefortheresearchertoincludemorecompanies for
researchpurposes.
Theresearcherwouldalsoensuretoeliminatethescopeofbiasnessfromthestudyandwoulddeal
effectivelywhileformulatingthequestionnaire,collectingandanalyzingthedataandpresentingthe
findings.Withthelimitedresourcestocarryouttheresearch,theresearcherwouldaimtoprovide
insight,knowledgeandunderstandingincontexttotheresearchtopicandlookforwardtopresentthe
enormousfindings.

CHAPTER 2

LITERATURE
REVIEW

Theliteraturereviewwouldconstructthetheoreticalframeworkbyincludingthecriticalfindings,statement,
theoriesandmodelsproposedbythevariousauthors.Itwouldincorporatevarioussecondarysourcesforthe
achievement of the research objectives and to effectively demonstrate findings and recommendations
thereafter.

2.1DevelopmentofFastFoodIndustryInIndia
TheIndianfastfoodhabitsandthecustomerperceptiontowardsfastfoodhasnoticedgradualshiftin
therecentyearsasthesignificantportionofthepopulationspentmoremoneyoneatingfastfood
from the domestic and international retailers in the market. The sector was once unnoticed and
merelyhadanyexistenceinthefoodandhospitalityindustrybutrecentfindingssuggestedthatthere
ishugepotentialinthesectorasthegrowthratewasrecordedabove30%intherecentyears(Aliet
al.2010).
Theliberalisationandglobalisationoftheindustriesbackedbythegovernmentin1991wasalsoone
ofthereasonsforthedevelopment ofthefastfoodindustryasnumberofinternationalretailers
enteredthemarketthereafter.ThemajorinternationalplayersincludingKentuckyFriedChicken,
McDonalds,PizzaHit,DominosenteredtheIndianmarketinthelastdecade.KumarandBasu
(2008)statedthatduringevolutioninthepresenceofoverseascompaniesinthemarket,thedomestic
playerstoochangedtheirbusinessstrategiesintermsofofferingnewmenusatrevisedpricesand
manyotherserviceincludingentertainment,changeinstoreformats,openingofstoresatanumberof
locationsandmoreoverprovidingfoodandserviceswiththeinfluenceofwesternculture.
However,theempiricalstudiessuggestedthatthegradualchangesinpracticesoffastfoodretailers
enabledsignificantchangesinthepurchasingbehaviouroftheconsumersastheyembracedfastfood
intheirdailydietconsumption.Moreover,KitaandHasan(2010)statedthatIndiawasranked7 thin
theAsianfastfoodmarkets.Kath(2003)statedthatavailabilityofhealthyfood,takeawayoptions,

hygiene andcleanliness atstores weresomeofthemajor yetcritical factors that influenced the

perceptionofthecustomerstowardsfastfoodgrowthinthecountry.However,KumarandBasu
(2008)regardedthatitwasactuallythefastdelivery,varietyoffoodandcompetitivepricesthat
attractedthelargeportionofpopulationespeciallytheyounggenerationinthecountry.However,
GoyalandSingh(2007)emphasisedthatconsumersaroundtheworldadoptedinformationseeking
behaviourintermsofgainingindepthknowledgeonnutritionvalues,availabilityofhygienicfoods
andthevalueformoneyandthereforefastfoodretailersinIndiahadtomakeseveralchangesintheir
businessmodelsasthenewcompaniesenteredthemarkets.
Sengupta(2008)statedthatfastfoodbecamepopularinIndiabecausetheywereeasilyavailable,
reasonablypricedandwerebetteralternativetothehomecookedfood.However,thereweresome
customhurdlesinacceptingthemenuoftheinternationalretailersthatincludedpork,hamandbeef
astheingredientsinthefastfoodoffering.PrasadandAryasari(2010)saidthatthesecompanieslater
carriedoutmarketanalysistomatchthecustomerprofileintermsofsocial,cultural,personaland
legalfactors.
BenderandBender(1995)definedfastfoodasthereadilyandquicklyavailablefoodforimmediate
consumptionbyconsumereitheratthedesignatedeatingareasprovidedbytheretailersortakeaway.
Sengupta(2008)foundthatinternationalstoresmainlyfocusedonmajorcitiesandmetroareasinthe
countrywherethepopulationhavehigherdisposableincome.Theinternationalcompaniesalsomade
changestotheirbusinessmodelinordertomeetthemarketdemandswhereoveronethirdofthe
populationwasvegetarian.Sanjeev(2007)surprisinglysaidthatcompaniesalsohadtoreposition
theiridentityasKFCdidbyrepositioning its brandmessagetoinfluencethevegetarianbuyers.
MalhotraandPeterson(2006)saidthatasignificantportionofthecustomerswerereluctanttohave
theirfoodfromtheretailerswhoservedvegetarianfoodalongwithnonvegetarianfood,astheyfelt
theyhadtocompromisetheirtraditionalvaluesiftheydidso.
However,customerperceptiontowardsfastfoodchainsgraduallyshiftedwiththeglobalisationof
economies,highertravellingrate,entertainmentsourceslikemovies,musicandtheinternet,that
eventuallybroughttheculturalchanges.Indeed,localplayerssawagradualshiftinthecustomer
perceptionandtheyturnedthisintoofferingnewfoodmenuinfluencedbywesternretailerstohave
moreprofitabilityandmarketshare.

Thus,theunstructuredfastfoodmarketdevelopedalongwhilstinternationalretailerswereentering
the market. Kumar and Basu (2008) said that domestic players such as Wimpy, Nirulas, Pizza
Corner,BikanerwalaandHaldiramweresomeofthedomesticretailersthatexpandedtheirmarket
operationsbyopeningvariousstoresaroundthecities.KitaandHasan(2010)recordedthatannual
marketturnoverforfastfoodsectorinIndiafor200910wasrecordedover$100Millionanditis
believedthatitwouldbedoubledinthenext5years.Thus,thefastfoodretailersvowedtosurprise
thelargepopulationandthemarketpresenceoftheselocalandinternationalretailersaregrowingat
multifoldspeedafterassessingtheconsumerneeds,theirperception,values,traditionandcustoms.
Still,thegradualshiftintheconsumerbehaviourandtheirperceptionarethemajorareasforthe
retailerstoprovideenhancedandgreatercustomerexperienceinordertogaincompetitiveadvantage
inthemarket.
2.2

MarketingStrategiesofFastFoodRetailers

2.2.1

Nirulas

Nirulaswasthefirstdomesticstructured,organisedandlargestdomesticfastfoodretailerinthe
countrythatopeneditsfirststoreinNewDelhiin1934.Dana(1999)saidthatthestoreintroduced
westernfastfoodbytheendof1950sandovertheperiodoftime,mademajorchangesinitsmenu
andpricingstrategybyaddingmorefoodproducts.Thecompanyreportedanannualturnoverofover
$ 25 Million in 2006 but Dholakia and Talukdar (2004) argued that domestic players had the
competitiveedgeastheypaylesstaxthantheinternationalplayers.Itwasfoundthatcorporatetax
forinternationalcompanieswas48%whereasfordomesticcompanies,itwas35%.Dana(1999)said
thatcompanypaysignificantproportionoffundsonmarketingcampaignthataremutuallyrunalong
withothermarketplayerssuchasLeeJeans,aleadingclothingchaininthecountry.Malhotraand
Peterson(2006)emphasisthatsharingmarketingresourcesamongtwomarketleadersfromdifferent
industrieshelpedtoimproveeconomiesofscaleandgavebetterresults.
PrsasadandAryasari(2010)saidthatforNirulas,itwaseasierforthecompanytopenetrateinthe
marketsincetherewasnootherorganisedretailerinthecountrybutitwasuntil1991whenthe
government opened various sectors for the international companies including the hospitality and
servicesector.But,therewasstilllittlescopefortheinternationalretailersasmostofthepopulation
livedunderthepovertylineandtherewassignificantlyverylowportionofpopulationthathad
substantiallyhighdisposableincome.Therefore,itprovidedcompetitiveedgetoNirulaswhichheld

highestpricesforitsgoodsandserviceforanotherdecadeandastherewasnofiercecompetitionin
themarket.GoyalandSingh(2007)criticisedaboutthemarketingmixofNirulasthatwasmadeto
catertheelitefamiliesirrespectiveofthefactthatfastfoodwasusuallyservedatcompetitiveprices
inothercountries.However,itwasuntil1995whenKFCenteredthefastfoodmarketandothers
including Pizza Hut, Dominos and McDonalds followed very soon. Sanjeev (2007) found that
Nirulassubstantiallytransformeditsmarketingmixwhilstothersmalldomesticandinternational
retailerswereevolvingduringthattime.Atthebeginningof2001,thecompanychangeditsbusiness
structuretoobyseparatingthefunctionssuchassales,procurement,operations,training,marketing
andnewprojectsundertheheadsforeachdepartment.Nirulasassessedthestiffcompetitioninthe
marketthatwouldlieaheadinthefutureandtherefore,theyaimedtoimprovetheirmenus,market
presencewhilekeepingthepricesatcompetitiverate.ItwasnoticedthatNirulasmademarketing
arrangementswiththeDelhiTourism,thenationalbodyofTourismPromotioninNewDelhi,India
topromoteitsbrandnameamongthenationalandinternationaltravellers.Asapartofthemarketing
strategy,thecompanywasabletolaunchitsstoresinairports,shoppingmallsandthehighstreetsof
the country. Min (2010) said that Nirulas obviously had the advantage of assessing the Indian
customer tastes and therefore it offered the menu in Indian style by following the menu of
internationalretailers.Mauri(2002)gaveevidencebystatingthatNirulaslaunchedIndianversionsof
PizzaHutmenubyofferingvegetarianpizzatothecustomers.MalhotraandPeterson(2006)stated
thatbytheyear2005,Nirulasexpandeditsmarketsharewiththreehotels,35restaurants,12pastry
shopsandfourbarsacrossthecountry.Itwasfurthernotedthatover50,000visitorswerevisitingthe
Nirulas stores everyday. Nirulas also diversified its businesses after 2005 by entering into the
manufacturingofvariouscheese,bakeryproductsanddrinks.
ThemarketingstrategyofNirulasalwaysprovidedaroomforinnovation,technologyandresearch
and development. Dholakia and Talukdar (2004) found that company offered broadband related
servicessuchasWiFiconnectivityinitsbarstomakethemmoreattractivetocustomersinthecities.
However,KitaandHasan(2010)arguedthatmuchofthesalesrevenuesweregeneratedbythefast
foodoperationsbutthecompanyputhardlyanyeffortstoofferentertainmentservicestoattractits
consumers.Precisely,targetedcollegegoingstudentsbyofferingseveralpromotionalanddiscounts
coupons during the time of students intake at the universities across various cities. Eventually,
company placed various advertisements on various media and communication channels but still
largelyitssaleshavebeeninfluencedgreatlybyitscustomerloyalty.
2.2.2

McDonalds

McDonaldshavethemarketpresenceinmorethan120countrieswithover30,000stores.InIndia,
McDonaldsopeneditsfirststorein1996.Initially,McDonaldsfacednumbersofallegationsraised
bythepoliticiansandthesocietyovertheissuesrelatedtothewesternisation,outflowofnational
incomeandsoon.However,McDonaldsmanagedtoentertheIndianmarketthroughjointventure
withothertwoleadinghospitalitycompanies.GoyalandSingh(2007)saidthatMcDonaldsmadea
perfectentryasthemarketbegantogrowandwithinafewyears,McDonaldsbecamethemarket
leader by leaving other major domestic players such as Nirulas behind by leaps and bounds.
McDonalds focused on standardisation of processes and development in the products lines and
improvement in brand identity. Duffy (2003) said that in India the scenario was different since
customerhaddifferentperception,culturalandsocialsettingandtherefore,thecompanyrequiredthe
determinants to influence buying behaviour. McDonalds had to show its image as purely being
dedicatedtotheindianbuyersandthusseveraladaptationswereexperimentedandasaresult,Big
Mac was replaced with Mac Maharaja to demonstrate that burgers were made of chicken and
vegetarianitemsandnotporkorham,asusesoflatterwasagainstthelocaltraditionandcustoms.
GoswamiandMishra(2008)saidthatmarketingstrategyofMcDonaldsfocussedontheabilityofthe
incomegroups,examinedthebuyingmotivesandcustomerperceptioninordertosucceedinthe
market. The value meals were results of those assessments, aiming for price sensitive Indian
consumermarket.
GoyalandSingh(2007)saidthatMcDonaldstargetedmiddle,uppermiddleandaffluentincome
classesandamongthose,companyspecificallyfocussedonchildrenastheyinfluencethedecisions
ofthefamiliestoeatout.Thus,themarketingstrategyofMcDonaldsalwaysfocusedonaddingfun
andentertainmentforchildren.Thehappymealsbecamepopularamongchildrenintheshortspanof
time,whichofferedmealplusatoytothechildrenatverycompetitiveprices.GoswamiandMishra
(2008)statedthatin2006,McDonaldswasawardedasthemostrespectedcompanyinIndiaforits
contributioninfoodretailing.

2.2.3

KFC

KentuckyFriedChickenwasamongstthefirstwhomadeentryintheIndianfastfoodmarketin1995
followedbytheliberalisationoftheeconomy.Dana(1999)saidthatKFCdeterminedtofocuson
upper middle class as their target market since they perceived that irrespective of their global
presence,themiddleclasswerenotawareoftheirbrands,tastesandpreferences.Empiricalstudies

suggestedthatKFCpositioneditsproductseffectivelyinthemarketwiththesuitablemarketingmix.
However,Durvasulaetal.(2009)arguedthatcompanymissedtoperceivethepreferences,tastesand
likenessofpeopleasthemenuoftheKFCconfrontedwiththesocialandreligiousviewofthe
population.GoyalandSingh(2007)foundthatHinduism,themajorreligioninIndiaopposedusing
beefastheingredientinthefood,whichKFCwasfoundusingintheirmenu.
However,LaceyandSneath(2006)statedthatKFCmanagedtodevelopitsproductandservicemenu
accordingtothelocalvalues,traditionandcustomanditwasfoundthatanumberofothervarieties
especiallyinvegetarianfoodwereintroducedduringthattime.Durvasulaetal.(2009)recordedthat
by2008,companyopenedover100storesinthemajorcitiesofthecountry,focusingonthemetro
citiesandtowns.

2.3

ConsumerBehaviour:Concept,ProcessandModels

Every consumer has different perception as the influence of social, personal and psychographic
factorsdifferfromonetoothers.Theimpactofvariousfactorsthathelpthecustomerstoinvolvein
thedecisionmakingprocesstomakejudgementtowardsparticularbrandinthemarketduringthe
buyingprocess.Clevelandetal.(2008)statedthatthesefactorsincludedthesocialclass,family
cycle,age,gender,attitudes,beliefs,values,motivation,andselfpersonalityamongothers.Thus,the
formulation anddevelopment ofthemarketing orbusinessstrategyofanyfirmmustthoroughly
analysetheconsumerbehaviourinthespecifiedmarketbeforemakingofferingstoitsconsumers.
Fleury andFeury(2003)stated that companies therefore make indepth analysis ofinternal and
externalenvironmentoftheirbusinessesinordertorecognisetheneedsoftheconsumers,evaluate
thealternativesandfinallymakereformstotheirofferingstolaunchtheirproductsandservicesinthe
market.
Kotler(2008)definedconsumerbuyingbehaviourasthebehaviourreferredtotheindividualandthe
finalconsumerswhobuygoodsandservicesfortheirownconsumption.Thus,consumermarketis
furtherdefinedastheexchangeofinteractionbetweenconsumersandretailersinagivenmarket.
Lancaster and Massingham (2010) further defined consumerbuying behaviour as the decision
makingprocesswherepeopleengageinbuyingandusingtheproductsandservicesbyacquiring,
evaluating,usinganddisposinggoodsandservices.

The empirical studies further suggested that consumer behaviour involved core decisionmaking
processestoassessthebusinessactivities,functionsandprocessesinordertomatchthemwiththe
marketdemands.Thus,informationplayedavitalpartintheoverallbuyingbehaviourprocessto
identifytheneedsoftheconsumersthatisfurtherevaluatedtomakedecisionsondevelopingand
formulatingproductsandservicesforthebenefitsoftheconsumers,organisationsandaswellasfor
the society itself. Precisely, Goyal and Singh (2007) stated consumerbuying behaviour enabled
companiestojudgetheirmarketperformance,customersattitudetowardstheirbrandsandmoreover,
thefurtherimprovementintheirproductsandservices.
Kotler(2008)statedthatbuyingprocesscommencedwiththeneedrecognition,astheremustbean
underlyingmotivetobuyspecificproductsorservicesinthemarket.TheconsumersinIndiawere
alwaysnotedtospendontraditionalorcustomfoodsavailabletothem.However,inthelastdecade,
numberofinternationalfastfoodretailersfoundIndiaasabigmarketinthefutureandeventually,
introducedtheircompetitivelowpricesfoodsintheregion.However,LaceyandSneath(2006)stated
that there were various challenges to the international fast food retailers ranging from political
barriers,culturalandsocialdifferencesandtheuseofpork,hamandbeef,wasnotacceptableinthe
Indianculture.Thus,severalreformsweretakenafterassessingtheconsumerbehaviourinorderto
achievethehighmarketshareinthecountry.LeverinandLijander(2006)statedthatfrequentvisits,
mediacommunication,effectivemarketingandcustomerrelationshipstrategiesenabledthescopeof
fastfoodstoresinthecountry.TheIndianconsumersrecognisedtheneedsforthefastfoodsuchas
hamburger, cheese burger, pizza etc as they travelled abroad or different places in the country.
However,PrasadandAryasari(2010)statedthatconsumerwouldhavethoughtofvariousvariables
whiledeterminingtobuythefoodincludingtheirpersonalspending,preferences,complexityand
attitudes.Kotler(2008)furtherstatedthatoncetheneedwasdeterminedthatnextphaseincluded
gatheringtheinformationabouttheproductsandservicesavailableinthemarket. Durvasulaetal.
(2009) stated that domestic as well as international companies chose a mix of marketing
communicationchannelssuchasdirectmarketing,mediaandpublished,digitalandonlinemethods
toretainandimprovetheircustomerbase.
However, Duttaetal.(2007) arguedthatinthebeginningthecustomerswerereluctanttochange
theireatinghabitsandtodependonfastfoodintheirdailyintake.Furthermore, Alietal.(2010)
statedthattherewerealsonotvalidsourceofinformationaboutthequality,hygieneandingredients
ofthefoods.Thus,theinitialexperienceofthecustomerswasattachedwiththelowinvolvement
withthefastfoodmarket,astheywerenotinfluencedtochangetheirhabitualpurchases.

Finally,theevaluationofappropriategoodsandservicesdependupontherelativeprice,valuefor
money,convenience,serviceandotherfactors.Kotler(2003)statedthateffectivemarketingmix
helpedthefastfoodretailcompaniestogetthesuccess.Thelastphasewiththeconsumerbuying
behaviourisconcernedwiththepostpurchasebehaviouroftheconsumers.Precisely,theconsumers
judgedtheabilityoftheproductstowardssatisfyingtheirneeds.Thisisjudgedbytheperformance,
valueformoneyandthelevelofsatisfactionreceivedfromusingorconsumingtheproducts.
2.3.1

ConsumerBehaviourTowardsFastFoodInIndia

Indiahasseenunprecedentedgrowthanddevelopmentinthefastfoodretailingintherecentyears
howeverthisisalsovestedtothesignificantincreaseintheincomelevel,influenceofcultures,
urbanisation,globalisation,changesinthelifestyles,familystructuresandsocialinteractionamong
consumers.Lingetal.(2004),GoyalandSingh(2007)emphasizedthatconsumerbuyingbehaviour
has been influenced by the gradual changes in the economic, social, psychological and cultural
factorsandmoreover,thesustaineddevelopmentintheIndianmarketplacehasfuelledthefastfood
sectorbecauseofitsrelativecompetitiveadvantageincomparisontootherrelatedsectorsinthe
market.
Precisely,MukherjeeandPatel(2005)foundthatthecustomerperceptionhassignificantlyimproved
with better eating experience they had at the stores that enormously changed their customer
relationshipstrategy.Thecustomersnowhaveaccesstothefreshfoods,varietyofoptionswithquick
deliveryatlowprices.Wellsetal.(2007)alsofoundthatcustomerpreferencehasalsochanged
towardspackagedfoodinIndiaasinthepastthereweremerelyfewcustomerswhotendedtobuy
them.However,therisingtrendoffastfoodavailabilityinthemarket,emergingculture,desirefor
affordablefoodandmoreover,favourableeatingexperiencehasinfluencedthecustomerstotrythe
differentkindsoffastfoodsavailableinthemarket.
Sabnavis(2008)citedthatconsumersnowmadefrequentvisitstofastfoodchainsinmetroandurban
citiesinthecountryandmoreover,thesmallcitiesandtownshavealsobeenlookingforwardto
welcomethefastfoodretailersintheirlocationswiththeincreasedawarenessamongthepublicin
themarkets.Batteetal.(2007),GoyalandSingh(2007)believedthatchoiceoffastfoodstores
amongIndianswaslargelyinfluencedbytheirsociodemographiccharacteristicssuchasdisposable
incomelevel,familysize,educationlevel,culturalbackground,agefactor,religion,etc.

Significantly,thefindingsbasedonthesurveyconductedbyAlietal.(2010)onBuyingBehaviourof
ConsumersinEmergingEconomiesfoundthatconsumersbuyingbehaviourhasbeendynamically
shiftingandwashighlyinfluencedbytheplacesofpurchase,variety,price,attractionforchildren,
entertainmentfeaturesatstoresandmoreoverintangibletraitslikehygienicfood,quality,cleanliness,
courtesy,convenienceandeffectivecustomerservices.
Sabnavis(2008)saidthatfoodconsumptionpatterninIndiahasnowshiftedfromfresh,unprocessed
foodtopackaged,brandedandprocessedfood.Theawarenessandconsciousnessaboutthefoodshas
alsoaddedadvantagetothefastfoodindustry.Themetroandfastgrowingcitieshavenoticedthe
fiercedemandforfastfoodasmultinationalorganisationsattemptedtoimprovetheirmarketsharein
thecountry.ThestudyconductedbyGoyalandSingh(2007)onConsumerBehaviourofFastFood
ChainsinIndia,foundthatconsumersnowwishedtohavemoreconvenientplacewheretheycould
go with their family to have good food while enjoying other features such as basic amenities,
entertainment,customerservicesandotherphysicalenvironmentalfeatures.

2.4FactorsInfluencingBuyingBehaviour

2.4.1

CustomerPerception

Thehospitalityindustryoffervarioustangible andintangible benefits tocustomers buthowever,

perceptionofcustomersdifferfromeachotherbasedonthevariousvariables.Clevlandetal.(2008)
definedthatcustomerperceptionistheprocessthatallowsindividualstoselectthebestandoptimal
optionbyinterpretingthebuyingstimulieffectively.Thecriteriaofbuyingthegoodsandservice
thusdependsontheavailablecriteriaofstimulisuchasvalueformoney,convenience,accessibility,
availability,newofferings,likeness,etc.
ThesurveycarriedoutbyCottametal.(2001)suggestedthatpeoplerecognisedbasicamenitiesas
important as the main service attributes in the hospitality industry. The evidence suggested that
prices,accessibilityandqualityoffoodandserviceweresomeofthestimulithatinfluencedthe
customeralotthanotherrealisticandperceivedfactors.
However, positive customer perception is important for the food retailers in order to retain the
customerstogaincompetitiveadvantageinthemarket. Durvasulaetal.(2009) emphasizedthatin
Indianmarketthesizeofthefoodretailersdoesntmattersincetheperformanceofthefastfood

retailersisjudgedbythequalityoffoodandthesecondaryadvantagescustomerenjoywhilehaving
theirfoodatthefoodstores.
Duttaetal.(2007)saidthecustomerserviceisalsothemajorareastofacilitatethepositivecustomer
relationship management. He further indicated that international retailers particularly paid more
attentiononthecriticalsuccessfactorssuchasavailabilityofparkinglots,cleanliness,courtesy,
speedandefficiencyintheiroperations.However,Greasleyetal.(2005)arguedthattheseretailers
too had tough competition with the local retailers that had strong customer loyalty in the past
however, he further admitted that positive brand image helped international players to gain a
significantmarketshareinashortperiodoftime. Changetal.(2010)admittedthatmostdesirable
attributestoinfluencetheperceptionofcustomerstowardsfastfoodinIndiawerethetastes,value
formoney,qualityandcustomerservice.However,Cromb(2006)arguedthatamongthesefactors,
theintangibleformsofservicesuchascleanliness,availabilityofnewfoods,promotiontechniques,
entertainmentandparkingservicealsoinfluencethecustomerperceptionintheemergingcountries
suchasIndiaandtherefore,theretailersneedtoreformtheircorporateandbusinessstrategiesin
ordertogaincompetitiveadvantageinthemarket.
2.4.2

CustomerExperience

Greasleyetal.(2005)saidthatthenatureofserviceshasbeenreformedandnowtheyareconsidered
onthebasisofintangibility,heterogeneity,inseparabilityandperishability.LaceyandSneath(2006)
calledthenewserviceattributesasServiceDominantLogicthatareusedtoinfluencethecustomers
intermsofdemonstratingthevalueformoneyorgoodcustomerexperience.However,Linn(2008)
argued that afast food retailer could provide the effective value proposition in their goods and
servicesbutconsumersweretheoneswhocouldjudgetheirexperienceaftertheirconsumptionand
finallyregardedthebrandasfavourableorunfavourable,fromtheirownaswellasorganizations
pointofview.
Fleury and Fleury (2003) said that physical environment plays an active part in improving the
customerexperience.Theserviceorganisationsthus,aimedtoincludethehighspaceformat,good
ambienceconditionsandfunctionstomakecustomerexperiencemorefulfilling.Thus,therelated
environment could be used to facilitate positive and favourable cognitive, psychological and
emotionalimpactonthecustomers.

2.4.3

CustomerSatisfaction

Alietal.(2010)saidthecustomersatisfactionresultedinhighrepeatsales,brandloyalty,indirect
promotions,utilizationofresourcesandintentiontosupportthenewofferingsbytheorganisation.
Moreover,McNabb(2004)saidthatpositivecustomersatisfactionistheresultofenhancedvaluefor
money and therefore, the organisation could use it to improve its sales revenue, new product
development and market development. Finally, Sengupta, A. (2008) confirmed that customer
satisfaction resulted in improving customer loyalty and there is a positive relationship between
customerloyalty,satisfactionandcustomerperception.
Kotler(2003)discussedthatcustomersatisfactionisthedegreeofselfactualizationwhereactual
performance exceeds the perceived performance of the goods and services consumed by the
consumer.HarrisandHarrington(2000)admittedthatthecompaniesstrivetoofferhighcustomer
satisfactioninordertoimprovethecustomerretentionwiththeultimategoalofhigheconomiesof
scale.
Thesatisfactionofcustomersalsodependsuponthepersonalcharacteristicsoftheindividualssuch
asage,education,background,religion,customs,lifestyle,attitudeandpersonality.Sincecustomers
needs change with thechanging environment, it is alsoimportant tounderstand that criteria for
customersatisfactiongraduallyshiftfromonepointtoanother.Sanjeev(2007)noticedthatemerging
customerloyaltyschemeshaveshadowedoverthetraditionalpromotionschemesandcustomersfeel
highlysatisfiediftheyareassociatedwiththeintangiblebenefitsalongwiththeirpurchasesinthe
market.PrsasadandAryasari(2010)statedthatorganisationsthereforemustdeveloptheirmarketing
strategyinordertoimprovethecustomersatisfactionlevel.
However,Min(2010)arguedthatperformanceofgoodsandserviceswerehighlycorrelatedtothe
customersatisfaction.Ifthedesiredattributesdonotmatchtotherealisticbenefits,thencustomer
satisfactionishighlydeterioratedandthus,performanceofthegoodsandserviceisanothertargetfor
theorganisationstoaccomplish.MalhotraandPeterson(2006)saidthatthebenchmarkingtechnique
isusefulforsuchcompanieswhowanttocomparetheirproductsandserviceswithotherrivalsinthe
market and thus, they could get a clue for the scope of improving their products and services.
Moreover,Kotler(2008)indicatedthatthereisadirectrelationshipbetweenthecustomerperception
andsatisfaction.Hefurtherstatedthatifthelatterresultsinthefailtomeetthedesiredoutcomethen
it would deteriorate customer perception towards that particular brand in their future buying
decisions.
Thus, the customer satisfaction is the inseparable and a very critical part in the overall buying

behaviourprocess.Linn(2008)concludedthatcompaniesmustbeabletorespondtotheconsumers
needs in an effective manner by choosing the right approach towards marketing mix, customer
loyaltyandpromotionstoachievetheobjectivesofmarketingstrategy.
2.5

CustomerLoyalty:ConceptandDefinition

The business organisations strive to improve their customer retention on a regular basis by
developingtheirmarketingstrategies. LaceyandSneath(2006) statedthatgainingacompetitive
advantageinthemarketisoneofthecriticalfactorfortheorganisationsandtherefore,theyneedto
facilitatethebrandidentityandcompanyimageinthemindsoftheconsumers.LeverinandLijander
(2006)definedcustomerloyaltyastheabilityoftheconsumerstorecognisethebrandsamongothers
inamarketanditislikelytoresultinrepeatpatronagetowardsthatparticularbrand.Rowley(2005)
saidthatcustomerscouldshowtheirrelativeloyaltyinnumberofwaysincludingfrequencyoftheir
purchases,wordofmouthpromotionsandtryingoutnewproductsandservices.Inrelationtothefast
foodbrands,GoyalandSingh(2007)discussedthattherearemanyattributesandfactorsassociated
withthecustomerloyaltysuchasthequalityofservice,varietyoffood,customerservicesandother
tangibleandintangiblefactorsthathaveanimpactoncustomersatisfaction. However,Laceyand
Sneath (2006) argued that most of the organisations have overruled to emphasize on customer
relationshipmarketingsincetheyhavesecuredsubstantialmarketshareintheirrespectivemarkets.
However,LeverinandLijander(2006)emphasizedthatcustomerloyaltyisstillaproactiveapproach
tolurethecustomersinordertoreachitsmaximumcustomerbase.Kotler(2003)admittedthat
customerloyaltyhasproventoaddcompetitiveadvantagetothebusinessesandtherefore,itmustnot
belookedinisolationrather,itmustbefacilitatedinthemarketingstrategyinordertostrengthenthe
businessobjectivesofafirm.
Thepurchasepatronageisthefunctionofpersonal,social,culturalandenvironmentalfactorsand
thus,theanalysisofbuyingbehaviourmustalsofocusonthebehaviouralandattitudinalaspectsof
the customers. Moreover, Greasley et al. (2005) emphasized that customer loyalty could either
remarkablyimprovethebrandperformanceinthemarketormayendupinbreakingtherelationship
betweentherepeatpurchasesandthepositiveattitudeoftheconsumers.
Inotherwords,customercommitmentisessentialfordeterminingthecustomerbuyingbehaviourand
iftherewerehighlevelofsatisfactionamongconsumers,itwouldhelptoenhancethemarketing
effortsbywordofmouthadvertisement,influencebyreferencegroupsandselfarousal.However,
Duttaetal.(2007)statedthatintheabsenceofalternativeproductsinthemarket,theorganisation

would have monopoly in influencing the buying behaviour of the customers and in this case,
companymaynotneedtospendonstrengtheningtheircustomerloyaltyprograms.
Therefore, the customers are information seeking and they screen and analyse the information
availableaboutthevariousproductsandservicesfromthecategorythatmatchtheirneeds.Changet
al.(2010) foundthatdomesticfastfoodretailersinIndiadidnotfocusonprovidinginformation
abouttheirmenuintermsofcalories,ingredients,processes,allergyprecautionsinthebeginningand
theyeventuallymadechangestothisafterinternationalcompaniesarrivedinthemarket.Therefore
tohaveanedgeovertherivalsacompanymusttrytodevelopacustomerloyaltyprogrammeasit
helpstoretaintheoldcustomersandattractsnewones,whichcouldleadtoincreaseinsales.

2.6

PorterFiveForceAnalysis

Porter five force model was proposed and developed by Michael Porter to assess the related
competitivepositionofacompanyinarelatedindustry,segmentandbusinesssector.Themodel
helpedtocomparethecompetitiveforcesbetweentheorganisationanditsrivalsinthemarket.The
modeldemonstratedthecompetitiveadvantagetothefirmandwhatwouldbethepossiblethreats
andrelativeopportunitiesinthemarket.Themodelclassifiedthefivemajorforcesthatdrivethe
companytomeasureitsposition.
BargainingPowerofBuyers
PrasadandAryasari(2010)saidthatfastfoodstoreshavetargetedthemetroandurbanareaswhile
enteringthemarket.However,theurbancustomersdemonstratedtheinformationseekingbehaviour
toraisetheirknowledgeandunderstandingaboutthemarketingmixofvariouscompaniesinorderto
effectivelyjustifytheirbuyingdecisions.Duttaetal.(2007)emphasizedthatfastfoodcompanies
havesuccessfullyassessedtheconsumerbehaviouroftheirtargetgroupbeforeenteringthemarket
andtherefore,theirmarketingstrategyfocusedonpromotingthekeyfeaturestothecustomersin
termsofcompetitiveprices,varietyoffoods,homedeliveriesandotherbenefitstotheconsumersin
ordertoretainthelargemarketshare.
However, Sengupta (2008) insisted that some of the local companies have not tarnished their
traditionalbusinessmodelandtheyhavebeenstillusingtraditionalmethodsofsalespromotionand
marketing communication in order to lure the customers. Eventually, the market entry of
internationalplayershaveraisedthecompetitioninthefastfoodmarketinIndiainrecentyearsand

therefore,thelocalplayersmustadoptthenewandcontemporarychannelsofcommunicationtoraise
awarenessabouttheirservicesamongtheconsumers.Thus,itcanbeconcludedthatirrespectiveof
high sales volumes, domestic retailers have remained incompetent in adopting new channels of
marketingcommunicationtosustaintheirmarketshareinthefuture.Onotherhand,despitethelow
growthrate,themultinationalretailershavefocusedontheircompetitiveadvantagesandbestow
everymarketingefforttoeffectivelyplacetheircompetitivepositioninthemarket.
BargainingPowerofSuppliers
Thesupplierstothefastfoodchainsplayedavitalandcriticalpartintheoverallproductionand
distribution process. Ali et al. (2010) said that McDonalds have access to one of the strongest
suppliersnetworkinthecountrythatprovidesdifferentrawfoodsfromdifferentpartsofvarious
countries.Furthermore,McDonaldshavesuccessfullymadetieswiththelocalsupplierstoimport
rawfoodstoitssubsidiaryfranchisesinothercountries.However,otherfastfoodretailerssuchas
KFCandDominosestablishedtheirwarehousesthataremanagedthroughprivatecompaniestostore
theirrawfoodsandensurethesupplyofrawfoodsatdifferentlocationsinthecountry.However,
Sanjeev (2007) argued that the suppliers have allegedly formed unions and set prices for their
serviceshigherthanthestandardmarketrates.Incontrast,Duttaetal.(2007)statedthatsincefast
foodmarketisattheentrystageandisfragmented,therehavebeenveryfewmeasuresinplaceto
ensuretheeffectivefunctioningofsupplierstocontributetotheoverallgrowthanddevelopmentof
fastfoodstoresinthecountry.Singh(2010)concludedthatfoodcorporationsmusttightentheir
supervision to control business activities of fast food business and their suppliers in order to
safeguardtheconsumersinterest.
ThreatofNewEntrants
TheNewIndustrialPolicyin1998easedthenormsforforeigninstitutionalinvestorstoenterand
participateintheIndianeconomyfortheirbusinesses. GoyalandSingh(2007)statedthatnew
regulationsallowedseveralmultinationalfastfoodretailers tostarttheirbusinessesthroughjoint
ventures, alliances and collaborations with local food chains through foreign direct investment.
Several new businesses havealready entered the market suchas Boston Pizza fromVancouver,
NandosfromPortugalandSliceofItaly.Changetal.(2010)saidthatthereishugescopeforthenew
fastfoodretailersinthecountrysincethegrowthrateremainedremarkableevenattheearlystage
andwiththefavourableeconomicconditionsthemarketwouldseethepromisingreturnsinthenear
future.However,Duttaetal.(2010)concludedthatafirmwiththeestablishedinfrastructureand

expertise would have more advantage to enter the Indian market since it would help them to
coordinatetheireffortsinordertoaccomplishtheirobjectives.
ThreatofSubstituteProducts
Theprimaryobjectiveforfastfoodretailersistoensuretheattainmentofcompetitiveadvantagein
themarketthatiswhytheybelievedinreformingtheirmarketingmixmoreoften.Sanjeev(2007)
foundthateatinghabitsofcustomergraduallyshiftedtonewtastes,preferencesandlikenessand
therefore,companies hadtoofferalternative foodoptionsinordertosustaintheirmarketshare.
Kotler(2008)specifiedthatnewfastfoodretailershadtooffernewalternativefoodoptionstothe
consumersinordertogaincompetitiveadvantage.Theseoptionsincludedbeverages,desserts,corn
foods,milkshakesandicecreams.Hence,therehasbeenimmensepressureontheexistingmarket
playerstoensurethehighcustomerretentionrate.

RivalryAmongExistingCompetitors
Singh(2010)statedthatfastfoodcompaniesinIndianoticedahugegrowthintermsofsalesrevenue
andprofitabilityintherecentyears.Duttaetal.(2007)alsostatedthatcurrenteconomicconditions
favouredthegrowthanddevelopmentofthehospitalitysectorandthus,companiesareseekingto
developtheirmarketshareinthecomingfuture.GoyalandSingh(2007)noticedthatinternational
players have different and impressive customer relationship strategy that offer various sales
promotions andalsooffer cashdiscount,customer loyalty schemes, offseasondiscounts among
otherstothecustomers.However,Durvasulaetal.(2009)emphasizedthatlocalplayershavebeen
enjoyingstrongbrandpresenceandcompanyidentityoveraperiodoftimeandtherefore,madeit
difficultforthenewplayerstoimprovetheirmarketsharequickly.However,DominosandKFC
haveslightlyhigherpricesforitsfoodandthereforetheytargetthemiddleanduppermiddleclass.
Durvasulaetal.(2009) furtherstatedthatMcDonaldsandNirulashavemarketingmixthatattract
consumers from the middle class and therefore, they have significantly higher sales volume as
comparedtoDominosandKFC.SinceMcDonaldshaverecordedhighersalesvolumeinthepast,it
attemptedtoimproveitsmarketsharebygoingtothesmalltownsandvillagesacrossthecountry.
Thus, McDonalds attempted to establish strong brand image and company identity among the
commonpeopleinthecountryirrespectiveoflimitingitsofferingstotheuppermiddleclass,the
culturethatprevailedinKFC,Dominosandotherpricedominatingfastfoodstorechains.

Theliteraturereviewthusdealtwiththeoriesandmodelsdevelopedbyvariousauthorsandscholars
andaimedtomeettheresearchobjectivesbyusingvarioussecondarydataandinformationsources.
However,theprimarydataprocesswouldfollowinthenextchapterandthereafter,dataanalysis
wouldbecarriedoutonprimaryaswellassecondarydataandinformation.

CHAPTER3

RESEARCHMETHODOLOGY

Theresearchmethodologywouldsumuptheresearchcomponentsandvariablesthatalltogether
wouldhelptocarryouttheresearchprocess.Thechapterdealtwiththeethicalissuesandpersonal
constraintsthatmighthindertheeffectivenessofthereport.

3.1

PURPOSEOFTHESTUDY

ThefastfoodindustryinIndiawasoncefragmentedbutthenewgovernmentpoliciesandindustry
regulationshaveallowednumberofforeignparticipantstoenterthemarketinanattempttoraise
competition, growthanddevelopment ofthe sector.Thedomestic retailers toosawasignificant
growthoverthelastdecadewiththeimpactofincreaseindisposableincomeofthepopulation,
changesinthelifestyle,attitudeandincreaseinawarenessofcommonpublicinthecountry.
However,theresearchneedstoaddresstheissuesrelatedtothefactorsthatimpactthechangesin
consumerbehaviourtowardsfastfoodamongtheIndianconsumers.Thestudyalsoexploresthe
buyingtraitsoftheconsumerswhoturntowardsfastfood.Forthepurposeofthestudy,theresearch
reportincludesonemajordomesticretailerandthreeinternationalretailersinordertodrawtheir
marketingstrategyandhowtheirmarketingcampaignsdifferinordertogaincompetitiveadvantage
in the Indian market. The study also addresses the factors integrated in customer relationship
marketingsuchascustomerloyalty.Thestudyalsoaimstoassessthescopeofthecustomerloyalty
programsinordertoimprovecustomerretentionforthefastfoodretailers.
3.2

RESEARCHDESIGN

Thedesignoftheresearchdemonstratestheresearchfactorsandvariablesrequiredtocarryoutthe
researchprocess.Italsodefinestheunderlyingprinciplesandframeworkrequiredtocarryoutthe
research effectively. The research design is developed in regard to the relevant approach. The
researchdesignalsoincorporatestheissuessuchasbiasness,researcherethicsandinterferenceofthe
researcherandhowtheywillbemanaged.Theresearchdesignincludesthefollowingissues:
3.2.1

NatureofStudy

Creswell(2003)statedthatthenatureofthestudydiffersassomeareformedtoexploreandidentify
thesocialorenvironmentalissueswhereasothersarebasedontheactionresearchandexperiments.
Thus,itisimportanttodescribethenatureofthestudyinordertodrawtheoverallresearchprocess
sincethevariousresearchtoolscorrespondsdifferentlytothedifferentstudies.
Saundersetal.(2003)concludedthattherearethreemajorcategoriesofstudiessuchasexploratory,
descriptiveandhypothesis.ExploratoryandDescriptivestudiesarefurtherrelatedtoidentifyingand
exploring the issues related to social behaviour in a specified environment. Whereas hypothesis
studiesarebasedondefiningthecauseandeffectrelationshipamongtheresearchvariablesthatare
largelyconductedinthestudiesrelatedtothescientificbehaviour.However,thepresentstudyis
formedinregardtothesocialbehaviourandlooksforwardtoexploringtheissuesrelatedtothe
changes in consumer behaviour towards fast food in India. The study also aims to identify the
developmentinbuyingtraitsofpeopleandhowtheygrewuponfastfoodovertraditionalhome
cookedfood.

3.2.2

TypeofInvestigation

Therearetwotypesofinvestigationsthatarecarriedoutontheresearchprocess.Theseincluded
correlationandcasual.Saundersetal.(2003)definedcorrelationinvestigationasthestudythatis
used to achieve the objectives related to the social study whereas casual study is used where
hypothesisareinvolvedtoprovethecauseandeffectrelationshipbetweentheresearchvariables.
Thus, the present study would be developed in regard to the correlation between the research
variables.Creswell(2003)furtherprovedthatcorrelationstudyisappropriatewiththequalitative
researchmethodandcouldhelpindrawingeffectiveresearchfindings.
3.2.3

UnitofAnalysis

Theresearcherwouldattempttocarryoutmarketresearchontheconsumersthatvisitedfastfood
storesinthecity.Theresearcherwouldattempttomeettheconsumersoutsidethefastfoodstores
locatedinthecitycentre,shoppingmallsandhighstreetsinDelhi,India.Theresearcherwouldalso
approachtheconsumersofKFC,McDonaldsandNirulasinordertocomparethecriticalfindings
fromdifferentperceptionsofthepeople.
3.2.4

TimeHorizon

Theprimaryresearchdatacanbecollectedatoneparticularpointoftimeorbetweentwopointsof
time. Thecrosssectional studyis related toconducting theprimarydatacollection process ata
specifiedtimewhereasthelongitudinalstudyaimstosignifythechangesintheresearchvariables
andthatiswhyitisconductedoveraperiodoftime.However,sincethepresentstudywouldrequire
todealwiththesubjectiveviewoftherespondentsthatwillbegatheredduringthemarketresearch
onfastfoodconsumers,thetimehorizonforthestudywouldbecrosssectional.
3.2.5

StudySetting

Saunders et al. (2003) defined three types of research settings such as field study, laboratory
experiment and field experiment. Field study is carried out at the markets, organisations and
institutionsinthesocietywhereaslaboratoryandfieldexperimentareconductedatthelaboratoryand
mostoftenrelatedtothescientificresearchreports.However,thepresentstudydoesnotinvolveany
scientificsettingtocarryouttheresearchandthus,fieldstudywouldberelatedtothepresentstudy.
3.2.6

ResearcherInterference

The researcher interference also affects the research outcomes. The researcher would have high
interferencewhereitwouldbecomplextomanage,analyseandevaluatethedatafindings.This
mostlyoccursinthescientificprojectswheredatacollectionmethodremainsquantitativeinnature.
However,thepresentstudyisqualitativeinnatureandthus,therewouldbeminimuminterferenceby
theresearcherthroughoutthedatacollectionandevaluationprocess.

3.3

ResearchApproach

Theresearchapproachlaysdownthepathofthestudy.Theresearchapproachsetsupthephasesfor
thestudybydeterminingwhatwouldcomefirstinordertoachievetheresearchobjectives.Kumar
(2010)discussedtwotypesofresearchapproachessuchasdeductiveandinductive.Thedeductive
approachiscarriedoutwhenprimarydatacollectioniscarriedoutbeforesummarisingthetheoretical
frameworkwhereasinductiveapproachisusedmostofthetimewhenprimarydataiscollectedafter
puttingdownthesecondarydata.Theinductiveapproachisthus,suitableforthequalitativedata
collection method that help to assess the social behaviour and environment in regard to the
participantschosenfortheresearchstudy.Theinductiveresearchapproachisthusconsistentwiththe
presentstudywheredata andinformation willbegeneralisedbytheprimarydata findings after
incorporatingtheliteraturereviewinthestudy.

3.4

ResearchStrategy

Therearevariousformsofresearchstrategiesavailabletoresearcherinordertoexecutetheiractions
intermsofgatheringthedataandinformation.However,theseresearchstrategiesmustalignwiththe
respectiveresearchapproachinordertohaveeffectiveresearchfindings.Creswell(2002)defined
thattherearestrategiesrelatedtoscientificbehavioursuchasexperiments,groundedtheoryand
ethnography.Theexperimentisconductedonthesmallsamplesizeandteststhehypothesisina
scientificenvironment.However,theethnographyandgroundedtheoryaretimeconsumingresearch
strategiesthatarerelatedtothelongitudinaltimehorizonandaimtomeasurethechangesinthe
researchvariablesovertheperiodoftime.However,almostallofthescientificresearchstrategies
aimtoestablishthecauseandeffectrelationshipandrelatethemselvestothescientificenvironment.
Onotherhand,therearesomestrategiesrelatedtothesocialsciencethatincludesurvey,casestudies,
action research and exploratory, descriptive and explanatory studies. Kumar (2010) stated that
surveysarethemostcommonresearchstrategythataimstogatherthedataandinformationfromthe
large numberofpopulation.However,Yin(2009)raisedconcerns thatfindingsfromthesurvey
mightbestandardisedandmisleadingsincetheparticipantsfromthesamepopulationgroupwould
havethesimilarcharacteristics.
Casestudyisoftenusedininvestigatingtheevidencethatwerealreadypublishedthroughoneor
othersourcesofpublicationandmediacommunication.However,inthepresentstudy,nocasestudy
hasbeenreferredintermsofjustifyingandevaluatingtheevidenceintermsofconsumerbehaviour
towardsfastfoodinIndia.Theactionresearchattemptstobringthechangefortheparticularsubject,
organisationortherelatedenvironment.Theactionresearchrecognisetheneedforchangebasedon
thefindings retrieved fromthedatacollectionandanalysisandthereafterexecutetheactionsto
implementchangesincontexttotheresearchsubject.Exploratory,descriptiveandexplanatoryare
theotherformsofresearchstrategiesthatarerelatedtothesocialscienceenvironmentbutsimply
describe,explainandjustifythefindingsgatheredthroughtheresearchprocess.However,thepresent
study is related to exploratory nature but it is believed that survey is the most consistent and
appropriatestrategyintermsofhavingresponsefromlargenumberofpopulationthatwouldbe
collectedfromthepeopleatthedifferentplaces.Thus,surveywouldbeconductedonthepeople
relevantforthestudy.
3.5

DataCollectionMethod

Thedatacollectionisimportantintermsofgatheringtheprimarydataforthepurposeofachieving
theresearchobjectiveseffectively.Yin(2011)saidthatdatacollectionistheessentialpartinthe
overallresearchprocessasitattemptstogatherthedataandinformationthatcouldchangethefacet
ofresearchfindingsimmensely.Sincethesurveyhasbeenpreferredastheresearchstrategy,itcould
be conducted with one or more methods that include interviews, questionnaire, observation and
schedules.Sincethestudywouldaimtoassessandidentifythefactorsthatimpactedontheconsumer
behaviourandtheirbuyingtraitstowardsthefastfoodavailableinIndia,theresearcherwouldneed
tohavealargenumberofpopulationtobeincludedinthestudy.However,interviewistherelevant
methodbutitmightturntimeconsumingfortheresearcherifthesamplesizeislarge.Sincethestudy
isbasedonlongitudinaltimeframe,itrulesouttheobservationandschedulingtechniquethataimto
assessthechangesintheresearchvariables.Thus,questionnaireasitisfeasiblewithgatheringthe
largeamountofresponsefromtheparticipants,ischosenforthestudy.
Thequestionnairewouldincludeamixofopenandclosedendedquestionsfortherespondentstobe
answered. The questionnaire would be developed with the help of peer group, supervisor and
colleaguesatworkplace.Moreover,apilottestwouldbeconductedonthemembersofpeergroupto
testthedesign,flowandsequenceofquestions.Thus,thetestingwouldhelptodeveloptheeffective
questionnairethatwouldbefurtherusedtogathertheresponse,opinionsandfeedbackfromthe
consumerswhowouldmakevisittofastfoodstoresinthecity.
Forthepurposeofthedatacollection,theresearcherwouldmakevisitstothevariousstoresinthe
cityincludingKFC,Dominos,McDonaldsandNirulas.Theresearchwouldmakecomplimentary
remarkstothecustomerswhojusteithervisitorcomeoutofthestores.Theresearcherwouldtryto
convince, as many participants tojoin the research process,as it would help to gain an insight
knowledgeintothesubjectcontextthatwouldservetheacademicneedsofthesocietyinthefuture.

3.6

SampleDesignandCharacteristics

Theresearchwouldbeconductedonthegeneralconsumersfromalargepopulation.Theresearcher
wouldapproachtheconsumersjustoutsidethestoresoffastfoodchainsincludingKFC,Dominos,
McDonaldsandNirulas.Theresearcherwouldseekthepermissionofthestoremanagerstoallow
carryingoutsurveyinsidethestorepremisesbutifitwouldnotbethecase,theresearcherwould
approachtheconsumersoutsidethestores.Theresearcherfurtherputconstraintontheagefactorand
wouldallowparticipantsonlyabovetheageof18yearsold.Thequestionnairehasbeendevelopedin

suchaswaythatseektheresponsefromtheadultgroupasitwouldbecomplicatedtoincorporatethe
findingsofadolescentsandadultsonthesameparameters.Thus,toavoidthecomplexityinthe
researchdesignandtheoverallresearchprocess,theresearcherhasconcludedtocarryoutthesurvey
on the persons above 18 years of age. However, no further distinction has been made in the
candidates. Thus, the convenience sampling techniques has been chosen to select the relevant
samplesfromthelargepopulation.However,theresearcherhasnotsetanyspecificlimitforthe
samplesizebutbelieveitwouldberelevanttogatherthedataanywhereabove50participants.Thus,
theresearchprocesswouldgeneratenonstandardiseddataandinformationthatwouldbesignificant
fortheresearchfindings.

3.7

ValidityandReliability

Thevalidityisoneofthecriticalfactorsintheoverallresearchprocessinordertohaveaccesstothe
validdataandinformation.Saundersetal.(2003)describedthethreeformsofvalidityintheresearch
suchasfacevalidity,contentvalidityandcriterionvalidity.However,theseformsalsocorrelatewith
the nature of the study. The present study is based on social behaviour and would explore the
previoustheoriesandwouldgatherthedatafromtherealenvironment.Constructvalidityisrelatedto
measurethevalidityofthetheoreticalpropositions.Tomeasurethevalidityinthepresentstudy,the
researcher would ensure the effectiveness of the questionnaire, summarising the theoretical
framework by only incorporating peerreviewed article and journals. The researcher would also
includetherelevantandrecentdataandinformationfromthevarioussources.Anyfiguresmentioned
inthestudywouldbecrosscheckedwiththeotherpublishedsources.
Havingreliabledataandinformationisessentialinordertohaveeffectivefindings.Saundersetal.
(2009)statedthatreliabilityisfacilitatedbystandardisedresearchconditionssuchascomplimentsby
theresearchertoeachparticipantattheendoftheirinterview.Thus,theremustnotbeanyvariation
in the behaviour, attitude and physical and psychological response of the researcher to the
respondents.
3.8ManagingBiasness
Managingandminimizingthebiasnessisthecriticalissueintheresearchprocess.Theresearcherhas
toensurethehonesty,integrity,opennessandconfidentialityduringtheresearchprocess.Kothari
(2008) stated that bias might occur in the research design or at data collection; analysis and

interpretation and therefore, researcher must carry out consistent set of actions to put down the
biasness. A researcher must not discriminate the specific respondents based on their personal
characteristics. Moreover, there could be various sources of errors that may develop during the
development of questionnaire, summarizing the findings to please the invigilator irrespective of
statingactualfindingsandmoreover,weaknessinresearchdesigncouldalsofacilitatebiasnessinthe
research.Eventually,researcherisawareofthenegativeimpactofbiasnessonmisleadingtheresults
andthus,wouldusetheirskillsandexpertiseeffectively.Theresearchwouldadoptstringentcodeof
conductanddisciplinetocarryouttheresearchprocess.Itwouldalsobeensuredtokeepthepersonal
motives away while developing the research report. The researcher would also commit the
participants for the confidentiality of their personal details that would not be discussed in any
circumstances.

CHAPTER4

DATAANALYSIS

Thedataanalysiscarryouttheanalysisonthedataandinformationgatheredfromprimaryand
secondarydatasources.Thechapterwouldalsodemonstratetheresultsintheformsofstatistical
charts.

4.1DataAnalysis:LiteratureReview
Theresearcherthoroughlyinvestigatedthevarioussecondarydatasourcestohaveaccesstoenrich
dataandinformationrequiredtomeettheresearchobjectives.Therefore,thevarioustheories,critical
statements and models summarised have been incorporate from various print and digital media
sources.
TheliteraturereflectedthatthereisimmensescopeandpotentialinfastfoodsectorinIndiaasthe
existingbusinessesrecordedlucrativeresultsandthegrowthratehasbeenover30%inthelast5
years.Theinternationalplayerstookfulladvantageoftheopportunitytoexpandtheirmarketsharein
theprofitablemarketandwiththeeaseinthenormsandmarketentryconditionsoftheeconomy,the
MNCs have been in favour of additional advantages. The domestic stores that in the past only
focusedonservingtraditionalfoodweredrawnintoofferingfastfoodalongwiththeirprevailing

menuitems.ItwasfoundthatfastfoodhadstartedinIndiaatthebeginningofthelastdecadeby
veryinfluentiallocalchains.LargelybecauseofNirulas,thefirstfamilyownedlargestrestaurant
chains,theothersfollowedsuiteincludingBikanerwalaandHaldiram.However,itwasnoticedthat
foralongtimecommonpeoplecontinuedtogotosmallrestaurantsasmostofthemwereprice
consciousandfeltvalueformoneywasthemajorinfluentialfactorfortheirbuyingbehaviour.
However,withtheadventofhighmediapresence,culturalsharing,commutingofpeoplefromone
countrytoanotherandawarenessamongthepopulation,thescopeoffastfoodraisedinIndia.Thus,
amongthedomesticfastfood,internationalfastfoodtoobecamepopularintheIndianmarketas
MNCsretailersbegantolaunchtheirstoresfrommetrocitiestotownsacrossthecountry.Itwas
foundthatMcDonalds,PizzaHut,KFCandDominoswerefirstamongtheoneswhoenteredthe
Indianmarketinordertotargetthedifferentcustomerbase.Themarketingmix,marketingstrategy
andsalespromotionstechniqueswerelargelydifferentamongtheseplayersbutallofthemshowed
greatcompetitiveadvantageinthemarketandverysoonbecamepopularamongtheIndianfastfood
chains.
Itwasfurtherstatedthatduetotherapidglobalisationandliberalisation,theconsumersnowhad
morespendingpowerandthus,thereismorescopeofnewproductandservicesofferingsinthe
markets. The consumers thus gradually inclined towards fast food as they developed their
personality,attitudeandperceptionandtheireatinghabits.Itwasfoundthatpeoplebecomemore
interested in celebrating their functions and special occasions at the eatingplaces and fast food
restaurantsbecametheirfirstpreferencesintermsofprices,food,speedandaccessibility.However,
itwasalsofoundthattherehasbeensignificantportionofthepopulationthatstillfeelreluctantto
havefastfoodfromtheinternationalfastfoodstoresduestomanyreasons.Thetheoriessuggested
thattherehavebeenculturaldifferencesandreligiousboundariesthathindermanyoftheconsumers
tohavefoodfromtheoverseasboundstores,asmostofthispopulationisvegetarianthatdonoteven
considerhavingtheirfoodwherenonvegetarianfoodisservedalongwiththevegetarian.
Despitethefacts,therehasbeenlucrativepotentialbothfordomesticandinternationalcompaniesas
ithasbeenfoundthatmostoftheretailerswereinvolvedinofferingnewmenumoreoften.Italso
emergedthatcompaniesinthefastfoodsectorshavebeenverycompetitiveintermsofdeveloping
andexecutingtheirmarketingstrategies.Thesecompanieswerefurtherinvolvedinraisingawareness
amongpublicthroughvariousmediaandmasscommunicationchannels.Thecorefocuswasalsoon

improvingthetangibleandintangiblefeaturessuchasstoreformat,entertainmentfacilities,parking
spacesandaddingfunelementforchildren.
Moreover,ithasbeenfoundthatconsumersweremoreinfluencedbythesalespromotionsschemes
suchasdiscountcoupons,peakoffpricereductions,onlinediscountvouchers,etc.Thecompanies
werethusmoreinvolvedinincreasingtheirsalesrevenuesandprofitabilityandoneofthemajor
objectiveswasthemarketexpansionalongwithcustomersatisfactionandretention.
Eventually, the information and critical statements reflected that consumers gradually became
interestedtowardsthefastfoodchainsandweremostlyinfluencedbythechangeintheirsocial
setting,involvementwiththereferencegroups,education,knowledgedevelopment,changesinthe
externalenvironment,personality,lifestyle,attitudeandotherpsychologicalandmacroeconomic
factors. The secondary research findings thus indicated that there has been positive consumer
behaviour towards the fast foods available as most ofthe domestic and international companies
reportedstrongpositioninthecountry.

4.2

DataAnalysis:Questionnaire

Beingonethefeasibleformofsurvey,wheredataandinformationcanbegatheredfromthelarge
proportionofpopulation,facetofacequestionnairemethodwaschoseninordertogatherdataand
informationfromthecustomerwhovisitedfastfoodstoresinthecity.Theresearcherapproachedthe
consumersoutsidethestoresofMcDonalds,KFC,DominosandNirulasasthestoremanagersdid
notallow gathering thedataandinformation insidethestores.However,researchersuccessfully
convinced68ofthecustomersthatshowedtheirwillingnessandinteresttoparticipateintheresearch
process. The researcher, however, ensured them about the confidentiality of their personal
informationandopinions.
Theresearchdidnotinvolvethepersonswhowereunder18asitmightgivethesegregateresultsand
thatwouldmaketheresearchprocessmorecomplex.However,almosttwothirdoftheparticipants
werefromtheagegroupof2436andalmostonethirdofthemwerewomen.Theprimarydatawas

collectedatthevariousstoreslocatedinthecitymajorlyinshoppingmallsandhighstreetsinNew
Delhi,India.
Onaskingaboutthefirstquestions,outof68,42oftheparticipantssaidthattheyvisitthefastfood
storesonceaweek,12ofthemsaidthattheyvisitalmostdailyintheafternoon.Oneofthemquoted
asIworkednearbyandthereforeIfinditgoodtoaccompanymycolleagueshereintheafternoon .
8oftheparticipantsandmostofthemwerewomenandfromworkingclasswhosaidthattheyvisit
twiceaweek.Therestofthemtickedtheonceafortnightandgavemanyreasonsforit.Onesaidas
toobusytogettimeoutinsomuchworkpressure,anothersaid,likehomecookedfoodbuthadto
accompanykidsfortheirtreats.
Thesecondquestionwasmorespecificabouttheinfluencegroupwhobecomethedrivingforce
behindtheconsumerstoforcethemtovisitthestores.Theresultreflectedthatalmostonethirdofthe
people wereselfinfluencedasmostofthem werefromworkingclassandfindfastfoodeasily
accessibleneartotheirworkplace.Therewassignificantproportionoftherespondentswhosaidthat
theyareconvincedbytheirkidsandspousetocometothestoresandmostlyovertheweekends.8of
the participants said that they are most of the time come to the stores in the company of their
colleagues.16oftheparticipantssaidthattherefriendgroupisthemajorinfluencepowerasthey
mostlycomewiththeircollegeanduniversityfriendstothesestores.

Thenextquestionaskedcandidatesabouttheirpreferenceforthedomesticandinternationalstores.
Theresponsewashoweversurprisingastwothirdoftheparticipantssaidthattheylikeinternational
retailersoverdomesticone.However,26oftheparticipantssaidthateventheyliketheoverseasfast
foodbuttheystillpreferdomesticandlocalretailerswhoservethem.Onerespondentsaid, Ifind
greatdifferenceinthepreparationoffastfoodasaccordingtothecustomarypractices,Indianfast
foodhavemoreunhygieniceatableoilthatisnotthecaseforfoodservingsinstoresfromoverseas
countries.However,theonewhofavouredthedomesticfastfoodquoted,Welikeandpreferthe
tasteofIndianfooditsbestknownforitsflavourthatisonlyfoundinfastfoodservedbythelocal
restaurants.
Thequestionwasalsoaskedabouttheserviceattributesandelementsthatmakethefastfoodretailer
popularamongtheconsumers.Thecandidateswereaskedtoranktheservicefactorsonthescaleof1

to8.Outof68,38candidatesrankedpriceastheirupmostreasontochoosethefastfoodstores.
However,similarfigurearoseforqualityoffoodwhere40candidatessaidthattheylookforthe
qualityoffoodandtheyalsowishtoknowabouttheingredientsoftheirfoodandthenmaketheir
decisiontochooseanyspecificstorefortheirfood.Almostonethirdofthecandidatesbelievedthat
theychoosethestorebasedonthelargemenuandeasyaccessibilityinthenearbylocation.However,
almost half ofthe participants ranked discounts,cleanliness and quick service as the significant
serviceattributesthatastoremusthaveinordertoretainandattractnewcustomers.Surprisingly,
mostofthecandidatesrankedCourtesyofStaffatlastandamongthose,mostoftheminsistedthat
staffmustalreadybetrainedtodealwiththecustomersandtheremustbeemphasiseonmakinglong
termcustomerrelationships.
Whenaskedabouttherecallingtheplaceofhavinggoodfastfood,surprisingly,overhalfofthe
candidatesadmittedthattheyhadthegoodfastfoodatthetimetheytravelledabroad.Thecandidates
mentionedseveraldestinationsintheirresponsesuchasThailand,China,Malaysia,Italyandother
Europeancountries.However,thereweresomewhosaidthedomesticdestinationssuchasGoa,
MumbaiandKeralawerewheretheyenjoyedthelocalfastfoodverymuch.Interestingly,mostofthe
candidatesmentionedthefastfoodofsmallvendorswhodidnothaveanystoreschains.
Onaskingabouttothinkofthefactorsthatcouldimprovethemarketpresenceoffastfoodstoresin
India,almosttwothirdofthecandidatesconcludedthatfastfoodretailchainsmustpromotethe
thingsthatcouldengageandattractnewcustomers.Oneofthemmentionedascompaniesmust
learnfromMcDonaldsGoodMealandentertainmentforkidsfactors.Theotherparticipantsaid
thatMcDonaldsoffersmalltoysforkidswiththeirmealsandthateventuallyturnintoimproving
theirsalesandbrandimage.Asectionofparticipantsalsobelievedthatfactorssuchasmoreparking
spaces, WiFi in stores, more store presence across the cities, home delivery option and online
marketingcouldproveusefulforthecompaniestoimprovetheirmarketshare.
Theresearcheralsoaskedthemaboutthesignificanceofpromotionalschemestoinfluencetheir
buyingtraits,48oftheparticipantssaidthattheymostofthetimeseektohavepromotionalcoupons
forthefastfoodrestaurants.Aparticipantsaid,ImakevisitstothestoremorefrequentlyifIhave
thediscountcouponsinmypocket.Anotherpersonsaid,Itisgoodtohavediscountcouponsandit
makesmoresensetotakefamilyandfriendstotheirtreatswiththediscountcoupons.Therestofthe
participantssaidthattheydonotmaketheirdecisionbasedontheavailabilityofanypromotional
schemesbuttheyreallywantedtohavetimeouttotrysomethingdifferent.

Onaskingaboutcustomerloyaltyscheme,56oftheparticipantssaidthattheywouldbewelcoming
tocustomerloyaltyschemethatcouldhelpthecompaniestorecognisewhattheircustomerwantson
thebasisofpurchasinghistory.AParticipantsaid,customerloyaltyispopularconceptinwestandit
mustbeestablishedheretooinordertogiveusmoreflexibility,convenienceandpromotionaloffers
throughasingleroute.
ThecustomerswereaskedtofurtherrankthespecificstoresincludingMcDonalds,KFC,Nirulasand
Dominosaccordingtothevariousparametersmentioned.38oftheparticipantsrankedMcDonalds
foritslowprices,28saidthatitisactuallyNirulaswhohadlowpricesforitsfoods.However,very
fewindicatedthatKFCandDominosareknownfortheirlowprices.Onotherhand,overhalfofthe
participants said that McDonalds offer true value for Money as the prices and food is very
competitiveandofgoodtasteascomparedtoothers.Incontrast,42oftheparticipantssaidthatthey
reallyenjoyedthefoodatDominosthatishygienicandhealthyascomparedtoothers.
OverhalftheparticipantsalsorecognisedMcDonaldsandDominosfortheirdiscountcouponsthat
theyofferthroughvarioussourcesincludingthewebsite.However,26candidatessaidthatNirulas
offerdiscountedfastfoodmealtothecollegeanduniversitystudentsatthetimeoftheyearwhen
theytakeadmissions.However,mostofthecandidatesrankedthatKFCdoesnotofferanydiscount
toanyspecificclassofpopulationinthemarket.
Overtwothirdoftheparticipantsrecognisedthattherearevariousnewandmoderncommunication
channelsthatmostothercompaniesturningto.Aparticipantquoted,Iusesocialnetworkingsites
verymuchandwouldappreciateifthefastfoodretailersmakeattemptstoimprovetheirpresence
online.Similarly,mostofothersaidthatonlinemedia,socialnetworkingmediasuchasFacebook,
twitter, blogsandphoneadvertisementaresomerevolutionary alternatives totraditional TVand
radiomediacommunications.
Chart1

Chart2

Chart3

Chart4

CHAPTER5

FINDINGSAND
RECOMMENDATIONS

Thefindingswouldbedrawnbasedonthetheoreticalframeworkanddataanalysis.Finally,the
recommendationswouldbemadeinreferencetotheoverallresearchfindings.

5.1

FINDINGS

The researcher has effectively carried out primary and secondary data methods to ensure the
accomplishmentofresearchobjectives.Theresearcherspentsubstantialtimeingatheringdataand
informationfromvarioussecondarysourcesandequallyemphasizedonthesampleofpopulationfor
theprimarydatafindings.Thedataanalysiswascarriedouttodiscussandunderpintheissuesusing
the broad as well as narrow analysis approach. However, consumer behaviour remained the
underlyingbasisandinseparablepartoftheoverallresearchreportthataimedtoexploreandtestthe
varioustheoriesincontexttoresearchsubject.
Thebusinessoperationshavebecomesocompetitiveanddynamicthatorganisationshavetofocuson
theirbusinessprocesseseffectivelyinordertoraisetheirscopeofoperationsforthesakeofgrowth,
development and market expansion. Therefore, there is much emphasis to facilitate innovation,
creativity,researchanddevelopmentintheorganisationthatcouldbeusedtoadvancethetechnology
andflexibilityinthebusinessprocesses.However,itwasfoundthatconsumerneedsaredynamic
thatchangeovertheperiodoftimeandhence,theintroductionofnewproductsandservicesisthe
essenceofthetimefortheorganisations.Organisationstoohaverealisedthatitisimportantforthem
toassesstheneedsoftheconsumersandtherefore,assessmentofconsumerbehaviouremergedto
becometheinevitablepartforthedecisionmakingandplanningfunctionsoftheorganisations.The
businessandcorporatestrategiesofthefirmensurethattheymeettheorganisationalobjectivesby
effectively utilising the organisational resources while developing the core competencies and
capabilitiesofthoseresources.
TheresearchfocusonthefastfoodindustryinIndiaandhowitgraduallyexpandeditsscopeand
operationsinthemarket,asotherinternationalmarketplayersbegantohaveinterestinthesector.
Soon it was found that number of major international companies entered the market when
governmentupliftedbarriersontariffs,licensing,taxesandforeigndirectinvestment(FDI)cap.The

fastfoodindustryrecordedhugegrowth,development andwidespreadrecognition sincethelast

decadewhenitwasfoundthatsignificantproportionofpopulationturnedandfavouredfastfoodin
theirfoodconsumption.Therehasbeensignificantincreaseinthegrowthrateovertheyearswhen
thebuyingtraitsofindividualsleanedtowardfastfoodthantheirtraditionalandcustomaryfood
availableinthemarket.Itwasfoundthatattitude,personalityandperceptionofcommonpeople
remarkably shifted with the advent of knowledge sharing through traditional and media
communicationchannelssuchaswordofmouthpromotion,entertainmentsourcessuchasmovies,
music and television, internet, awareness through education, relocation, travelling and other
communicationsourcesfromthecompanysuchasdirectselling,advertisement,etc.
Overthelastdecade,themarketplayerssignificantlyattemptedseveralreformsinordertodevelop
their customer relationship strategy, marketing mix and sales promotion techniques in order to
effectivelyexecuteoverallmarketingstrategiestomeettheorganisationsobjectives.Itwasfound
that domestic players focused on changing their physical setting such as store features, easily
accessibilityofthestoresandotherintangiblechangessuchaspromotionsoncelebrations,home
delivery options whereas multinational companies emphasize on improving their food menu,
marketing mix, online promotions and raising awareness through advertisement. The mix of all
tangible and intangible factors helped to facilitate the change in the perception, experience and
attitudeoftheconsumerstowardsfastfood.
Duringthesameperiod,globalisationandliberalisationofeconomyhelpedtoimprovetheGDP,
growthofthemarketsandspendingpowerofconsumers.Thewidespreadavailabilityoffastfood
throughdomesticaswellasinternationalretailersbegantodrawtheattentionoftheconsumersand
lateritwasfoundthatfastfoodhasbecomeaninseparablepartofeatinghabitsoftheconsumers.
Customer loyalty programs emerged as to provide competitive edge to the companies when
companieswerefoundtoprovidenumerousloyaltiesdiscountstotheconsumersthroughvarious
sources.However,itwasalsofoundthatalmostallofthemethodsweretraditionalandnoneofthe
companiessofarofferedcustomerloyaltycardschemeinordertoretainthedetailsandconsuming
trendsofcustomerstodevelopthefuturestrategies.However,thefindingsalsosuggestedthatthere
hasbeenhugedifferenceinthemarketingpracticesoftheinternationalplayersinthehomeandhost
countriesandthereisneedofshiftinthemarketinginitiativesofthesemarketplayers.Despitethis
fact,thecompaniessuccessfullyfocusedonissueslikeentertainmentfactor,courtesy,cleanliness,
hygienicfood,accesstoparkinglotsandpresenceacrossthecountry.

Eventually,theflexiblefinancialmodelstoohavefacilitatedthemarketexpansionandsizeoffast
food market in the country as it was found that number of international and domestic retailers
promotedtheirbrandsthroughfranchise,jointventureandcontractsystems.Thus,severalmacroand
micro economic, social andpsychological factors helpedtheconsumers todeveloptheirinterest
towardsavailablefastfoodinthemarket.Asaresult,fastfoodfromdifferentcountriessuchas
Italianpizza,continentalfood,Americanhotdogs,Kentuckychickenbecamepopularamonglocal
southIndian,Punjabiandtraditionalfastfood.
Thus,thedevelopmentinthelifestyle,personality,attitude,perceptionandothersocialdemographic
factorsinfluencedthepublicatlargetodeveloptheirconsumptionandbuyingtraitstowardsthe
overseasandcustomfastfoodavailabletothem.However,thefindingsalsosuggestedthattherewas
significantportionofthepublicthatavoidedhavingfoodattheinternationalretailersduetoreligious
andcustomarybarriersasaccordingtothetraditions,thesepeoplecouldnothavetheirvegetarian
foodwherenonvegetarianfoodwasbeingservedaswell.Consequently,internationalretailersdo
nothaveanysuchpolicytodifferentiatetheircookingandservingpracticesirrespectiveofthefact
thatthepracticesarefollowedinthedomesticfastfoodstores.
Hence, it can be concluded that consumer behaviour has formed by many factors during the
developmentofconsumersperception,experienceandsatisfactionandmoreover,companiestook
thosefactorsseriouslyintryingtoimprovetheirproductivity,profitabilityandmarketperformance.
However, still a holistic approach is essential to integrate the various marketing practices and
strategiestomakethemmorecustomerorientedratherthanmarketoriented.

5.2RECOMMENDATIONS

CustomerLoyaltyPrograms
Ithasbeenfoundthatoperations offastfoodretailers aremarket oriented rather thancustomer
orientedandthus,thereisneedtoadoptthestrategicapproachtowardsthecustomersinorderto
influence their behaviour towards fast food. The customer loyalty programs have proved their
credentialtogainacompetitiveadvantageinthewesterncountriesbuthowever,ithasbeenfound
thatfastfoodcompaniesfromwesthavenotsofarappliedanyofthesemarketingeffortinIndia.
Hence,itisbelievedthatamidstthestronggrowthrate,itwouldbeappropriateforthecompaniesto

launchcustomerloyaltyprograms.Kumar(2010)statedthatcustomerretentionisoneofthemajor
objectives of corporate strategies of the firm and customer loyalty is indispensable part of the
marketingstrategiesatpresenttoimprovecustomerretention.
OnlineMarketing
Onlinemarketingprogramshavegainedunprecedentedrecognitionatpresentandveryfewfastfood
retailersinIndiahaveinitiatedonlinemarketingstrategytoattractthecustomers.However,thereis
hugepotentialforonlinemarketingasconsumersbegantousethebroadbandandInternetrelated
services soon after the immense offerings from the telecom companies. The benefits could be
exaggeratedifthestrategyisdevelopedandexecutedeffectively.

EffectiveMixofIntegratedMarketingCommunication
Ithasbeenfoundthatmostofthefastfoodretailersespeciallythedomesticones,havebeenusingthe
traditional marketing communication method such as direct sales, discounts in stores, radio
advertisementandsoonbuthowever,withtheadventofmodernisation,manynewandmodern
techniquesemergedtoattractthecustomers.Someofthemnamelyareuseofsocialmediachannels,
companyblogs,website,sendingemailstothecustomers.Theintegratedmarketingmethodcould
helptheretailerstogainsignificantmarketshareintheindustry.
CustomerRelationshipManagement
Theglobalenvironmentisdynamicandthereforecompaniesstrivetostrengthentheirbrandimage
andcompanyidentityinordertosecurecustomerretention.Therefore,managingandimproving
customer satisfaction is crucial to the growth and development of the companies. Customer
relationshipmanagementensurethatcustomersaresatisfiedwiththeproductsandservicesonoffer.
Themanagementofstaff,courtesyandfriendlyenvironment,cleanlinessinstores,freshfoodand
lowpricescouldbedealtwiththeeffectivecustomerrelationshipmanagementatthefastfoodstores.

CHAPTER6

CONCLUSION

ThepostliberalisationperiodinIndiafacilitatedcompetitiveadvantageformanysectorsandfast
foodsectorwasoneofthem.TheaccumulationintheGDPundoubtedlyhelpedtoincreasetheper
capita income and eventually, the customer spending. Fast food emerged in the country in the
beginningoflastdecadewhennumberofdomesticretailersfromorganisedandunorganisedmarket
begantoofferthefoodotherthanthetraditionalandcustomaryfood.Thefoodwasoriginallyrelated
tothelocaltraditionandalsototheoverseascounterparts.However,therewereverylittlescopefor
theretailerstogrowinthemarketsincethesaleswaslargelyisolated.PrasadandAryasari(2010)
statedthatpeoplefromthemiddleclassduringthattimewouldneglecttodineoutandpreferredto
have home cooked food. Consequently, the open market improved the standard of living of the
consumers and they began to raise their knowledge towards the changes in the society and
environment. Moreover, the GDP grew and so did the consumer spending in the market. The
availabilityoffastfoodstoressoonbecamepopularinthemarketsandthereafter,themarketentryof
internationalfastfoodretailerssuchasMcDonalds,KFC,PizzaHutandDominosincreasedthe
competitionaswellasawarenessinthemarket.Asthesizeofmarketgrew,theconsumerbehaviour
graduallyturnedtoadoptthefastfoodinthedailylifeoftheconsumers.Later,itwasfoundthat
peopleturnedmoretothestoresthateventuallythestorestosettheircriticalsuccessfactorsinorder
todifferentiatethemfromothers.
Thedomesticaswellasinternationalfastfoodchainsusedvariousfinancingmodelsfortheirmarket
expansionbyincludingfranchise,jointventures,contractandpartnerships.Atpresent,thefastfood
marketinIndiahavebecomeaninseparablepartoffoodconsumptionofthepublicandmuchofthe
creditforitsrecognitionandpopularitybelongedtothechangesinthelifestyle,education,media
awareness,travellingandattitudeofthepeopleinregardtothemacroandmicroeconomicfactors

suchasincome,spending,savingrate,referencegroup,socialsettingandpeergroups,moreover,the
psychologicalfactorsinfluencedthebehaviourofcustomersatlarge.
Thus,itcanbeconcludedthatorganisationsmustrealisetheimportanceoffactorsthatinfluenceand
affectthecustomerbehaviourandthepotentialofcustomerloyaltyprograminordertoimprovetheir
brandimageandcompanyidentityintheconsumermarket.Togainthecompetitiveadvantageisthe
corepurposeoforganisationsandtoachievethis,aholisticapproachisessentialtointegrateallthe
crucialyetimportantfactorsthatcouldimprovetheoverallmarketingstrategy.