Professional Documents
Culture Documents
61218
Project Report
On
For
Submitted By
Parinita Sharma
In
To
(2017)
1
DEPARTMENT OF OPERATIONAL RESEARCH
FACULTY OF MATHEMATICAL SCIENCES
NEW ACADEMIC BLOCK
UNIVERSITY OF DELHI
DELHI-110007
Name and Address of the Organization :Domino’s Pizza India Pvt. Ltd.,
2
CERTIFICATE
This is to certify that this project entitled “Study of consumer behaviour towards the Inian
pizza market” is my original work carried out at Domino’s Pizza India Pvt. Ltd. in the
year 2017, and has been submitted for partial fulfilment of the course M.A/M.Sc. Applied
Operational Research. This Project report has not been submitted earlier or in full or in
part for any other diploma or degree to any other University or Institute to the best of my
knowledge.
Parinita Sharma
M.A/M.Sc. (Semester-IV) Applied
Operational Research
Department Of Operational Research
Faculty of Mathematical Sciences
University of Delhi,
Delhi-110007
3
ACKNOWLEDGEMENT
I express my sincere gratitude to the Operational Research Faculty for the
timely needful guidance, help, managerial support and co-operation at
various levels during the project study and for their inevitable guidance,
co-operation and suggestions in planning and execution of the project.
Parinita Sharma
M.A /M.Sc. (semester-IV) Applied Operational Research
Department Of Operational Research
Faculty of Mathematical Sciences
University of Delhi,
Delhi-110007
4
CONTENTS
Literature
Factor Analysis
Questionnaire Design
Company Profile
Summary
5
Introduction
to
OPERATIONAL
RESEARCH
6
INTRODUCTION
The term operational research was first coined in 1940’s the Closky and Trefthen in a
small town of United Kingdom. This new science came into existence in military context
during World War II military management called on scientist from various discipline
and organized them into teams to assist in solving strategic and tactical problems i.e. to
discuss, evaluate and suggest ways and means to improve the execution of various
military projects. By their joint efforts, experience and deliberations, they suggested
certain approach to systematic and scientific study of operation of this system was
called the OPERATIONAL RESEARCH (O.R.).
7
Morse & Kimble defines O.R. as ‚a scientific method of providing executive
departments with the quantitative basis for decision regarding the operations under
their control.
According to miller and Starr ‚O.R. is applied decision theory, it use any scientific,
mathematical and logical means to attempt to cop with the problems that confront the
executive when he tries to achieve a through going rationality in dealing with his
decision problems‛
In the words of Ackoff & Sasieni ‚O.R. is the application of scientific method by
interdisciplinary teams to problems involving the control of organized system so as to
provide solutions which best serve the purpose of the organization as whole.‛
From the various definitions of O.R. it is clear that O.R. has wide scope. In general
whenever there is any problem simple or complicated, we can apply O.R. techniques to
find the optimal solutions.
O.R. in India
In India O.R. came into existence in 1949, with the opening of an O.R. unit at
Hyderabad. In 1953, an O.R unit was established in the Indian Statistical Institute,
Calcutta, for the application of O.R methods in national planning and survey. The O.R
society of India was formed in 1957.
The prevalence of operations research in the Nation's economy reflects the growing
complexity of managing large organizations that require the effective use of money,
materials, equipment, and people.
8
Operations researches analysts help determine better ways to coordinate these elements
by applying analytical methods from mathematics, science, and engineering. They solve
problems in different ways and propose alternative solutions to management, which
then chooses the course of action that best meets the organization's goals. In general,
operations research analysts may be concerned with diverse issues such as top-level
strategy, planning, forecasting, resource allocation, performance measurement,
scheduling, design of production facilities and systems, supply chain management,
pricing, transportation and distribution, and analysis of data in large databases.
9
Significant Features of Operation Research
2. Scientific approach: - O.R. employs scientific methods for the purpose of solving
problems.
3. Objective ‚- O.R. attempts to locate the best or optimal solution to the problem under
consideration. For this purpose, it is necessary that the measure of effectiveness is
defined which is based on the goals of the organization.
10
CHARACTERISTICS OF OPERATIONAL RESEARCH
(i) Such a team, when confronted with a problem, determines the solution of the
problem by following inter-disciplinary approach. Every expert of the team tries to
abstract the essence of the problem and determines if the same type of problem has
been previously undertaken or not. If a similar problem has been dealt previously then
it becomes quite easy to apply the same technique to determine the solution of current
problem as well. In this way, each member of the team, by utilizing his experience and
expertise may be in a position to suggest an approach that otherwise may not be
thought of. Thus, Operational Research makes use of experience Interdisciplinary Team
Approach. It is an important characteristic of operational research. According to this
characteristic, no single individual can be an expert on all aspects of a problem under
consideration. Thus, Operational Research utilizes the inter-disciplinary approach i.e.,
an Operational Research team comprises of experts from different disciplines and
expertise of people from different disciplines for developing new methods and
procedures.
(ii) Operational Research is a continuing process. It cannot stop on the application of the
model to one problem, for this may create new problems in other sectors and in the
implementation of the decision taken. Operational Research must also specify the
organizational changes required to implement decisions and control the result thereof.
Without this, the work of Operational Research practitioner is incomplete.
(iii) Objective. Operational Research attempts to find the best or optimal solution to the
problem under consideration. To do this, it is necessary to define a measure of
effectiveness that takes into account the goals (objective) of the organization. In other
words ‚Operational Research is the scientific study of large systems with a view to
identify problem areas and provide the managers with a quantitative basis for decisions
which will enhance their effectiveness in achieving the specified objectives.‛
11
(viii) Operational Research gives only bad answers to the problem where only worse could be
given i.e.; it cannot give perfect answers to the problems. Thus, Operational Research
improves only the quality of the solution.
12
METHODOLOGY IN OPERATIONAL RESEARCH
13
STEP5: Establishing Controls
Control processes are necessary to ensure that the solution suggested by the model
results in predicated changes in performance. Beyond initial implementation, controls
are necessary for maintenance for the solution.
1. Probability: It is rarely possible to predict the future of the business world with
complete certainty. There is always an element of uncertainty as far as the future
courses of events are concerned. The probability concepts try to analyze the
uncertainties and bring out necessary data with reasonable accuracy for the purpose of
decision making. Probabilities are of two types:
(i) Objective probability
(ii) Subjective probability.
14
The basic premise of decision theory is that the behaviour of the future is probabilistic
and not deterministic. Various probabilities are assigned to the state of nature on the
basis of available information or subjective judgement and the likely outcomes of the
alternative courses of action are evaluated accordingly before a particular alternative is
selected.
This technique of decision making is based on expected monetary value and utility. By
analyzing the monetary value of utility from a given set of circumstances, a model is
constructed and accordingly decisions are taken. It is a well-known fact that the
environment within which decisions are taken can be logically divided into three parts:
certainty, risk and uncertainty. Certainty exists when one can specify exactly what will
happen when during the period for which the decision is being made. Risk refers to a
situation where one can specify a probability distribution for the possible outcomes.
Uncertainty refers to the condition when one cannot specify the relative likelihood of
the outcomes. Although some business decision can be made under condition nearing
certainty, elements of risk and uncertainty underline most of the decisions which
mangers make.
(a) The Simplex Method. This aims at maximizing or minimizing a given function,
subject to constraints in respect of each variable.
(b) The Transportation Problem. This deals with problems of matching the origins
(stores, warehouse, and factories) with the outlets (process centre, market etc.) at a
minimum cost of distribution and transportation.
(c) The Assignment Problem. It can handle the problems of assigning a given number of
agents each one to the same number of tasks so as to result in maximum efficiency or
minimum cost.
4. Dynamic Programming: This technique deals with the problems that arise in
connection with multi period analysis and decisions. In contrast to Linear Programming
there is no standard mathematical formulation of Dynamic Programming, rather it is a
15
general type of approach to problem solving and particular equation must be
developed to fit each individual situation. However, the basic approach used in
Dynamic programming is to break down a problem into series of problems in such a
way that answer to the first sub problem can be used in deriving the solution to the next
sub-problem and so forth finally giving solution to the whole problem.
5. Sequencing: This method solves problem where effectiveness measure( in terms of
cost, time, mileage, etc.), depends upon the sequence of performing given jobs. This
helps to determine a sequence in which given jobs should be performed if the objective
is to minimize the total efforts.
6. Game Theory: Developed by Jon Von Neumann and Morgenson, this is a
mathematical theory applicable to competitive business problems. This technique deals
with situations where two or more (finite) individuals are making decisions involving
conflicting interests. However the final decision depends upon the decisions of the
parties concerned.
The first decision namely – how much to order at one time, is to be balanced between
two pressures – the first pressure is to order huge lots so as to minimize ordering costs
and the other pressure is order small lots so as to minimize carrying costs. The optimum
course of action is a compromise between the two extremes. Arriving at a model for
deriving the economic order quantity (E.O.Q) can do this.
The second decision namely – when to order this quantity, is decided by ascertaining
the re-ordering level. The re-ordering level is the point lying between the maximum and
the minimum levels at which time it is essential to intimate the purchase department for
fresh supplies of the material. This point will usually be slightly higher than the
minimum stock, to cover such emergencies as abnormal usage of material or
unexpected delay in delivery of fresh supplies. Re-ordering level depends upon lead-
time, rate of consumption and economic ordering quantity.
8. Queuing Theory: Waiting lines at any service centre are common phenomena and
Queuing theory is devoted to mathematical study of waiting lines. Various alternative
models have been used to describe such situations, but they basically share the
following common features: (i) Units requiring services are generated from an input
source from different kinds of queues for service, (ii) a service discipline by which the
16
queue members are selected for receiving service, (iii) a service mechanism which
defines the type of service, after the completion of which unit leaves the system or
rejoins it for further processing. Many alternative assumptions can be made about these
common elements, and these give rise to the different queuing problems.
11. Replacement Theory: This theory suggested the determination of the time when
items of plant should be replaced. The replacement of items is necessary because the
efficiency of an item deteriorates with time, or sometimes the item may fail completely.
Replacement, on the one hand, requires investment, on the other, saves operating cost
which otherwise is more while using old parts. Thus, a problem arises when the part
should be replaced so that cost is minimized. The replacement problems arises in three
conditions:
17
(i) Replacements of item that fail completely and are expensive to be replaced.
(ii) Replacement of items whose efficiency deteriorates with time: and
(iii) Replacement of items because of obsolescence.
13. Markov Analysis: The Markov analysis is a method of analyzing the current
movement of some variables in an effort to predict the future movement of the same
variable. Russian mathematician, A. Markov developed this analysis, early in the 20th
century. As a management tool, the Markov analysis has been used in the last few years
mainly as a marketing aid for examining and predicting the behaviour of the consumer
in terms of their brand loyalty and their switching from one brand to another. A full
treatment of the application of Markov analysis to managerial decision making would
require an extensive background in mathematics. This technique, however, can be most
favourably applied
(ii) Integer programming: Integer programming applies when the values of decision
variables are restricted to integers. Applications include Financial Management and
Plant Location.
(iii) Goal programming: Goal programming deals with the problems having multiple
objectives. It is a technique quite similar to linear programming. Applications include
production scheduling, transportation problems, portfolio analysis and crop selection in
agriculture.
18
(iv) Heuristic programming also known as discovery method refers to step by step
search towards an optimal when a problem cannot be expressed in mathematical
programming form. The search procedure examines successively a series of
combinations that lead to stepwise improvement in the solution and the search stops
when near optimal has been found.
(v) Algorithmic programming is just the opposite of Heuristic programming. It may also
be termed as mathematical programming. This programming refers to a thorough and
exhaustive mathematical approach to investigate all aspects of given variables in order
to obtain optimal solution.
(vi) Quadratic programming refers to a modification of linear programming, in which
the objective function and constraint equations appear in quadratic form, i.e., they
contain squared terms.
(vii) Probabilistic programming also known as stochastic programming refers to linear
programming that includes an evaluation of relative risks and uncertainties in various
alternatives of choice for management decision.
APPLICATIONS OF O.R
O.R is mainly concerned with the techniques of applying scientific knowledge, besides
the development of science. In recent years, O.R. has successfully entered many
different areas of research in Defence, Govt. service organizations and Industry. Some
applications of O.R. in the functional areas of management are:
FINANCE, BUDGETING AND INVESTMENT:
Cash flow analysis, long-range capital requirement, investment portfolios, dividend
policies, etc.
PHYSICAL DISTRIBUTION:
Location, size of warehouses, distribution centres’, retail outlet etc.
Distribution policy.
19
MANUFACTURING AND FACILITY PLANNING:
Production scheduling.
MARKETING:
Product selection, timing competitive actions.
PERSONAL:
Recruitment policies and assignmentof jobs.
20
RESEARCH AND DEVELOPMENT:
Determination of areas of concentration of research and development.
21
LITERATURE
22
MARKETING RESEARCH
It is "the function that links the consumers, customers, and public to the marketer
through information — information used to identify and define marketing
opportunities and problems; generate, refine, and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a process.
Marketing research specifies the information required to address these issues, designs
the method for collecting information, manages and implements the data collection
process, analyzes the results, and communicates the findings and their implications."[1]
Marketing research is the systematic gathering, recording, and analysis of data about
issues relating to marketing products and services. The goal of marketing research is to
identify and assess how changing elements of the marketing mix impacts customer
behavior. The term is commonly interchanged with market research; however, expert
practitioners may wish to draw a distinction, in that market research is concerned
specifically with markets, while marketing research is concerned specifically about
marketing processes.
Marketing research is often partitioned into two sets of categorical pairs, either by target
market:
Consumer marketing research, and
Busines-sto-business (B2B) marketing research
23
Consumer marketing research is a form of applied sociology that concentrates on
understanding the preferences, attitudes, and behaviors of consumers in a market-
based economy, and it aims to understand the effects and comparative success of
marketing campaigns. The field of consumer marketing research as a statistical science
was pioneered by Arthur Nielsen with the founding of the ACNielsen Company in
1923.
Thus, marketing research may also be described as the systematic and objective
identification, collection, analysis, and dissemination of information for the purpose of
assisting management in decision making related to the identification and solution of
problems and opportunities in marketing.
‚The study of the buying units and the exchange processes involved in a acquiring,
consuming, and disposing of goods, services, experiences, and ideas‛
This simple definition contains a number of important concepts. First, note the inclusion
in the definition of the word ‚exchange‛. Consumer is inevitably at the one end of an
exchange process in which resources are transferred between two parties. For example,
an exchange takes place between a doctor and a patient: the physician trades medical
services for money. Other resources- such as feelings, information, and status- may also
be exchanged between the parties. Exchange process as a fundamental element of
Consumer Behavior. Exchanges occur between Consumers and Firms. Again looking at
the definition the term ‚buying units‛ rather than consumers. This is because purchases
may be made by groups as well as individuals. In fact, an important study area for
Consumer researchers is organizational buying behavior.
24
THE EXCHANGE PROCESS INVOLVES A SERIES OF STEPS
i) Acquisition phase
ii) Consumption phase
iii) Disposition phase of the product or service.
ACQUISITION PHASE
Researchers analyze the factors that influence consumer’s product and service choices.
Indeed, most of the researchers has focused on the Acquisition phase. One factor
associated with the search for and selection of goods and services is product
symbolism- i.e., people often acquire a product to express to others certain ideas and
meanings they have about themselves.
CONSUMPTION PHASE
Consumption phase researchers analyze how Consumers actually use a product or
service and the experience they obtain from such use. The consumption experience is
extremely important for service industry. In some industries, such as restaurants,
amusement parks, and rock concert promotions, the consumption experience is the
reason for purchase.
DISPOSITION PHASE
Disposition phase refers to what Consumers do with a product once they have finished
using it. In addition, it addresses Consumer satisfaction levels after purchasing a good
or service. When Consumers have unrealistic expectations of a product, they are
unlikely to realize anticipated outcomes, and they will probably be highly dissatisfied.
25
Consumer Behaviour is a young discipline. It incorporates theories and concepts from
all behavioural sciences, so that when studying the Acquisition, Consumption, &
Disposition of products, services, and ideas, one has to explore the discipline of
Marketing, Psychology, Sociology, Anthropology, Demography, and Economics.
26
THREE RESEARCH PERSPECTIVES ON CONSUMER BEHAVIOR
A key feature of the field is its research base. As a social science, Consumer Behaviour
employs research methods and procedures from psychology, sociology, economics, and
anthropology. To generalize, research in Consumer Behaviour is organized according to
three research perspectives that act as guides in thinking about and identifying the
factors that influence consumer acquisition behaviour. These three perspectives are:-
1 The Decision-Making Perspective
2 The Experimental Perspective
3 The Behavioural Influence Perspective
TYPES OF BUYERS
Buyer Behaviour is a complex topic precisely because it deals with people. People are
complex, unpredictable, and at times even irrational. They are also unique. No two
buying situations are exactly alike because the buyers are not exactly alike. Yet all buyer
behaviour is goal oriented; people are trying to satisfy particular needs when they
purchase and consumer products and services. It is marketers’ task to recognize the
needs of the particular buyer and attempt to satisfy them. In every buying situation, the
actual decision to buy is made by a decision-making-unit (DMU). There are three basic
DMUs, this classification is based on the process of buyer behaviour, not on the
products consumed:
Individual consumers:- The decision to buy is made by the individual, and the purchase
is used to satisfy a personal need. Many buying decisions are made, and many products
are consumed by an individual consumer.
Households:- Many times, a product is used by, and perhaps purchased by, a group of
consumers who form a Household. Example is a family meal.
Organizations: - Businesses, Governments, and Non Profit Organizations are all formal
Organizations. DMUs in organizations are composed of a number of members with
different roles to play.
27
ROLES OF BUYERS
While individual consumers make buying decisions for themselves, the purchase of
households and organizations are the results of group decision-making-processes by
DMU. The role of buyers is that of :-
1 Initiator
2 Purchaser
3 Decision maker
4 Influencer
5 Gatekeeper
The initiator recognizes the need for a purchase and puts the rest of the buying process
in motion. Someone actually performs the activities of purchasing the product.
However the question comes ‚Is the purchaser also the decision maker?‛ often they are
not the same, in the decision making the entire DMU may be involved while the
purchase is done by only one person. Also the purchaser may have been requested by
another household member to make a purchase so there may be influencer for the
purchase. A gatekeeper is a person who controls a flow of information, there by
controlling whether or not a potential customer hears about a product. This role can be
especially critical in the organizational setting.
28
less of the buyer’s attention. Three basic types of buying situations have been identified
as:
1 Automatic response buying,
2 Limited problem solving,
3 Extensive problem solving.
INTERNAL FACTORS
At the care of any individual’s Consumer Behavior is his or her own psychological
makeup. There are number of concepts from fields of psychology and social psychology
that are critical to an understanding of Consumer Behavior. The Internal Factors include
the psychological factors as
1 Needs and Motives
2 Personality
3 Perception
4 Learning
5 Attitudes
6 Involvement
EXTERNAL FACTORS
The overall society in which a Consumer lives has considerable effect on Consumer
Behaviour. The beliefs and values and indeed, the world view that an individual holds
are learned and transmitted within the societal framework. The effect of those values is
often difficult to assess because they are deeply, almost unconsciously, held. They are
also enduring, changing slowly, even in the face of major technological and social
change. The various sociocultural factors have a tremendous effect on people’s
behaviour as consumers. The external factors can be categorized as
1 Sociocultural factors
Societal values
Economic factors
The media
Reference groups
29
2 Demographic characteristics
Age
Gender
Income
Educational level
Occupation
Social class
Ethnic group
Place of residence
RESEARCH METHODOLOGY
In a market research the most important aspect is to define the problem accurately.
Once the problem is defined well, it makes it easier for us to study different aspects
related to the problem and find solutions. Defining the problem is the single most
important step in the market research process. A clear statement of the problem is a key
to a good research. A firm may spend hundreds or thousands of dollars doing market
research, but if it has not correctly identified the problem, those dollars are wasted. In
our case it is obvious that the problem here is setting up a business.
For understanding and analysing the problem at hand we need to collect data from
various sources, find appropriate information from the data collected and propose
suggestions based on the information. In this study which studied the consumer
behaviour and response in the internet service provider sector and specifically the
wireless internet segment, the following was the methodology we followed.
Data Source:
The research included gathering data from primary and secondary sources. Primary
data is first hand information and is original in nature. Primary data was important to
understand the consumer response towards the product Tata Pocket Wi-Fi Router and
understand the level of satisfaction by the product.
The Secondary data sources of information were the sources that were collected from
newspaper articles, internet websites and company websites.
30
Personalized interview method was used to gain information. The following is the
relevant information about the sample.
1. Target Population: The collection of elements or objects that possess the information
about which inference are to be made.
3. Sampling Unit: The basic unit of containing that elements of the population to be
sampled.
Sampling Frame: A representation of the elements of the target population. It consists of
a list or set of directions for identifying the target population.
4 Sampling Technique:
The technique for sampling is Simple random sampling. In this technique each element
of the population has an equal probability of being sselected in thee sample. Every
element is selected independently of every other element. The sample is drawn by a
random procedure from the sampling frame. In this case the standard deviations of the
distribution of characteristic of interest (of population) are not known.
Sample Size:
The formula used for calculating the sample size under simple random sampling is
given as
n = (z2*ϭ2)/D2
where n represents the sample size
z represents the value from the statistical table associated with the confidence
level(1.96)
ϭ represents the standard deviation of the population
and D represents the level of precision.(±5%)
In this case the standard deviations of the distribution of characteristic of interest (of
population) are not known. So instead of the above formula we use the formula given
below that makes use of the market share of the Company,
n = { z2 * p*(1-p)}/D2
where p= proportion of the population that satisfies the characteristic of interest
proportion of the population that will choose our product out of all the given products
in the market. This represents the market share.i.e. 54%.
31
FACTOR
ANALYSIS
32
Factor analysis is a technique that is used to reduce a large number of variables into
fewer numbers of factors. Factor analysis extracts maximum common variance from all
variables and puts them into a common score. As an index of all variables, we can use
this score for further analysis.
In marketing research problems normally involve several variables, for example the
demand of a television set may depend not only on the price but also on income of
households, advertising expenditure and other similar factors. Such problems require
the use of multivariate techniques. Apart from multiple regression there are several
method used in multivariate analysis.
Factor analysis is used to uncover the latent structure (dimensions) of a set of variables.
It reduces attribute space from a larger number of variables to a smaller number of
factors and as such is a "non-dependent" procedure (that is, it does not assume a
dependent variable is specified). Factor analysis could be used for any of the following
purposes:
33
2. To select a subset of variables from a larger set, based on which original variables
have the highest correlations with the principal component factors.
4. To validate a scale or index by demonstrating that its constituent items load on the
same factor, and to drop proposed scale items which cross-load on more than one
factor.
5. To establish that multiple tests measure the same factor, thereby giving justification
for administering fewer tests.
A non-technical analogy: A mother sees various bumps and shapes under a blanket at
the bottom of a bed. When one shape moves toward the top of the bed, all the other
bumps and shapes move toward the top also, so the mother concludes that what is
under the blanket is a single thing, most likely her child. Similarly, factor analysis takes
as input a number of measures and tests, analogous to the bumps and shapes.
Those that move together are considered a single thing, which it labels a factor. That is,
in factor analysis the researcher is assuming that there is a "child" out there in the form
of an underlying factor, and he or she takes simultaneous movement (correlation) as
evidence of its existence. If correlation is spurious for some reason, this inference will be
mistaken, of course, so it is important when conducting factor analysis that possible
variables which might introduce spuriousness, such as anteceding causes, be included
in the analysis.
34
Factor analysis is part of the multiple general linear hypothesis (MLGH) family of
procedures and makes many of the same assumptions as multiple regression: linear
relationships, interval or near-interval data, untruncated variables, proper specification
(relevant variables included, extraneous ones excluded), lack of high multicollinearity,
and multivariate normality for purposes of significance testing. Factor analysis
generates a table in which the rows are the observed raw indicator variables and the
columns are the factors or latent variables which explain as much of the variance in
these variables as possible. The cells in this table are factor loadings, and the meaning of
the factors must be induced from seeing which variables are most heavily loaded on
which factors. This inferential labelling process can be fraught with difficulty as diverse
researchers impute different labels.
There are several different types of factor analysis, with the most common being
principal components analysis (PCA). However, principal axis factoring (PAF), also
called common factor analysis, is preferred for purposes of confirmatory factory
analysis in structural equation modelling.
2. Confirmatory factor analysis (CFA) seeks to determine if the number of factors and
the loadings of measured (indicator) variables
on them conform to what is expected on the basis of pre-established theory. Indicator
variables are selected on the basis of prior theory and factor analysis is used to see if
they load as predicted on the expected number of factors. The researcher's à priori
assumption is that each factor (the number and labels of which may be specified à priori
) is associated with a specified subset of indicator variables. A minimum requirement of
confirmatory factor analysis is that one hypothesize beforehand the number of factors in
the model, but usually also expectations about which variables will load on which
factors (Kim and Mueller, 1978b: 55). The researcher seeks to determine, for instance, if
measures created to represent a latent variable really belong together.
3. Factors and components: Both are the dimensions (or latent variables) identified with
clusters of variables, as computed using factor analysis. Technically speaking, factors
(as from PFA -- principal factor analysis, a.k.a. principal axis factoring, a.k.a. common
35
factor analysis) represent the common variance of variables, excluding unique variance,
and is thus a correlation-focused approach seeking to reproduce the intercorrelation
among the variables. By comparison, components (from PCA - principal components
analysis) reflect both common and unique variance of the variables and may be seen as
a variance-focused approach seeking to reproduce both the total variable variance with
all components and to reproduce the correlations. PCA is far more common than PFA,
however, and it is common to use "factors" interchangeably with "components."
4. Factor loadings: The factor loadings, also called component loadings in PCA, are the
correlation coefficients between the variables
(rows) and factors (columns). Analogous to Pearson's r, the squared factor loading is the
percent of variance in that variable explained by the factor. To get the percent of
variance in all the variables accounted for by each factor, add the sum of the squared
factor loadings for that factor (column) and divide by the number of variables. (Note the
number of variables equals the sum of their variances as the variance of a standardized
variable is 1.) This is the same as dividing the factor's eigen value by the number of
variables. In SPSS, the factor loadings are found in a matrix labelled Factor Matrix if
PFA is requested, or in one labelled Component Matrix if PCA is requested, or one
labelled Pattern Matrix if an oblique rotation is requested. The sum of the squared
factor loadings for all factors for a given variable (row) is the variance in that variable
accounted for by all the factors, and this is called the communality. In a complete PCA,
with no factors dropped, this will be 1.0, or 100% of the variance. The ratio of the
squared factor loadings for a given variable (row in the factor matrix) shows the relative
importance of the different factors in explaining the variance of the given variable.
Factor loadings are the basis for imputing a label to the different factors
5. Communality, h2, is the squared multiple correlation for the variable using the
factors as predictors. The communality measures the percent of variance in a given
variable explained by all the factors jointly and may be interpreted as the reliability of
the indicator.
When an indicator variable has a low communality, the factor model is not working
well for that indicator and possibly it should be removed from the model. However,
communalities must be interpreted in relation to the interpretability of the factors. A
communality of .75 seems high but is meaningless unless the factor on which the
variable is loaded is interpretable, though it usually will be. A communality of .25
seems low but may be meaningful if the item is contributing to a well-defined factor.
That is, what is critical is not the communality coefficient per se, but rather the extent to
which the item plays a role in the interpretation of the factor, though often this role is
greater when communality is high.
36
Communality for a variable is computed as the sum of squared factor loadings for that
variable (row). Recall r-squared is the percent of variance explained, and since factors
are uncorrelated, the squared loadings may be added to get the total percent explained,
which is what communality is. For full orthogonal PCA, the communality will be 1.0 for
all variables and all of the variance in the variables will be explained by all of the
factors, which will be as many as there are variables. In the communalities chart, SPSS
labels this column the "initial" communalities.
Note that the eigen value is not the percent of variance explained but rather a measure
of "amount," used for comparison with other eigen values. A factor's eigen value may
be computed as the sum of its squared factor loadings for all the variables. Note that the
eigen values associated with the un-rotated and rotated solution will differ, though
their total will be the same.
7. Trace :is the sum of variances for all factors, which is equal to the number of variables
since the variance of a standardized variable is 1.0. A factor's eigen value divided by the
trace is the percent of variance it explains in all the variables, usually labelled percent of
trace in computer output. Computer output usually lists the factors in descending order
of eigen value, along with a cumulative percent of trace for as many factors as are
extracted.
8. Factor scores: Also called component scores in PCA, factor scores are the scores of
each case (row) on each factor (column). To compute the factor score for a given case for
a given factor, one takes the case's standardized score on each variable, multiplies by
the corresponding factor loading of the variable for the given factor, and sums these
products. The SPSS FACTOR procedure saves standardized factor scores as variables in
37
your working data file. By default it will name them FAC1_1,FAC2_1, FAC3_1, etc., for
the corresponding factors (factor 1, 2 and 3) of analysis 1; and FAC1_2, FAC2_2, FAC3_2
for a econd set of factor scores, if any, within the same procedure, and so on. Although
SPSS adds these variables to the right of your working data set automatically, they will
be lost when you close the dataset unless you re-save your data.Criteria for determining
the number of factors, roughly in the order of frequency of use in social science
9. Kaiser criterion: A common rule of thumb for dropping the least important factors
from the analysis. The Kaiser rule is to drop all components with eigen Values under
1.0. Kaiser criterion is the default in most computer programs.
10. Scree plot: The Cattell scree test plots the components as the X axis and the
corresponding eigenvalues as the Y axis. As one moves to the right, toward later
components, the eigenvalues drop. When the drop ceases and the curve makes an
elbow toward less steep decline, Cattell's scree test says to drop all further components
after the one starting the elbow. Scree plot example
11. Variance explained criteria: Some researchers simply use the rule of keeping
enough factors to account for 90% (sometimes 80%) of the variation.
12. Rotation Methods: Rotation serves to make the output more understandable and is
usually necessary to facilitate the interpretation of factors. The sum of eigen values is
not affected by rotation, but rotation will alter the eigen values of particular factors. No
rotation is the default in SPSS, but it is a good idea to select a rotation method, usually
varimax. The original, un-rotated principal components solution maximizes the sum of
squared factor loadings, efficiently creating a set of factors which explain as much of the
variance in the original variables as possible. The amount explained is reflected in the
sum of the eigen values of all factors. However, un-rotated solutions are hard to
interpret because variables tend to load on multiple factors.
13. Varimax rotation: is an orthogonal rotation of the factor axes to maximize the
variance of the squared loadings of a factor (column) on all the variables (rows) in a
factor matrix, which has the effect of differentiating the original variables by extracted
factor. That is, it minimizes the number of variables which have high loadings on any
one given factor. Each factor will tend to have either large or small loadings of
particular variables on it. A varimax solution yields results which make it as easy as
possible to identify each variable with a single factor. This is the most common rotation
option.
16. Direct oblimin rotation: is the standard method when one wishes a non-orthogonal
solution -- that is, one in which the factors are allowed to be correlated. This will result
in higher eigenvalues but diminished interpretability of the factors. See below.
39
Brand
switching
analysis
40
ABSTRACT
More and more brands and products are being launched every day. In the traditional
retail mix, moden retailers like Walmart have started launching their own unique
products. On top of that, Walmart has even tougher competition from E commerce
companies. In E commerce, every day marks the launch of new and unique products,
several of them being launched because they failed through traditional distribution
channels.
At such times, the customer gives very less time and attention to your brand. You have
to attract the customer within seconds. Thus, your brand building starts much before
the customer enters the final buying stage.
Equally important is the fact, that at the buying stage, the customer can switch brands
easily. Instead of deciding to go ahead with your brand, he can decide to finalise a
competitor’s product or their brand. So what are the reasons for brand switching? Let
us dwell deeper in the customer’s mind
Value for money – The first and foremost condition which comes to mind when a
customer is buying a product is value for money. If the customer is buying a Levi’s
jeans and it is costly, then he will still go for it if he can afford it. But the same customer
will not go for a lower cost jean which is unbranded. This is because Levi’s jeans are
clearly a status symbol also.
So one of the major reasons for brand switching is ‚not enough value‛ being provided
by your brand against the price being offered to the customer. This value can be
monetary, it can be an emotional value or it can be targeted towards the personality of
the buyer. Increase the value offering to stop the customer from brand switching.
41
Marketing mix – A very basic concept but one on which a complete company can be
built. Many companies have erred in their marketing mix by either keeping the price
very high, or by having an inferior product, or by not reaching the proper distribution
channel. The people of the company matter too. I have seen many product managers
who have brought the right product in the market, but they did not have enough fire
power to ensure that the product succeded.
Hence, your marketing mix can be one of the reasons for brand switching by customers.
If your price is too high, you can offer a low cost variant which can be an addition to
your product depth. Similarly, if your product is premium, you need to reach the
premium channel of distribution and you might have to wait before you start
distributing to every tom, dick and harry. Overall, there are many tweaks possible in a
marketing mix to stop your customers from switching brands.
Improper service – There have been many times that I myself have switched brands
because the service given to me was pathetic. Although the brand might be giving good
service in the market, losing more than 10 % of your customers to a competition brand
because of service reasons is an alarming situation.
Because when you are facing dire times, these 10% of customers will compound up to
create a fantastic customer base. These 10% lost customers annually can bring 10% more
customers and it will keep adding year on year. You need that customer base and you
need to give proper service to your customers so that they don’t switch brands.
Outdated technology – We saw the crash of Nokia in the last decade. So many
customers switched brands in the start, and the movement got so solid that Nokia could
not keep up. But why was action not taken right at the start? Was the introduction of
Android thought of as a wave that will eventually play its part and die?
If it was that, then it was poor decision making from Nokia. A brand is made by
innovators and not by adopters or laggards. And technology is the one thing which
immediately attracts the innovator type of customers. Hence, If you are using outdated
technology, It is highly likely that you might see your customers switching brands.
42
their way to connect to the customers. And in the end, Airtel and other telecom brands
might be wondering where their customers went and why? (Even though they were
giving good service)
The role of marketing communications is to attract new customers and build the brand.
Naturally, if your competitor is good at it, you will see a lot of customers shifting
brands immediately. The only attack you can launch is to have an equally cut throat
communications strategy. This will help you maintain your brand equity, and won’t
change the PERCEPTION of your brand in the market. If anything, it will show you as a
strong competitor and will help retain the market share. Hence, investment in
advertising never goes waste, even though measuring the ROI becomes difficult.
Brand fatigue / “I wanna try that new product” – The last and most valid reason, is
when people want to try new things. Now, you were busy with your own product
catlog, refining it and pushing new life into it. And hence, you could retain customers
for a long, long time. But ultimately, all customers start questioning – Is there
something new out there?
Hence, when customers want to try something new in the market, they do brand
switching and try out a new brand. Such customers are highly likely to return to your
brand again and hence they are not going to cause a huge dent in your bottomline. For
example – Instead of Dove, you try out a new shampoo or soap. However, looking at
the next TVC, you immediately decide that you loved Dove better, and then you switch
back to Dove.
Thus, in this case you have done brand switching twice. The best way to avoid such
switching of brands, is if Dove keeps introducing new types and new products in the
market which keeps attention of innovative customers captured.
Overall, the above are the main reasons for switching from one brand to another. There
may be others as well. Influencers are people who themselves buy a brand and then
influence others to buy the same brand. Similarly, word of mouth, social perception are
all hidden reasons for which a customer might shift from one brand to another.
43
INTRODUCTION
Brand switching otherwise known as brand jumping is the process of choosing to
switch from routine use of one product or brand to steady use of a different but similar
product. When consumers switch from one brand to another, building a picture of
likely brand switching behavior occurs.
If a consumer’s propensity to switch is known, the market can be modeled to indicate
future market share and the relative positioning of the competing brands (Chaarlas &
Rajkumar, 2012).
That customers evaluate brands, develop images of brands with varying degrees of
loyalty is well established ( Keller, 1993; Park, Jun & Shocker, 1996,;Arvind Nivedita,
2010). Product attributes are the image building features of a product which may
include packaging, branding, labeling, design, colouring, quality, price, warranty and
servicing ( Biodun, 2002).
Every consumer of a product is expected to have utility function for each of these
attributes. Utility function enables a consumer of a product to study how product
satisfaction varies with alternative levels in each of the attributes.
For example, what a consumer wants from a brand of soft drink may be the colour,
flavour, taste or gas content. The highest level of utilities emanating from the attributes
forms the consumer’s ideal brand of soft drink. Several reasons may be responsible for
consumers of products switching from one brand to another. According to
Umeshanand (2008), the following reasons are said to be underlined factors responsible
for brand switching:
Inconsistent brand positioning of the product and brand.
Low research and development which do not provide improvisation in product
quality and standards.
Customers finding it uncomfortable if quality of products starts falling.
Unavailability of product brand and variant which customers demand for.
Uniqueness and variety in other brands.
Price escalation or availability of other brands at competitive price.
kleptomanic customers who are not advocates of brand loyalty, but after consumption
and taste of every kind of products and utility possession.
Definitions of Terms
Brand: This is a name, sign, symbol or design used to identity a product and distinguish
it from another
product, service or business.
Brand Loyalty: This refers to consumer’s behaviour of repeatedly purchasing a specific
brand over a certain period of time.
44
Brand Image: This is a symbolic construct created within the minds of people and
consists of all the information and expectations associated with a product or service.
Global Brand: This is the brand that reflects the same set of values around the world. It
transcends its origin and creates strong and enduring relationship with customers
across countries and cultures.
Selective Perception: This is the process by which individuals perceive what they want
to in media messages and disregard the rest.
Selective Exposure: This is the perception by a customer of certain more relevant
factors or advertisements but not of others. In this case, a customer may seek or avoid
various stimuli.
Markov Chains
Markov model is a stochastic process used in terms of a random variable indexed with
respect to time. Its analysis also takes cognizance of a sequence of events. The state
probabilities at a future instant given the present state of the process do not depend on
the states occupied in the past. The behavior of the system in each state memorizes i.e
the future state of the system at tn+1depends on its present state at tn (Dilip, Rupam &
45
Anupawa, 2009). Markov chains have been used in many applications; see Jarrow,
David and Stuart (1997), Zipkin (1993), White (1993), Sandman (2005), Guedon (1993),
Glennon, Dennis and Peter (2005) among others.
46
QUESTIONNAIRE
DESIGN
47
Questionnaires are an inexpensive way to gather data from a potentially large number
of respondents. Often they are the only feasible way to reach a number of reviewers
large enough to allow statistically analysis of the results. A well-designed questionnaire
that is used effectively can gather information on both the overall performance of the
test system as well as information on specific components of the system. If the
questionnaire includes demographic questions on the participants, they can be used to
correlate performance and satisfaction with the test system among different groups of
users.
Before these steps are examined in detail, it is good to consider what questionnaires are
good at measuring and when it is appropriate to use questionnaires.
48
quantitative data well, but that Qualitative questions require more care in design,
administration, and interpretation.
A good rule of thumb is that if you are finding it difficult to write the questions, then
you haven't spent enough time defining the objectives of the questionnaire. Go back
and do this step again. The questions should follow quite naturally from the objectives.
Typically, demographic data is collected at the beginning of the questionnaire, but such
questions could be located anywhere or even scattered throughout the questionnaire.
One obvious argument in favour of the beginning of the questionnaire is that normally
background questions are easier to answer and can ease the respondent into the
questionnaire.
49
It is important to ask only those background questions that are necessary. Do not ask
income of the respondent unless there is at least some rational for suspecting a variance
across income levels. There is often only a fine line between background and personal
information. You do not want to cross over in to the personal realm unless absolutely
necessary.
Questionnaires are easy to analyze. Data entry and tabulation for nearly all surveys can
be easily done with many computer software packages.
Questionnaires are familiar to most people. Nearly everyone has had some experience
completing questionnaires and they generally do not make people apprehensive.
50
Disadvantages of Written Questionnaires
One major disadvantage of written questionnaires is the possibility of low response
rates. Low response is the curse of statistical analysis. It can dramatically lower our
confidence in the results. Response rates vary widely from one questionnaire to another
(10% - 90%), however, well-designed studies consistently produce high response rates.
When returned questionnaires arrive in the mail, it's natural to assume that the
respondent is the same person you sent the questionnaire to. This may not actually be
the case. Many times business questionnaires get handed to other employees for
completion. Housewives sometimes respond for their husbands. Kids respond as a
prank. For a variety of reasons, the respondent may not be who you think it is. It is a
confounding error inherent in questionnaires.
Finally, questionnaires are simply not suited for some people. For example, a written
survey to a group of poorly educated people might not work because of reading skill
problems. More frequently, people are turned off by written questionnaires because of
misuse.
Most problems with questionnaire analysis can be traced back to the design phase of the
project. Well-defined goals are the best way to assure a good questionnaire design.
When the goals of a study can be expressed in a few clear and concise sentences, the
design of the questionnaire becomes considerably easier. The questionnaire is
developed to directly address the goals of the study.
51
One of the best ways to clarify your study goals is to decide how you intend to use the
information. Does this before you begin designing the study. This sounds obvious, but
many researchers neglect this task. Why do research if the results will not be used?
Formulate a plan for doing the statistical analysis during the design stage of the
project.
Give your questionnaire a title that is short and meaningful to the respondent.
Place the most important items in the first half of the questionnaire.
Hold the respondent's interest.
52
COMPANY
PROFILE
53
ABOUT
Jubilant FoodWorks Limited (the Company) is a Jubilant Bhartia Group Company, The
Company was incorporated in 1995 and initiated operations in 1996, The Company got
listed on the Indian bourses in February 2010, Mr, Shyam S, Bhartia, Mr, Hari S, Bhartia
and Jubilant Enpro Private Ltd, are the Promoters of the Company. The Company & its
subsidiary operates Domino's Pizza brand with the exclusive rights for India, Nepal,
Bangladesh and Sri Lanka, The Company is India's largest and fastest growing food
service company, with a network of 1004 Domino's Pizza restaurants across 230 cities
(as of February 11, 2016).
Restaurants (as of 31st March, 2012) The Company is the market leader in the organized
pizza market with a 54% market share (Euromonitor Report 2010) and 70% share in the
pizza home delivery segment in India, The Company has strengthened its portfolio by
entering into an agreement with Dunkin' Donuts Franchising LLC, for developing the
Dunkin' Donuts brand and operating restaurants in India,
Over the period since 1996, Domino's Pizza India has remained focused on delivering
great tasting Pizzas and sides, superior quality, exceptional guest care and value for
money offerings. We have endeavored to establish a reputation for being a home
delivery specialist capable of delivering pizzas within 30 minutes or else FREE to a
community of loyal consumers from all our restaurants around the country.
Domino's vision is focused on " Exceptional people on a mission to be the best pizza
delivery company in the world!" We are committed to bringing fun, happiness and
convenience to lives of our consumers by delivering delicious pizzas to their doorstep
and our efforts are aimed at fulfilling this commitment towards a large and ever-
growing guest base.
Domino's constantly strives to develop products that suit the tastes of our consumers
and hence delighting them. Domino's believes strongly in the strategy of 'Think global
and act local'. Thus, time and again we have been innovating with delicious new
products such as crusts, toppings and flavours suitable to the taste buds of Indian
Consumers. Further providing value for money and affordable products to our
consumers has been an important part of our efforts. Our initiatives such as Fun Meal
54
and Pizza Mania have been extremely popular with consumers looking for an
affordable and value for money meal option.
Domino's believes that when a box of pizza is opened, family and friends come together
to share the pizza. Hence, our brand positioning: ‘Yeh Hai Rishton Ka Time'
That's why, all our efforts, whether it is a new innovative and delicious product,
offering consumers value for money deals, great service, countrywide presence or the
promise to deliver in 30 minutes or free are all directed towards making relationships
stronger, warmer and more fun by giving consumers an opportunity to get together,
catch up, reunite and spend more time together.
ACHIEVEMENTS
1. › The Images Most Admired Retailer of the Year: Food-service. This award has
been bestowed by Indian Retail forum at the 8th annual Images Retail Award.
2. › Mr. Basab Bordoloi won HR leadership award in Asia’s Best Employer Brand
Strategy at work’ in Asia’s Best Employer Brand Award - 2010 by World HRD
Congress.
5. › Ranked 9th Best Employer 2009 in India in Hewitt’s Best Employers survey
2009.
55
6. › Ranked amongst the top 25 best employers across Asia pacific market, which
includes Australia/New Zealand, China, India, Hong Kong, Malaysia, Korea &
7. › Best employer in Retail and 3rd best employer in Services category in India -
11. › Highest employee engagement score amongst the "best companies" in BT-TNS-
MARKETING AWARDS
1. › JFL won IAMAI award for Best Search Marketing Campaign of the year.The
industry body in India representing the interest of Online and Mobile industry.
2. › JFL accorded with three prestigious awards at the Coca Cola Golden Spoon
Awards 2014
1. . Domino's Pizza awarded the title of ‘Most Admired QSR of the Year'
56
1. .India's most prestigious Marketing/Creative effectiveness award
2. .Silver Effie for Pizza Mania Pehli Kamai campaign and ‘Yeh Hai Rishton
4. › JFL has been recognized as the ‚Most Admired Retailer of the Year: Food
Services- Domino's Pizza‛ By Images Retail This is the third consecutive year
5. › 2013 - JFL was honoured with the ‘Digital Champion of the year award' in the
CMO Asia.
6. › 2013 - Jubilant Food works has been recognized with four Indian E Retail
Congress Awards 2013 held on the 15th of Feb under the following categories:
57
10. › Jubilant FoodWorks Ltd won the award for "Brand Excellence in service /
11. › 2012- won awards in 3 different categories in the Coca Cola Golden Spoon
12. › 2012- Recognized with 2 Effies, India's most prestigious Marketing awards
13. › 2010 - Won the Golden Spoon Award for the 'Most admired FnB retailer of the
14. › 2009 - Domino's won the top 25 Marketers of 2009 award presented by a
15. › 2009 - Recognized as one of the 10 brands that have changed the consumer
behavior and set new trends in last decade, presented by Brand reporter &
agency faqs
16. › 2006 - Marketing Excellence Award from Domino's International for the best
58
17. › 2005 - Silver Effie Award.
Retail Associates of India) Retail Awards. The award is for excellence in guest
services by honouring front end retail associates who have created memorable
shopping experiences for their guests throughout the year. A special category
‚Being Human Awards‛ was introduced in which one of the team members was
declared a winner
2. › Domino's Pizza won the ‚Best Customer Service Restaurant‛ award at the
'Indian Restaurant Award 2013'. Domino's Pizza has been accorded with this
Awards 2013‚
4. › Franchise Awards 2009 for Best Guest Services presented at Asia's largest
Franchise Expo - Among other initiatives by us the one that stood out was our
59
DOMINO´S PIZZA INDIA - INTERNATIONAL
OPERATIONS AWARDS
1. › Domino's Pizza India won the GOLD FRANNY award for the fastest growing
Domino´s franchisee in world for 3 consecutive times - 2006 2007 & 2008,
2. › 2008: Domino's Pizza India won 1 International and 2 Asia Pacific awards
6. › 2007: Domino's Pizza India won 1 International and 3 Asia Pacific awards
11. › 2006: Domino's Pizza India won 1 International and 2 Asia Pacific awards
15. › 2004 / 2005 / 2009 Franchise Award - Award for Excellence in Franchising and
Business
60
16. › Development. Domino´s Guest Service Food and Beverages
2. › Mr. Ajay Kaul won CEO with HR Orientation in Asia's Best Employer Brand
3. › 2010- Golden Spoon Award - Most Admired Food Professional Of The Year In
VISION
EXCEPTIONAL PEOPLE ON A MISSION, TO BE THE BEST
PIZZA DELIVERY COMPANY IN THE WORLD.
61
OBJECTIVE
OF THE STUDY
AT A GLANCE
62
The main objectives of this study are as follow:
1. To study the perception, behaviour and brand awarness of people towards the
Indian pizza industry over certain attributes and thereby derive results for
Domno’s.
The methodology adopted for collecting data and sample design is given below:
COLLECTION OF DATA
63
ANALYSIS
BASED
ON THE
SURVEY
64
DEMOGRAPHICS
GENDER
INTERPRETATION
From the above pie chart we can observe the distribution of male and female in our
sample. We can observe that there are majority of females in the sample. There are 195
females in the sample and 186 males. The above frequencies correspond to 51.1%
females and 48.9% males.
65
AGE GROUP
INTERPRETATION
We can observe from the frequency distribution and the pie chart that the respondents
of the survey are in majority with 336, from the age group 19-24. We have 29
respondents in the age group 25-29 years, 8 in the age group 18 and under, 4 in 30-34
years & 4 respondents are above 40 years of age. This frequency is a result of random
sampling as no particular age group has been targeted.
66
OCCUPATION
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 292 are students and 57 are in service. Also, 12 respondents fall
under the category of self-employed and 12 are home-maker. 8 respondents are from
some other occupation.
67
ANNUAL FAMILY INCOME
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 109 have income more than 10 lacs and 101 have income between
2.5lacs-5lacs. Also, 85 respondents have their family income between 5-7.5 lacs. 45
respondents have income between 7.5-10 lacs and 41 have their family income less than
2.5lacs.
68
How much would you spend at a time, while visiting a food joint?
INTERPRETATION
We can observe from the frequency distribution and the graph above that 60.6% people
are willing to spend an amount of Rs 200- Rs 500 while visiting a food joint, while 28.7%
people wish to spend somewhere between Rs.500-Rs1000. Only 4.3% and 6.4% people
wish to spend <200 and >1000 respectively.
69
As compared to other fast foods, how likely are you to eat pizzas, whenever
you go for an outing?
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 38.3% are likely to eat pizzas when they go out whereas 36.2% are
neutral to this. Also, 11.6% are unlikely and 10.6% are very likely to eat pizzas in an
outing.
70
On an average, how often do you eat pizzas?
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 178 people prefer eating pizza occasionally and 162 prefer eating
pizzas monthly while the rest settle for a frequency of eating pizza weekly.
71
How do you usually prefer eating pizzas?
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, the majority i.e. 62.8% wish to eat pizza at the outlets as compared
to take away and home delivery which accounts for 4.2% and 33% respectively.
72
FACTOR ANALYSIS
Factor analysis is a statistical method used to describe variability among observed,
correlated variables in terms of a potentially lower number of unobserved variables
called factors.
Factor analysis searches for such joint variations in response to unobserved latent
variables. The observed variables are modelled as linear combinations of the potential
factors, plus "error" terms. The information gained about the interdependencies
between observed variables can be used later to reduce the set of variables in a dataset.
Computationally this technique is equivalent to low rank approximation of the matrix
of observed variables. The following question was asked in the survey.
How important are the following factors for you, while choosing any pizza outlet?
Rate on a scale of 1-5.
1 2 3 4 5
Food Taste
Quality
Quantity of food
Presentation of
food
Packaging
Ambience
Brand Image
Staff Behavior
Price
Delivery Time
Offers
73
Accessibility
Innovation
Location
Recommendation
Variety
Coupons
Combos
OUTPUT
Communalities
Initial Extraction
Presentation of
1.000 .606
food
74
Recommendatio
1.000 .664
n
The proportion of variance in any one of the original variables which is captured by
extracted factor is known as communality.
From the data we have got the KMO value as 0.871>0.5. Thus factor analysis is
appropriate to use in this case. Thus we can further proceed with the analysis.
75
7 .622 3.457 81.905
8 .503 2.793 84.697
9 .460 2.555 87.252
10 .437 2.430 89.682
11 .371 2.060 91.742
12 .327 1.815 93.557
13 .291 1.617 95.174
14 .282 1.567 96.741
15 .213 1.181 97.922
16 .161 .893 98.815
17 .131 .730 99.545
18 .082 .455 100.000
Extraction Method: Principal Component
Analysis.
a. When components are correlated, sums of squared loadings cannot be added to obtain a
total variance.
From the 18 attributes, 4 factors have been extracted; factors with Eigen values more
than 1 are assumed to be extracted.
The above table tells that after 4 factors extracted and retained, the communality is
0.838 for variable 1, 0.821 for variable 2 and so on(all values are labelled communality
in the above table). This means that 83.8% of the variance information content of
variable 1 is captured by 4 factors extracted together and so on.
The first step in interpreting the output is to look for the factors extracted, their Eigen
values and the cumulative percentage of variance. We consider 4 factors because the
Eigen value for these is greater than 1. We see from the cumulative % column that the
4 factors extracted account for 70.454% i.e. approximately 70% of the total variance
(information contained in the 18 original variables).
76
Rotated Component Matrixa
Component
1 2 3 4
Coupons .887
Offers .880
Combos .728 .354
Price .615 .551
Delivery time & charges .552 .364 .485
Accessibility .542 .433 .338
Food Taste .876
Quality .826
Quantity of food .310 .714
Staff Behaviour .417 .364 .356
Packaging .743
Ambience .734 .301
Brand Image .706
Presentation of food .369 .617
Variety .301 .389 .586
Location .388 .792
Innovation .375 .408 .669
Recommendation .423 .657
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser
Normalization.
a. Rotation converged in 7 iterations.
77
Consumers were asked to rate the attributes that they considered while choosing any
pizza outlet. Rating was on the scale of 1 to 5, where,
1- Not at all important, 2-Unimportant, 3-Neutral, 4-Important, 5-Very Important
The 18 attributes were reduced to 4 using factor analyses which are free from
redundancy.
After the statistical computations of factor analyses have been completed, the next
step is of interpreting these factors. This is achieved by inspecting the pattern of high
and low loading of each of the factors on the variables.
After observing the Scree Plot we can conclude that there are 4 factors that have to be
extracted from the original 18 variables.
78
INTERPRETATION
INTERPRETATION
Factor 1 mainly comprises of the attributes that take into the account the monetary
features affecting the choice of any pizza outlet. These factors influence the consumers
to choose an outlet. All the attributes have high factor loading. The highest factor
loading is for the attribute ‚coupons‛ followed by ‚offers‛. Combos and price follow
the previously mentioned attributes in the sense that these are the next set of attributes
that influence the buying behaviour of the consumers significantly.
Thus as a whole this factor has significant importance for the consumer while making a
choice.
The second factor comprises of attributes that are related to the product quality offered
to the consumers. Again all the factors have high factor loading. The most important
attribute in this factor is the food taste followed by quality and the quantity of food.
79
Next, the staff behaviour of the restaurant’s employees also has a fair amount of
importance associated with it from the eyes of the consumer.
It is clear that a consumer gives a lot of importance to these attributes while making
his/her decision before choosing any pizza outlet.
INTERPRETATION
This factor consists of attributes that help the consumers know about the service
technicalities of the pizza outlet. As is clear from the above table all the factors have
reasonably high factor loading means this factor is of some importance. It helps
consumers in comparing products and making their decision regarding which car to
purchase.
Packaging with a factor loading of 0.743 has the highest factor loading in the given
factor and thus is a significant criteria. Ambience of the restaurant has a factor loading
of .734. Brand image with a factor loading 0.706 has an impact on the decision of the
buyers, followed by the presentation of food has factor loading of 0.617. Variety also
influences the decision regarding the choice of any pizza outlet.
80
INTERPRETATION
This factor consists of attributes that motivates the consumers to choose any the pizza
outlet. As is clear from the above table that location with a factor loading of 0.792 has
the highest factor loading in the given factor and thus is a significant criteria.
Innovation of the restaurant has a factor loading of .669 followed by with a factor
loading of .657.
Among the listed pizza brands, which all have you visited?
Frequency Percent
Domino’s 369 96.8
Pizza Hut 361 94.7
Slice of Italy 142 37.2
Chicago Pizza 174 45.7
Papa Johns 97 25.5
Smokin Joe’s 20 5.3
A multi-cuisine 154 40.4
cafe
Others 101 26.6
81
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 369 have visited Domino’s which is quite huge, also 36 have visited
Pizza Hut. This clearly shows the two major players in market. Number of respondents
who have visited Chicago pizza, a multi cuisine cafe, slice of Italy, Other cafes, Papa
Johns and smokin joe’s are 174, 154, 142, 101, 97 and 20 respectively.
82
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, the majority i.e. 76.6% respondents have their current brand as
Domino’s. 12.6% respondents are currently visiting Pizza Hut whereas 10.6% people
prefer some other brand.
83
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 190 prefer cheese burst crust pizza. Thin n crispy, deep pan and
stuffed crust pizzas hold 122, 45 and 24 respondents respectively.
84
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 215 respondents wish to have bottled drinks with a pizza. 102
respondents prefer having Mojitos and cooler, 32 wish to have lemonades, 16 prefer
shakes and 16 prefer some other drink.
Which one of the following are you more likely to order at any pizza outlet at a
similar pricing?
85
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 239 respondents would take a combo and only 142 would have
customized orders.
How would you rate the following food items from your current brand on a
scale of 1-5?
DOMINO’S
Excellent Good Average Below Haven’t Total
Average Tried
PIZZA 93 82 69 72 65 381
PASTA 73 82 90 71 65 381
BREADS 69 80 88 76 68 381
SIDES 72 83 87 73 66 381
BEVERAGES 67 81 91 72 70 381
DESSERTS 69 84 93 70 65 381
TOTAL 443 492 518 434 399
86
100
90
80
70
60 EXCELLENT
GOOD
50
AVERAGE
40
BELOW AVERAGE
30 HAVEN'T TRIED
20
10
0
PIZZA PASTAS BREADS SIDES BEVERAGES DESSERTS
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, majority i.e. 93 respondents have rated Domino’s pizza as excellent.
While the majority respondents have rated pastas, breads, sides, beverages and desserts
as average.
PIZZA HUT
Excellent Good Average Below Haven’t Total
Average Tried
PIZZA 80 77 75 74 74 381
PASTA 76 75 77 76 76 381
BREADS 79 76 76 74 76 381
SIDES 74 77 76 74 80 381
BEVERAGES 79 75 76 77 74 381
DESSERTS 74 78 80 74 75 381
TOTAL 457 458 460 450 460
87
81
80
79
78
77 EXCELLENT
GOOD
76
AVERAGE
75
BELOW AVERAGE
74 HAVEN'T TRIED
73
72
71
PIZZA PASTAS BREADS SIDES BEVERAGES DESSERTS
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, majority i.e. 80 respondents have rated Pizza Hut’s pizza as
excellent. While the majority respondents have rated pastas, breads, and desserts as
average, excellent and average. In case of beverages maximum respondents have rated
it as excellent and people haven’t tried sides from Pizza Hut.
"Ye hai rishton ka time" Do you remember which pizza brand possess this
tagline?
88
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 190 respondents remember the tagline whereas 77 don’t and 114 are
not sure about it.
89
Which type of restaurant do you think is the most comfortable?
a)
b)
90
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 312 respondents consider pizza hut as a better dine in place than
Domino’s.
91
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 260 respondents find Domino’s advertisement more convincing
than Pizza Hut’s.
Which of the following areas should your current pizza brand work on?
Frequency Percent
Variety 166 43.6
Quality 158 41.5
Quantity 150 39.4
Service 162 42.6
Ambience 142 37.2
Price 215 56.4
Offers 166 43.6
None 12 3.2
92
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 215 respondents want their brand to work on price and are affected
by it.
How likely are you to recommend your current brand to your friends and
acquaintances?
93
INTERPRETATION
We can observe from the frequency distribution and the graph above that out of a total
of 381 respondents, 175 are likely to recommend there brand to others, 101 are very
likely, 93 can’t say whereas 8 are unlikely and 4 are very unlikely.
94
BRAND SWITCHING ANALYSIS
If given a chance, would you like to switch from your current pizza brand? If
yes, then choose your option. If no, then select no, I won't switch.
95
Table 2: Brand Insistence and Switching Rates
This matrix shows only the existing and the next brand preference of the consumers.
The transition diagram showing the three states and the probabilities of moving from
one state to another is shown:
96
Table 3: Computation of Steady State Probabilities of the Product Brands
(10 STEPS AHEAD FORECAST)
Discussion of Results
From Table 1, 45.94% of the respondents were of the opinion that they would not have
pizza at any other outlet apart from Domino’s, 7.2% of the consumers believed that they
would only choose Pizza Hut and those that insisted that they would prefer some other
brand were 6.3% of the consumers.
97
From table 2, the total demands for Domino’s, Pizza Hut and other brands are 282, 51
and 48 respectively. Out of these, only 175, 27 and 24 insisted on having pizza at
Domino’s, Pizza Hut and others respectively.
Those that would switch from Domino’s to Pizza Hut and Others are 22% and 16%
respectively. Those that would switch from Pizza Hut to Domino’s and Others are 27%
and 20% respectively. The number of consumers switching from Others to Domino’s
and Pizza Hut are 21% and 29% respectively. However, if consumers of the pizza keep
to their switch brand decisions, then the future demand for Domino’s would be 199 as
against 175; 103 as against 27 for Pizza Hut and 99 as against 24 for other brands. This
shows that the number of consumers for each of the brands would increase.
From the transition matrix, about 107 (38%) consumers switched from Domino’s to
other brands; 24 (47%) consumers from Pizza Hut to other brands and 24 (50%)
switched from their current brand to other brands. From the three states, there is an
indication that the switch rate is not favourable.
From Table 3, the balanced vector was analyzed using matrix Algebra and sequel to the
examination of the Tables 3, and interpretation of the brand preferences, we discovered
that with the value of 0.40, Domino’s seemed to be the preferred brand compared to
others in the long run. The implication of this is that consumers showed the most brand
loyalty towards Domino’s followed by Pizza hut and other brands.
98
SUMMARY
99
Market Analysis: Domino’s focusses on the youth population of India. They
should work on the other items as well apart from pizzas so that it generates new
interest amongst the youth.
Geographic Factor: There should more outlets available in all metros as well as
tier 1 and tier 2 cities because income level of middle class is increasing.
Marketing Need: As pizza and pastas are food, so the most important need they
satisfy is hunger. But if we further narrow down needs, can be satisfying more than
just the hunger and replace full meals ( lunch, dinner) instead of just being
consumed as a snack.
100
SUGGESTIONS
Product:
Price:.
1. Maintain a fixed price for all specific outlets overall the Indian market.
2. Keep prices as per the Indian market.
Place:
Promotion:
1. Promotions should focus mainly on price, menu size and offers to attract
more customers.
2. Improve their campaign though use of more effective taglines.
101
SURVEY ON INDIAN PIZZA MARKET
1. Gender
1. Male
2. Female
1. Less than 18
2. 19-24
3. 25-29
4. 30-34
5. 35-39
6. 40+
1. Student
2. Service
3. Self Employed
4. Home maker
5. Others
102
4. 7.5 lakhs - 10 lakhs
5. More than 10 lakhs
5. How much would you spend at a time, while visiting a food joint? *
6. As compared to other fast foods, how likely are you to eat pizzas, whenever you go
for an
outing? *
1. Very likely
2. Likely
3. Neutral
4. Unlikely
5. Very unlikely
1. Weekly
2. Monthly
3. Occasionally
1. Dine in
2. Carry out
3. Home delivery
9. How important are the following factors for you, while choosing any pizza outlet?
Rate on a
scale of 1-5.
103
*
1 2 3 4 5
Food Taste
Quality
Quantity of food
Presentation of
food
Packaging
Ambience
Brand Image
Staff Behaviour
Price
Delivery Time
Offers
Accessibility
Innovation
Location
Recommendation
Variety
Coupons
Combos
10. Among the listed pizza brands, which all have you visited? (you can choose
multiple options)
*
1. Domino's
2. Pizza Hut
3. Slice of Italy
4. Chicago Pizza
5. Papa Johns
6. Smokin Joe's
7. A multi-cuisine cafe
8. Others
11. Which is your "CURRENT" pizza brand? (where you last had your pizza)
104
1. Domino's
2. Pizza Hut
3. Others
1. Cheese burst
2. Thin n crispy
3. Stuffed crust
4. Deep Pan
14. Which one of the following are you more likely to order at any pizza outlet at a
similar pricing? *
1. Combos
2. Customized orders
15. How would you rate the following food items from your current brand on a scale of
1-5? *
1 2 3 4 5
PIZZA
PASTAS
BREADS
SIDES
BEVERAGES
DESSERTS
105
16. "Ye hai rishton ka time" Do you remember which pizza brand possess this tagline? *
1. Yes
2. No
3. Can't remember
17. If your answer for the above question is yes, then please specify the pizza brand?
1. Domino’s
2. Pizza Hut
Domino's advertisements
http://youtube.com/watch?v=FXs9J5xoaOM
Pizza hut advertisement
http://youtube.com/watch?v=s5Tfh1ziAxw
19. Based on the above advertisements, which advertisement do you think is more
convincing? *
106
1. Dominos
2. Pizza Hut
20. Which of the following areas should your current pizza brand work on? (you can
choose
multiple options) *
1. Variety
2. Quality
3. Quantity
4. Service
5. Ambience
6. Price
7. Offers
8. None
21. If given a chance, would you like to switch from your current pizza brand? If yes,
then choose your option. If no, then select no, I won't switch. *
1. Switch to Domino's
2. Switch to Pizza Hut
3. Switch to some other brand
4. No, I won't switch
22. How likely are you to recommend your current brand to your friends and
acquaintances? *
1. Very likely
2. Likely
3. Can't Say
4. Unlikely
5. Very Unlikely
THANK YOU
107