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MARKETING RESEARCH PROJECT

REPORT

Analysis & Evaluation of Food Delivery Platforms

Submitted To: Submitted By:

Dr. S. K. Tyagi Group 2

Uttam Dwivedi (070/2018)

Ritesh Khatri (080/2018)

Reetayan Majumdar (092/2018)

Karan Luthra (102/2018)

Sachin Parashar (113/2018)

Nitima Jain (124/2018)

Shivam Siddharth (134/2018)

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ACKNOWLEDGEMENT

This project would not have been a success without the guidance and motivation of our
mentor. We are thankful to all the people behind the success of this project. We would like to
express our gratefulness to Prof S.K. Tyagi, who acted as a mentor throughout our project and
provided us invaluable information and guidance.
Last but not the least we would like to thank our colleagues and all the other people who
helped us at various stages of the project.

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TABLE OF CONTENTS

 Introduction

 Research objective

 Research design

 Secondary research

 Primary research

 Data analysis
2 tests are applied:

1. Factor analysis
2. Multi-Dimensional Scaling analysis

Factor analysis

 Limitations

 Interpretations

 Annexure containing questionnaire

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Introduction
ZOMATO

Zomato is an Indian restaurant search and discovery service founded in 2008 by Deepinder
Goyal and Pankaj Chaddah. It currently operates in 24 countries. It provides information and
reviews on restaurants, including images of menus where the restaurant does not have its
own website. It then later ventured into the food-delivery sector. Zomato announced that
the "zero commission model" is to be introduced for partner restaurants. It started its
online food delivery system in March 2015 by adding the feature of food delivery in Indian
metros.

SWIGGY

Swiggy is an online food ordering and delivering service based in Bengaluru, Karnataka,
India. It was founded in 2014 by Nandan Reddy, Rahul Jaimini, and Sriharsha Majety. Swiggy
is operated by Bundl Technologies Private Limited in over 25 cities in India. Its total
valuation in the market is $1.3 billion and its total funding amount is $465.5 million.

Other Major Competitors

Other major players in this industry are Uber Eats and FoodPanda. The average order value
for UberEats and Foodpanda is pegged at between Rs 50-70, as per sources mentioned
above. UberEats clocks about 3.5-4 million orders per month while FoodPanda clocks 1-1.5
million monthly orders as of August.

Background of the Problem

Restaurant discovery and food delivery firm Zomato claimed to have hit the 21 million
monthly order run rate in India in September implying that the firm saw its highest daily
order volume during the month touch 700,000 orders each day of the week. With this
Zomato claims it is the market leader in the food delivery space in India. In August 2017,
Zomato claimed it had reached the 3 million monthly order volume mark. Industry sources
however peg Zomato’s absolute order volumes at over 14 million as of September. Swiggy
clocks over 20 million monthly orders in absolute terms as of September.

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Swiggy also edged past Zomato, albeit by a smaller margin, when it came to best user
experience starting from exploring and ordering dishes to cancellations, customer support
and overall net promoter score (NPS). NPS is a key customer satisfaction metric based on
how likely customers are to recommend a brand or company.

After its latest funding round, Swiggy became the country’s fifth most valuable startup,
commanding a valuation of $3.3 billion and underscoring the stunning rise of a venture that
was launched four years ago. It has raised $1.5 billion in total so far, according to data from
Crunchbase, which also showed that Zomato has, in comparison, raised $653.8 million so
far. Still, Zomato has managed to close the gap over the past year and also received over
$400 million in two rounds of funding last year.

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RESEARCH OBJECTIVE

Management Decision Problem

How can Zomato, an oldest brand in the market increase its relevance in the online food
delivery industry?

Market Research Problem

1. To understand factors affecting choice of online food delivery apps.

2. Perform a competitive mapping of the top brands in food delivery service and
understand their strength and weakness

Research Design
The following pieces of information needs to be collected –
1. Information on online ordering of foods and beverages using different platforms available.
(a) Considering the brands Zomato, Swiggy and Uber Eats.

2. Patterns of online ordering habit for the customers and their experience.
(a) By college students and people visiting malls.
(b) Different factors and preferences of customers.

3. Basic socio-economic information

(a) Occupation of the target customers using the online food delivery platforms.
(b) Gender and age group of the consumers.

Types of Research methods that were used are the following:

Exploratory research method –
▪ Conducted pilot study to determine characteristics that people consider
before ordering food online.
▪ Also, we have used secondary data to find out the relevant service offerings
consumers look for.
Here in our study, we are using descriptive research to find out:
• The relevance of independent variables affecting the customer choice criteria
with respect to different online food delivery platforms.

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• The attributes on which the different food delivery platforms are having an
edge against their competitions.

Research Instrument -
The study made use of Questionnaires to find out the ordering patterns of customers and
what can be done to make customer ordering more convenient and more competitive in the
market.
A questionnaire has been designed for customers to take the different demographic details
and the rating for the different delivery platforms against relevant attributes to place an
order online.
Another questionnaire was designed for the factor analysis taking into consideration 18
different attributes which are relevant for customers to make an online order of food.
The questionnaire designed is been presented in annexure.

DATA COLLECTION -
The data has been collected in the following ways:
• Primary Data - Questionnaire: Comprehensive structured questionnaire was
designed for collecting the data.
• Secondary Data - The outlook of the industry was analysed and reported after
diligently studying reports of various institutions and research papers published in
different journals.
MEASUREMENT & SCALING -
• The scale being used is Interval Scale.
• We have used Itemized Rating Scale.
• We have used Likert Scale (1-5)
SAMPLING PLAN -
• Population Universe – Urban consumer population
• Sampling Frame – Teens and Adults
• Sampling Unit – Colleges, Hostels and Malls
• Sampling Elements – Students going to colleges, people visiting malls and ordering
from hostels.
SAMPLING TECHNIQUE-
We have used non-probability convenience and judgmental sampling method.

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SAMPLE SIZE -
We will use continuous variables on an Itemized rating scale. So, for calculating sample size,
we have the formula-

Where n is the sample size

Sigma is population standard deviation of the variable we are trying to find
E is the Tolerable Error
Z is the value from the standard normal distribution table for the given confidence level
Here we have taken confidence level of 95%, so Z comes out to be 1.96 from the standard
normal distribution table.
Sample size calculation
As all the responses are measured on scale of 1 -5
➢ Sample size = (ZS/E)^2
➢ Standard Deviation = Range/6
➢ S =4/6 =.67
➢ Tolerable error = 0.075
➢ Confidence interval at 95%
Therefore Sample Size=(1.96*.67/0.075)^2= 307 (approx.)

Limitations of Research

• Analysis of primary data is done on the assumption that the answers given by the
respondents are true and correct.
• Time and Resource constraints.

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SECONDARY RESEARCH- LITERATURE REVIEW

1. Key Success Factors of Online Food Ordering Services: An Empirical Study; By Mr.
Zulkarnain Kedah, Mr. Yusof Ismail, Mr. Selim Ahmed; December 2015

Abstract- This study examines the determinants of the customer ordering experience,
which include website trust, customer satisfaction and loyalty. The determinants are
represented by website quality and service quality. A survey data of 353 online food
ordering customers were used to test the research model using structural equation
modelling (SEM). Results reveal that not only is there a significant positive relationship
between website quality and website trust but also a significant positive relationship
between service quality and customer satisfaction. Furthermore, significant positive
relationships are also found not only between website trust and customer satisfaction
but also between customer satisfaction and loyalty. Finally, the study also found an
unexpected direct link between service quality and loyalty. Overall, the study provides
valuable insights for operating online food ordering services successfully.

2. A study on customer’s attitude and perception towards digital food app services; By
Dr. Neha Parashar1 Ms. Sakina Ghadiyali; June 2017

Abstract- Consumer behavior is the study of how individual customers, groups or

organizations select, buy, use, and dispose ideas, goods, and services to satisfy their
needs and wants. It refers to the actions of the consumers in the marketplace and the
underlying motives for those actions. This paper helps in understanding the shift in
consumer behaviour with the introduction of technology and what are the different
kinds of application that consumers are satisfied with and what makes them happy
and satisfied about the service. A sample of 129 respondents was taken and mostly
Gen Z was included in the sample. Tests like Chi-square were employed to study the
association between gender and factors affecting the choice of delivery apps.

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3. A Research article on ‘The changing market for food delivery’; Mckinsey; November
2016

Abstract- Online food-delivery platforms are expanding choice and convenience,

allowing customers to order from a wide array of restaurants with a single tap of their
mobile phone. The article segments the food delivery business in two tiers: The first
type is the “aggregators,” which emerged roughly 15 years ago; the second is the “new
delivery” players, which appeared in 2013. Both allow consumers to compare menus,
scan and post reviews, and place orders from a variety of restaurants with a single
click. The aggregators, which are part of the traditional-delivery category, simply take
orders from customers and route them to restaurants, which handle the delivery
themselves. In contrast, the new-delivery players build their own logistics networks,
providing delivery for restaurants that don’t have their own drivers.

Customers drawn to the new online food-delivery platforms have a different set of
needs and expectations from the traditional pizza customer. The study uncovered the
following important traits: Sticky platforms, Critical delivery time, Home meals, High
intensity on weekends.

4. Consumer Preference and Attitude Regarding Online Food Products in Hanoi,

Vietnam; By Anh Kim Dang, Bach Xuan Tran, Cuong Tat Nguyen, Huong Thi Le; May
2018
Abstract- This study aimed to examine: (1) how the Internet has changed consumers
food-buying behavior and identify its associated factors; (2) consumers’ concern about
food safety information of online food products. A cross-sectional study was
performed from October to December 2015 in Hanoi—a Vietnamese epicenter of food
service. One thousand seven hundred and thirty-six (1736) customers were randomly
chosen from food establishments of 176 communes. Data were collected through
face-to-face interviews using structured questionnaires. The majority of participants
reported using the Internet to search for food products (81.3%). The most crucial
factors influencing food purchases through the Internet were convenience (69.1%)
and price (59.3%). Only one-third of participants selected products based on accurate

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evidence about food safety certification or food origin. The majority of participants
were concerned about the expiration date (51.6%), while brand (9.8%) and food
licensing information (11.3%) were often neglected. People who were:(1) female, (2)
highly influenced by online relationships, and (3) having difficulty in doing usual
activities were more likely to look for online food products.

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Primary Research - Data Analysis & Interpretation

Techniques of Data Analysis:

i. Graphical Analysis
ii. Factor Analysis
iii. Multidimensional Analysis
▪ Factor analysis helped to understand the factors that affects the
customer choice criteria while purchasing.
▪ Multidimensional scaling helped in finding the position Zomato have on
the minds of the customers with respect to its competitors.

GRAPHICAL ANALYSIS
Gender

Age Group

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Occupation

Frequency of Online Food Order

FACTOR ANALYSIS
After conducting a pilot survey, we found 18 variables that are considered by consumers
before making a purchase through online food delivery apps, we performed factor analysis,
through which the following variables were identified. These variables gave us four factors,
viz. Value Added Services, Affordability & Time bound Service, Loyalty & Image and Tangibility
of Service. These variables explain 60% of the data collected.

Affordability & Time Bound

Value Added Services Loyalty & Image Tangibility of Service
Service
Minimum Amount of Premium Member
Price Packaging
Order Subscription
After Sales/Customer Creative Online Delivery Agent
Discount
Service Advertisement Hospitality
Modes of Payment Delivery Time Brand Image
Variety of Available
24/7 Food Delivery
Restaurants
Application User
Information Quality
Interface

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KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .796

Bartlett's Test of Sphericity Approx. Chi-Square 1993.521

Df 136

Sig. .000

KMO and Bartlett’s Test measures the quality of correlations between variables. A KMO
close to 1 indicates small partial correlation coefficients, while a value close to 0 indicates
weak correlation between variables. The KMO of our analysis came out to be 0.796 and
hence, the factor analysis is considered to be good.

The following table shows the variance, which came out to be 60.762. The factor analysis test gave
us 4 factors having an eigenvalue greater than 1. Cumulatively, these factors explains 60.762% of
data.
Total Variance Explained
Extraction Sums of Squared Rotation Sums of Squared
Initial Eigenvalues Loadings Loadings
Compon % of Cumulativ % of Cumulativ % of Cumulativ
ent Total Variance e% Total Variance e% Total Variance e%
1 5.361 31.533 31.533 5.361 31.533 31.533 2.889 16.992 16.992
2 2.195 12.911 44.444 2.195 12.911 44.444 2.733 16.079 33.070
3 1.456 8.567 53.011 1.456 8.567 53.011 2.515 14.797 47.867
4 1.318 7.750 60.762 1.318 7.750 60.762 2.192 12.894 60.762
5 .990 5.825 66.587
6 .890 5.234 71.821
7 .793 4.667 76.487
8 .631 3.710 80.198
9 .586 3.446 83.644
10 .472 2.777 86.421
11 .421 2.476 88.897
12 .395 2.325 91.221
13 .383 2.255 93.476
14 .340 2.001 95.478
15 .287 1.691 97.169
16 .275 1.618 98.787
17 .206 1.213 100.000
Extraction Method: Principal Component Analysis.

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Rotated Component Matrixa

Component

1 2 3 4

Price .171 -.017 .823 -.123

Variety of Restaurants
.268 .252 .737 .047
Available
Food Delivery Time -.062 -.044 .615 .555
Application User Interface .487 .392 .200 .158
Packaging .183 .288 -.086 .722
24x7 food delivery .596 .271 .183 .332
Delivery Agent Hospitality .199 .567 .029 .514
Online Tracking .239 -.101 .149 .685
Discount .429 -.413 .482 .053
Minimum Amount of Order .787 .031 .118 .094
Information Quality-
Availability of all the required
.064 .304 .649 .344
information about restaurants
and dishes
Modes of Payment .468 -.019 .294 .301
Extra/Hidden Charges (like
.588 .049 .135 .435
cancellation/refund)
Premium Member Subscription .436 .659 .004 .023
After Sales/ Customer Service .698 .358 .022 -.005
Creative Online
.065 .793 .200 -.130
Advertisements
Market Perception of the
.079 .754 .034 .225
platform

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.a

The above table explains the variables that are considered important and are divided into
four factors. The method used for extraction is rotation method.

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MULTI DIMENSIONAL DISCRIMINANT SCALING ANALYSIS

After conducting the factor analysis total variables that were influencing the customer
choice towards ordering food online were reduced to 10.

A multidimensional Discriminant analysis was performed on the brands Zomato, Uber Eats
and Swiggy to map them overlapping the attributes.

Output is as follows

Wilks' Lambda

Test of Function(s) Wilks' Lambda Chi-square df Sig.

1 through 2 .597 117.889 20 .000

2 .602 42.157 9 .000

Canonical Discriminant Function Coefficients

Function

1 2

affordabilaty and discount -.414 -.548

time bound service .631 -.938
better packaging .281 .212
delivery agent hospitality -.524 -.306
brand perception -.244 .403
diversified payment options -.004 -.140
24x7 delivery .696 .323
mimimum order amount -.295 .436
user interface -.734 .986
variety of restaurant .726 -.146
(Constant) -.409 -.973

Unstandardized coefficients

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Functions at Group Centroids

Function

brand preference 1 2
swiggy -.150 .311
zomato .443 -.060
uber eats -.290 -.252

Unstandardized canonical discriminant functions

evaluated at group means

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Interpretation

• AS CAN BE SEEN FROM THE PLOT SWIGGY HAS AN UPPER HAND IN THE OVERALL
IMAGE THAT THE COMPANY CREATES THROUGH ITS ADVERTISEMENTS, ACTIONS
RECENTLY THE FOOD EATING SCANDAL HAS HIT THE BRAND IMAGE OF ZOMATO
AND IT IS EVIDENT IN THE PLOT
• IN TERMS OF DIVERSIFIED PAYMNET OPTIONS ZOMATO IS FAR BEHIND SWIGGY ,
SWIGGY AS COMMONLY EXPERIENCED HAS DISCOUNT OPTIONS ON COD WHEREAS
ZOMATO PROVIDES NO SUCH SERVICE.
• ZOMATO HOWEVER HAS BETTER DELIVERY SERVICE AS COMPARED TO ITS
COMPETITORS.
• ZOMATO ALSO HAS A BETTER PERSONALIZED SERVICE WITH BETTER PACKAGING
• UBER EATS TRIES BEING A LOSS LEADER AND IS MOST AFFORDABLE.
• ZOMATO ALSO HAS MINIMUM ORDER CRIRERIA ON MANY OF ITS RESTAURANTS
WHICH IT NEEDS TO REMOVE TO REGAIN.

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ANNEXURE
QUESTIONNAIRE - 1

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QUESTIONNAIRE - 1

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