CHAPTER-1

INTRODUCTION

Production and consumption are important activities in the economy. Business is dependent
mainly on these two activities consumer consume the goods and services for their satisfaction.
Consumer satisfaction leads to long term business relations. The main objective of the business
organization is the maximization of profit inferior trade practices like poor quality of products,
black marketing & delivery of wrong products can exploit the consumers. This situation can
lead to dissatisfaction of consumers. Consumer behaviour helps the marketers to find out ways
to satisfy the consumers by studying various aspects of their behaviour.

Behaviour is the mirror in which one sees himself, herself. Consumer behaviour basically is how
and why people make purchase decisions. It helps marketers to understand consumer buying
behaviour and make better marketing decisions.

“SO WHY IS IT THAT SOME BRANDS GET THE SAME POSITIVE RESPONSE AMONG
MOST CONSUMERS WHILE OTHERS DON’T LIKE THEM? THE REASON IS
CONSUMER BEHAVIOUR.

Meaning Of Consumer Behaviour

Consumer acts I a variety of way when faced with market situation that requires a purchase
decision. Consumer behaviour comprises of a number of uses and is diverted ot answer the
questions. What buyer’s buy, how much they buy, who does buying, why buyers buy, how
buyers buy, and where buyers buy and so on.

The term Consumer is used to describe two different kinds of consuming entities. The
“personal consumer” and the “Organisational consumer”. The personal consumer buys goods
and services for his or her own use e.g. shaving blade or lipstock or for use of family like T.V.
set and fridge or as a giftfor a friend —a book or a shirt. In all these cases goods are bought for
final use by individuals who areknown as “End servers” or “Ultimate Consumers”.

On the other hand, Organisational Consumer are business houses, government Agencies
and institutions like school, Colleges, hospitals and prisons etc. All the organisations purchase

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the products or services in order to run their organizations. But here in this book our main focus
would be individual or ultimate consumer.

DEFINITIONS

The concept of consumer behaviour can be defined as

“Consumer behaviour refers to the action and decision processes of people who purchase goods
andservices for personnel consumption.’

—James. F. Engel

“Consumer behaviour is the process whereby individual decides, when, what, where, how and
fromwhere to purchase goods and services?

—Prof. C.G. Walter

“Consumer behaviour is the behaviour that consume displays in searching for purchasing, using,
evaluating and disposing of the products and services that they expect will satisfy their needs.”

—Leon.G. Schiffman

“Consumer behaviour refers to the mental and emotional processes and they physical activities
ofpeople who purchase and use goods and services to satisfy particular needs?

—Bearden

CONSUMER VERSUS CUSTOMER

The concept of consumer and customer have been described from different point of views like:

“A consumer Is anyone who is engaged in any one or all of the activities mentioned in the
buying procedure.

“Consumer is one who consumes goods and services.”

Consumer is one in whose’s case monetary exchange is being involved. In some cases there may
not be involvement of money transactions e.g., users of the services of voluntary organisations
like UNICEF but they are consumers.

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Consumers may be organisational and personal consumer. Anyone who regularly purchases good
from a store or a company would be termed as Customer.

The term customer can also be typically defined in terms of specific store or company.
Acustomer may or may not be consumer and a consumer may not be the customer. e.g. if Neena
purchases a suit for her mother-in-law. In this case Neena is a customer but not the consumer,
whereas Neena’s mother-in-law is a consumer but not the customer.

Meaning of Consumer Behaviour :

Consumer Behavoiur basically is how and why people make purchase decision they do.
Consumer behaviour is studied both in terms of sectors of population as well as individuals. It
helps marketers to understand consumer buying behaviour and make better marketing decisions.
So why is it that some brands get the same positive response among most consumers while
others like them Don’t? The reason is Consumer Behaviour.

Consumer behaviour consist of Actions that consumer take in accordance of making decisions
for purchasing several goods & services.

Before discussing consumer behaviour it is important to know who is consumer?

CONSUMER BEHAVIOUR:-

Consumer act in a variety of way when faced with market situation that requires a purchase
decision. Consumer behaviour comprises of no. uses R is diverted to answer the questions:-

What buyers buy?

How much they buy?

Who does buying?

How buyers buy?

Where buyers buy?

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Features of Consumer Behaviour

As we know consumer behaviour is the decision process and physical activity that individuals
engage in whey evaluating acquiring using or disposing of Gods & Services.

(1) Systematic process

(2) Influenced by various factors
(3) Different to different customers
(4) Different to different products
(5) Varies from consumer to consumes
(6) Varies from region to region
(7) Information on consumer behaviour is
important to marketers.
(8) Leads to purchase decision
Importance of consumer behaviour

Business is all about the customer : what the customer wants and what they get. As earlier it is
said producer is king of the market but now consumer is.

According to Peter Drucker:-

The aim of marketing is to know and understand the customer so well the product or service fits
him & sells himself.

Take care of customer, customer will take care of everything else. Customer may not need us
but we always need customers.

1. Modern Philosophy:-
It concerns with modern philosophy- identify consumers needs & satisfy them more effectively
than competitors. It makes marketing consumer oriented. It is the key to succeed.

2. Useful for Dealers & Salesmen:-

The study of CONSUMER BEHAVIOUR is not useful for the comp. alone. Knowledge of
CONSUMER BEHAVIOUR is equally useful for middleman & salesman.

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3. Predicting Market Trend:-
Consumer Behaviour also aid in projecting the future market trends. Marketer finds enough time
to prepare for exploiting the emerging opp.

4. Creation & Retention of Consumer:-

Marketers who base their offerings on a recognition of consumer needs find a ready market for
their product.

5. Effective use of productive Resources:-

The study of consumer behaviour assists the manager to make the organisational efforts
consumer- oriented

6. To Remove the Malpractices:-

Business firms perform various unfair trade practices like adulteration, high prices, low quality,
delay in delivery of products to protect the consumers from all these practices and to create.

7. To create awareness among the customers:-

Consumer education & awareness is important on the modern competitive business environment.
This helps the consumer to recognize their rights.

8. Consumer education:-
In the modern competitive business environment consumer education has important role which
can safeguard the interests of the consumers.

NEED AND IMPORTANE OF CONSUMER BEHAVIOUR MARKETING

DECISION

Consumers are the base of any business. Following points highlights the need and
importance of the consumer behaviour:

1. To Remove the Malpractices: Business firms perform various unfair trade practices like
adulteration, high prices, low quality of products, delay in delivery of products etc. to protect
the consumers from all these practices and to create a sound business environment in the
economy, the study of consumer behaviour is essential.
2. Pricing: Business firm has to determine the price of its products before marketing. It is the
important step in the process of marketing. Pricing decisions can affect the entire marketing

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 programme. Two main pricing strategies namely rapid skimming and slow skimming have
great importance while making pricing decision based on consumer behaviour.
3. Promotion of Products: Promotion mix is the communication mix which deals with the
personal and impersonal persuasion about the product of the manufacture. In personal
communication the face to face interaction is required while in impersonal communication
advertising, sales promotion and public relations are required. Both these programmes will
be effective only with the study of consumer behaviour.
4. To create awareness among the consumers: Consumer education and awareness is
important in the modern competitive business environment. This helps the consumers to
recognize their rights. Consumers should be aware of the exploitation and grievance
redressal machinery. The concept of consumer behaviour helps the consumers to obtain the
knowledge about all these issues.
5. Consumer Organizations: Many organizations are working in India such as Consumer
Education and Research Centre, Ahmedabad, Grahak Panchayat, Mumbai, Consumer
Coordination Council, Noida and Association of Consumers Action on Safety and Health,
Mumbai and Grahak Shakti, Bangalore etc. for safeguarding the interests of the consumers.
These organizations affect the marketing decisions of the firm significantly. The
Government has to provide a legislative front to these organizations for promoting the
consumer education and awareness in the society.
6. Promotion of Consumer Sovereignty: The new concept of marketing has emphasizing the
consumer sovereignty for the successful business. Nowadays, marketing begins after the sale
of goods and service. For ensuring the better after sales services to the consumers the
specific study of consumer behaviour is required.
7. To Compensate the Consumers: Consumers suffer from the unfair trade practices in many
ways. The problem of adulteration and low quality has become big challenge in the modern
era. A solid legislation system for the determination of compensation is needed in the
country.
8. To ensure the standardization in the products and services: The Government and
industry both are doing efforts for initiating standardization process in the business.
Standardization process helps the consumer protection in an effective way.

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9. Quality Control: For increasing the consume base, it is necessary for the business firm, to
deliver the products and services having the high quality. Low quality products not only
discourage the consumers but can ruin the goodwill of the organization.
10. Consumer Education: In the modern competitive business environment, consumer
education has important role which can safeguard the interests of the consumers. The study
of consumer behaviour is important part of the consumer education.
Factors Affecting Consumer Behaviour

Ones behaviour either as an individual for as a consumer is being affected by many factors some
of which are:-

I. Economic determinants:-
These are:-

 Personal income
 Family income
 Consumer credit
 Level of living standard
 Consumer income expectation’s
(a) Personal Income:-
When we take about income we one concerned with discretionary & disposable income.
Disposal income is the amount of money that a consumer has at this disposal for spending or
saving or both.
Decline in disposable income will have direct effect on consumer buying decisions. Decline
intrisp. Income decrease the consumer spending & increase the income, consumer spending
on more luxurious.
Discretionary income is income which is available after meeting the basic needs of living. A
increase in dis income result in increased spending by consumer on those items that raises
their living standards.

(b) Family income

The buying behaviour is influenced by family income rather than individual income.
Family Life & Buying Behaviour

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 Stage 1 Young unmarried people living Financial burden minimum, basic
away from home. furniture, car, vocational
Stage 2 Young, newly married couple no Wife is usually working, higher purchase
children. rate.
Stage 3 Married couple having youngest Spend maximum in some purchaser baby
child under 6 foods, toys
Stage 4 Married couple having youngest Financial position better, buy bicycle,
child over 6 different games, spend on education and
house purchasing.
(c) Consumer credit:-
Consumer credit is the facility extended by a marketer to postpone the payments of the
product. Easy availability of consumer credit make to go for those consumer durables which
he would have postpone otherwise.
(d) Consumer Income Expectations:-
It influence as, if consumer assumed that there will be less future expected income, he spends
less and save more and vice versa.
(e) Consumer Liquid Assets:-
If consumer has got food amount of liquid assets then his spending capacity and behaviour
would be different.
Good amount of cash in Bank means that spending will be more
II. Psychological determinants:-

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A) Motivation:

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 A need becomes a motive when it is aroused to a sufficient level of intensity. Motivation
leads to why a consumer behaviour in a particular way.

B) Perception

Perception is process where one can see, hear, touch, smell and sense something, some
event and act accordingly.

C) Attitude

Attitude are learned these are formed as a result of direct experience with product
information acquired from others attitude occurs without situation.

III. Sociological Determinants:

The human beings live in complex social environment where they are surrounded by
several people who have different buying behaviour since the man is social animal who
likes to be Acceptable by all tries to imitate the behaviours that are socially acceptance.
Some of social factors are:

 Family
 Reference group
 Role & status
IV. Cultural factors:-
It is believed that an individual learns the set of values, perceptions, behaviour, and
preferences at a very early stage of his childhood from the people especially the family &
the other key institutions which were around during his develop stage. Thus, the
behavioural patterns are developed from culture where he or she is brough up.

V. Personal factors:-
There are several factors personal to the individual that influence their buying decisions.
Some of them are:-

1. Age
2. Income
3. Occupation

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 4. Lifestyle
There some of underlying factors that influence the consumer behaviour, and the marketer most
keep these in mind.

CONSUMER DECISION MAKING PROCESS:-

The consumer decision making process is the method used by marketers to identify & track the
decision making process of customer journey from start to finish.

The consumer decision process model represents a road map of consumers mind no one buy a
product unless he have a need for it. So consumer decision making powers shows how people
solve the everyday problem in life and what motivate them to buy the product.

Assumptions of Consumer Decision:-

1) Consumer involvement is very necessary for a choice from 2 or more alternatives.

2) Consumer use evaluation criteria for determining chosen alternative.
3) External information is used by the consumer for evaluation procedure.
TYPES OF CONSUMER DECISIONS:-

Why to buy

TYPES OF CONSUMER
When to buy DECISIONS How much to buy

Where to buy

Consumer decision process has got the following stages:-

Problem Recognition Search for information Pre purchase evaluation of Alteration

Disinvestment Post purchase behaviour Consumption Purchase

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b) Problem Recognition

Problem recognition is caused by different between the consumers ideal stage and actual
stage. It occurs when the consumer perceives a need and becomes motivated to solve the
problem. Consumer buy things when they believe a product’s ability to solve a problem
is worth more than the cost of the product.

e.g. Its 9 at night and Divya is starving for snacks she does not want to eat the food available
at home. Now the question arises where to order the where is option to order anything
from Zomato or Swiggy. So problem recognition in this eg. is the need of food.

Types of problem recognition :-

1) Routine Problems:-

The problems arise due to difference between actual and desired sales and for which
immediate solution is required.

2) Emergency Problem:-

The problem arises suddenly and the solution has to be found immediately e.g. ATM cash
service.

3) Planning Problem:-

Problem is expected to occur but an immediate solution is not necessary.

4) Evolving problem:-

Problem may occur unannounced, yet it needs no immediate solution e.g. engagement of
the daughter. E.g. on support arrival of guest, needs an immediate solution what to serve
zomato is option.

(STAGE2) Search for information:-

Once there is recognition of problem, there is need for search of information. The information
search be external or internal. The internal search oftenly consist of an attempt to scan
information stored in memory to recall past experience.

After searching of information the consumer goes for information processing like:-
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1. Exposure

2. Attention towards information

3. Comprehensive

4. Acceptance

5. Retention

e.g. After problem recognition. Divya will search for information i.e. she will search where
she will get her preferable snack from, she will search on Zomato&Swiggy both
according to the require food type, payment method, time of delivery and internal search
also i.e. past experience.

(STAGE3) Pre-Purchase evaluation of Alternatives:-

In this stage, consumer compares from different alternatives, they seek answers that what is best
for them?”

Consumer uses new or old both existing evaluations stored in memory to select product, service,
brands and store when they like moist and get satisfaction with that product. Other attributes
also affect the consumer behaviour i.e.

 Quantity
 Quality
 Size
 Price
 Changes.
e.g. Next step after problem recognition search for information is the purchase evaluation of
alternative’s i.e. check the rating of Swiggy&Zomato then the extra services it offer i.e.
piggy bank service, personal recommendations.

(STAGE4) Purchase:-

All the above stages might happen in a few minutes while the Reader is considering the
Advertisement, in the comfort way. But the final buying decision may take place sometime later.

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People usually do shopping in order to purchase something. Once the consumer decides for
purchasing, consumers to more through two processes.

1. Consumer choose one retailer over the another retailer.

2. Deciding the purchasing pattern which focuses on 2 important pattern.
3. The extent to which consumer develop repeated purchasing pattern.
4. The extent to which purchase are unplanned.
(STAGE5) Consumption:-

First of all consumer purchases a product after going through decision making process. Then,
consumer takes possession of the goods and consumption is ready to occur. Consumption may
can occur immediately or be delayed.

For example . In given example of divyawhen food is delivered by zomato she may decide to
consume it after coming back from market or first eat and then go to market.

(STAGE6) Post Purchase:-

The review stage is a key stage for the company and for the customer likewise. Did the product
deliver on the promises of the marketing? Did the product match the exceed expectations?

If a customer finds that the product has matched the promises made and their own expectations
they will potentially become a brand ambassador influencing other potential customers in their
stage 2 of their next customer journey, boosting the chances of your product being purchased
again.

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 Zomato – A brief Profile

History of Brand Zomato

The storyIndia’s most used food directory was originally launched under the name
‘Foodiebay’ in 2008 at the peak of the Indian start-up boom. The founders were
DeepinderGoyal and Pankaj Chaddah. Both are IIT Delhi graduates from 2005 and
2007 respectively and were working as analysts for the consulting firm Bain &
Company.

The idea for FoodieBay sprang from them when after having to scrounge around for
restaurant menus they finally decided to take matters into their own control.  It started
with a simple foundational idea- an internet directory for restaurant menus.

The idea, even before FoodieBay, was being pursued by Deepinder with another
friend Prasoon Jain in Delhi NCR as a venture called Foodlet. However, Prasoon soon
moved to Mumbai and left behind Foodlet as a venture too.

Soon there was a severe lack of HR and business, which kept Foodlet struggling. This
is when Pankaj Chaddah stepped in to help Deepinder’s idea, and they began afresh
by starting FoodieBay.  The graph, since then, started bolting only upwards for the
company.

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Deepinder describes Pankaj as a “turning point for the company”. The team of
FoodieBay was just 6  in number but in a short span of 9 months, they became the
biggest restaurant directory in the Delhi NCR region by late 2008. The service, after
two years of operations, was renamed as Zomato in 2010. 

Funding:

Zomato has received investments worth $443.8 million through 10 rounds of fund
Acquisitions:

Zomato has acquired several companies over the years; with the most notable being the
acquisition of US based Urbanspoon in 2015. Other acquisitions made by Zomato include
Obedovat, Menu Mania, Lunchtime, Maple Graph, Sparse Labs, Gastronauci, NexTable,
Cibando, Mekanist, and Runnr.
Competition:
Zomato competes with other restaurant discovery and food delivery platforms such as Swiggy,
Dineout, Grubhub, Yelp, Door Dash, Just Dial, etc.
About the Founders:
Zomato was founded by Deepinder Goyal and Pankaj Chaddah, both of whom are from IIT,
Delhi. Deepinder Goyal currently serves as the Chief Executive Officer (CEO) at Zomato. Prior
to launching Zomato, he used to work at Bain & Company as a Senior Associate Consultant.
Pankaj Chaddah is the co-founder and prior to launching Zomato, he had worked at Bain &
Company as a Senior Analyst and Associate Consultant.

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 COMPANY PROFILE
Founded in 2008, Zomato is a leading platform for restaurant search & discovery, online food
ordering, and restaurant table reservations. The company was founded by DeepinderGoyal and
Pankaj Chaddah and is headquartered in Gurgaon (officially Gurugram). Zomato has been a
pioneer in food ordering and restaurant discovery in India, which has benefitted both restaurants
and customers.

Featuring a robust review system, Zomato allows foodies to find the best meals and restaurants
in their neighborhood. A notable aspect about Zomato is that it is among the few companies that
have gone global after starting operations in India. Zomato currently features more than 1 million
restaurants globally on its platform. Apart from its restaurant discovery service, the company
now offers multiple services under its name. Its offerings include white-label platform that helps
restaurants create their own customised application, which features Zomato’s support and
analytics. It also has a table reservation service by the name Zomato Book. More recently, it has
entered the food ordering business under the banner Zomato Orders. It aims to help consumers
by offering frictionless ordering experience with large variety of options. Users can browse
menus and track their deliveries in real time. The logistics in the process are fuelled by third-
party affiliates. Zomato’s applications are available on Windows, Android and iOS.

In terms of geography, India and the UAE stand to be the largest markets for the company. Its
restaurant search and discovery service is available across 23 cities worldwide. Zomato Order is,
however, available only it is major markets in India and the UAE. The company provides food
ordering service in 13 cities of India and three cities of the UAE.

Also, as per our findings from the market survey, we believe that Zomato has been actively
pursuing the creation of a large user base of consumers and at the same time increasing online
orders for the listed restaurants by means of providing discounts on behalf of the restaurants that
are advertising on it. This has multiple implications. Firstly, most of the advertised results on the
platform are discounted and this pushes consumers into ordering online. Secondly, higher
number of orders for restaurants helps them perceive that advertising drove higher sales for
them, whereas a significant part was played by the discount provided. Hence, this results in
restaurants purchasing advertising slots regularly. Lastly, one would argue that revenue from
advertisements is offset by the discounts provided, but the larger picture lies in the benefits of

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 scale. Once a dependency is created on the platform for sales, restaurants are charged a higher
commission, which further helps improve the overall probability of zomato

Strategy of Zomato: Zomato works with keen interest on various strategies to achieve their goal. It
includes

1. Financial strategy: To increase their fund and revenue

2. Marketing strategy: To tap their customers from across the globe
3. Growth strategy: To grow continuously and increase their customers and page traffic
4. Globalization strategy: To expand themselves across the whole globe as a leading service provider
Marketing Strategy
5. Featured and user friendly website
6. Global mobile app
7. Focusing on digital marketing channels for potential customers

8. Acquire the competitors: To be the largest resource in food supply market, Zomato bought urbanspoon
for $52 million to enter US, Canada and Australia
9. Simpler review and rating system
Integrating other tools in their marketing strategy has given them wonderful hike in their business.
 Sales promotion: Coupons and price-offs
 Direct Marketing: Phone call and direct mail

Geographical Coverage
By 2011, Zomato’s coverage reached Chennai and Hyderabad as well. In 2011, Zomato also
launched applications for iOS, Android, Windows Phone and BlackBerry devices. In September
2012, Zomato expanded to its first overseas location by launching its services in Dubai, UAE.
This was followed by quick expansion into Sri Lanka, Qatar, the United Kingdom, The
Philippines, South Africa, New Zealand, and more recently to Brazil, Turkey and Indonesia.

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Zomato Business Revenue Model

Advertising on their website and app Zomato’s advertising is to the point, when users
search for specific keywords, ads of restaurants are shown for that specific keyword. This
makes it highly targeted. This is also hyper local.

Consulting services with data

98% of restaurants fall within the first year and Zomato can help in this! Zomato sits on a
pile of data and information. They have an in-built analytics platform that run a lot of
queries and get important information out. Say if a person wishes to open a new food point,
they can approach with Zomato and find out the success rate of opening a restaurant in a
particular location. Food point owners can also find out what is the most popular type of
food in the area, understand the needs of the customers and provide a complimenting
service that will help build their business.

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Zomato Events

Zomato  has forayed into the events space by partnering with restaurants and creating
limited events. They make a sale through the price of the tickets. A lot of Zomato hosted
annual parties were held.

Online Food Ordering

Very late to the game, Zomato started their online food delivery service. Different from
other players like Swiggy, Zomato does not have their own delivery system, they let users
place the order through the website or the app and the restaurant fulfil that order through by
their own.

Zomato Restaurant Guide: Discontinued

Zomato started food point guide for the famous cities in India. They tied up with the e-
commerce behemoth, Flipkart and hoped to sell around 200,000 copies. The last of this
food point guide was created in 2012 and has not been updated since.

Revenue Model of Zomato

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Zomato open with only listing restaurants Static menu and getting reviews from users about
the food served and their experience .This created a atmosphere for consumers and food
point and Advertising and sponsored listing of restaurant are the main revenue earning
plan. Zomato business revenue model.

Zomato also started with online food ordering and delivery but its only available in Top
metro cities and premium restaurants and zomato charges from 10–15 % for online
ordering and extra charges on delivery by Zomato.

OVERVIEW

A. Brand Elements Brand Name:Zomato named after Foodiebay to avoid conflicts with
eBay. It is an arbitrary brand name (no relationship with the company/product)

Brand Tagline: “Discover more places to eat around you”

Brand Logo: Simple and classy

B. Positioning: The brand/website is very popular and common these days among the youth
especially, since they want to experiment new places to dine-out or enjoy with their
friends and family. Such experiments require reviews.

C. Customer Support: Thousands of customers view and use the Zomato website daily.
These customers belong to India, Dubai, UAE. This was followed by quick expansion
into Sri Lanka, Qatar, the United Kingdom, the Philippines, South Africa, New Zealand,
and more recently to Brazil, Turkey and Indonesia.

Overall Brand Social Media Strategy

Zomato aims to be the place where Foodie’s hangout. In fact, it had rechristened itself as a Food
Network. It is leveraging 3 primary platforms to power its own Food Network: Facebook,

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Twitter and Pinterest. Their social media content strategy revolves around food and restaurants
but the efforts look a little half-hearted.

Facebook

Though Zomato has a 1288k strong Facebook community, it is seriously lacking in engagement

The page doesn’t have regular updates going out. Only a handful go out each month. But
whatever content they share, they do a stellar job at it.

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Twitter

Twitter is where Zomato shines. Twitter is primarily being used as a conversation platform and
the brand is doing an excellent job at engaging in conversation with the people.

Because Twitter allows for Realtime conversation, it is used daily to respond to queries from
people asking for recommendations. They also periodically run contests on Twitter, Foodie
Friday being one that has taken off and seen a great response. The Yummy Yatra happened
recently and was covered live almost entirely on Twitter. Twitter is less about updates, more
about conversation/engagement.

Facebook is a little static in comparison, and is more a platform for updates from Zomato. For
example, our new TV commercial, posts fresh off our official blog, or photo albums from events
conducted by us.

Blogs

The Zomato blog is the company’s mouthpiece where it shares all the latest updates about the
brand and its initiatives. Though the posts are written very well, there is no regularity here as
well.

Pinterest

A visual treat and a foodie’s true delight, the content shared on their Pinterest channel is simply
amazing! They should work hard on promoting it.

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Comparison of Brand Zomato with Competitors

With the might of Network 18 behind it, Burrp.com still can’t give a tough fight to Zomato.
Zomato is low on content and it has low engagement, but Burrp is worse. Even when it is adding
content twice a day, there is still not enough engagement to mention about.

Yelp focuses on local businesses as well as compared to Zomato. Also Just eat / Yelp are not that
technologically strong as compared to Zomato.

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PESTLE Analysis of Brand Zomato

Political

The political situation in India is favourable for Zomato. A company entering a global market is
always prone to political risk.

Economic

 Global expansion requires the firm to raise more funds

 The banking system is different, so setting up bank accounts and carrying out transactions
also takes time to settle.
Social

It was difficult to operate in a new language while also trying to reinvent their operations.

Technological

Superior technology allows Zomato to better meet the needs of their customers in ways that
competitors can’t imitate.

Positioning and Communication Strategy of Brand Zomato:

Zomato has a presence in 11 countries and lists more than 3,00,000 restaurants. Its website gets
15 million visits a month. It has a very strong online presence along with below the line to TV
advertising to remain on top of the user's mind. The sheer amount of content aggregated daily
sets them apart from its competitors and gets connected to their customers.

Zomato is present across all social platforms such as Facebook, Twitter, Pinterest and Google
Plus which allows it to keep interacting with its customers base on a regular interval and
communicating the fact that Zomato is for the love of food and is the first place to reach out to
when it's about food.

Engaging stuff on Twitter (#FoodieFriday quiz) has worked very well, TV advertisements for
New Year Ticketing in December were very aggressively implemented and established Zomato
as a brand to watch out for among both users and merchants. Getting involved with users,
especially the ones who are very active on Zomato, with physical activity like the FoodSprint in

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Delhi and Zomathon in Bangalore, has given Zomato a lot of brand ambassadors who are always
very highly valued.

Zomato Print Restaurant Guides -The Connoisseur's guide to eating out have really helped
establish Zomato as an authority in the restaurant space.

Zomato's initiative "Menus For Change" to work for the less privileged, a program that aims to
give back to society and help provide nutrition and overall health to children less fortunate than
us has positioned it as a much superior brand than its competitors and enhancing its brand value.

Communicating with its customer base through online presence:

Zomato communication through its Facebook page:

Communicating with its customer base through technology:

Zomato has been smart enough to react swiftly to technological developments. With more and
more consumers using phones to search for food, the company launched a mobile application in
2011. The app has recorded more than 3 million downloads so far.

Pricing Strategy

Pricing Model-The company earns revenue from advertising by listed restaurants. Ad rates vary
between Rs. 5,000 and Rs. 3 lakh a month, depending upon location, cuisine and other factors.

Advertising Options:

1. Headliner Strip

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2. Hover Advertisement

3. Banner Advertisement

4. Enhance your business page

PURPOSE

The purpose of this case study is to do an analysis of the way Zomato has scaled up its
operations, expanded its business into various countries. We also plan to find out the strengths,
weaknesses, future opportunities and threats of their business model. This will ultimately help us
understand the F&B industry and build our opinions about few business scenarios which will
help us build solutions to them.

STRENGTHS
●FIRST MOVER ADVANTAGE:-

One of the best competitive advantages of Zomato is that it is the first mover in many of the
nations where it is establishing itself. Directories and other forms of restaurant ratings might
exist. But as an app Zomato is excellent and many countries (like India) have loved the usability
of the Zomato app.

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●Evergreen industry – The restaurant industry is an evergreen industry. Sure, there may be
recessions and other downturns which might affect the industry. But overall, this industry is
going to stick around at all times and is only going to grow with rising disposable income.

●Fast Expansion – It is appreciative that Zomato has expanded so fast. It is already in 24

countries and is expanding year on year though there are competitors
WEAKNESS
 Security issues for the app – A major issue for Zomato in the past has been some
security issues due to which the app was hacked and at least 17 million users data was
copied. Such security issues are a nightmare for internet companies

● Still a lot of expansion required – Considering that the app has established in 24 countries,
there is good expansion. But at the same time, the app has been started 7 years back and with the
amount of funding available for Zomato, the expansion can be much faster. It is allowing other
services to establish themselves in this niche before it reaches their country
OPPORTUNITIES
●Further expansion – The number 1 opportunity for Zomato is to expand to more countries and
establish its base faster. Service industry has a major problem that services can be copied very
fast and very easily. As a result, it is critical for Zomato to establish and expand itself faster.
 Cashless transactions: Currently available only in Dubai, diners at participating
restaurants pay through the Zomato app, eliminating the need to use cash/swipe cards. On
every such transaction, Zomato receives a percentage cut on the total amount. There is
huge opportunity for such a venture in the other existing markets like India and the US

 Cloud restaurants – Zomato is coming up with the concept of Cloud restaurants wherein
restaurants will not have to get a physical space to actually sell their food products.
Instead, they can sell from Zomato.

THREATS
 Aggressive expansion in a huge market landscape – Zomato has been continuously
acquiring companies for expansion – which may not be a bad thing. But when this comes
at a cost of losing out domestic ground, it may not be the best thing to do. Zomato may be
missing out on strengthening and innovating on the existing network by focusing on
expansion. There are a lot of things which they can do to get more people to use their

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 services for e.g. Online delivery – they lost out on the first mover advantage by not
focusing on this and allowed breeding ground for startups like Foodpanda to get into this
space and stand up as a competitor. Tomorrow their might be some other startup which
may give some other service which Zomato doesn’t provide and gain market share for
itself. Hence, it may not be the best policy to ignore the existing market while being on
the mission of expansion. As clearly evident in the mentioned above image, there is a
huge scope for improvement for Zomato. There are so many avenues that it needs to get
into before its competitors get in.
 Intense competition from national and international brands - With expansion to various
countries. On the other hand, we haveplayers which are slowly covering ground in
domestic area like –
o Foodpanda
o Swiggy
o ubereats
○TastyKhana
• Restaurants low on ratings may never be able to get good number of patrons – not everyone has
the funding to improve standards – they may actually lose out their existing customers. All such
restaurants owners may resort to protest.

Political

 Digital India Campaign launched by Prime Minister Narendra Modi will help in getting
more Internet penetration in India which will lead to greater access to almost every
market. Under this, National Optical Fiber Network campaign recently launched will help
to reach even Gram Panchayats. Zomato can take advantage of this by getting restaurants
of cities covered under Digital India Campaign.
 Recently launched Pradhan MantriKaushalVikasYojana will be focused on enhancing
and developing the skill of youth which in turn will help to get many people with
knowledge and skill. Zomato, to increase market penetration and reach, will require
skilled people to establish themselves in the new market. Hence, PMKVY will help to
provide skilled people which could be hired by Zomato

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 Indian government’s focus on Ease of Doing business will help bring more investments in
form of FIIs and FDIs. Zomato can be benefited with the expected investment, which would
help it to grow.

Economic

 Zomato grew 1399% from 2011 to 2014. Its revenue was 96.7 crore INR in 2014-15.
Zomato is present in 22 countries and contributing to respective economies of the
countries
 Increase in service tax from 12.36% to 14% will lead to increase in prices of services
which in turn will impact Zomato
 Zomato is starting cashless transaction which will create jobs in various cities. Currently,
Zomato employs 2319 employees
 Zomato is attracting various investments and funding from Indian as well as foreign
investors which in turn is good for Indian economy.

Social

 In a span of six years Zomato has become India’s favorite online Restaurant Discovery
tool. It has influenced and changed the way how people select their restaurants
 There has been an increase in the middle class Indian working population and substantial
change in lifestyle pattern. Gone are the days of 9 to 6 job, people are now working

29
 around the clock. More and more people especially youngsters and new age working
couples love to eat out. As per the survey released by national Sample Survey
Commission the proportion of expenditure of dining out has increased steadily from 19%
in 2000 to 30% in 2012
 The biggest social factor of Zomato is User Engagement. Reviews and Ratings make the
website very engaging which ensures customer participation. The concept of incentive
based rating has also caught up with people and has made them socially active and
responsible

 Customer Service of Zomato is also very amazing. Prompt and friendly replies ensure
that Zomato keeps its customers loyal. Customer Service is an important aspect of any
service company and Zomato has definitely taken a lead here over other Indian
Companies
Technological
 The biggest advantage of Zomato is it has a beautifully designed UI (User Interface),
which is beautiful and at the same time easy to browse differentiating it from other Indian
tech start-ups. The speed with which the website opens is amazing and the mobile app is
also very fast. The only problem around the same is with the menus you need high
resolution otherwise it gets too cluttered to read

 The restaurant finder module is also very well made. It has been integrated with the app
as well which is the highlight because one will need to find the restaurant on the go. The
restaurant information is well thought out and organized which makes sure you get the
information you are looking for without any hassle

 The number of vote options adds a lot of context to the rating. There is also a focus on
personalization with the personalize option and thus you can play with the interface the
way you like

 The website is SEO (Search Engine Optimization) friendly which makes sure that it pops
up on the search engine. There is a huge challenge that Zomato will have to face from
Google because it is promoting its own restaurant finder and booking tool. Zomato will
have to constantly evolve and innovate and add value if they want to sustain in the market

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  The business model of the Zomato Revolves around gate keeping of information, which
means that when you call a restaurant, its number gets masked, and you are being routed
through Zomato. It also requires you to login to use the service. The reason behind this is
Zomato needs to compete with companies like Google and thus to get the funding they
need more registered users. Even if with the gate keeping feature they miss on a small
percentage of users who are skeptical about their privacy they will surely add a lot of
information from people who register.

Local Competition-
The timeline of entry of food technology services in India. The aggregator services started with
the entry of global player FoodPanda in 2012. TinyOwl and Swiggy entered the space in 2014.
Zomato was founded as a restaurant delivery platform in 2008, but expanded into the delivery
space with Zomato Order in 2015.
Industry Rivalry Foodpanda– foodpanda who has also acquired TastyKhana and JustEat is a
competitor to Zomato in this marketspace. But, as per one of interviews with Mr.
DeepinderGoyal, Zomato doesn’t consider it as a threat because foodpanda in spite of being
present in market for 3 years has clocked only 10,000 orders a day whereas people visiting
Zomato has 1, 00,000 searches..

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Swiggy

Swiggy is food ordering and delivering company, founded by techpreneursNandan Reddy,

Sriharsha, and Rahul Jaimini in August 2014. It provides a single window for ordering from a
wide range of restaurants and have their own exclusive fleet of delivery personnel pick up orders
from restaurants and deliver it to customers. It is a complete food ordering and delivery solution
connects neighborhood restaurants with urban foodies.

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UBEREATS:-

Uber Eats is a popular online food ordering app in India which operates in all major cities
including Mumbai, Chennai, Bangalore, Hyderabad, Delhi and more. The mobile app
available for both android and iOS devices. This is a venture of Uber Technologies, Inc. who
is also own popular taxi service across the globe
TASTYKHANA

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Tasty Khana is an Indian based Food Delivery mobile app founded by Sheldon D’souza and
Sachin Bahrdwaj. It empowers Customers to get moment access to its database of more than
7,000 eateries crosswise over India.

It gives a couple of choices to give Customers a chance to make profiles, spare eatery areas,
and their past requests. Founded in 2007, Tasty Khana available for Android and iOS
platforms.

Barriers to Entry – Barriers to entry are very high as there are already major players established
in market. Zomato is very well established and market leader. There are other players such as
foodpanda, Tiny Owl and Burrp which have already having decent market share.

Bargaining power of buyers

 Presence of various competitor apps in the market means that it is easy for the buyers to
switch to other apps like food panda, Burrp! Tinyowl, just eat.
 With improving features, and upgrades such as food ordering, people may switch to other
apps offering better features.
 Since it is easy-to-use online platform, constraints related to distribution is eliminated.
This removes a potential factor for bargaining of buyers.

Bargaining power of suppliers

 Suppliers of Zomato - Print media and online media - Editors' choice on play store

 Zomato has become famous through its publicity in print media, through play store,
through advertisements in Restaurants. To add to this, there is also dependency on
reviewers - they do not have any way to check the authenticity of reviews as of now.

 These all become the suppliers of Zomato.

Thus the threats which they face are:

 What if restaurants do not want to list themselves on Zomato? What if they move to
another app?

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  Since the reviews are subject to the perspective of the patron, it may be a biased one -
moreover, spam may defeat the purpose - Ratings may get subjective. They have a
content team, but it needs to expand.

 Zomato does not have a system of rewarding the reviewers who spend a lot of time
writing reviews - which may put them off from writing

 Incentives for reviewers are required - if competitors give them - they may switch to
other apps - they should make sure the reviewers stay put

 Many restaurants are not available on Zomato. More publicity is required.

Threat of new entrants

 Strong Brand Name
A brand name is a must to survive in the industry. Zomato has been very effective in the past few
years. However, they have been late in entering the ordering segment and Food Panda has taken
effective strides in the same. Any new competitors will need to work extensively on their brand
value in order to effectively compete. Thus this threat is low for Zomato however they need to
constantly innovate in different verticals to ensure that they build on the advantage that they have
created.
 Advanced technologies
This is another area where Zomato has taken huge strides. As mentioned earlier in the
technological analysis, the app and website are aesthetically beautiful and the whole experience
is enriching! Thus new entrants will have to come up with an overhaul of the whole strategy as
far as application and technological advancements are concerned. Innovation in technology
positively affects Zomato.

 Industry affects economies of Scale

Economies of scale positively affects large producer by lowering the cost of the next unit of
output at lower cost. Thus it is relatively easier and economical for Zomato to expand at a faster
pace. Any new entrant will have to pump in a lot of investment to challenge Zomato because
they will have smaller economies of scale. However, this is one area where if the new entrant can
generate enough capital they can challenge Zomato on the ground level even though economies
of scale are tilted towards Zomato.

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 Geographical Factors affecting Competition
Food Panda is present in 200 Indian cities and has made huge strides in the recent past however
it is still considerably lagging Zomato in terms of territory covered as Zomato has presence not
only in huge number of Indian cities but also in 22 different countries and they are taking strides
very fast. Tying up with restaurants and getting the information organized in the way Zomato has
done is a huge challenge for any new entrant. However, seeing the pace at which Zomato has
reached out and expanded it seems possible and thus Zomato will have to constantly maintain
that advantage and keep coming out with new and innovative models.

 Difficult learning curve

Though Zomato has been able to do learn and grow in the market at a very effective speed; the
learning curve for any new entrant into the market will be very steep.
E-commerce in India is expected to grow from 2.9 billion in 2013 to 100 billion by 2020. There
are different factors which lead to emergence of online quick food services with increasing
demographics 50% of population, making India the youngest population in the world. As today
generation is more adaptable to the innovative environment, they change their taste and
preferences accordingly.

Different Reasons for growth of online food delivery company’s-

(1) Promising income & Consumption Levels:- A change in income typically results in
change in demand for goods. Change in urban tastes leads to further advancement of fast
food restaurant in India. Higher disposable income is also a key driver for other sub
categories food products.
(2) Favourable life style changes:- Every person is habitual of a particular level of standard
even if standard if his income goes down the consumer spending will not come down
proportionately because it is very difficult to come down from ones established standard
of living. On the other hand rise in one income means more spending on consumption.
(3) Rising Number of working women:- There has ben been dramatic shift in indian
culture man and women is treated same today in work place also

India: Higher disposable income is also a key driver for other sub-categories of food
products too.

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2. Favourable life style changes:-

With change in mindset of the generation today every member of family is working now
both parents bring home income which make changes in way they live, with changes in
routines, lifestyle and food habits. Time crunches and an increasing need to spend
quality time with 92% nuclear families reacting out for fast food or takeouts to save time
& energy that would otherwise go into cooking up meal at home everyday of the week.

3. Rising number of working women:-

There has been an dramatic increase in working women. Working women end up
spending most of their product line hours at work. When women come back from work
place to home they usually want to spend time with her family ,so rather then spending
time on cooking she will order online.

4. Expanding variety of cuisines:-In competitive scenario every one wants to win the rat
race and make profits at any cost., same in case of restaurants offering global cuisine has
had a significant chicken biryani, burgers, butter chicken, pizza thali’s are customers
most preferred orders.

5. Upgrading of Retail formats:-

Today taking franchise is easy task, we can see different international food brands and
restaurants making themselves available at popular malls these make the ideal space to
get more customers who go to malls to shop and can easily have variety of food options
at single roof.

6. Rising of Contract Cultivation:-

Contract cultivation is essentially a binding agreement that guarantees farmers purchases

from giant global company’s, provided they agree and supply the preferred crops to the
companies.

e.g. McDonald’s currently has ever 400 farmers cultivating potatoes for them in over 2000
acres of farmland in the state of Gujarat.

7. Growing of Delivery- dedicated formats.

Starting up restaurant required huge investment but the initial investment needed for a
delivery focused is much lower. Investments include rent, designing interiors, furniture

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 & on due to such cost benefits more operators are ready to devote their time energy &
investments in the formats dedicated to delivering food at the doorstep.

8. Delivery dedicated websites:-

Though Zomato is one of the biggest food service website picking up almost double the
funding of that of uber eats while global food chains like Mcdonald’s& Pizza Hut have
their own websites from where you could order food.

Impact of online food services on Restaurant Business In India

The format of home delivery or the takeaways have gained a lot more customers in locations
such as malls, offices & big party orders for residential complexes.

 People missing breakfast on the way to work order in.

 People who desire a better choice or corporate lunch or party order in too.

Online food delivery option give the convenience & immediate source of food at home. Beside
the convenience of ordering groceries from your mobile app, you can reserve your slots of
Restaurants also.

Wireless ordering system:-

In the pass decades, the rapid growing of network and wireless technology did a great impact for
how people communicate with each and other.

The changing scenario from delivering food by ordering on phone directly going through phone
online delivery apps have given ease in working. Wireless food ordering system is a system that
integrated both concept of intranet wireless technology.

Online Ordering System :

In our generation era, computer has become a key component to our daily life because of the
advancement technology of World Wide Web that becomes an internet that allow each and every
user connected with theirs’ computer for information sharing throughout the whole world. The
World Wide Web did a great contribution to a lot of enterprise which use this mechanism for
information sharing within the enterprise and also outside the enterprise.

From the benefit of World Wide Web, a lot of fast food industry applies a system known as
Online Ordering System to assist their business processes. Online Ordering System is a
technique that allow customer to order their favourite food online via the internet by using a web

38
browser that installed in their respective computer or smart phone. Implementing this system can
help fast food industry to solve the problem that they face while using the traditional food
ordering processes.

The system greatly simplifies the food ordering process for both customer and restaurant
compare to the past. The customer can place an order everywhere and anywhere whenever
internet connection is available for them. Customers access to the website and choose the food
that they prefer from the online menu display then customers have to choose whether the food is
delivered to them or it will be packaged for pick up and the payment method will be upon
delivered or pick up and lastly it will show all the order details to the customer for double
checking and confirmation.

On the other hand, the system also greatly lightens the work load on the restaurant’s end. Once
customers have place an order via the internet, the data will send to the restaurant database and
place in a queue in real-time. In addition, the data will be display on the computer screen along
with the corresponding option. It allow restaurant employee easily manage the orders
sequentially, produce the necessary item with a minimal delay and help to reduce human error.

STRENGTH OF WIRELESS NETWORKS:-

The system is very suitable for fast food industry due to it provides ability for customer to place
order anywhere and everywhere and also minimized the time require during the order processes.
Customers do not need to physically go to the restaurant for food ordering instead of just using
their mobile device to place an order via the internet and when the customer reach the restaurant
they can directly have their meal without waiting for the queue. Meanwhile, it help the fast food
restaurant to have a better customer services because the most important factor that fast food
industry concern about is quickness therefore the restaurant should serve their customer without
any delay.
Weaknesses and Limitations

The main weaknesses of the system will be internet connection depended. The system will not be
operating without the internet connection. Because customer have to place order via the internet
as a medium and the data send to the restaurant database for further process, the customer will
not be able to access the web service if no internet connection available. Furthermore, if the

39
Internet Service Provider (ISP) is under maintenance it will did a great impact to the restaurant
that relies on the online order system for their business.

Other than that, the system is not effective enough to target all the customers on the market.
Because have a lot of senior citizen are without computer literate, so they do not really
understand how to utilize the web service. Thus, if they want to place an order by using the
system it will be a very troublesome incident for them.

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 CHAPTER-2
REVIEW OF LITERATURE

Hall (1977) stated that the millions of people who "eat out" every day have a wide variety of
needs and tastes from a quick lunch to a luxurious meal with elaborate service. Because of these
differences there are many kinds of restaurants varying from street stands for a hot dog or bowl
of noodles to elaborate restaurants with the best cooking.

Brymer (1991) states that the hospitality industry is comprised of those businesses which
practice the act of being hospitable; those businesses which are characterized by generosity and
friendliness to guest. This business that comprise the major segments of the industry: food
service, lodging, travel and recreation.

Lungberg and Walker (1993) said that the reasons for "eating out" are several and some of
them complex. The National Restaurant Association (NRA) has sponsored a number of studies
of restaurant consumers and their reactions to various kinds of restaurants.According to one of
these studies, the three most important considerations in the decision to eat out were:

- No one has to clean up

- It permits a change of pace

- It is considered a treat

Schiffman and Kanuk (1994) stated about consumer perception saying "as diverse individuals,
we all tend to see the world in our own special ways. "Reality" to an individual is merely that
individual's perception of what is "out there"- of what has taken place. Individuals act and react
on the basis of their perceptions, not on the basis of objective reality. Thus, to the marketer,
consumers' perceptions are much more important than their knowledge of objective reality.

Lundberg (1994) said people eat out for a variety of reasons: to satisfy hunger, social needs, and
ego and self-fulfilment needs. The most popular theory of motivation, that proposed by A.H.
Maslow, states that humans are wanting animals. As soon as one need is satisfied, another
appears to take its place, motivating from the need for safety or security up the scale through

41
social, ego, and self-fulfilment. People go to restaurant to satisfy not only hunger but also self-
esteem, self- respect, self-confidence, and prestige needs

Parasuraman et al. (1994) revealed that price and product quality together with service quality
influence customer satisfaction. Furthermore, several studies on fast food restaurants showed that
food quality is related to satisfaction and it was tested as a potential determinant of customer
satisfaction.

Moskowitz (1999) said “Customers are stocking up in pursuit of fresh, simple Vietnamese food
made with an emphasis on clean flavour and bright herbs, delivered quickly, and priced
reasonably".

Aaker (2000) opined that, brand awareness was remarkably durable and sustainable asset. It
provides a sense of familiarity especially in low- involvement products such as soaps, a sense of
presence or commitment and substance and it was very important to recall at the time of
purchasing process. Apart from the conventional mass media, there were other effective means
to create awareness viz., event promotions, publicity, sampling and other attention getting
approaches.

Brown et al. (2000) reported that the need for effective nutritional education for young
consumers has become increasingly apparent, given their general food habits and behaviour,
particularly during adolescence and analyzed that the interaction between young consumers’
food preferences and their nutritional awareness behavour, within three environments (home,
school and social interaction appears to be somewhat overshadowed by the young consumers,
while developing an independence trait, particularly, during the adolescent years. The authors
suggested that food preferences are often of a ‘fast food’ type and consequently the food habits
of many young consumers may fuel the consumption of poorly nutritionally balanced meals.
While young consumers were aware of healthy eating, their food preference behaviour did not
always appear to reflect such knowledge, particularly within the school and social environments.

Benedict et al (2001) Study explains that perceptions toward online shopping and intention to
shop online are not only affected by its nature of ease in usefulness and enjoyment, but also by
exogenous elements like consumer traits, situational factors, product characteristics, previous
online shopping experiences, and trust in online shopping.

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Yoon (2002) tested the relationship of website properties such as width of product selections,
accuracy of online information, and firm’s reputation to website trust. He found that website
properties have a significant relationship with website trust.

Thorbjørnsen et al., (2002)found that Social and general media sites on the Internet, such as
blogs, are growing increasingly as areas of interest for social research on reviews and personal
experiences. Some authors state that nowadays all consumers are different. No consumer is the
same because people have different reactions to the same experiences and behave differently to
the same flavours. Each consumer is unique so it is very important to study the behaviour of
people who go out to restaurants. More importantly, those who search for information on the
internet about restaurants, use mainly platforms such as the “zomato,” These sites are considered
very important to consumers because here anybody can share his or her experiences and make
comments which can be seen by potential consumers. These comments will possibly influence
their decision as to which restaurants to go to.

Posselt and Gerstner (2005), using the theory of order effect,argue that satisfaction with a
service will be influenced by the sequence of service encounters. In fact, websites that were rated
poorly in customer service were the least likely to be shopped again which reflects the state of
customer dissatisfaction.

Mukherjee and Nath (2007) also suggest that perceived value over privacy and security
features of the websites is the crucial antecedent of trust which eventually positively influences
the behavioural intention of the consumers. Hence, security and privacy of all the e-service
providers have been addressed as the primary concern in many studies

Dholakia and Zhao (2010) found that timing plays an important influence on the relationship
between online store attributes and satisfaction. Delayed delivery beyond the 5 common practice
(e.g. one hour delivery) will have a negative effect on satisfaction regardless of the road and
weather conditions.

Furthermore, Suleyman (2010)found that customer service quality has strong effect on overall
online customer satisfaction. Many Internet customers are concerned with real time, return and
replacement issues, and speed of response time to their queries from customer service

43
representative. Finally, despite a considerable debate about the causal ordering between service
quality and satisfaction.

Sheryl E. Kimes (2011) found that perceived control and perceived convenience associated with
the online food ordering services were important for both users and non-users. Non-users need
more personal interaction and also had higher technology anxiety to use the services.

Ramasamy et al. (2005) reported that, the buying behaviour is vastly influenced by awareness
and attitude towards the product. Commercial advertisements over television was said to be the
most important source of information, followed by displays in retail outlets. Consumers do build
opinion about a brand on the basis of which various product features play an important role in
decision making process. A large number of respondents laid emphasis on quality and felt that
price is an important factor while the others attached importance to image of manufacturer.

Serhat Murat Alagoz & Haluk Hekimoglu (2012) found that e-commerce is rapidly growing
worldwide, the food industry is also showing a steady growth. In this research paper they have
used the Technology Acceptance Model (TAM) as a ground to study the acceptance of online
food ordering system. Their data analysis revealed that the attitude towards online food ordering
vary according to the ease and usefulness of online food ordering process and also vary
according to their innovativeness against information technology, their trust in e-retailers and
various external influences.

Varsha Chavan, et al, (2015) conducted the use of smart device based interface for customers
to view, order and navigate has helped the restaurants in managing orders from customers
immediately. The capabilities of wireless communication and smart phone technology in
fulfilling and improving business management and service delivery. Their analysis states that
this system is convenient, effective and easy to use, which is expected to improve the overall
restaurant business in coming times.

H.S. Sethu & Bhavya Saini (2016) their aim was to investigate the student’s perception,
behavior and satisfaction of online food ordering and delivery services. Their study reveals that
online food purchasing services help the students in managing their time better. It is also found
that ease of availability of their desired food at any time and at the same time easy access to
internet are the prime reasons for using the services.

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Leong Wai Hong (2016) conducted the technological advancement in many industries have
changed the business model to grow. Efficient systems can help improve the productivity and
profitability of a restaurant. The use of online food delivery system is believed that it can lead the
restaurant’s business grow from time to time and will help the restaurants to facilitate major
business online.

Hong Lan, et al, (2016)found that online food delivery market is immature yet; there are some
obvious problems that can be seen from consumers‟ negative comments. In order to solve these
problems, we can neither rely merely on the self-discipline of online food delivery restaurants
nor the supervision and management of online food delivery platforms. Only by taking laws as
the criterion, with the joined efforts of the online food delivery platforms and restaurants, the
government departments concerned, consumers and all parties in the society, can these problems
be solved and a good online take away environment can be created.

Kashyap (2017) found that today’s ongoing upps of online food delivery like zomato, food
panda, uber eats have created their importance in the Indian sustainable ecosystem, but had this
same statement if made in 2010 it would have sounded differently. There wasn’t much of any
statistical evidence but yet the Indian market evolved in Industry today is known as the food
delivery industry.

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 CHAPTER-3
RESEARCH METHODOLOGY

OBJECTIVES

1. To analyse factors affecting attitude of customers regarding food delivery apps.

2. To find out what factors convenience consumers to order food from Zomato.
3. To analyze the relationship between food delivery app and the facilities provided by the
same.

Data Collection Methods: The source of data includes primary and secondary data sources.

Primary data: Primary data has been collected directly from sample respondents through
questionnaire and with the help of interview.

Secondary data: I was collected the secondary data from Standard textbooks, Journals, Blog
pages, Magazines and Internet sources.

Research Instrument:  Research instrument used for the primary data collection is
Questionnaire.

Sample Design:  Probability Sampling.

Sampling Technique:  Convenience

Sample Size: The sample size for this research will be about one hundred (100) respondents,

which will be issued with closed ended a questionnaires.

Area of Study: Ludhiana City.

Research Tools: Percentage method, Pie charts, Average mean & bar graph.

46
Chi-square Test

The chi-square test is one of the simplest and most widely used non-parametric tests in statistical
work. The χ2 are the Greet letter chi the chi-square (χ 2) test was first used by Karl Pearson in the year
1990. The quantity chi-square describes the magnitude of the discrepancy between theory and
observation. It is defined as:

Chi-Square = Σ(O-E)2 / E

Where O = Observed frequency

E = Expected frequency

To determine the value of chi-square, the steps required are:

1. Calculated the expected frequencies

Total no. of Respondents
E = -------------------------------------
Different types of respondents

2. Take the difference between observed and expected frequencies and obtain the squares of
these differences i.e., (O-E) 2
3. Divide the values of (O-E)2 with respective expected frequency and obtain the total i.e.,

Σ (O-E) 2 / E

4. Degree of Freedom is (n-1).

47
 CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

1. Age of Respondents

Age in years Male Total % of Female Total % of

male female
respondents respondents
10-30 yrs 16 16% 57 57%
30-50 yrs. 8 8% 10 10%
More than 50 9 9% 0 0%
Total 33 33% 67 67%

60

50

40

30 Male
Female

20

10

0
10-30 yrs 30-50 yrs. More than 50

Interpretation:

The above table classifies the respondents according to their age groups. The majority of the
respondents belong to the age group 10-30 years with 73% followed by age group of 30-50 yrs
with 18% and then more than 50 years with 9%.

48
2. Details of the respondents on the basis of occupation

Types of Male Total % of Female total % of

occupation Male Female
respondent respondents
s
Student 7 7% 47 47%
Service 4 4% 11 11%
Business 22 22% 2 2%
Housewife 0 0% 7 7%
Total 33 33% 67 67%

50

45

40

35

30

25 Male
Female
20

15

10

0
Student Service Business Housewife

Interpretation:

Out of 100% customer 67% of respondents are female form which 47% are student, 11% are
working followed by 2% business women and 7% housewives.

The other 33% are male respondents of which 7% are student’s 4% doing service followed by
22% business mans

3. Table showing income group of respondents

49
 Income group Male Total % of Female Total % of
Male Female
Respondents Respondents

Upto 19,000 p.m 2 2% 0 0%

10,000-30,000 p.m. 1 1% 6 6%
30,000-50,000 p.m. 11 11% 6 6%
More than 50,000 p.m. 15 15% 3 3%
Total 29 29% 15 15%

16

14

12

10

8 Male
Female
6

0
Upto 19,000 p.m 10,000-30,000 p.m. 30,000-50,000 p.m. More than 50,000 p.m.

Interpretation :

Out of total 100 respondents, 11% of male and 6% of female respondent

50
4. Differentiation of respondents based on their education

Education level Male Total % of Female Total of %age of

Male Female Respondents
Respondent
s
Secondary & below 4 4% 5 5%
High secondary 3 3% 31 31%
Graduated 14 14% 16 16%
Post graduated or 12 12% 15 15%
above
Total 33 33% 67 67%

35

30

25

20
Male
15 Female

10

0
Secondary & below High secondary Graduated Post graduated or above

Interpretation:

51
The above table and bar graph shows that the total 100 customers 67% of respondents are female
from which 34% are high secondary, 30% are graduated and 27% are post graduated.

Remaining 33% are male respondents of which 14% are graduated, 12% are PG followed by 4%
are secondary and 3% are high secondary.

52
5. Details of respondents on the basis family size.

Family size Male Total % of Female Total %age of

Male Female respondents
Respondent
s
Single 6 6% 5 5%
Nuclear 16 16% 38 38%
Joint 11 11% 24 24%
Total 33 33% 67 67%

40

35

30

25

20 Male
Female

15

10

0
Single Nuclear Joint

Interpretation:

Out of selected respondents 6% of male and 5% of female respondents are single. 16% of male
and 38% of female respondents belong to joint family and remaining to joint families

6. Table showing place of study of different respondents

53
 Place of study Male Total % of Female Total %age of
Male Female respondents
Respondent
s
Hostel 1 1% 4 4%
Paying guest 3 3% 5 5%
Rented 10 10% 5 5%
accommodation
Own accommodation 19 19% 53 53%
Total 33 33% 67 67%

60

50

40

30 Male
Female

20

10

0
Hostel Paying guest Rented accommodation Own accommodation

Interpretation:

The above survey of 100 respondents showed that 72% of the customers line in there own
accommodation, 15% rented accommodation and remaining followed by 8% PG, 5% in Hostel
on accommodation, 15% in rented accommodation followed by 8% paying guest.

7. Details of respondents on the basis of Marital Status

Marital Status Male Total % of Female Total %age of

54
 Male Female respondents
Respondents
Single 14 14% 54 54%
Divorced 4 4% 0 0%
Married 15 15% 13 13%
Total 33 33% 67 67%

60

50

40

30 Male
Female

20

10

0
Single Divorced Married

Interpretation:

Out of 100% respondents, 14% of males respondents and 54% of females are single followed by

15% of male respondents and 13% females are married and 4% of males are divorced.

55
8. Ordering food through Zomato

Options Male Total % of Female Total %age of

Male Female respondents
Respondent
s
Yes 30 30% 56 56%
No 3 3% 11 11%
Total 33 33% 67 67%

Yes

Male
Female

Interpretation:

Out of 100 respondents 30% of male and 56% of female order food through zomato and

3% of male and 11% of female are not using zomato

56
9. Reasons for ordering online

Options Male % Female %

When I am not in mood of cooking 0 0% 6 6%

Change of taste 5 5% 13 13%

Special offers 7 7% 14 14%
Saves time 1 1% 10 10%
Cost effective 2 2% 7 7%
Variety available 3 3% 7 7%
For house parties 7 7% 2 2%
I don’t know cooking 4 4% 3 3%
To meet emergency in case of sudden 4 4% 5 5%
arrival of guests
Total 33 67

16
12
8
4
0

Male
Female

Interpretation

Out of total number of respondents main reason of ordering was special offer with 7% of male
and 14% of female respondents.

10. Frequency Using the Zomato App:

57
 Frequency Male Total %of Female Total %age of
male female
respondents respondents
Everyday 12 12% 11 11%
Twice of week 3 3% 19 19%
Once of week 4 4% 17 17%
Once of month 14 14% 20 20%
Total 33 33% 67 67%

25

20

15

Male
Female
10

0
Everyday Twice of week Once of week Once of month

Interpretation:

Out of 100 respondents 12% of male and 11% of female respondents use zomato app everyday.

11. Reasons for preferring zomato over other food delivery apps

58
 Reasons Average Ranks
mean
Speed of delivery 6.29% 5
24*7 delivery 5.11% 12
Reservation option available 6.11% 7
More restaurant available 6.31% 4
Quality of services 6.7% 2
Payment options 5.98% 8
Discounts 5.37% 11
Better reviews 6.13% 6
Convenience 5.91% 9
Safety of payments 5.49% 10
Tracking of orders 6.56% 3
Ease in navigation 7% 1

Interpretation:
Out of total no of respondents 6.7 % of respondents agreed that quality of service was the major
factor that influence to order food through zomato ,followed by tracking of orders ,more
restaurants available nd the least factor that influence them according to the survey is payment
options.

12. Rely on review’s of restaurants

Options Male Total % of male Female Total % of female

59
 respondents respondents
Sometimes 11 11% 26 26%
Never 10 10% 24 24%
Always 12 12% 17 17%

30

25

20

15 Male
Female

10

0
Sometimes Never Always

Interpretation :

Out of the total 100 respondents 11% of male and 26% female respondents take into
consideration reviews given by restaurants sometimes whereas 12% of male and 17% of female
respondents always consider reviews.

13. Experience in using zomato according to different factors

Factors Average mean

1 Convenience 0.25

60
 2 delivery 0.02
3 Packaging 0.29
4 Outlet reach 0.34
5 Ease in ordering 0.22
6 friendly delivery persons 0.04
7 Cost effective 0.33

Interpretation:

On the basis of average mean of rank it was identified that ease in ordering is the most important
factor that influence customers to order from zomato followed by cost effectiveness, outlet reach
on other hand delivery services is the least important factor.

14. Plan to shift from zomato to other apps

options Male Total % of male female Total % of

respondents female
respondents
Never 6 6% 15 15%
Maybe 9 9% 6 6%

61
 Can’t say 3 3% 32 32%
Yes 15 15% 14 14%
total 33 33% 67 67%

35

30

25

20
Male
15 female

10

0
Never Maybe Can’t say Yes

Interpretation:

Out of 100 respondents 3% of male customers and 32% of female customers are neutral to shift
their preferences from zomato to any other app, whereas 6% of male customers and 15% of
female customers will never shift from zomato

Chi-square

15. Relationship between age and online ordering

Age Ordered Not ordered Total

10-30 36 6 42%
30-50 26 5 31%
More than 50 24 3 27%
Total 86 14 100%
x2=12.64 d.f.=2 T.V.=5.991

62
As calculated value is more than table value , the null hypothesis is rejected which show that
there is no relationship between age and online ordering.

16. Relationship between occupation and online ordering.

Occupation ordered Not ordered Total

Student 43 9 52%
Service 18 1 19%
Business 17 3 20%
Housewife 8 1 9%
Total 86 14 100%
x2=0.484 d.f=3 T.V =7.8147

63
As calculated value is less than table value. Hence we can conclude that there is relationship
between occupation and online ordering.

64
 CHAPTER-5
FINDINGS, SUGGESTION AND CONCLUSION
FINDINGS:

1. The majority of the respondents belong to the age group 10-30 years with 16% male and
57% female
2. Out of total 33% male respondents 22% are business mans
3. 47% of female’s respondents are students.
4. 15% male respondents earn more than 50,000 p.m.
5. 14% of male respondents are graduated and 12% are post educated.
6. 38% of female respondents live in nuclear family size
7. The majority of respondents live in there own accommodation with 19% males and 53%
females
8. 14% of male respondents and 54% of female respondents are single
9. 30% of male and 56% of females order food through zomato
10. Respondents main reason for ordering through zomato is special offers provided by them
11. 6.7% of respondents agreed that quality of service was the major factor that influence to
order food through zomato
12. 11% of male and 26% of female respondents take into consideration reviews given by
restaurants sometimes.
13. Ease in ordering is main factor that influence customers to order from zomato
14. 15% of male respondents and 14% of female respondents are planning to shift from
zomato to other apps.
15. Chi square shows that there is no relationship between age and online ordering
16. We can conclude that there is relationship between occupation and online ordering.

65
 SUGGESTIONS

1. The company should focus on timely delivery services.

2. The refund system is not proper so care should be provided for ‘Zomato Credit’ services.
3. According to the survey taken by different respondents they complaint that zomato chat
agents never respond on time, so it should be given care.
4. Zomato has core competition with Swiggy, so it need to maintain strong internal
structure.
5. There is lack of clear rules and regulations with there services.
6. Zomato need to improve there software system.
7. It should make the working app easier.
8. They must hire more delivery man’s so that more job opportunities can be suggested.
9. The critical production inputs are similar as compare to other online delivery apps,
zomato need to redesign something innovative.
10. Zomato should give due consideration on the past ratings by its customer

11. They do not give discounts on cash delivery as compare to other payment’s mode

66
 12. CONCLUSION

It was found that social media platform is not being properly utilized. The Facebook page should
be more active to interact with consumers. Also, Zomato needs to keep innovating. New features
like virtual tour of restaurants should be added. Live video shots from café/pubs can be added if
some famous band is performing over there. The brand should build on its most used features. It
must ensure that Authenticity of the reviews should be maintained. Paid reviews should not be
encouraged, as it will dilute the brand.

67
 ANNEXURE-I
BIBLIOGRAPHY

Das. Jyotishman (2018),Consumer Perception Towards Online Food Ordering And Delivery
Services An Empirical Study, Journal of Management, Vol5(5) pg.(155-163)

Anderson, R. E., & Srinivasan, S. S. (2003). E-satisfaction and e-loyalty: a contingency

framework. Psychology and Marketing, 20(2), 123-138

Anderson, E. W. (2003). The formation of market-level expectations and its covariates. Journal
of Consumer Research, 30(1), 115-124.

Saad Andaleeb, S., & Conway, C. (2006). Customer satisfaction in the restaurant industry: an
examination of the transaction-specific model. Journal of Services Marketing, 20(1), 3-11.

Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review
and recommended two-step approach. Psychological bulletin, 103(3), 411.

Law, A. K., Hui, Y. V., & Zhao, X. (2004). Modeling repurchase frequency and customer
satisfaction for fast food outlets. International Journal of Quality & Reliability Management,
21(5), 545-563.

Bansal, H. S., Irving, P. G., & Taylor, S. F. (2004). A three-component model of customer to
service providers. Journal of the Academy of marketing Science, 32(3), 234-250.

Ballantine, P. W. (2005). Effects of interactivity and product information on consumer

satisfaction in an online retail setting. International Journal of Retail & Distribution
Management, 33(6), 461-471.

Kimes Sheryl E. Ph.D. (2011), “Customer Perceptions of Electronic Food Ordering”, Cornell
Hospitality Report, 11(10), pp. 6-15.
Retrived from https://futureworktechnologies.com/how-zomato-works-business-revenue-model
24.jan.2019
Retrived from https://www.zomato.com/blog/20.JAN.2019

68 i
 QUESTIONNAIRE

DEMOGRAPHIC PROFILE

NAME :- _____________________________

AGE :- _____________________________

GENDER :- _____________________________

OCCUPATION:- Student Service Business Housewife

INCOME:- (a) Upto 10,000 pm

(b) 10,000 – 30,000 pm

(c) 30,000 – 50,000 pm

i
(d) More than 50,000 pm

EDUCATION STATUS:

(a) Secondary and below

(b) High Secondary
(c) Graduated
(d) Post graduated or above

FAMILY SIZE: (a) Single

(b) Nuclear

(c) Joint

PLACE OF STAY:- (a) Hostel

69ii
 (b) Paying Guest

(c) Rented Accommodation

(d) Own Accommodation

MARITAL STATUS:- (a) Single (b) Divorced/widow

(c) Live with spouse /partner

1. Do you order food through Zomato?

Yes No

2. What are the reasons for ordering food online?

When I am not in mood of cooking

Change of taste

Special offers

Saves time

Cost effective

Variety available

For house parties

I don’t know cooking

To meet emergency in case of sudden arrival of guests

3. How frequency do you use the zomato app?

Everyday Twice a week

Once a week Once a month

70
iii
4. Why do you prefer to use zomato over other food delivery apps?

Ranks the following factors [1, 2, 3…..12]

1) Speed of delivery
2) 24 x 7 delivery
3) Reservation option available
4) More Restaurant available
5) Quality of service
6) Payment options
7) Discounts
8) Better reviews
9) Convenience
10) Safety of payments
11) Tracking of orders
12) Ease in navigation
5. Do you rely on the Review of Restaurants given on the Zomato app?

Sometimes

Never

Always

6. How would you rate your experience in using the zomato app. Rate the factors from 1-5
where 1 is highly dissatisfied and 5 is highly satisfied.

Highly Dissatisfied Neutral Satisfied Highly

dissatisfied satisfied
1. Convenience
2. Delivery
3. Packaging
4. Outlet reach
5. Ease in ordering
6. Friendly delivery
persons
7. Cost effective

7. iv
Do you plan to shift to any other food delivery app in the future?

Never Maybe

71
Can’t say Yes

72
 IMPACT OF CONSUMER DECISION MAKING
VARIABLES ON ZOMATO

SUBMITTED TO PANJAB UNIVERSITY, CHANDIGARH

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF
DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION

SUBMITTED TO: SUBMITTED BY:

DR. POOJA CHATLEY DRISHTI KAPILA
(H.O.D) PUPIN- 14316000646
ROLL NO.16089887

KHALSA COLLEGE FOR WOMEN

CIVIL LINES, LUDHIANA
(2018-2019)

73
 CERTIFICATE

This is to certify that this project report entitled to “Impact of consumer decision making
variables on zomato”, embodies the work carried out by Drishti Kapila (14316000646) herself
under my supervision and this is worth of consideration for evaluation.

Dr. Pooja Chatley

(HOD)

74
 DECLARATION
I hereby affirm that the work presented in this project report entitled to, “Impact of consumer
decision making variables on zomato” is exclusively my own and there is no collaboration. It
does not contain any work for which a degree/diploma has been awarded by other university/
institutions.

Date: (Drishti Kapila)

Place:

75
 ACKNOWLEDGEMENT

When we set goals for ourselves there are always obstacles in the way deter us from
accomplishing the goals. There are also people in our lives that are aware of those goals and
encourage us to continue with these obstacles. It is now that I can formally thank those people
for doing just that for me, thanks to my guide DR. POOJA CHATLEY an excellence
personality, Professor Khalsa college for women, for support and encouragement to give my best
and never let me to give up. Her high level of expectations from me, made me work harder than I
have ever worked in my life. Thank you madam for encouraging me and motivating me to come
up with this project nicely.

Drishti Kapila

76
 TABLE OF CONTENTS

Chapter No. Chapter Name Page no.

1. INTRODUCTION 1-38
2. REVIEW OF LITERATURE 39-43
3. RESEARCH METHODOLOGY 44-45
4. DATA ANALYSIS AND INTERPRETATION 46-61
5. FINDINGS, SUGGESTIONS AND CONCLUSION 62-64
ANNEXURE-I i
ANNEXURE-II ii-v

77
78