Matthew Conklin, Lauren Kocsis, Talia Pavese, Charlie Turnage

Team 4
MKTG 482 Final Paper

Industry Background:
The fast-food industry is a mature and lucrative industry. In 2019 the quick service restaurant
industry accounted for 273 billion dollars of revenue in the USA alone. That number dropped in
2020 to 239 billion dollars due to the coronavirus. Studies show that the leading reason why
consumers eat fast food in the United States as of November 2020 is due to the level of
convenience. The fast-food industry employs 3.88 million people within its 196,794 franchised
establishments in the U.S. (Lock, 2021).
Business Problem Summary:
Following the COVID-19 pandemic, the use of mobile ordering apps for fast food
restaurants has increased tremendously. Although this trend took off because it allowed
customers to get their food with minimal human contact, it is a trend that is here to stay beyond
the pandemic. In a study done by Deloitte, they found that 46% of the survey respondents expect
online ordering & delivery habits to remain at current levels once the pandemic ends (Deloitte
2020). Mobile ordering apps can improve the customers' overall experience by offering features
that provide more flexibility, convenience, and order customization. Not only does the customer
benefit from mobile ordering but it allows the fast-food restaurant to become more profitable as
well. It was found that on average, online orders are 20% larger than ones placed in store
(Resendes). Mobile ordering apps also allow companies to become more efficient and increase
their customer loyalty through improved engagement. It is crucial that when investing in mobile
ordering technology, fast food companies are conscious of customers' preferences and behaviors
to ensure they maximize customer utilization rate. Many mobile ordering apps require you to
enter and save your payment information when placing an order. Although this feature makes it
more convenient to place future orders, it can also deter some customers from placing orders that
are worried about the safety and security of their credit card information. Thus, it is important
that if a mobile ordering app requires you to save your payment information, they promote the
benefit that resonates with their customers the most.
Research Questions:
1. Are consumers more or less willing to save their personal information when it is required
versus when it is optional?
2. Do consumers have a more favorable opinion about saving their credit card information
when they receive a reward or benefit?
Research Objectives and Hypothesis:
Objective 1: Understand consumers' preferences of the auto-save function for payment methods
and other personal information.
H1: Requiring consumers to save their payment information will not significantly impact
consumers' willingness to save their personal information
 H2: Requiring consumers to save their payment information will increase consumers'
frustration with the user experience.
Objective 2: Understand what type of benefit/ reward creates positive sentiment within the
consumer when saving their payment information.
H1: Consumers will experience more positive sentiment when there is an incentive to
leave their credit card information versus no incentive.
H2: The ease-of-use benefit will have a more significant impact on willingness to save
information than a promotional offer.
Research Method: Experimental Analysis
Project Timeline:
Once we gathered secondary research for evidence of the problem, we created a survey to
test our hypotheses. Our survey consisted of 18 total questions. Respondents were shown one out
of the six possible scenarios listed below, asked to rate importance of cluster attributes on a scale
of 1-5, rate their level of agreement with the descriptor statements on a scale of disagree – agree,
and lastly were asked to provide basic demographic information. More detailed description of
each cluster of questions is provided below:
Experimental Scenarios:
1. Required with promotion
2. Required with ease of checkout next time
3. Required with nothing
4. Optional with promotion if you do
5. Optional with ease of checkout next time
6. Optional with nothing
Cluster Attributes:
1. Speed – The time it takes for the order to be ready
2. Image – image of the food provided on the app
3. Customization – ability to customize your order
4. Save Payment – ability to save your payment information
5. Save Order – ability to save your previous orders
6. Loyalty – loyalty program offered through the app
7. Ingredients – Product ingredients listed on the app
8. Nutrition – Nutrition facts provided under each item
Descriptors:
1. Frequency – I use mobile ordering apps frequently.
2. Safety - It is unsafe to save my credit card information on a mobile ordering app.
3. Dining Habits - I rarely eat out or takeout.
4. Pick up vs Delivery - I prefer to pick up in store instead of having it delivered.
5. Privacy - I care about data privacy.
Demographics:
 1. Age
2. Gender
3. Income Level
4. Employment Status
On 11/11 we sent our survey to get approved by Dr. Ozcan. While we waited to get
feedback, on 11/15, we submitted our Question Pro survey to IRB for approval. We made minor
changes to our survey, which were recommended by Dr. Ozcan, on 11/16. Before making our
survey public, we sent our survey to 10 individuals to ensure there was no confusion or errors
and to see how long it took to take the survey on average. On 11/18 it was officially approved to
be sent out. Once approved, we uploaded our survey to Amazon mTurk and started collecting
responses on 12/1. After 8 days, we collected a total of 200 responses.
Data Cleaning Procedures:
After we downloaded our raw data report from Question Pro, we created a new sheet
identical to the raw data called “Clean Data”. We cleaned the data on the duplicate sheet by first
deleting any rows with missing data, test response rows, and those that had the status
“Terminated” or “Started”. We then copied the cluster data and put it on a new sheet called
“Base” and did the same with the demographics & descriptors data. In order to get the
experiment data onto its own sheet, we used the filter function to sort the responses by scenario
and copied each one. When pasting the data onto the separate experiments sheet, we ensured that
we assigned the appropriate independent variables for each scenario. Lastly, to make sure we did
not mess up the data when transferring it to separate sheets, we checked the number of rows on
each sheet to make sure they all matched.
Final Sample Size & Demographics:
After cleaning the raw data, our final sample size consisted of 189 responses. Looking at
the demographics of our final sample size, the average age of respondents was 36 with 69.8% of
them being male and 30.2% female. 84.12% of them work full time and 7.41% work part time.
The most common income range was $30,000 to $59,999.
Experimental Scenario Findings:
Objective 1
For hypothesis one we ran an ANOVA test with saving option and benefit as the
independent variables and consumers' willingness level as the dependent variable. Our test
concluded that neither of the independent variables were statistically significant with a p-value of
0.9. We were able to conclude that our first hypothesis was supported. For hypothesis two, we
ran another ANOVA test with saving option and benefit being the independent variables and
frustration as the dependent variable. The test supported our hypothesis but was not statistically
significant. To answer research question one, on average, consumers are less willing to save their
personal information when it is required versus when it is optional. Their willingness does not
decrease by a significant amount when it is required. When it was required, customers rated their
willingness a 3.69 on a scale of 1-5 (disagree – agree) versus 3.72 when it was optional. To see
the result outputs from R, see appendix A1 for hypothesis one and A2 for hypothesis two.
Objective 2
For objective two hypothesis one, we ran an ANOVA test where the independent variable
was benefit and the dependent variable was appreciated. This test was not statistically significant
with a p-value of 0.07. Although not statistically significant, this test supported our hypothesis,
but the benefit was very minimal. For our second hypothesis, we ran another ANOVA test with
the independent variable being benefit again and our dependent variable being attitudes towards
willingness to save their payment information. We found this test was not statistically significant
and returned a p-value of 0.059. The results showed that customers rated their willingness a 3.87
when the benefit was a promotional offer versus 3.85 with the ease-of-use benefit; thus, our
second hypothesis was rejected. To answer research question two, our results showed that on
average, consumers appreciate the benefit slightly more but not enough to have an overall
impact. To see result outputs from R, see appendix B1 for hypothesis one and B2 for hypothesis
two.

Cluster Findings from R

After running cluster analysis on R, we found that our data results are best broken down
into 3 clusters as there was minimal overlap and good segment sizes. The cluster dendrogram(*C1),
elbow graph (*C2), cluster plot (*C3), and cluster means (*C4) can be found in the appendix. As shown in
the graphic below, cluster one cares a lot about each attribute, cluster two mainly cares about
speed, image, and customization, and cluster 3 does not think any attribute is super important,
but cares moderately about loyalty, ability to save your order, speed, image, and customization.

When testing the clusters to see if they differed significantly based on demographic
factors, we found that the demographic factors have no effect on the clusters. We used a chi-
squared test on gender (*D1), income level(*D2), and employment status(*D3) since they are categorical
variables. We found that none of the clusters differ significantly in terms of gender, income
level, or employment status. We ran a one-way ANOVA to test age(*D4) and it also had no
statistical significance. These results show that the clusters are based on factors other than
respondents' demographics.
 Next, we tested the clusters to see if they differed based on our descriptors. To test each
descriptor, we ran ANOVA tests comparing each cluster's interaction with the clusters. Out of
the 5 descriptors, we found that the clusters differ significantly based on 3 things: frequency(*E1),
dining habits(*E2), and privacy (*E3). First looking at how frequently respondents use mobile ordering
apps, cluster one uses them most frequently and cluster three uses them the least. The second
significant descriptor asked respondents to rate their agreement/ disagreement with the statement
“I rarely eat out or takeout”. The results show that cluster three eats out/ orders take out the most,
and cluster one does the least. Looking at the result for frequency for mobile app compared to
how often that customers eat at home, we can conclude that cluster one does not eat out
frequently, but when they do, they mostly use mobile apps to place their order. Lastly, when
looking at the privacy descriptor results, cluster one cares the most about data privacy and cluster
three cares the least. We found the results for pick vs delivery(*E4), and safety (*E5) were not
significant. To see graphical outputs of significant results, see appendix F1.

Recommendations:
Based on our findings, we are recommending that all fast-food restaurants invest and
utilize mobile ordering apps to increase their revenues and improve the productivity of their
business. By having a mobile ordering app companies can capture a portion of customers they
normally wouldn’t. These are the individuals in cluster one who don’t eat out frequently, but
when they do, they often use a mobile ordering app. When building or making improvements to
the features of their mobile ordering apps, it is not important whether it is required or optional for
customers to save their credit card number and other personal information. Further, we are
recommending that companies do not reward customers for saving their information on the app
as our results show it does not provide any additional benefit. Instead, we are recommending that
fast-food companies focus more resources on the attributes that all customer segments cared
about the most. These attributes were speed, image, and customization. When looking at cluster
one preferences, which accounts for 55% of the market, it shows that all attributes were rated
highly. From this, we recommend that if companies have enough money to invest in their mobile
ordering app technology, they should keep all these attributes in mind.
 Appendix:

A1. A2.

B1. B2.

C1.

C2.
C3.

C4.

D1.
D2.

D3.

D4.

E1.
E2.

E3.

E4.
E5.

F1.
Sources:
Deloitte (2020). Deloitte study: delivery and takeout orders increased by 14% since the COVID-
19 outbreak, driving restaurants to rethink their physical footprints,
https://www2.deloitte.com/ro/en/pages/about-deloitte/articles/studiu-deloitte-comenzile-
de-preparate-culinare-la-pachet-si-cu-livrare-au-crescut-cu-14-de-la-izbucnirea-
pandemiei-de-covid-19-determinand-restaurantele-sa-si-reconfigureze-
retelele.html

Resendes, Stephanie (2020). 26 Online Ordering Statistics Every Restaurateur Should Know in
2021, https://upserve.com/restaurant-insider/online-ordering-statistics/

Hsu, James (2020). Why Top Restaurants are Doubling Down on Mobile Ordering Apps,
https://www.qsrmagazine.com/outside-insights/why-top-restaurants-are-doubling-down-
mobile-ordering-apps

Izzo, Drik (2021). Why Restaurant Mobile Technology is Here to Stay,

https://www.qsrmagazine.com/outside-insights/why-restaurant-mobile-technology-here
-stay
Lock. (2021, November 4). Topic: Fast food industry in the U.S. Statista.
https://www.statista.com/topics/863/fast-food/#dossierKeyfigures