GROWTH OF FAST FOOD INDUSTRY IN COMING
FIVE YEARS IN INDIA
SUBMITTED TO:- NCHMCT, NOIDA
CENTER:- IHM GWALIOR
SUPERVISION BY :- RESEARCHER :-
MR. J L SHAH ABHISHEK PATHAK
ROLL NO. – 101734
GROUP:- ‗A‘
CERTIFICATE OF THE GUIDE
This is to certify that the project work entitled GROWTH OF FAST FOOD INDUSTRY IN
COMING FIVE YEARS IN INDIA submitted in partial fulfillment for the award of the degree
of b.sc in hospitality and hotel administration by NCHMCT , noida in collaboration with IGNOU, New delhi having is an authentic work carried out by him under my complete guidance. The matter embodied in this project work has not been submitted earlier for the award of any degree or diploma to any other institution to the best of my knowledge and belief.
SIGNATURE OF PRINCIPAL SIGNATURE OF GUIDE
NAME OF THE EXAMINER SIGNATURE OF EXAMINER
ACKNOWLEDGEMENT
The project “GROWTH OF FAST FOOD INDUSTRY IN COMING FIVE YEARS IN
INDIA” prepared by me has been possible owing to the relevant data & information collection
from different sources like websites, newspapers & through personal investigation.
For this project I would like to thank my guide Mr. J L SHAH in particular for his valuable & complete guidance in preparing the project work.
INDEX
CHAPTER I
INTRODUCTION
OBJECTIVES
RESEARCH METHODOLOGY
LIMITATION
CHAPTER II
THEOROTICAL FRAMEWORK
CHAPTER III
DATA ANALYSES
CHAPTER IV
CONCLUSIONS AND RECOMMENDATIONS
APPENDIX
BIBLIOGRAPHY
CHAPTER I
INTRODUCTION
OBJECTIVES
RESEARCH METHODOLOGY
INTRODUCTION
The fast-food industry has been developing rapidly and has successfully penetrated majority of the markets globally, at the same time bringing about several significant changes in practices, work and employment relations. Fast-food restaurants are distinguished and characterized by their inexpensive food products prepared in a standardized method that is dispensed to their customers quickly and efficiently for takeaway or dine-in and are usually packaged without the provision of utensils. However, the rapid expansion and proliferation of the industry was not a smooth transition, instead, it has brought about several controversies and criticisms.
Such growth and success has brought disadvantages to workers‘ rights, wages and the conditions of work (Royal & Towers, 2002) as well as providing a greater insight on how work and
employment relations should be better managed.
In addition, it also brought to light that not all protocols, standards and practices of the fast-food company fits the different markets globally perfectly, due to the different cultures, mindsets and preferences, which we will be exploring in depth in this essay - in particular, the fast-food industry in Singapore, Germany and United States.
Even though major corporations were to set up fast-food restaurants in the listed countries, similarities and differences will arise and we will discuss this in the essay
OBJECTIVES
To study the marketing stragies adopted by pizza hut and dominos pizza
To understand fast food industry and trends in fast food industry
To understand the environmental factors affecting these two brands
To understand the service delivery gaps that can occurs and how does pizza hut and dominos pizza avoid or fill these gaps.
METHODOLOGY
Information regarding the organisation, HRD and consumer preferences has been obtained through:
a. Primary Sources b. Secondary Sources.
Primary Sources
i. Marketing personal, HRD personal, PR personnel of the concerned organisation were approached to obtain in formation about the concerned subject.
ii. Market research study was conducted in order to find out percentage wise preferences of the stated fast food restaurants.
Secondary Sources
i. Internet
ii. Articles from newspapers & magazines iii. Company brochures, literature and pamphlets.
Based on the information obtained from the above sources concepts were developed on which analysis could be made.
LIMITATIONS OF STUDY
There are following drawbacks in the findings:
Sales figures (current and past) could not be made available for any of the three restaurants.
Distribution strategies of McDonalds not up to the mark.
CHAPTER II
PIZZA HUT
The legacy of Pizza Hut began in 1958, when a family friend with the idea of opening a pizza parlor approached two college students from Wichita, Kansas. Although the concept was relatively new to many Americans at that time, the brothers quickly saw the potential of this new enterprise.
After borrowing $600 from their mother, they purchased some second-hand equipment and rented a small building on a busy intersection in their hometown. The result of their entrepreneurial efforts was the first Pizza Hut restaurant and the foundation for what would become the largest and most successful pizza restaurant in the world.
During the past four decades we‘ve built a reputation for excellence that has earned us the respect of consumers and industry experts alike. Our products have been voted number one in countless consumer surveys nationwide. Our accomplishments as an innovative business leader have been cited by such respected publications as Restaurant Business, Fortune, USA Today and The Wall Street Journal.
Pizza Hut has been named the number one national pizza chain in America according to Restaurants & Institutions‘ "2001 Choice in
Chains" survey. Pizza Hut is the recognized leader of the $25 billion pizza category and has been since 1971.
Building the leading pizza company has required innovation, a commitment to quality, and a dedication to service and value. But perhaps as much as anything, it has taken the qualities of entrepreneurship, growth and leadership, which have characterized our business through more than four decades of success.
Pizza Hut franchisees, for example, exemplify the entrepreneurial spirit which launched the system back in 1958. Through their interest and initiative, the Pizza Hut system was able to develop new territories both in the United States and overseas. Today, franchisees and joint venture partnerships account for nearly half of the system‘s total units.
Following the opening of the first international restaurant in Canada in 1968, Pizza Hut restaurants quickly appeared in Mexico, Australia, Europe, the Far East and Africa.
Another important step in the growth of the company came in 1977 when Pizza Hut was acquired by one of the true giants of international business: PepsiCo, Inc. As part of the PepsiCo corporate family, Pizza Hut shared its leadership position with such fine products as Pepsi-Cola brand soft drinks and Frito-Lay brand snack foods.
Beginning with the original thin crust pizza first served in 1958, Pizza Hut has made continuing efforts to refine our products, and to develop new products to suit consumer‘s tastes.
We strive to present the finest products the industry has to offer and to provide those products wherever and whenever people want them. To achieve these goals, we‘ve developed a number of services and points of distribution through the years.
With our Personal Pan Pizza, we‘ve made quick, affordable pizza a viable lunch alternative for millions of Americans.
It has come a long way since that opening night back in 1958 when pizzas were given away to generate interest in the brand new business. And through the strength of its heritage, culture and people, the company looks forward to even more success in the years ahead.
THE CULTURE
At Pizza Hut, the culture reflects the values, the essence of what it believes in as a people and as a system. It includes a shared vision of who they are and where they are heading. And it encompasses everything from the way they treat their customers to how to deal with their competitors.
One of the most important values within the Pizza Hut culture is integrity. The people are committed to providing uncompromising product quality, to offering consumers the highest quality for their money, and to providing service that is personal and concerned. In fact, the people strive each day to provide what they call "customer mania," the kind of service that will make customers tell stories to their family and friends about their experience with Pizza Hut. The commitment to integrity also extends to the role they play nationally and locally in the many communities it serves. On a national level, they‘ve created the ―BOOK IT‖ National Reading Incentive Program. The goal of BOOK IT is to instill a life-long love of reading in children. This unique program, which awards a complimentary Pizza Hut Personal Pan Pizza and special recognition to elementary school children who achieve set reading goals, has received national accolades from educators and government officials across the country.
Our commitment to integrity is exemplified by how they treat their employees as well. They invest heavily in their people through skills training and management development to help them reach their full potential & encourages them to think unconventionally, to take prudent risks to achieve results. They provide an informal environment with open communications to give them the freedom to make contributions on their own initiative.
This is a part of their culture that is valued highly. They call it "ownership" the feeling that comes from knowing you can affect the company‘s direction through your expertise, innovative ideas and hard work. And because it gives its employees a stake in the company‘s success, they take on the kinds of challenges people in other businesses only dream of a group of engineers developing a revolutionary new oven, a restaurant manager devising a way to save the system millions of dollars on food costs, or a marketing team turning a movie tie-in event into the most successful kid‘s marketing program in our system‘s history.
THE FUTURE
The food service industry today is one of the fastest growing industries in the United States, with the pizza segment a $25 billion business leading the way.
Spurred by the increasingly rapid pace of living and the subsequent demand by consumers for convenience, Pizza Hut has taken aggressive steps to provide quality products at off-site locations. In recent years, they‘ve streamlined and refined their carryout procedures to provide faster, more efficient service, and have rapidly expanded its delivery operations throughout the country. In addition, they‘ve already begun exploring exciting new concepts that will bring its products and services to a variety of new, non-traditional sites:
They‘ve implemented combination operations with its sister companies Taco Bell and KFC at major shopping areas.
It has reached thousands of new customers through its Pizza Hut Express program, a mini-restaurant concept that provides unprecedented speed and fast food pricing to customers in a variety of locations. And have negotiated agreements with major hotels, retailers and arenas to provide contract food service at hundreds of sites across the country.
Thanks to these innovative new concepts, people at school cafeterias, sports arenas, major airports, shopping malls and office settings are now enjoying Pizza Hut pizza. As a result, Pizza Hut is greatly expanding its share of the off-premise, fast-food market, one of the fastest-growing segments in our industry.
DOMINO'S PIZZA
Domino's Pizza is the world's second-largest pizza company. The delivery-carryout chain is based in Ann Arbor, Mich., and boasts 7,473 units in some 60 countries around the world. Its reported gross revenues for 2003 were $4.2 billion.
Domino's Pizza is recognised as the world's leading pizza delivery company. Our expertise and passion for delivering hot and fresh pizzas has earned us numerous awards and the loyalty of millions of pizza lovers around the world.
Domino's Pizza Group Limited ('DPG') is a wholly owned subsidiary of Domino's Pizza UK & IRL plc which is quoted on the Alternative Investment Market of the London Stock Exchange. DPG is the UK and Ireland's leading pizza delivery company and holds the master franchise to own, operate and franchise Domino's Pizza stores in these markets. Our first UK store opened in 1985 and the first Irish store opened in 1991.
Over 8,000 team members work in our UK and Irish stores and in a range of support functions ranging from marketing, IT and training to fresh dough production at our three commissaries in Milton Keynes, Penrith and Naas, Ireland. The majority of our stores are owned by franchisees who are responsible for delivering our brand's high standards to customers.
There are over 350 Domino's Pizza stores in a growing number of towns and cities throughout England, Scotland, Wales and Ireland.
For more information about Domino's Pizza Group, download the Company Information Pack at the bottom of this page.
Pepperoni is America's favorite topping (36 percent of all pizza orders); we eat approximately 251,770,000 pounds per year. Other popular pizza toppings are mushrooms, extra cheese, sausage, green pepper and onion.
Gourmet toppings are gaining ground in some parts of the country with such toppings as chicken, oysters, chicken, crayfish, dandelions, sprouts, eggplant, Cajun shrimp, artichoke hearts and tuna.
Pizza lovers are experimenting with gourmet toppings by ordering oysters, chicken, shrimp, eggplant, artichoke hearts, dandelions and tuna. More recent trends include game meats like venison or duck, and Canadian-style bacon.
Pizza makers have tried virtually every type of food on pizzas, including peanut butter and jelly, bacon and eggs and mashed potatoes.
Sixty-two percent of Americans prefer meat toppings on their pizza, while 38% prefer vegetarian. (source: Bolla wines)
Women are twice as likely as men to order vegetable toppings on their pizza. (Source: Bolla wines)
According to Domino's, some of the more popular international toppings are: pickled ginger, minced mutton and tofu in India, squid and Mayo Jaga (mayonnaise, potato and bacon) in Japan, and green peas in Brazil. In Russia, they serve pizza covered with mockba, which is a combination of sardines, tuna, mackerel, salmon and onions. In France, a popular combo is called the Flambée, with bacon, onion and fresh cream. Around the world, toppings vary greatly to reflect regional preferences. In Japan, for
instance, eel and squid are favorites. In Pakistan, curry is a big seller. In Russia, red herring is a topping of choice and Australians enjoy shrimp and pineapple on their pies as well as barbecue toppings. Costa Ricans favor coconut. (Courtesy of Numero Uno Pizzeria)
In the Netherlands, the "Double Dutch" is a favorite, with double cheese, double onions, double beef. (Source: Domino's Pizza)
TELSTRA SOLUTION GIVES DOMINO’S PIZZA A BETTER SLICE OF THE MARKET
Pizza lovers will be able dial up a pizza on their mobile phones progressively from next month with the launch of new technology developed by Domino‘s Pizza and Telstra.
Prompted by the surge in Australian mobile phone ownership, customers will be able to dial Domino‘s Pizza‘s 131 888 number on their mobile phone and be connected to a nearby Domino‘s Pizza store after completing a number of automated voice prompts.
The launch follows recent trials of the new 131 888 mobile phone voice recognition system in South Australia and Toowoomba.
Previously, Domino‘s Pizza‘s 131 888 phone number could only be used from a fixed line because the call was automatically directed to the closest store.
The national rollout of the new system, designed in conjunction with Telstra, begins next month and is expected to be completed by October 2005.
Domino‘s Pizza CEO Don Meij said the new technology would give Domino‘s Pizza a
competitive advantage by expanding the company‘s reach and giving customers easier access. ―The trial of the system found that not only was there a substantial increase in mobile phone orders, but also that the number of landline callers remained constant,‖ he said.
―This new technology means we can reach those people who wish to order their pizza while they are on the run, such as traveling home on the bus or train.‖
Telstra State and Government Sales Managing Director, Tony Henshaw said Domino‘s Pizza customers can expect even more convenience when ordering their favourite pizza.
―Telstra developed this solution to solve a business problem for Domino‘s Pizza in order to significantly improve customer service,‖ Mr Henshaw said.
Domino‘s Pizza has 380 stores across Australia and New Zealand, employing more than 9,700 staff and making more than 35 million pizzas each year.
THE MARKETING STRAGIES ADOPTED BY PIZZA HUT AND
DOMINOS PIZZA
Domino‘s Pizza Inc. has been considered as the second-largest pizza chain in the United States according to Forbes Magazine. The status of the company is that it has over 9,000 franchised and corporate stores tin over 60 international markets including the 50 states in the United States. It is important to note that the company was bought Bain Capital back in the year 1998 and shares were traded in 2004 after the company went public. Some of the delicacies featured on the Domino‘s menu include pasta, oven-baked sandwiches, boneless chicken, wings, breadsticks, salads, a variety of desert items, cheesesticks, and of course pizza (Daszkowskii).
Since its inception, the company has grown from strength to strength. Domino‘s Pizza Inc. started its first franchise business in 1967 by opening a first store in Ypsilanti. Despite the original idea to add a dot to the logo of the company on every opening of a new branch, the idea was quickly faced out because the company was quickly experiencing rapid growth. By the year 1978, the business opened its 200th store. This showed how first the business was growing. However, it is important to note at this point that the company has underwent a major challenge during its infancy stages that threatened to hamper the growth of the company and even its existence.
The 1975 lawsuit filed by Amstar Corporation, which was a maker of Domino Sugar at that time, made a complaint arguing and alleging that Domino‘s Pizza Incorporation had violated and infringed its trademark and had therefore instituted unfair competition to their company. This legal battle lasted for five years and on May 2, 1980, the court of appeal or federal appeals court ruled in favor of Domino‘s Pizza Incorporation (Daszkowskii).
Domino‘s Pizza Incorporation went international in 1983 when it opened its first international store on May 12, 1983 in Winnipeg, Manitoba, Canada. During the same year, the Domino‘s had managed to open its 1,000th store in general. The company also managed to reach a whooping 1,000 international stores by the year 1995 and further stretched this number to 1,500 stores in the next two years. One of the greatest achievements of the company in terms of expansion was the opening of seven stores across five continents in just one day (Datamonitor).
Domino‘s Pizza Company rolled out its mobile and online ordering services in the year 2007 while at the same time delivering and introducing their Dream franchising programs and at tits Veterans respectively. These events made a significant impact in the company pushing company operations a notch higher. One another significant event in 206 was the performance of
Domino‘s store in Tallaght, Dublin in Ireland: the store made a turnover of $3 million and become the first store ever in the history of the company to hit the mark (Daszkowskii). It is of equal importance to take note of the fact that the company was rated the last tying with Chuck E. Cheese‘s in a survey that was conducted by Brand keys on all consumer taste preferences among national chains in 2009.
This arguably meant bad results for the company and strategic issue had to be developed some of which are still under current implementation as will b e discussed later in this paper
(Datamonitror). In 2008, the Dominos adopted a diversification strategy through the introduction of non-pizza fare where they offered oven-baked sandwiches in four unique styles. The strategy was intended to compete with toasted submarine sandwiches cooked or prepared by Subways, a first food restaurant. One of the marketing strategies adapted by the company in marketing these sandwiches was to offer them freely to people who were named ―Jared‖ which was a reference to one an employee of Subways, its targeted competitor (Daszkowskii).
it is quite important to note that some of the strategies adopted by the company started back in 2009, as part of an ambitious program to increase its competiveness in the market and in the industry as a whole. one of the strategies that the company adopted in 2009 was the introduction of american legend line of pizzas, which was significantly their specialty line of pizza
(daszkowskii).
these pizzas featured over 40% of cheese over and above the normal or regular pizzas that the company used to sell at the time. in addition, the company made some additives, which composed of a variety of toppings. within the same year, domino‘s introduced the bread bowl pasta entree which was mainly a lightly seasoned bread bowl that was purely baked with pasta inside. in another successive twist, domino‘s introduced the lava crunch cake dessert which was composed of warm fudge that was filed on crunchy chocolate shells (young).
as a way of promoting the strategy above, domino‘s flew in about 1,000 cakes to deliver at their store, which is located at hoffstadt bluffs visitor center that is near mount st. helens. the whole idea of introducing these delicacies was a part of the strategy of diversifying the scope of
operation of the business to include other competitive delicacies like other companies in the fast food industry business (daszkowskii). in addition, the company made tremendous changes to its pizza recipe: ―from the crust up‖ this year, 2010, which ushered in new changes in the cheese, sauce, and dough that are used in preparing their pizza (young). the launch of this new recipe was viewed by many consumers as a correction to their earlier mistake in which the company‘s product had been criticized in terms of taste by many individuals. this had affected the perception of the product of the company and indeed the company confirmed this view in one of its
advertising campaigns, which promoted the new recipe (daszkowskii).
currently, domino‘s is planning to undertake expansive strategies with plans to open an
additional 55 stores within this year at various strategic locations in its major areas of operation. the company aims to achieve its needed growth and expansion in the fast food industry amid its growing revenues that increased by 8.1% in the first quarter of the year 2010 alone. the plans were announced by the company at the beginning of april this year, 2010, after successfully appointing a new executive vice president to manage its supply chain. according to the company, the need to mange fully their supply chain was mainly because of the increasing need to manage supply chain routes that have been attributed as major contributors to increases in operational costs in businesses, especially in the united states (associated press).
the company has undertaken strategies to improve supply chain management and plans are currently underway to develop fully automated management systems to monitor the supply chains of the business. the company bases this reason on the fact that its supply chain contributed heavily to the operational costs according to its financial report for the year ended 2009. the costs led to a decrease of 1.5% in company revenues to $1,404.1 million when compared to the
revenues that the business earned in 2008 (daszkowskii).
domino‘s company has also intensified its competitive strategy by pushing their battleground to pay up media with the company‘s subscription amounting to 94% against 92% from its close
competitor pizza hut according to the report released by tns media intelligence. according to the company analysis, the media advertising strategy is justified because the effects were evident in the market place. the domino‘s tv adverts have been designed to be tactical and market-oriented, which places on the platform the menu range and the quality. this fact is supported by the tns media intelligence who says such adverts would have an impact on the market in terms of responsiveness of the consumers to the products of the company (globaldata).
the company is making plans to invest heavily in media advertisement with significant focus on content and creativity for their adverts. it is important to note at this point that the company has been targeting subways in most of its advertisement with the comparison advert, which showed that many customers preferred products from domino‘s than from subways. as motioned before, this strategy has been utilized by the company for a number of years now and the company seeks to continue pursuing this strategy as a way of eluding its competitors (daszkowskii).
in 2009, domino‘s pizza inc. almost tripled the amount investment in online advertising and the main targets being the social media like facebook, college humor, and myspace. in future plans for the company are to continue in this line of investment because it has witnessed tremendous growth in sales based on this line of investment. in august, domino‘s introduced an application which allows consumers to order for pizza directly from their iphone. during the launch, the company recorded massive downloads but according to the company‘s ceo, the company is currently undertaking measures to increase the number of customers or users utilizing this exciting service (globaldata).
domino‘s incorporation was a little bit behind in terms of users using this service behind their bitter rival pizza hut. pizza hut managed over 100,000 downloads of the application in only two weeks after the launch, which was almost 24% more than what domino‘s achieved. this is the main reason that has triggered the company‘s strategy of utilizing search engines such as google and yahoo through the pay per click system, which the company hopes it will increase the customer traffic to their application download (young).
In the past, most sales of the company have been supported by the promotional activities that have accompanied every strategy that the company has ever introduced. Domino‘s is currently counting on the promotional campaigns it has adopted basing its argument on the idea that extensive promotions will bear good fruits like the promotional campaign that the company held following the launch of its ―American Legend‖ specialty pizza in 2009, as earlier mentioned (Daszkowskii).
Generally, the company‘s strategy are geared towards expansion and gaining a competitive advantage in the fast food industry (Young). Domino‘s is also camping on the pricing strategy that it introduced back in 2009 which was aimed to bring back some price-sensitive customers under their ―barbell‖ technique. In addition, Domino‘s is planning to continue the advertising wars, which are aimed at targeting major competitors like Subways and Pizza Hut.
FOOD INDUSTRY AND TRENDS IN FAST FOOD INDUSTRY
Fast Food Industry in 2013 at a Glance
It is no secret: Americans love fast food. And its not just us! The Golden Arches have spread across the globe, and emerging markets are one of the fastest growing areas in the industry. But the fast food industry is not without its challenges, especially in the United States. From rising food costs, economic recession and changing perceptions about health, many fast food franchises have been feeling some heat.
But rather than flee from this challenge, the fast food industry has been adopting new practices and offering new products. Modern society is on the go, and there is plenty of demand for a quick bite at all times of the day. Fast food franchising opportunities exist in the ―traditional‖ spaces like burgers and pizza, but are also sprouting up in healthy and unique ways as well.
The Industry
The fast food industry, also known as Quick Service Restaurants (QSR), has been serving up tasty morsels for as long as people have lived in cities. The modern system of fast food
franchising is believed to have started in the mid 1930‘s when Howard Johnson franchised his second location to a friend as a means to expand operations during the Great Depression. And oh how it has grown! As cars became commonplace, the drive-thru concept brought explosive growth to the idea of food-on-the go. ―Fast Food‖ was added to the Merrion-Webster dictionary in 1951 and U.S. fast food companies are now franchised in over 100 countries. In the U.S. alone there are over 200,000 restaurant locations! Revenue has grown from $6 billion in 1970 to $160 billion last year, an 8.6% annualized rate.
Fast food franchises focus on high volume, low cost and high speed product. Frequently food is preheated or precooked and served to-go, though many locations also offer seating for on-site consumption. For stands, kiosks or sit-down locations, food is standardized and shipped from central locations. Consumers enjoy being able to get a familiar meal in each location, and menus and marketing are the same in every location.
There have been challenges for the fast food industry in recent years that have been pressuring profit margins. The industry as a whole has proven robust enough to withstand these challenges, though some players have done better than others.
Over the last decade there has been increased focus on the quality of food served in fast food restaurants. Typically highly processed and industrial in preparation, much of the food is high in fat and has been shown to increase body mass index (BMI) and cause weight gain. Popular books such as Fast Food Nation and documentaries like Super Size Me have increased public awareness of the negative health consequences of fast food. Fast food companies have responded by adopting healthier choices and have had some measure of success, but the shadow of bad press still hangs over the industry.
Rising commodity prices have also significantly crunched many fast food franchises. With food and beverage inputs making up approximately 33% of costs, higher prices for livestock, corn, wheat and more have seriously shrunk margins over the past decade. In such a fiercely
competitive space it is impossible to force a price increase on customers, so profit margins are often south of 10%. The recent economic recession did lower commodity prices, but the
recession brought on its own complications, and now prices for commodity inputs are on the rise again.
Fast food had been thought to be largely recession proof, and indeed the industry did not suffer nearly as much as other discretionary spending sectors. In fact, there was some increase in consumer visits as people choose cheaper fast food options over fast casual or traditional restaurant choices. But overall, the recession hurt spending, and consumers overall purchased less with each trip. Fast food franchises fared reasonably well but still felt some pain.
Market saturation is also a relevant issue in the fast food industry today, at least in the U.S. There is a McDonald franchise is in almost every town, and it usually sits in a row with several
competitors. With so many competitors which offer similar products there are fewer customers per location. Increasingly fast food restaurants are also losing market share to fast casual, a relative newcomer in the restaurant space.
Busy citizens still need quick meal options, and fast food restaurants are fighting these
challenges with gusto. Now offering healthy choices to battle the stigma of unhealthy food, some quick service restaurants now focus on fresh or organic products. From franchises focused solely on salads or healthy wraps to the lower calorie options offered at traditional burger franchises such as Wendy‘s or McDonald‘s, consumers are able to make better choices…if they want!
Fast food market research
Euromonitor has the world‘s most comprehensive research on the fast food category within the consumer foodservice industry. We monitor and analyse industry trends around the world, including in-depth data on market share and market size – from the ―big picture‖ qualitative analysis; down to specific category data.
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ENVIRONMENTAL FACTORS AFFECTING THESE TWO BRANDS
Customers:
Anyone who spends money buying goods and services is a Customer.
Cuisine:
Art of cooking, preparation in the kitchen is known as Cuisine.
Customer Behavior/Choice:
There is no definition of customer behavior that has universal acceptance. Generally, ―Customer behavior‖ refers to what goods and services people buy, how they buy them, why they buy them, where they buy them, and how often they both them. In addition, customer behavior refers to individual and group decision-making activities, the role that consumption plays, and the interactions, between customers and sellers.
For our purpose, the defection of customer behavior is modified version of one given some years ago by three writers early in the development of this field. Customer behavior can be defined as ―those decision making acts of both individuals and groups of people directly involved in obtaining and using economic goods and services, including the decision processes that precede and determine these acts.‖
Catering Service Sector:
This sector exist to provide hospitality and catering service in a manner similar to the commercial sector, the difference being that these services are secondary and indirect.
Outlet:
Restaurants:
A place where one can eat, pay for the some and go.
Fast Food Joints:
These are the outlets or the setup for the quick and fast service i.e. fast turnover rate.
Market Segmentation
Markets very widely from one another since the customers who constitute the markets very widely in their characteristics. When a market is spilt up into several smaller units, each with homogenous characteristics, it facilitates the effective tapping of market.
Market Segmentation and its Necessity
Market segmentation is the process of disaggregating the total market for a given product, into a number of sub-markets. The heterogeneous market is broken up into a number of relatively homogenous units. This process is based on the recognition that any market or customer group is made up of a number of subgroups distinguished by varying needs and buying behavior, it is feasible to disaggregate the customers into suitable segments in such manner that the
characteristics of the segmented groups would vary significantly among segments but would almost be identical 'within segments'.
Market segmentation confers several benefits on the marketing man. It helps him distinguish one customer group from another within a given market, thereby; enabling him to decide which segment of the market should form his target. It facilitates an in depth study of the characteristics of the customers. When the customers are approached after careful segmentation, responses that are predictable would be forthcoming from them. This would help the marketing man develop his marketing programme on a predictable and reliable base.
The responses of any given from are normally limited. So, it would be better if the efforts were concentrated on the most productive and profitable segments of the market. By focusing sharply on each of the different Customer groups within a market, market segmentation would be making the marketing effort more efficient and economical. Segmentation helps access how far
the existing offers in the market from competitor match the needs of the customer segments. Thereby segmentation also helps the marketing man spot the relatively less satisfied segments and make a business success by satisfying such segments.
Segmentation brings benefits to the customers as well. When market segmentation reaches higher levels of. sophistication and perfection, customers and companies can choose each other for mutual benefit and satisfaction. .
VALUE FOR MONEY WANTS OFFER
Ever wonder what goes on behind the scenes at fast food restaurants? Fast-food insiders (i.e. former employees) reveal a slew of nasty secrets that may make you think twice about ever eating in one of these restaurants again …
Black Oil, Blood and “Melted” Chicken
The featured article has quite a few doozies, such as a former worker from Burger King who describes the restaurant‘s oil rotation policy:1
"Here is how the oil rotation went. You had four vats of oil that you cooked fries in. And boy did you cook fries. Tons of them. After about 2 days worth, the oil got too dark for fries. So we switched it over to the ones for chicken. Since it was darker, it was ok.
Then that goes on for a week. After a week of massive frying. The oil is black as motor oil. At that point, it's switched to the Fish Filet vat. That's the only thing you cook in that vat." Another former worker, this one from McDonald‘s, recalled what happened when a bag of chicken nuggets was left out on the counter for too long:
"They melted. Into a pool of liquid. I never understood why. But they were completely indiscernible as being the nuggets I once knew."
Large chunks of mold in ice-cream machines and ice dispensers (which are rarely cleaned)
A worker continuing to handle food with an open, bleeding wound on her hand
―Recycling‖ overcooked burgers into chili, or stripping chicken patties of their breading and passing it off as chicken salad
Startling discoveries like these are all too common when it comes to fast-food … it was several years back when 12-year-old middle schooler Jasmine Roberts won the science fair at her school when she discovered that the ice used in the drinks of fast food restaurants had more bacteria than the toilet water. And in 2010, nearly half of soda fountains at fast food restaurants tested were found to contain coliform (bacteria that grows in feces) while 11 percent also contained E. coli!2
And Then There’s the Food …
Even under the best circumstances, fast-food restaurants fail when it comes to your health. Eating the food at nearly every fast food chain (except maybe Chipotle and a few other
restaurants committed to sustainable, organic suppliers) means you are likely consuming feedlot animal meat – flesh that comes from animals raised in crowded unsanitary conditions, fed massive doses of antibiotics and unnatural "frankenfeed" full of GM crops and some other truly disturbing ingredients.
This is just the tip of the iceberg when it comes to all the decidedly unhealthy practices that go on at a CAFO (Concentrated Animal Feeding Operation). The problem begins at the massive CAFOs where the beef, chicken or pigs are fed genetically modified corn and soybeans and excessive grains in general (which are not the natural diet of these animals), along with the following almost unbelievable feed ingredients:
Plastics -- for the many animals whose digestive systems need roughage to pass food through them, the CAFOs now use plastic pellets.
Meat from members of the same species -- CAFOs turn farm animals into cannibals. Scientific research has linked this practice to the spread of both mad cow disease and avian bird flu.
Manure and animal feces-- this can include cattle manure, swine waste, and poultry waste. It also includes wood, sand, rocks, dirt, sawdust and other non-food substances. Roxarsone -- more commonly known as arsenic, which until last year was put into
chicken and pig feed to control intestinal parasites that might cause them to eat less and grow slower. Chicken litter (containing the arsenic that passes through the birds) is also collected from chicken CAFOs and fed to feedlot cattle, for some apparent reason that defies common sense.
Animal byproducts -- categorized as "animal protein products," this includes rendered feathers, hair, skin, hooves, blood, internal organs, intestines, beaks and bones, dead horses, euthanized cats and dogs, and road kill.
Most Fast Food is a Mixture of Chemicals, Sugar, Flavoring and Salt …
From there, fast food is often nothing more than a slew of chemicals, sugar, high fructose corn syrup and salt … for instance, only about half of a Chicken McNugget is actual chicken. The rest is a mix of corn-derived fillers and additives (most likely genetically modified), along with a slew of synthetic chemicals, including:
Dimethyl polysiloxane, a type of silicone with anti-foaming properties used in cosmetics and a variety of other goods like Silly Putty
Tertiary butylhydroquinone (TBHQ), a petroleum-based product with antioxidant properties
Even the seemingly healthy menu items are loaded with surprising additives like preservatives and inordinate amounts of sugar (in a salad, no less!). A burger or a chicken sandwich from a fast-food restaurant is not equal, nutritionally, to the equivalent you would make at home … nearly always the fast-food version will contain a staggering variety of additives, flavoring, coloring, and other chemicals that give it that ―fast-food‖ flavor … For instance, even the
hamburger buns used at McDonald‘s, which you may think would be relatively ―safe,‖ allegedly contain:3
Calcium sulfate (aka Plaster of Paris) and calcium carbonate (limestone; antacid medication)
High fructose corn syrup
Ammonium chloride (Causes irritation to the gastrointestinal tract. Symptoms include nausea, vomiting and diarrhea)
Calcium propionate (Preservative) and Sodium propionate (Mold inhibitor) Artificial flavors
Studies have shown that eating fast food just twice a week DOUBLES your risk of developing insulin resistance and can make you gain 10 pounds, compared to eating it just once a week, for example.4 Insulin resistance, as I've discussed on many occasions, is one of THE primary driving factors behind most of the diseases many currently struggle with, from diabetes to cancer and heart disease...
Three Tips for Breaking Free of the Fast-Food Trap
There is just no way around it -- if you want your family to be healthy, someone in your
household, or someone you pay, must invest some time in the kitchen preparing your food from scratch, using fresh, whole ingredients. Avoiding processed, fast food requires a change in mindset, which is not always an easy task. It CAN be done, however. Rather than looking at fast foods as a convenience that tastes good or saves money, try thinking of it as:
Extra calories that will harm your body
A toxic concoction of synthetic chemicals and artificial flavors that will lead to disease A waste of your money
Likely to lead to increased health care bills for you and your family
Not something to give to children, whose bodies are still developing and in great need of nutrients
Your goal should be to strive for 90 percent non-processed, whole food. Not only will you enjoy the health benefits—especially if you buy mostly organic—but you'll also get the satisfaction of knowing exactly what you're putting into your body, and that in and of itself can be a great feeling. The following three tips can make it easier to eat well without resorting to fast food:
Identify someone to prepare meals. Someone has to invest time in the kitchen to
prepare your meals, or else you will succumb to costly and unhealthy fast food and convenience foods.
Become resourceful: This is an area where your grandmother can be a wealth of
information, as how to use up every morsel of food and stretch out a good meal was common knowledge to generations past. Seek to get back to the basics of cooking -- using the bones from a roast chicken to make stock for a pot of soup, extending a Sunday roast to use for weekday dinners, learning how to make hearty stews from inexpensive cuts of meat, using up leftovers and so on.
Plan your meals: If you fail to plan you are planning to fail. This is essential, as you will
need to be prepared for mealtimes in advance to be successful. Ideally this will involve scouting out your local farmer's markets for in-season produce that is priced to sell, and planning your meals accordingly. But, you can also use this same premise with
supermarket sales or, even better, produce from your own vegetable garden.
You can generally plan a week of meals at a time, make sure you have all ingredients necessary on hand, and then do any prep work you can ahead of time so that dinner is easy to prepare if you're short on time in the evening.
SERVICE DELIVERY GAPS PIZZA HUT AND DOMINOS PIZZA
To be the reliable delivery brand that consumers love as it is value for money, has a good variety of food and is hot and on time every time.
Pizza Hut's expertise in delivering quality pizzas goes as far back as 1986, when we first introduced the concept of home delivery to Singaporeans. Just like how we create delicious pizzas in the kitchen, we're constantly whipping up new
ideas to improve our delivery service.
In 2003, we created the revolutionary Hot Pouch that keeps your food hot during the delivery process. A special nylon bag prevents condensation from accumulating, so your pizza remains fresh, while built-in insulated heating elements lock in the pizzas' heat. Combined with the heat-sensitive Hot Dot sticker, you can be doubly sure that your pizzas are delivered hot and fresh.
In 2008, Pizza Hut successfully launched the first pizza online ordering service in Singapore. In the following year, we implemented the ―Hot Dot Guarantee‖, a promise that all our food will be delivered hot. Using the heat-sensitive Hot Dot sticker, it will transform from its original black to white on pizza box, revaling the word ‗HOT', if the pizza is hot.
With the Hot Guarantee, we've given pizza lovers in Singapore yet another first. Call us a leader or pioneer, but our real number one has always been the customer.
CHAPTER III
DATA ANALYSE A Agge:e: 0 0--1010 1100--2200 2020--3300 3300--440 0 4400--5500 AbAboovvee 5500 0 0 2200 4400 3300 55 5 5 T Thheesese ttyyppeses ooff rreessttaauurarannttss araree momorree ppooppuullarar ttoo tthhee uuppwwaarrddlly y mmoobbiilele aanndd tthhee y yoouuthth ggrorouupp.. 0-10 0% 20-30 20% 20-30 40% 30-40 30% 40-50 5% Above 50 5%
W Whhaat t bbrriingngss yyoou u ttoo tthhee “F“Faasstt FFoooodd TTaakkee AAwwaayy ReRessttaauurraannt”t”?? Quality S Seervrviiccee RReessppoonnssee VVaarrieiettyy AAmmbbiieenncece 2 255 4400 55 3300 S Seervrviiccee rreessppoonnsse e aanndd AAmmbibieennccee aarree ththee ttwwoo momosstt imimppoorrttaannt t ffaacctotorrss ffoorr wwhhiicchh t thhesesee pplalacceess aarree ffrreeqquueenntteedd bbyy tthhee ppaattrroonnss. . QQuuaalliittyy ccoommeses aa cclloossee tthhiirrdd. . Quality 25% Service Response 40% Variety 5% Ambience 30%
DDoo yyoouu ccoommee hheerree wwiitthh yoyouurr F
Faammiilyly FFrriieennddss Girl friend/ Boy friend AAlloonne e 3
300 4455 1155 1100
Family and friends are the main reason that the customers frequent these places.
Family 30%
Friends 45% Girl friend/ Boy
friend 15%
Alone 10%
H Haaveve yyoouu ccoommee aacrcroossss aannyy aaddvvererttiisseemmeenntsts ooff ““ FaFasstt FFoooodd TTaakkee AAwwaayy R Resesttaauurraanntt””?? Yes N Noo 7 700 3030 M Mosostt ooff tthhee ppeeopopllee hhaavve e aaccttuuaallllyy ccoomeme aaccrroosss s aaddvveerrtitisseemmeennttss ooff tthheesse e kkiinnddss ooff r resesttaauurraanntts s ssoommewewhheerree oorr ththee ootthherer.. Yes 70% No 30%
H Haaveve yyoouu ccoommee aaccrroossss ananyy ssppeeciciaall ooffffeerrss ggiivevenn bbyy tthheessee““FaFasstt FFooodod TTaakkee AAwwaayy R Resesttaauurraanntt””?? Yes N Noo 8 855 1515
Most of the people have actually come across special offers given by these ―FFaasstt FFoooodd TTaakkee A AwwaayyRReessttaauurraannt‖. t Yes 85% No 15%
CONCLUSIONS
For the purpose of growth of each at the thee fast food restaurants i.e., Pizza Hut, Domino Pizza certain recommendation have been given below :
PIZZA HUT
Accessibility: Pizza Hut could come up with a restaurant at the International Airport/Domestic airport considering the success of its NDR station joint.
Home delivery services could also improve its clientele.
Compared to the items of McDonalds, the masses do not derive value for money for certain items and hence its price should be reduced at least marginally. If done in places where both are located, more income could generated by Pizza Hut.
DOMINO PIZZA
Accessibility: Domino Pizza should look at more and more places like ―Destination Point‖ and ―Leisure bowl‖ to expand its chain of outlets.
Standard of hygiene: People of India are becoming more hygiene conscious. Therefore the management needs to become more hygiene conscious. The restaurant should start providing with disposable spoons, plates etc., Mineral water should also be provided free of cost.
Décor: Any new restaurant that Domino Pizza plans to come up with should be spacious, vibrant and give a pleasant look.
Services: Staff needs to be more efficient and friendly.
Other than the variety provided by Domino Pizza a low calorie diet could also be added to its menu. This would attract health conscious people into the restaurant thus improving its customer base.
The company‘s plan of opening up of outlets in West and South East Asia should be materialized as soon as possible as this would affect the image of the restaurant nationally.
BIBLIOGRAPHY
Sources Referred 1. Internet : www.mcdonalds.com. www.pizzahut.com www.rubytuesdays.com www.papajohns.com2. Company Literature : McDonalds India Information Booklet
3. News Papers : Economic Times Dated - 15th September 2003
July 21st 2003
4. McDonald‘s Restaurant Brochures 5. Pizza Hut Restaurant Brochures
QUESTIONARE FOR RESTAURANTS
Name: Designation:
Outlet:
How are the services of your restaurant, differentiated vis-à-vis the services of the other restaurants?
1. Excellent ( ) 2. Good ( ) 3. Satisfactory ( ) 4. Average ( )
Who are the target audience (age group)?
1. 18-22 ( ) 2. 23-27 ( ) 3. 28-32 ( ) 4. 32 & above ( )
Where does you restaurant stand in the matched vis-à-vis other restaurants (Rating)? 1. Excellent ( ) 2. Good ( ) 3. Average ( ) 4. Poor ( )
How much emphasis is placed on each of the following promotional tools: 1. Advertising ( ) 2. Sales Promotion ( ) 3. Public Relation ( )
Any particular advertising agency/PR firm handling your account? 1. Yes ( ) 2. No ( )
On what basis are, the product at your restaurant priced? 1. Food ( ) 2. Service ( ) 3. Ambience ( )
How much popular is your Restaurant (in %age)? 1. 25%-50% ( ) 2. 50%-75% ( ) 3. 75%-100% ( )
Any specific period of the year when some special promotional schemes are introduced? 1. Yes ( ) 2. No ( )
What media used by your restaurant to reach the right target audience. 1. Television ( ) 2. Radio ( ) 3. Newspaper ( ) 4. Pamphlets ( )
How is the work environment in your Restaurant? 1. Excellent ( ) 2. Good ( ) 3. Average ( )
