Transcript of "Comparative analysis on mac d and dominos"
Mc-Donald Vs Domino’s - Comparative Analysis
Determinant Of Choosing Fast Food Restaurant And Their Service Quality
BY:- ANUJ CHAUHAN (FINANCE + MARKETING)
ITM UNIVERSITY, SITHOLI, GWALIOR
Parasuraman et al. (1988) introduced a 22-item scale, called SERVQUAL, for
measuring service quality, the model has been widely adopted across industries.
The scale was tested in 4 service settings different from those of the original test: a
dental school patient clinic, a business school placement center, a tire store, and an
acute care hospital. In service industries, customer satisfaction is always influenced
by the quality of interactions between customers and the personnel involved in the
contact services (1994). In the last decade, the movement towards quality had
started to spread from the manufacturing sector to the service sector. The shift of
focus to quality is basic for the service business to survive the competition, get
acceptance from society, and be able to achieve its missions.
In principle, the two main things closely related to services are expected
quality and experienced or perceived quality. The first is the customers'
expectations of service quality and the latter is the customers' perceptions of
service quality. The customers will always assess the services they experienced by
comparing them with whatever they expected or wished to receive.
Services are behavioral rather than physical entities and have been described as
deeds, performances or effort (1966); deeds, acts or performances, (1980);
activities or processes (1991). (1988) defined services as "that broad class of
products characterized by intangibility, inseparability of production and
consumption, difficulty of standardization and perishability".
As (1986) notes, there is fairly widespread agreement in the literature concerning
the characteristics which tend to differentiate services from goods. These are
intangibility, perishability, inseparability of production and consumption, and
TABLE OF CONTENT
1. Industry Profile
2. Literature review
3. Need for study
4. Research methodology
5. Analysis of study
6. Finding and suggestions
In this comparative analysis of two fast food restaurants regarding their
In this, there are pair of determinant factors of Domino’s pizza and Mc-
Donald which identifies the service quality regarding their customers and how they
affect customer satisfaction.
Both are famous for their services as it explained in the abstract, it includes
the service delivered to their customers and what they perceived before getting
these services in terms of their service quality. There are two stages are forms, one
of them related to their perception and another are totally related to expectations,
which is observed by these fast food restaurants after service delivered to their
customers, and related too their satisfaction level of customers.
INDUSTRY PROFILE:- FAST FOOD RESTAURANT
A fast food restaurant, also known as a quick service restaurant (QSR) within the industry
itself, is a specific type of restaurant characterized both by its fast food cuisine and by
minimal table service. Food served in fast food restaurants typically caters to a "meat-sweet diet"
and is offered from a limited menu; is cooked in bulk in advance and kept hot; is finished and
packaged to order; and is usually available ready to take away, though seating may be provided.
Fast food restaurants are usually part of a restaurant chain or franchise operation, which
provisions standardized ingredients and/or partially prepared foods and supplies to each
restaurant through controlled supply channels. The term "fast food" was recognized in
a dictionary by Merriam–Webster in 1951.
Arguably the first fast food restaurants originated in the United States with A&W in 1916
and White Castle in 1921.Today, American-founded fast food chains such
as McDonald's and KFC are multinational corporations with outlets across the globe.
1872 Walter Scott of Providence, RI outfitted a horse-drawn lunch wagon with a
simple kitchen, bringing hot dinners to workers
1902 First Horn & Hardart Automat opened in Philadelphia
1912 Horn & Hardart opens a second Automat in Manhattan
1916 Walter Anderson built the first White Castle in Wichita, KS in 1916,
introducing the limited menu, high volume, low cost, high speed hamburger
1919 A&W Root Beer took its product out of the soda fountain and into a roadside
1921 A&W Root Beer began franchising its syrup
1921 White Castle opens its first restaurant
1926 Maid-Rite opened its first restaurant in Muscatine, Iowa.
1930s Howard Johnson's pioneered the concept of franchising restaurants, formally
standardizing menus, signage, and advertising
1948 In-N-Out Burger begins drive-through service utilizing call-box technology
1967 McDonald's opens its first restaurants outside the U.S.
1971 McDonald's begins serving breakfast, test-marketing the Egg McMuffin in the
1971 The first Starbucks store opens in Seattle, Washington in Pike Place Market to
sell high-quality coffee beans and equipment
1980 7-Eleven introduces the 32-US-fluid-ounce (950 ml) Big Gulp
1981 Arby's offers nutritional7-Eleven introduces the 32-US-fluid-ounce
1987 Howard Schultz leads purchase of the Starbucks brand from its founders (who
adopted the name Peet's) and begins offering coffee drinks modeled after those
sold in Italian coffee bars
1994 McDonald's begins "supersizing" Extra Value Meals
1994 Arctic Circle becomes the first fast food restaurant to sell Angus
1994 Arby's is first fast food restaurant to implement a no-smoking policy
2002 McDonald's cuts back on the amount of trans fat by 48 percent on French fries
2006 Arby's begins elimination of trans fat oils in French fries
Indian Fast food Industry
With rapidly growing middle class population and changing lifestyle, India is blessed with one of the
fastest growing fast food markets of the world. The Indian fast food market is growing at the rate of
30-35% per annum. Almost all big fast food brands of the world have succeeded in making their
presence felt in the country and most of them are posting appreciable growth.
Consequently, all the popular fast food chains have chalked out massive plans for expanding their
business and presence throughout the country. Moreover, foreign fast food chains are aggressively
increasing their presence in the country. For instance, Domino’s has planned to open 60-65 outlets
every year for the next three years (2010-2012) while Yum Brands Inc is also preparing for massive
expansion across the country with plans to open 1000 fast food outlets by 2015.
According to “Indian Fast Food Market Analysis”, although the market has witnessed a robust growth
in the past couple of years, it remains largely underpenetrated and concentrated into metropolitan
cities. However, there is large room for growth in tier-II cities and tier-III cities, which are mostly
untapped. Therefore, the future of Indian fast food industry lies in masses that live in tier-II and tier-III
The report provides extensive research and objective analysis on the fast expanding Indian fast food
market. The report analyzes all the vital industry trends and possible growth areas for future
expansion. It also analyzes important driving forces in detail, which will help clients to understand the
Moreover, we have also identified the important players operating in the sector and have made a
separate chapter which talks about their business expansion plans in detail. Most importantly, the
report also features forecast on fast food sales in the country. The forecast is based on the
correlation between past market growth and growth in base drivers such as growth in middle
class, urbanization, cultural shift and lifestyle changes.
McDonald's India Profile
A Locally Owned Company:
McDonald's is the world's leading food service retailer with more than 33,000 restaurants
in 118 countries serving more than 67 million customers each day. In India, McDonald's has two
Indian entrepreneurs: Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd, which has
been awarded a Development Licensee status by McDonald's Corporation, U.S.A, spearheads
McDonald's operations in West & South India, while McDonald's restaurants in North & East
India is managed by Vikram Bakshi's Connaught Plaza Restaurants Private Limited, which is
still a Joint Venture with McDonald's Corporation.
For Hardcastle Restaurants Pvt. Ltd ('HRPL'), the transition to a Development Licensee
implies a higher level of commitment by McDonald's Corporation as it enhances its trust in the
Local partner. McDonald's ensures that the evolution to a Development Licensee takes place
only after the financial strength, viability, profitability and long - term sustainability of the
business is assured.
Celebrating over 15 years of leadership in food service retailing in India, McDonald's India
now has a network of over 250 restaurants across the country. McDonald's India is a leader in
the food retail space, with a presence of more than
250 restaurants serving more than 6.5 lakh
customers daily in India.
McDonald's India and HRPL in particular has an
aggressive expansion plan - including market
expansion, new customer outreach formats and
menu expansion. With HRPL becoming a
Development Licensee in the year 2010, there are
strong and robust commitments to investments,
expansion and growth. By 2014, HRPL plans to
double the number of restaurants it currently has.
HRPL is expanding its reach by expanding the
portfolio and access points with formats like from
kiosks, drive thrus, web-delivery and petrol
pumps in addition to the restaurants. In 2012,
HRPL plans to open another 35-40 McDonald's
restaurants in West and South India.
An Employer of Opportunity:
McDonald's India is an employer of
opportunity, providing quality employment and
long-term careers to professionals across the
country. The average McDonald's restaurant
employs 40-60 people from crew to restaurant
manager. McDonald's invests in its employees,
leveraging world class-training inputs to create
ambassadors of the brand and creating food service professionals with global outlook. The brand
currently has over 10,000 employees in India.
Respect for Indian Customs and Culture:
McDonald's worldwide is well known for the high degree of respect for the local culture of each
market it operates in. In line with this respect for local culture, India is the first country in the
world where McDonald's does not offer any beef or pork items. McDonald's has developed a
menu especially for India with vegetarian selections to suit the Indian palate, and has also re-
engineered its operations to address the special requirements of vegetarians. Special care is taken
to ensure that all vegetable products are prepared separately, using dedicated equipment and
utensils. This separation of vegetarian and non-vegetarian food products is maintained
throughout the various stages of procurement, cooking and serving. So much so that the
mayonnaise and soft serves are also 100% vegetarian, and McDonald's uses only vegetable oil as
a cooking medium in India.
Quality, Service, Cleanliness & Value (QSC & V):
McDonald's is driven by the philosophy of Quality, Service, and Cleanliness &
Value for Money. This translates into a commitment to provide customers high
quality products, served quickly with a smile, in a clean and pleasant environment
at an affordable price. This effectively means that the McDonald's menu is priced
at a value that the largest segment of the Indian consumers can afford, while at the
same time ensuring that quality is not sacrificed for value - rather, McDonald's
leverages economies to minimize costs while maximizing value to customers.
McDonald's a Global Phenomenon
Formed in 1954, McDonald's brand is the leading global foodservice retailer with
more than 30,000 local restaurants serving nearly 50 million people in more than
120 countries each day. Our rich history began with the founder Ray Kroc's vision
and his commitment, transformed in our talented executives, and will keep the
shine on McDonald's arches for years to come.
McDonald's Corporation is the world's largest chain of hamburger fast food
restaurants, serving around 68 million customers daily in 119 countries.
Headquartered in the United States, the company began in 1940 as a barbecue
restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized
their business as a hamburger stand using production line principles. Businessman
Ray Kroc joined the company as a franchise agent in 1955. He subsequently
purchased the chain from the McDonald brothers and oversaw its worldwide
A McDonald's restaurant is operated by either a franchisee, an affiliate, or the
corporation itself. The corporation's revenues come from the rent, royalties and
fees paid by the franchisees, as well as sales in company-operated restaurants.
McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8
billion, and 9 percent growth in operating income to $3.9 billion.
McDonald's primarily sells hamburgers, cheeseburgers, chicken, french fries,
breakfast items, soft drinks, milkshakes and desserts. In response to changing
consumer tastes, the company has expanded its menu to include salads, wraps,
smoothies and fruit.
Quick Facts About McDonald’s
1. McDonald's was started as a drive-in restaurant by two brothers,
Richard and Maurice McDonald in California, US in the year
2. By mid-1950s, the restaurant's revenues had reached $350,000.
3. Ray Kroc, distributor for milkshake machines, expressed interest
in the business, and he finalized a deal for franchising with the
McDonald brothers in 1954.
4. He established a franchising company, the McDonald System Inc.
and appointed franchisees.
5. In 1961, he bought out the McDonald brothers' share for $2.7
million and changed the name of the company to McDonald's
Corporation. In 1965, McDonald's went public.
McDonald’s is a global foodservice retailer with more than 32,000 local
restaurants in 117 countries, serving more than 58 million customers each day. In
simpler terms, we’re a global brand of local restaurants. At the heart of
McDonald’s operations is a unique business model comprised of the Company, our
suppliers and franchisees (also called owner/operators). Often referred to as a
three-legged stool, all three parts of this business model are essential to
McDonald’s success around the world.
Domino's Pizza is an international pizza delivery
corporation headquartered in Ann Arbor Township, Michigan,
United States, near Ann Arbor.[
Founded in 1960, Domino's is the
second-largest pizza chain in the United States (after Pizza Hut)
and has more than 10,000 corporate and franchised stores in 70 countries and all 50
U.S. states. Domino's Pizza was sold to Bain Capital in 1998 and went public in
Domino's serves Coca-Cola products, and as of January 2012 is the only "Big
Four" pizza chain to do so. Rivals Papa John's Pizza and Little Caesars sold Coca-
Cola in the past (Pizza Hut, due to its previous ownership by PepsiCo, has a
lifetime contract to sell Pepsi products.), but both switched to Pepsi in 2012 and
2007, respectively. Domino's Pizza in Mexico switched to Pepsi in November
The Domino's franchise started out as just one tiny store. It was purchased
and started by brothers Tom and James Monaghan in 1960. At that time, the
restaurant was known, not as "Domino's," but as "Dominick's Pizza" and was
located in Ypsilanti, MI. The two brothers only worked as a team until 1961, when
James traded his half of the business to his brother for the price of a Volkswagen
Beetle. In 1965, the name "Dominick's" was traded for "Domino's."
The second Domino's pizza store was opened in Ypsilanti in 1967, officially
starting the Domino's franchise. Since that time, the chain has experienced record-
breaking growth: By 1978, 200 Domino's restaurants had been opened, and by
1983, the chain boasted 1,000 openings as well as restaurants in Australia and
Canada. By 1985, Domino's was the fastest-growing chain in the United States,
with additional locations in England and Japan.
As hugely successful as the Domino's pizza franchise has been, the chain's
history has been riddled with obstacles and troubles. In 1968, the company's
headquarters were destroyed in a fire. In 1975, Domino's entered, and eventually
won, a 5-year legal battle over trademark infringement claims posed by Domino
Sugar. In 1989, a man named Kenneth Noid created a hostage situation at an
Atlanta restaurant, angrily believing that the company's "Avoid the Noid" ad
campaign (featuring a pizza-stealing, stop-motion animation character known as
"The Noid") to be a personal insult. Luckily, Noid surrendered to police without
harming his hostages, though he did force them to make pizza for him.
From the early days of the company, Domino's has had a delivery-focused
business model. This approach helped the business gain a serious leg up during the
late 1960s when the store's East Lansing location gained massive popularity with
Michigan State University students wanting convenient food options without
having to have their own cars. The delivery-heavy model prompted the restaurant's
famous "30 minutes or it's free" guarantee. However, this guarantee was rescinded
in 1993 as a result of complaints about reckless driving and accidents caused by
delivery drivers in a rush to meet the requirements.
Nowadays, Domino's pizza continues to grow, with over 8,000 store
locations worldwide. The company has continued to develop its business model by
featuring many non-pizza menu items and incorporating new customer service
options such as online order. Domino's has also been listed in Entrepreneur
magazine's list of the top 10 best franchise opportunities.
Domino’s pizza opened its first store in India in January 1996, at New Delhi.
Today Domino’s pizza India has grown into a country wide network of more than
300 stores with a team of 9000 people. According to India retail report 2009,
domino’s is the largest Pizza chain in India.
According to (1982), service quality is generally viewed as the output of the
service delivery system, especially in the case of pure service systems. Moreover,
service quality is linked to consumer satisfaction. Although there is no consensus
in the research community about the direction of causality relating quality and
satisfaction, the common assumption is that service quality leads to satisfied
customers (1994; 1990, 1989).
For example, customers leaving a restaurant or hotel are asked if they were
satisfied with the service they received. If they answer "no," we tend to assume
service was poor. Direct service providers, such as waitresses, also note that at
times the best service efforts are criticized because the customer's perceptions of
the service are clouded by being in a bad mood or having a disagreement with
someone just before arriving at the restaurant. These service providers recognize
that in practice the influence of service quality on customer satisfaction is affected
by other factors, one of which is the customers themselves.
In addition, (1989) and (1983) defined both service quality and customer
satisfaction as matching the expectation of the service with that which is actually
experienced by the customer. Therefore, when customers' experiences meet or
exceed their expectations, the service is viewed as a quality service and the
recipients are typically satisfied customers. On the other hand, when the service
experienced by consumers is less than their expectations, the perception of service
quality is diminished and customers are generally not satisfied.
Almost half of our food expenditure today is on food prepared away from home. And we all
know that food prepared away from home is far too often high in calories, unhealthy fat, and
sodium. So why are we eating out so much? The top three reasons for choosing fast foods are:
1. Rapid service
2. Convenient location
3. Good-tasting food
Researchers from Texas A&M University recently investigated whether additional explanations
for eating away from home exist. In particular, they looked at factors like: parental work
(whether one or both parents were working), family meal rituals (like who eats dinner together
and whether family members believe it is important to eat together), parenting style, and
mothers' worries and concerns regarding their children's weight3
. Researchers spoke with 312
families (parents and children ages 9-11 or 13-15), asking them about the factors above as well
as all of the foods they ate over a two-day period.
Some interesting findings included:
When both parents have a standard work schedule (8-5), father has a flexible schedule or
he feels that he has control at work, children use full service restaurants more.
Children whose mothers rank their job role as more important than their other roles,
including that of a parent, reported spending more time in fast food restaurants.
Time spent by children traveling in the car was directly related to use of fast food
restaurants and time spent in both fast food and full service restaurants.
Fathers who reported that the family dinner was a family ritual had children who
frequented fast food restaurants less.
Children with authoritative mothers (parenting style that consists of caring, clear
behavioral expectations and punishment by privilege withdrawal) used fast food
Children with neglectful parents (parenting style with lack of caring, lack of control, and
few punishments) spent more time in fast food restaurants.
Researchers concluded that eating away from home and the healthfulness of children's
diets are linked with the manner in which parents interact with their children (parenting
style), time available for family meals, and the role restaurants play in their lives.
Services are different from physical goods on some key dimensions or characteristics such as
intangibility, heterogeneity, inseparability and perishability (Lovelock and Wirtz, 2004). The
delivery and measurement of the high-quality service are difficult tasks for a service provider
because of the intangible nature of the services. Research has revealed that the consumers may
respond to more than just the tangible part of the product or service rendered when making a
purchase decision (Kotler, 1973; Milliman, 1986). A proper combination of tangible and
intangible aspects should result in a customer’s perception of high service quality (Ryu, 2005).
Physical evidence is one such instrument, which is widely used to visualize the intangible
aspects of the service delivery. It relates to the style and appearance of the physical surroundings
and other experiential elements encountered by customers at service delivery sites (Lovelock and
Wirtz, 2004). It is one of the additional Ps of services marketing mix and considered as a
powerful tool for those services in which customers and service providers have high degree of
involvement (high-contact) while delivering and receiving the service.
Considerable research has been conducted in the area of physical evidence as it is one of the
determinants of service quality. Most of the previous studies related to physical evidence tried to
relate it with the perceived performances of the services and expectations of the service
customers, which in turn produces service quality perceptions. Such studies on the effect of
physical evidence on the perceived service quality and on store or outlet selection covered wide
range of service categories. Baker (1987) classified three fundamental factors that affect the
tangible portion of service quality dimensions: design, social, and ambient factors. Ambience
includes background factors such as lighting, aroma, and temperature. Design factor represents
the components of the environment that are more visual and tangible in nature. It includes color,
furnishings, and spatial layout. The design elements contain both the aesthetic aspects (e.g.,
beauty, décor) and the functional aspects (e.g., layout, ease of transaction, and waiting room
design) that facilitate high quality service. The social factors relate to an organization’s concern
for the people in the environment, including customers and employees.
Berman and Evans (1995) classified tangible quality clues into four categories: external,
general interior, layout, and point of purchase factors. External variables or factors include
exterior, signs, building size and color, location, and parking. General interior variables include
music, scent, lighting, temperature, and color scheme. The layout and design factors pertain to
the workstation placement, waiting facilities, and traffic flow. Finally, the point of purchase and
decoration variables relate to the displays, pictures, artwork, and product displays at point of
purchase. Environmental dimensions of the servicescape shapes the way customers and service
providers interact and behave (Zeithaml, et.al., 2006). Such environmental dimensions are the
basic constituents of the framework for understanding environment-user relationships in service
organizations. Ambient conditions (temperature, air quality, noise, music, odor), space (layout,
equipment, furnishings), signs, symbols and artifacts are included in these environmental
A multiple item scale has been developed by Raajpoot to determine tangible quality of
foodservice industry. The scale captures factors such as music and temperature; design factors
such as location and seating arrangement and service factors such as food presentation and food
variety (Raajpoot, 2002). In another study among the elderly citizens, Knutson and Patton (1993)
found that about one fourth of older diners named service quality as a strong motivator for
choosing a restaurant. According to this research, seniors want to eat in a welcoming, pleasant,
Determinant factors are:-
Accessibility:- according to Litman, 2003a Accessibility refers to the ability to
reach desired goods, services, activities and destinations (together called
opportunities). Accessibility depends on mobility, mobility substitutes and
opportunities as follows:
• Mobility - provided by walking, cycling, public transport, car sharing, taxi,
cars, and other modes. All else being equal, an increase in the speed, service
quality or affordability of a mode will improve access by that mode.
• Mobility substitutes - telecommunications and delivery services. These can
provide access to some types of goods and activities, particularly those
• Land uses - the geographic distribution of activities and destinations. The
dispersion of common destinations increases the amount of mobility needed
to access goods, services and activities, reducing accessibility. When real
estate experts say “location, location, location” they mean “accessibility,
• Other factors - information availability, affordability, convenience and
comfort, security and prestige.
Key responsibility for accessibility:-
“ All else being equal” – Responses to mobility changes can mean that things are usually not
“equal” and often complex behavioural responses need to be considered.
The need to consider information, availability, comfort, security, prestige, speed, modes
available, telecommunications, land uses and all potential activities emphasises that it is
important not to confuse detailed components of accessibility with the definition “the ability to
reach goods services, activities and destinations”.
Accessibility is a term often used in transport and land-use studies and the main aim of this
report is to survey the range of measures of accessibility that have been proposed. Accessibility
is seen as being concerned with the opportunity available to an individual or type of person at a
given location to take part in a particular activity or set of activities. However various other
interpretations of the term accessibility have been made and in order to survey the range of
indices to which the term accessibility measure has been applied it is necessary to consider also
the range of definitions that have been given to the term accessibility. The advantages and
disadvantages of the various measures are discussed. No single "best" measure is identified;
rather the choice depends on the type of problem being studied and the resources available. Some
consideration is given also to the areas of study in which accessibility may be a useful concept.
1. Price:- Pricing actually plays a vital role in the branding and image of your product.
Determining your price can be difficult, especially if you product is in a widely-variable
industry. You must determine pricing strategy, retail and wholesale pricing, possible
bundling, and any type of discounts.
2. Ambiance:- Eating takes place in a context of environmental stimuli known as ambience.
Various external factors such as social and physical surroundings, including the presence
of other people and sound, temperature, smell, color, time, and distraction affect food
intake and food choice. Food variables such as the temperature, smell, and color of the
food also influence food intake and choice differently. However, the influence of
ambience on nutritional health is not fully understood. This review summarizes the
research on ambient influences on food intake and food choice. The literature suggests
that there are major influences of ambience on eating behavior and that the magnitude of
the effect of ambience may be underestimated. Changes in intake can be detected with
different levels of the number of people present, food accessibility, eating locations, food
color, ambient temperatures and lighting, and temperature of foods, smell of food, time of
consumption, and ambient sounds. It is suggested that the manipulation of these ambient
factors as a whole or individually may be used therapeutically to alter food intake and
that more attention needs to be paid to ambience in nutrition-related research.
LITERATURE REVIEW:- Researchers have recently addressed the links between
customer satisfaction (CS) and restaurant performance, emphasizing the way that satisfaction
affects a customer’s repeat purchase practices (Sulek and Hensley 2004; Söderlund and
Öhman 2005; Cheng 2005). Several studies have identified some of the factors that
influence customer’s satisfaction of dining experience, including wait time, quality of
service, responsiveness of front-line employees, menu variety, food prices, food quality, food
consistency, ambience of the facilities, and convenience (Sulek and Hensley 2004; Iglesias
and Yague 2004; Andaleeb and Conway 2006).
In reality, the success of restaurant managers/owners depends on understanding their
customers’ needs and expectations, and then meeting these needs better than the competition.
While estimates vary, a National Restaurant Association report indicated that 60% of all new
restaurants fail within the first three years in business, and roughly half of those fail in the
first year (Parsa, Self, King, and Njite 2005). This high percentage of failure shows the
importance of ensuring customer satisfaction by providing excellent service, listening to
customers’ needs and complaints, and caring about the customer.
An additional benefit of customer satisfaction is the increased likelihood that diners will
repatronize the establishment. The majority of previous research has addressed the nonlinear
effects of antecedents on CS (Anderson and Mittal 2000; Mittal, Ross, and Baldasare 1998;
Oliver 1995). For example, Mittal et al. examined the nonlinear effects of attribute
performance on CS, and found support for an S-shaped function (which is steep in the middle
and flat at the extremes). These results question the commonly held belief of linear (positive
and direct) relationships between product attributes and consumer satisfaction. Only a few
studies have presented empirical evidence for nonlinear effects in the satisfaction-outcome
link (with dependent variables such as customer loyalty and complaining behavior), and no
examination of the functional structure for specific relationships have yet been undertaken.
3. Choice:- Currently healthy food choices are difficult. The food environment around us
is not conducive to healthy eating. In restaurants, people are offered large portion sizes,
value meals include French fries and soda, and there are limited healthy choices on
menus. That is, the default options are primarily unhealthy.
Studies consistently show that the default exerts a powerful influence on choice, and the default
option is more likely to be chosen. Behavioral economic interventions that make default options
healthy make the healthy choice the easy choice and mean that individuals must actively work to
engage in less desirable behaviors. The use of healthy default items as part of restaurant meals is
supported by studies in retail food chains and cafeterias, as well as from studies in the areas of
health insurance, 401(k) savings plans, and organ donation. Providing healthier default items on
menus could lead to healthier food choices and positive health benefits.
The fast food industry is on in an upward trend. The demand for fast food product is now
growing as it is convenience which suits the lifestyle of customers. With the changing lifestyle of
Malaysian consumers, more educated people and affluent, people tend to eating-out especially in
fast food restaurants. Along with the heavily promote through media and information technology
exposure, customers has variety choice of fast food pattern and restaurants. Therefore, local fast
foods restaurants have to be sensitive to these changing trends and to be innovative and get
prepare to change accordingly to avoid from losing their existing and future potential customers.
The aim of this study is to examine how the respondent’s perception will be influenced by
factors of customer loyalty towards preferred fast food restaurants. Malaysia is a multiracial and
multicultural country that made up by several dominant groups such as Malay, Chinese and
Indians. Malaysia is a rapidly developing country in Asia and economic growth is projected to
moderate to 5.2% in 2011. According to the World Bank Group, Malaysia GDP per capita is
US dollars 14, 215, which adjusted by purchasing power parity. This shows that the purchasing
power and standard of living of the population in Malaysia is growing adequately. Consequently,
Malaysians allocated largest amount of household expenditures to their food budgets. Owing to
the changing lifestyle of Malaysian households, the trend towards greater consumption of take-
away food outside the home is increasing. This gave birth to fast food sector. According to
Bender and Bender (2001), fast food is a general term used for a limited menu of foods that lend
themselves to production line techniques and that are typically hamburgers, pizzas, chicken or
sandwiches. According to ACNielsen (2005), there is 59% of adult population that eats at take-
away restaurants at least once a week. This is due to convenience concept of fast food restaurant
match the busy lifestyles and ease of access to a wide variety of fast food restaurants in the
Analysis of the global fast-food industry is enhanced by segmenting it into Quick Service
Restaurants (QSR, 65.5%), Takeaways (17.7%), Leisure Locations (13%), and Mobile and Street
Vendors (3.9%) (Datamonitor, 2005a). Global consumers generally perceive fast food as
characteristically similar to McDonald’s, Burger King, or Taco Bell. As noted earlier, the present
study was designed to examine consumer perceptions of fast food in the United States, Japan,
and China due to the continued growth rates of fast-food consumption in each of these three
The average American dines out four times weekly, with nearly half of adults consuming
at least one meal outside the home daily (Rubin, 2004). In 1970, away-from-home foods
accounted for 25 percent of total food spending. That amount increased to 47 percent by 1999
(Clauson, 2000). Fast-food accounts for 32 percent of America’s away from- home meals
Fast-food consumption among Chinese children appears to be increasing (Cheng, 2003).
Consistent with this, Chinese generally perceive McDonald’s as representing youth, perhaps due
to the brand’s self-promotion as a children’s birthday party venue and “Uncle Ronald” as an icon
for Chinese children (Eckhardt and Houston, 2002). Elder Chinese
are commonly observed acquiescing to their children and grandchildren’s requests to be escorted
to McDonald’s, although they generally find the food’s taste and affordability to be lacking
People are willing to queue and pay to get food. Knowing peoples’ opinions on queuing
is of interest to restaurant stakeholders since it and related actions have a direct effect on
revenue. While most previous studies focused on dine-in restaurants, we observed queuing for
fast food restaurants. Specifically, we observed the actual waiting time of customers for a
number of fast food restaurants, and compared the metrics with waiting times that customers
expected. During lunch time peak hours, customers spent on average 5.4 minutes waiting before
they could get their orders. The 5.4 minutes consisted of 2.42 minutes of queuing time and 2.98
minutes of service time. This total waiting time is only slightly below the actual expected waiting
time of 5.42 minutes. How the fast food restaurants try to manage the perceived waiting time of
customers was also discussed.
In general, restaurants can be divided into five categories; quick service, family dining, casual
dining, dinner house and fine dining (Walker, 2011, p. 34-40). Quick service restaurants are
restaurants where the food and drink are paid for before being served. The critical points for this
type of restaurant are to have staff and food ready to serve the maximum number of customers in
the least amount of time. The menus offered are usually limited and include burgers, sandwiches,
hot dogs, tacos, burritos, fried chicken and so on. Family restaurants developed from coffee
shop-style restaurants, offering simple menus and providing service for the family market
segment. Due to their market type, most family restaurants do not serve alcoholic drinks. Casual
restaurants or casual dining offers a relaxing lifestyle, signature food items, wine service, bar and
comfortable décor. Fine dining is a type of restaurant that offers expensive cuisine and beverages
such as wine, elegant service and luxurious ambiance. The table turnover is usually only once an
Other sources (Jackson, 2011; Walker, 2011; Knutson, 2000) mention that the fast food
restaurant is often categorized under quick-service restaurant, even though not all quick-service
restaurants serve fast food. The main characteristics of quick-service restaurants are speedy
service, inexpensive food items, simple décor, limited menu normally displayed on a wall, and
convenience. This type of restaurant may also provide drive-thru, delivery, and take-out services.
Simplicity and limitation in a menu are important in a quick-service operation due to speed of
service and high turnover rates to achieve high sales volumes. To realize speed, several factors
are required: minimum food handling by food production staff, minimum handling by the service
staff, and the ability to withstand a holding temperature since most of the food items are
precooked (Drysdale and Galipeau, 2009, p. 207-208).
Restaurants fall into the category of a service industry. As such, researchers analyze the
efficiency of restaurant services. Hummel and Murphy (2011) mapped out an entire service
system to depict the impact of efficiency management on a restaurant and its industry. This
technique was termed service blueprinting. One of their findings was that optimizing the time to
serve the customers paying their bills would earn the restaurant three additional dining tables in a
peak hour. Hummel and Murphy highlighted that the difficulties in producing a conclusion were
due to service blueprinting requiring extensive research that observes larger samples than had
previously been utilized.
Restaurants balance efficiency-for-profitability with customer satisfaction. As defined by
Carbone and Haeckel (2002), customer satisfaction includes functional, mechanical, and
humanic clues. Kimes (2004) discussed that efficiency and profitability could be represented in
numbers, whereas customer satisfaction measurement was subjective. Sulek and Hensley (2004)
showed that choice of foods, restaurant atmosphere and the fairness of the seating contributed a
large part to a customer satisfaction model. Wall and Berry (2007) added performance,
appearance, and behavior of the employees to the above dimensions.
Literature shows that the entry decision to any market is significantly affected by the
Political (P), Economical (E) and Social (S) conditions (Whitelock & Jobber, 2004). The growth
rate of fast food industry is directly proportional to employment and consumer income. The
consumer spending at fast food outlets reflects the better life patterns of people according to
economics (Deane, 1987). According to Deane, these factors affect the growth of fast food
industry and with a better understanding of these factors managers can increase the profits and
remain up to date with time. A positive correlation was found between income of consumers and
visit of customers to some types of restaurants. Consumers with higher income visit restaurants
more frequently as compared to lower income consumers. Fast food has the negative effect on
the social habits of the people, as the gain in the mass (weight) is found to be directly
proportional to the fast food especially in Women (Jeffery & French, 1998). It is supposed that
both the technical and the legislative parties should sit together and find some solution to the
problems that are being faced in the environment to improve the quality of the fast food so that
the technical issues may be made the part of the policy (Tester, Stephanie A. Stevens et al.,
2010). Hazard analysis and critical control point (HACCP) is found to be the very good
technology to improve the speed of the safety implementation and the quality of the food in the
industry especially fast food industry (Sweet, Balakrishnan et al. 2010). The use of the
technology has increased the growth of the fast food industry, as the Burger King and the
Macdonald’ s has increased their budget for the TV advertisements, and as a result led to
increase in the sale (Harris, Schwartz et al. 2010). Poultry meat (One of the key ingredients
used in the fast food industry) quality insurance is the very key and primary issue for the fast
food industry, so for that purpose the PRP are introduced to manage the meat requirement and
supply efficiently (Manning & Chadd, 2006).
NEED FOR STUDY:-
Determinant of Service quality in response to fast food restaurants.
Research Methodology deals with, the procedure adopted to carry out
the study. According to GREEN AND TULL:“A research design is the
specification of methods and procedures acquiring the information needed. It
is the overall operational pattern or framework of the project that
stipulates which information is to be collected from which
sources by what procedures’’. For conducting the study, as a researcher
I adopted both primary as well as secondary method of data collection.
The purpose of research is to discover answer to
questions through the application of scientific procedures. The main
aim of research is to find out how much people an individual get aware and
go for those advertisement and collect more information about it. Though each
research study has its own specific purpose. The objective of study “To know the
impact of determinant factors on service quality and satisfaction of customer”.
1. To know an individual awareness about fast food industry.
2. To know how these determinant factors can affect one’s fast food industry.
1. There is null hypothesis of different determinant on service quality and
satisfaction level of customer.
2. There is positive hypothesis of different determinant on service quality and
satisfaction level of customer.
TYPES OF RESEARCH:-
Research refers to the search for knowledge. It can be defined as
scientific and systematic search for pertinent information on a specific topic. It is
careful investigation or enquiry especially through search for new facts of any
branch of knowledge. In this study I used Exploratory research, which
provides insights into and comprehension of an issue or situation. It helped me to
draw some definitive conclusions. Exploratory research is a type of research
Conducted when the problem has not been clearly defined. It helps in determine
the best research design, data collection method and selection of subjects. Given its
fundamental nature, exploratory research often concludes that a perceived
problem does not actually exist.
A research design or a structure is the process done before data collection or
analysis can commence. A research design is not just a work plan. A
work plan details what has to be done to complete the project but the function of a
research design is to ensure that the evidence obtained enables us to answer the
initial question as unambiguously as possible.
The primary data was collected with the help of questionnaire filled using
Interview method. As per the need of the study I formulated the questionnaire
with the help of the mentor’s guidance. This helped me to frame the required level
of questionnaire needed for the study of the service quality.
The secondary data was collected from the database, publications
and the websites of the company through Internet.