a study of consumer perception of fast food outlet in delhi & ncr

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RESEARCH PROJECT REPORT

ON

A STUDY OF CONSUMER PERCEPTION OF FAST FOOD

OUTLET IN DELHI & NCR

SUBMITTED FOR THE PARTIAL FULFILLMENT TOWARDS THE AWARD

OF THE DEGREE IN MASTER OF BUSINESS ADMINISTRATION (MBA)

OF UTTAR PRADESH TECHNICAL UNIVERSITY, LUCKNOW

BY:

SATISH KUMAR PUNDIR

ROLL NO.0613370049

MBA-(4th) SEM

2006-2008

UNDER THE SUPERVISION OF

Mr. PANKAJ CHAUHAN

DEPARTMENT OF MANAGEMENT STUDIES

NOIDA INSTITUTE OF ENGINEERING & TECHNOLOGY

GREATER NOIDA [U.P.]



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STUDENT DECLARATION

I „Satish Kumar Pundir‟ Roll no. 0613370049, a student of MBA-IV Semester

of Noida Institute of Engineering And Technology (NIET), Greater Noida

hereby declare that the Research project report titled

” A STUDY OF CONSUMER PERCEPTION OF FAST FOOD OUTLET IN

DELHI & NCR ” is my original work and the same has not been submitted for the

award of any other diploma or degree

Place:

Date: (Satish Kumar Pundir)



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PREFACE

Customers have become more and more aware of their requirements and demand

higher standards of services. Their perceptions and expectations are continually

evolving. The key lies in improving the service selectively, paying attention to

more critical service attributes/dimensions as a part of customer service

management. It is imperative to understand how sensitive the customers are to

various service attributes.

This study is an attempt to explore the relative importance of service quality

dimensions for fast food restaurants that differ in their country of origins. The

objective of this study is to analyze customer expectation and perception of

different fast food joints and if they differ on the basis of their country of origin.

The study also analyses if customer satisfaction and overall service quality differ

with country of origin. Five service quality dimensions have been employed in the

study and the variables defined in the study have been measured using these five-

service quality dimensions.

The statistical tool used in the study is questionnaire and data was collected from

the consumers who had been to a fast food restaurant.

The service quality dimensions have been measured using ZOT concept.



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the service quality dimensions are important to customers visiting any fast food

restaurant; the relative importance of service quality dimension is different with

respect to an International and an Indian fast food joint;

there is a significant difference in consumer‟s expectations for services offered by

an International and an Indian fast food restaurant.

There is a difference in consumer perception of services provided by an

international or Indian fast food restaurant.

The service performance in relation to the „expectations‟ is poor in respect of

nearly all the dimensions for both fast food joint, and

The overall service quality satisfaction is high for the international fast food as

compared to Indian fast food restaurant.



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ACKNOWLEDGEMENT

I, “Satish Kumar Pundir”, owe enormous intellectual debt towards my faculty

guide Mr. Pankaj Chauhan (Faculty guide), who has augmented my knowledge in

the field of “A Study of Consumer Perception of Fast Food Outlet in Delhi &

NCR” ”, helping me learn about the process and giving me valuable insight into the

subject.

I am obliged to her for being extremely patient, giving me sufficient time for

discussions and guidance at all stages through the course of this research. My

increased spectrum of knowledge in this field is the result of his constant

supervision and direction that has helped me to absorb relevant and high quality

information.

I would like to thank him for her guidance and enriching my thoughts in this field

from different perspectives.

SATISH KUMAR PUNDIR



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]TABLE OF CONTENTS

S.no Contents Page no.

1. Introduction to the topic 10

2. Introduction to the Organization 11

3. Objective of the study 36

4. Literature review 37

5. Conceptual framework: 39

6. Methodology

Pre test

Measurement

46

7. Data collection 48

8. Analysis of data 50

9. Conclusion 61

10. Bibliography 64

11. Appendix 65



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LIST OF TABLES

S.no

Contents

Page no.

1. Frequency of Arriving at Any Restaurants 51

2. Which Restaurants do you go 52

3. Drivers of Approaching to the Restaurants 53

4. Time of taking Order 54

5. Time taken in delivering the order 55

6. Views about Services 56

7. Satisfaction level of customers 57

8. Reason for preferring this Restaurants 60

9. Evaluation of McDonald and Pizza hut 62

10. Cleanness score 63

11. Employee‟s behavior score 64

12. Space management score 65



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LIST OF GRAPHS

S.no Contents Page no.

1. Frequency of Arriving at Any Restaurants 50

2. Which Restaurants do you go 51

3. Drivers of Approaching to the Restaurants 52

4 Hospitality 53

5 Satisfaction level 54

6 Service problem 55

7. Service preference 56

8. Cleanness score 57

9. Employee‟s behavior score 58

10 Menu evaluation 59



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EXECUTIVE

SUMMARY



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EXECUTIVE SUMMARY

It makes me clear about Fast Food Industry”

This study introduces us about fast food products or services offered to the public

by MacDonald, Pizza hut, Nirula‟s and Domino‟s. We are using the fast food

frequently in our daily life. So it is crucial to think in a dynamic world while using

these types of products or services.

A project is an outcome offer of sincere labor and curious mind. Its worth depends

not necessarily on the status of the maker but on practice and profession. Given the

level of treatment there is no essential dichotomy between quality and brevity that

together must go into construction of project.

The each and every fast food company (outlets) aims to cover a large market area

with efficient market infrastructure and though better services. My project report

has been prepared on the topic “A STUDY OF CONSUMER PERCEPTION OF

FAST FOOD OUTLET IN DELHI & NCR ”.

By studying this concept, we can come to know the actual performance of

providing services to customers by different companies mentioned above.



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INTRODUCTION TO

THE TOPIC



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INTRODUCTION TO THE TOPIC

The topic of this research project report is”A STUDY OF CONSUMER

PERCEPTION OF FAST FOOD OUTLET IN DELHI & NCR”

The study introduces us to identify the importance of service quality dimensions in

the fast food restaurant Industry in India and if they differ with country of origin.

To analyze customer expectations (would- should) for fast food restaurants and if

they differ on the basis of their country of origin

To understand how perception of service quality dimensions are related to overall

service quality and customer satisfaction.



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INTRODUCTION

TO THE

ORGANIZATION



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INTRODUCTION TO THE ORGANIZATION

INTRODUCTION

The Indian Fast Food Market

The traditional dhabas, potential restaurants in the customers‟ colony and some

restaurants in a five star hotel predominantly dominated Upto the year 1995 Indian

food market. Having fast food i.e., burgers, pizzas etc., was considered to be an

option for eating out. It was not at all synonymous with the American concept of

fast food as a quick takeaway bite or a substitute for lunch.

Apart from fast food being available at the local colony restaurants and at some

five star restaurants, Nirulas was the only fast food chain existing in the country

with its restaurants expanding with every passing year since its inception. It has

been almost 50 years now since its set up and there is hardly any one who doesn‟t

know that Nirulas exists. Nirulas was the first one to bring fast food to India back

in the 50‟s since then it has evolved into an eating place with a tremendous brand

equity and brand recognition. It proved to be a perfect eating place for an average

middle class who wants to eat out at an affordable price who cant afford the five-

star restaurants and would not want to go to the local dhabas.

Nirula.s almost had a monopoly for decades due to the way it has been placed. It is

a place where a person from an average middle class group to upper class group

can go to eat out. Its popularity has increased over the decades. With the trends

changing and the incomes rising almost anybody who can afford to eat out could

go for a snack at Nirula‟s.

However the year 1995-96 witnessed a drastic change. 1996 is considered to be the

year of India‟s entry into the world food market. International giants such as



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McDonalds, KFC, TGIF, Dominos, Pizza Hut all bombarded the Indian food

market.

Before these, UK- based joint called Wimpy‟s had established its chain in the

country in 1990. By year 1996 it had about three to four joints established in Delhi.

However it did not pose much of a threat to Nirula‟s reason being lack of variety

and that Wimpy‟s was looked at more of a hang -out place rather than eating out

with the family.

It‟s been the American international giants i.e., McDonalds, Pizza Hut etc., who

have targeted their restaurants to the families. Apart from the foreign and Indian

fast food chains setting up shop, there are a range of specialty restaurants offering

varied fare such as Chinese, Mexican, French, Italian etc. These places however

offer range of items different from burgers, pizzas etc, but they definitely are

competition to both foreign and Indian fast food chains.

However, restaurant business is such which is surrounded by threat from

everywhere be it Indian joints or foreign joints.

It is only these international joints and specialty restaurants which are gradually

coming up and some Indian restaurants which have made up the food market. Prior

to this it was only the local restaurant which became visible while passing by or

through local banners etc., and the five star restaurants were for the elite class out

of reach by the average middle class customer. There was hardly any awareness or

promotion to beat competition.

Each of the foreign food joints that have come into the country have their own

strategy lined up to differ from the rest. Each of these studied the Indian tastes and

style and thereby targeted the Indian customer. An average Indian restaurant goer

is no convenience eater, unlike the Americans.



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If he is paying, he is paying for food that tastes good (Spicy, soft, savory etc.), not

for how pleasantly the stuff is served or how spotless the widows are. He wants

food for that can make him come back to the restaurant. An Indian food joint

owner would definitely understand this but an American company which comes

and places itself directly without knowing the customer is definitely in for trouble.

Customer loyalty in a restaurant business is essentially low. A customer when he

comes to a restaurant usually looks at the quality of food, variety, ambience, speed

of delivery and the location. The variety would influence the frequency of visits

since taste is a dominating factor to the Indian customers.

Almost all the fast food chains both Indian i.e., Nirulas and foreign i.e.,

McDonalds etc., are targeting the families. This serves to be an advantage because

the turnaround time is short and family has higher propensity to spend because

different members order larger variety of dishes.

Each of these restaurants deliver quality, value and services in its own way through

its line of strategies. The emphasis is on the value that the restaurant is delivering

to the customers.

OVERVIEW OF THE PIZZA INDUSATRY IN INDIA

In India nowadays so many fast food joints are opened and people are turning more

towards the pizzas and they try to go to the best pizza parlor opened in their area of

living.

There are many different companies, which have come up the major players in this

category are:

PIZZA HUT

DOMINO‟S PIZZA



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PIZZA EXPRESS

PIZZA CORNER

PIZZA HUT

Tricon global; restaurants which owns the Pizza hut Franchisee has become very

very popular in India in the Indian Pizza Market. The first Pizza Restaurant was

opened in 1958 in Wichita, Kansas Under the name Pizza hut and features a

variety of pizzas with different toppings as well as pasta, salads, sandwiches and

other food chains . For the last ten years Pizza hut was named as the world‟s best

pizza chain in America and in India also it has captures most of the market share.

Pizza hut is the largest pizza restaurant company in the world. It has 12,000 outlets

in the 90 countries, employing more than 300,000 people.

Pizza hut is the largest pizza restaurant company in the world. It has 12000 outlets

in 90 countries, employing more than 30000 people.

Pizza Hut has an aggressive expansion plan for India. It intends to have 100 outlets

by the end of 2004. Pizza Hut will consolidate its presence in cities where it is

already existing as an endeavor to create a major share of these profitable markets

first before spreading to other markets.

Pizza Hut has more than 12,500 units across 90 countries making it one of the

largest pizza brands. Further, all new outlets in India would be franchisee owned

resulting from the smooth functioning of the existing stores which are all

franchisee owned. Hence, the same arrangement will be followed in the future to

ensure growth-oriented results

Pizza hut have 19 stores across 10 cities including Mumbai, Delhi, Bangalore,

Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Agra and Jaipur. By the end



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of this year we will scale it up to 35 stores. In Mumbai alone we plan to have five

stores by the end of the year they want to become the most preferred pizza brand

by offering great tasting pizzas for all the usage occasions at our place (table

service) as well as yours (home service)

Pizza Hut has more than 12,500 units across 90 countries making it one of the

largest pizza brands. Further, all new outlets in India would be franchisee owned

resulting from the smooth functioning of the existing stores which are all

franchisee owned. Hence, the same arrangement will be followed in the future to

ensure growth-oriented results

DOMINO‟S PIZZA

The company started in the year 1960 ,Tom Monaghan and brother James purchase

"DomiNick's," a pizza store in Ypsilanti, Michigan. Monaghan borrowed $500 to

buy the store. Then in the year 1961 James traded his half of the business to Tom

for a Volkswagen Beetle. Then in the year 1965 Tom Monaghan became the sole

owner of company, and renames the business "Domino's Pizza, Inc." In the year

1967 The first Domino's Pizza franchise store opens in Ypsilanti, Michigan.

Company headquarters and commissary are destroyed by fire. First Domino's store

outside of Michigan opens in Burlington, Vermont. In the year 1975 Amstar Corp.,

maker of Domino Sugar, institutes a trademark infringement lawsuit against

Domino's Pizza. The 200th Domino's store opens on the year 1978, then in theyear

1980 Domino's first international store opens in Winnipeg, Canada.

The 1,000th Domino's store opens. Then in the year 1985 Domino's opened 954



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units, for a total of 2,841, making Domino's the fastest-growing pizza company in

the country.

2000Domino's Pizza International opens its 2000th store outside the United States.

Domino's Pizza celebrates 40 years of delivering pizza and innovation to homes

around the world. During the past four decades, Domino's has paved the way for

businesses involved in food delivery, employing practices that have set the

standard in the industry. Domino's Pizza announces record results for 2000.

Worldwide sales exceed $3.54 billion. Revenues increased 5.3% over 1999.

There are many outlets opened in India also and it is specializing in the home

delivery they have less of sitting arrangement and more of home delivery.

In December 1998, investors, including funds managed by Bain Capital Inc., a

leading private equity investment firm, together with management and others,

acquired a 93% stake in the Company, which was formerly owned by founder,

Thomas Monaghan and his family. Domino's Pizza has been dedicated and

committed to quality service, product and delivery excellence for more than 40

years, making it the world leader in pizza delivery. Domino's is the largest

privately-held restaurant chain, and the eighth largest of all restaurant chains in the

world.

Domino's Pizza offers Crunchy Thin Crust, Ultimate Deep Dish and Classic Hand

Tossed pizzas with a number of regional toppings. Side items include Domino's

Bread Sticks, Double Cheesy Bread, CinnaStix and Buffalo Wings. Beverages

consist of icy cold Coca-Cola products Domino's Pizza operates a network of

6,977 owned and franchised stores in the United States and 64 international

markets.



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Over 120,000 associates are employed by Domino's around the globe. 15,000 of

those are corporate employees, of which 550 work at the worldwide headquarters

in Ann Arbor, Michigan.

Each Domino's store employs 15-30 part-time and full-time individuals. Total

worldwide corporate and franchise store sales were $3.54 billion, a 5.3% increase

over 1999. Domino's Pizza, founded in 1960, is the recognized world leader in

pizza delivery. Domino's Pizza operates a network of company-owned and

franchise-owned stores in the United States and international markets. But

Domino's isn't just about delivering, it's also about giving back to the community.

Domino's Pizza believes that an essential component of its corporate responsibility

is to provide support to charitable organizations that benefit the communities

where our employees and customers work and live. Headquartered in Ann Arbor,

Michigan, Domino's is committed to supporting initiatives and causes in its

hometown while also participating in national programs that align with our vision,

guiding principles and strategic focus.



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Key Players

Mcdonald‟s

a). An Overview

History and Background

In 1955, Ray Kroc, a 52-year old salesman of milkshake mixing machines, became

interested in a string of seven restaurants owned by Richard and Maurice

McDonald. These two founded the quick service restaurant industry when they

converted their barbecue drive in with car hops into the world‟s first Macdonald‟s

limited menu, self service drive-in in 1958, in California. Kroc liked their fast-food

restaurant concept and bought the Chain for $2.7 million.

He opened his first McDonalds in Illinois in April 1955 and founded the company

that evolved into McDonalds Corporation. He decided to expand the chain by

selling Franchises, and the number of restaurants grew rapidly.

Worldwide Operations

There are more than 23,000 McDonald‟s restaurants in III Countries (as of Jan.

1998). McDonalds 1997-year end system wide sales were $ 33,368.3 billion.

McDonalds is the largest and the best known global food service retailer. Its global

market potential is enormous seeing the member of restaurants it has. On any day

McDonald‟s serves less than one percent of the worlds population. Its outstanding

brand recognition. (It is one of the most recognised brands all over the world),

experienced management, high quality food, site development, high quality food,

site development expertise, advanced operational systems and unique global

infrastructure position it to capitalize on global opportunities.



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McDonalds Vision is to dominate the global food service industry. Global

dominance means setting the performance standard for customer satisfaction and

increasing market share and profitability through successfully implementing

convenience value and exception strategies.

In order to expand its operation McDonalds goes by a simple thumb rule to

estimate haw many outlets it wants: One restaurant for every 25,000 people with

new markets sprouting in so many parts of the would, the chain is expanding at a

breathtaking pace of one restaurant every three hours. This can be known from the

following:

Period No. of outlets Countries Sales

Jan. 1997 19,400 95 $ 30 billion

Jan 1998 23,000 111 $ 33 billion

McDonalds franchises restaurants in many international markets, and decisions

relating to the selection of candidates are made local by the management in the

country where the restaurant is located.

McDonald‟s India

A locally Owned Company

McDonalds India is a locally owned company managed by Indians. In Mumbai

Amit Jatias Company, Hard castle restaurants Pvt. Ltd., owns and manages

McDonald‟s restaurants. In Delhi, McDonald‟s restaurants are owned and managed

by Vikram Bakshis Connaught Plaza restaurants Pvt. Ltd. Both these individuals

are responsible for the running of McDonalds India.

Local Sourcing is Key for Truly Indian Products

Around the world, McDonald‟s traditionally operates with local partners or local

management. In India too, Macdonald‟s purchases from local suppliers.



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McDonald‟s constructs its restaurants using local architects, contractors, labors and

- where possible - local materials. McDonald‟s hires local personnel for all

positions within the restaurants and contributes a portion of its success to

communities in the form of municipal taxes and reinvestment. Its 98% of the

inputs are obtained domestically.

McDonald‟s sources food products from local companies. mutton patties are

supplied by Al-Kabeer, Hyderabad, Andhra Pradesh; fresh lettuce comes from

Pune, Ooty, Maharashtra and Dehradun; cheese from Dynamix Dairies, Baramati,

Maharashtra; sesame seed buns and sauces from Cremica Industries Phillaur,

Punjab, and pickles from VST Natural Foods, Hyderabad, Andhra Pradesh.

Setting Up of an Extensive Food Chain

For three years before the opening of the first McDonald‟s restaurant in India,

McDonald‟s and its international supplier partners worked together with local

Indian companies to develop products that meet McDonald‟s vigorous quality

standards. These standards also strictly adhere to Indian Government regulation on

food, health and hygiene. Part of this development involves the transfer of state-of-

the-art food processing technology which has enabled Indian business to grow by

improving their ability to compete in today‟s international markets.

For instance, Cremica Industries worked with another McDonald‟s supplier from

Europe to develop technology and expertise which allowed Cremica to expand it

business from baking to also providing breading and batters to Macdonald‟s Indian

and other companies. Another benefit is expertise in the areas of agriculture, which

allowed McDonald‟s, and its suppliers to work with farmers in Ooty, Pune and

Dehradun and other regions to cultivate high quality lettuce. This includes sharing

advanced agricultural technology and expertise like utilization of drip irrigation



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systems, which reduce overall water consumption, and agricultural management

practices, which result in greater yields.

In some cases, these Indian suppliers had the technology - but no market for the

products they produced. For example, Dynamics Dairies -- through its relationship

with McDonald‟s was introduced to a large customer of milk casein and other milk

derivatives. The two companies entered into a business relationship resulting in an

initial export order of approximately US $ 12 million per year - with the potential

to increase. McDonald‟s local supply networks through Radhakrishna Foodland, to

get products from the various suppliers to restaurants in Delhi and Mumbai.

Respect for the Indian Customers and Culture

McDonald‟s worldwide is well known for the high degree of res pect to the local

culture. McDonald‟s has developed a menu especially for India with vegetarian

selections to suit Indian tastes and culture. Keeping in line with this McDonald‟s

does not offer any beef or pork items in India. McDonald‟s has also re -engineered

its operations to address the special requirements of a vegetarian menu. 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.

An Employer of Opportunity

McDonald‟s India is an employer of opportunity, providing quality employment

and long-term careers to the Indian people. the average McDonald‟s restaurant

employs more than 100 people in 25 different positions - from cashier to restaurant

manager. McDonald‟s world-class training inputs to its employee could be seen in

the present close to 1000 employees currently in Mumbai and Delhi.

Community Partnership



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McDonald‟s believes in giving back to the communities it serves. Wherever

McDonald‟s goes it becomes a part of the community it operates in and contributes

towards the development of the locality. For example, McDonald‟s has introduced

the concept of „Litter Patrol‟ - McDonalds‟s employees go around the immediate

vicinity of the restaurant every day, packing up garbage left behind not only by

customers from McDonald‟s restaurants but also by other visitors to the area. The

result is a cleaner neighborhood.

To commemorate 50 years of Indian independence, on 15 August, 1997,

McDonald‟s Mumbai organised a „No Grabage Drive‟, in association with the

„Brihan Mumbai Municipal Corporation‟ and five schools in Bandra. Inaugurated

by the Municipal Commissioner, this was in support of BMCs „Zero Garbage,

initiative. Other community activities undertaken by McDonald‟s in India include

the adoption of local public parks for restoration and beautification, thereby

providing a play area for children. In fact in Delhi, McDonald‟s has even addressed

the security issues relevant to a particular residential colony.

Charities, especially those benefiting children, are often the recipients of

McDonald‟s support - either through the use of the restaurants for meetings or for

fund-raising activities. McDonald‟s International charitable foundation, Ronald

McDonald House Charities supports charities around the world. In fact, in 1993,

RMHC donated to the Indian Prime Minister‟s Relief Fund following the

devastating earthquake in Maharashtra.

Quality, Service, Cleanliness and Value

The McDonald‟s philosophy of QSC & V is the guiding force behind its service to

the customers.



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McDonald‟s India serves only the highest quality products. All McDonald‟s

suppliers adhere to Indian government regulations on food, health and hygiene

while continuously maintaining McDonald‟s own recognized standards. All

McDonald‟s products are prepared using the most current state-of-the-art cooking

equipment to ensure quality and safety.

At McDonald‟s the customer always comes first. McDonald‟s India provides fast,

friendly service - the hallmark of McDonald‟s,, which sets its restaurants apart

from others.

McDonald‟s restaurants provide a clean, comfortable environment especially

suited for families. This is achieved through McDonald‟s stringent cleaning

standards, carefully adhered to.

McDonald‟s menu is priced at a value that the largest segment of Indian consumers

can afford. McDonald‟s does not sacrifice quality for price - rather McDonald‟s

leverages economies of scale to minimize costs while maximizing value to

customers.

McDonalds has a 20-year profitability plan for India and it intends having at least

50 restaurants here by the year 2000. The company has already invested Rs. 50

crore in its Indian operations, and each of the two joint venture partners has

invested about Rs. 17.56 crore.

b) Marketing Functions

Mc Donald‟s started its operations in India in October 1996 and by July 1998 it has

served about 10 million customers in the country.

Mc Donald‟s marketing philosophy is captured in its motto of “Q.S.C.V .”, which is

the guiding force behind its service to the customers.



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Mc Donald‟s India serves only the highest quality products. All Mc Donald‟s

suppliers adhere to Indian government regulations on food, health and hygiene

while maintaining Mc Donald‟s own recognized standards. All its products are

prepared using the most current, state of the art cooking equipment to ensure

quality and safety.

At Mc Donald‟s, the customers always comes first. Mc Donald‟s India provides

fast friendly service – the hallmark of Mc Donald‟s which sets its restaurants apart

from others.

Its restaurants provide a CLEAN, comfortable environment especially suited for

families. This is achieved through Mc Donald‟s stringent cleaning standards,

carefully adhered to.

Mc Donald‟s menu is priced at a VALUE that the largest segment of Indian

customers can afford.

It‟s strategy in India is to target the plain and simple mass market. The target

consumers for Mc Donald‟s are the family and the kids. Mc Donald‟s has been

positioned as a “Family Restaurant”.

c) Product Related Strategies

World over Mc Donald‟s is known for its juicy beef burgers. But in order to settle

in India the entire concept of beef burgers had to be changed. India is the only

country where Mc Donald‟s is offering veggie burgers and non-veg burgers

without beef (uses mutton instead).

This is a classic case of Product Adaptation, where Mc Donald‟s adapted its

product according to the culture and norms of the country in order to position itself

in the market.



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There have been other products adaptations too. McDonald‟s sells a spicier

Maharaja Mac in India as its flagship product in place of the globally famed Big

Mac. It also has a large capacity for vegetarian burgers, the production and serving

of which is separated in such a way that the customer can actually see it.

Mc Donald‟s product line is almost similar to other burger chains in the country.

Burgers

Desserts

Beverages/shakes

Assorted items.

Burgers

(in variety)

Pizzas

(in variety)

Ice Creams

(in variety)

Additional (in

variety)

Meal

Combos

12 - 2 2 (French fries and

veg nuggets)

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Product standards, packaging, quality, processing are all the same like at any other

Mc Donald‟s outlet in the world. The quality standards are so stringent that

nowhere, not even is its rawest state, is any of the food touched by hand. The

typical burger undergoes 54 checks before it is served. The menu at Mc Donald‟s

has remained more or less the same over the past 2 years except a couple of

additions in the burgers variety and inclusion of couple of items in the dessert

variety.



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Mc Donald‟s even has the calorie count carefully worked out for its burgers. A veg

burger offers 418 calorie, 10 gm of protein, 22gm of fat and 48 gm of

carbohydrate.

All Mc Donald‟s menu items fit into a balanced diet and it offers certain items that

fit well within a low fat diet (option of burger with or without cheese).

Pricing Strategies

Worldwide Mc Donald‟s is known for its „ Purchasing power’ pricing. The ability

to pay-of a large section of customers has been the sole criteria. This was assessed

through market research. It wanted to price its products in such a way that it can

even be accessible to a child. For this it examined Indian spending on snacks and

other foods before setting on the prices.

Price variations from 1996 to 1998 for a couple of items are as follows:

Item Entrylevel (1996) (1998)

Mc Burger Rs. 12 Rs. 14

Maharaja Mac Rs. 412 Rs. 46

The company continued with the 1996 prices for about a year in order to meet its

one million-target audience.

One look at the restaurant and it doesn‟t seem that the prices of its products would

be this low. Reason being that Mc Donald‟s gets the materials (55 per cent of an

outlet running expenses) at very cheap rates. Therefore this is one of the reasons

that Mc Donald‟s products are priced reasonably.

It buys its supplier from 35 suppliers who sell at incredibly low prices. Products at

Mc Donald‟s are neither elitist in its pricing nor at the dhaba level, they are

average in its pricing.



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Mc Donald‟s was offering a softie at a price of Rs 6/- about a year back during the

festive season. Today this softie costs only a rupee more at Rs.7/-. No restaurant of

this caliber offers a product at this rate.

Mc Donald‟s recently has come up with “Eco-meals”, in which one can afford to

have a burger and coke for as little as Rs. 29/- and at max for Rs. 49/- (In store

pamphlet enclosed) Mc Donald‟s keeps on coming up with such meals almost

every month such that almost anyone can afford to have a Mc Donald‟s product.

Promotional Strategies

Mc Donald‟s ad line goes like:

“Food Family Fun”

Mc Donald‟s had started its promotional activity with local area banners and

posters and now it has moved on to movie hall commercial. Its commercial is a 60-

second close up which focuses on a burger being prepared in slow motion

tantalizing the audience as though it‟s a strip tease.

It has even started advertising through local channels such as siti cable.

Mudra is the ad agency which puts up publicity banners in Delhi and Mumbai and

takes up the local T.V. commercials. Newspapers such as Delhi times are also

being used for local advertising. McDonald‟s plans to advertise in national

newspapers such as Hindustan Times and Times of India in another couple of

months.

In addition to this Mc Donald‟s also has a public relation agency handling its

account that takes care of publicity and press releases.

McDonalds keeps on coming up with sales promotion schemes every now and

then.



31

During World Cup Soccer it came up with this soccer game for Rs.11/- with every

meal combo ordered. Since kids are the prime targets by the restaurant, it has come

up with happy meals especially for the kids along which a game is free.

Also, for the kids Mc Donald‟s is the most happening place for birthday parties

kids love the place due to all the attention and knick-knacks they are showered

with. The restaurant even has playpens displayed especially for the kids.

McDonalds also comes up with special schemes during the festive season Last

month i.e. September, during Navratras it came up with special “Shudh

Shakahari Meal” where a meal for two was for Rs. 99/- and a meal for four was

for Rs. 199/- (In store pamphlet enclosed). Another way through which Mc

Donald‟s is promoting its image is via community services. There are Mc Sermons

on maintaining parks, conducting litter patrols and putting up public trash cans.

At majority of McDonald‟s restaurants, the management emphasizes on

developing parks for the kids as a play ground for them. E.g. At McDonald‟s G.K.

restaurant there is a play ground developed for the kids in front of the restaurant.

The management has put boards at these parks to put across certain messages for

the community as a whole, such as:

“If you see someone without a smile, give them one of yours”

“Children are the light of our future” etc.

In addition to all these promotional measures, McDonalds has boards put all over

the roads to show directions to their restaurant. These boards are put almost two to

three kms before the location of the restaurant. This makes it easier for the

customer who is not familiar with McDonald‟s restaurant location.

Distribution Strategies



32

Till date Mc Donald‟s has 11 outlets in India out of which six are in Delhi and five

in Mumbai. In 1997 there were about 3 outlets in Delhi and only three more outlets

have been added to the list by 1998.

By the year 2000 Mc Donald‟s plans to have about 50 outlets in the country. At Mc

Donald‟s, while opening a restaurant the emphasis is, to choose a site whereby

150-200 seating capacity can be available. This is to attract as many people as

possible into its premises.

Customer Demand

The factors influencing customer demand for McDonald‟s menu items are as

follows:

McDonald‟s world wide is known for its quality burgers. This world wide name

for burgers has influenced the demand for it in the Indian market. This can be

known from the fact that within two years it has served about 10 million customers

at its restaurants.

The factor that influences customer demand for the organizations product to a great

extent is the offering of highest quality product, providing services which is fast

friendly and accurate, creating a restaurant atmosphere which is always clean,

comfortable and ideally suited to India families and children.

The maximum number of Indian consumers offers McDonald‟s products at a value

which can be affordable.

The Chain of restaurants provides a variety of comfortable seating arrangement to

accommodate different size groups of people from individuals to large families.



33

McDonald‟s Customer Base

In 1997, Mc Donald‟s 3 outlets received about 15,000 customers daily.

A Mc Donald‟s restaurant with about 150-200 seating capacity serves about 40,000

customers per month.

By July 1998, Mc Donalds has served 10 million customers in the country.

c) comparitive analysis

A comparative analysis for the three food chains has been made on the following

five parameters:

Performance

Variety

Price

Accessibility

Service

Performance

Nirulas started its operations in the country as early as in 1930‟s but its first fast

food restaurant came up around in 1950‟s. This means that the chain is about five

decades old. Mc Donald‟s just two years old.

Each of these chains has its own reputation and name in the market. Nirulas being

in the country for so long still has it‟s distinguished fan following and is surviving

in the market despite the coming in of the international chains such as Mc

Donald‟s and Wimpy‟s. Nirula‟s is considered to be more of a dine – in eating place

than a fast food joint like the other two. Most of the time the customers coming in

at Nirula‟s are not in a hurry to leave, they want to relax and enjoy their meals. In

contrast Mc Donald‟s and Wimpy‟s are considered to be a place to grab a bite or a

quick take away fast food joint. McDonald‟s in US is a lunch time place from



34

which customers keep away in the evening. Nirula‟s on the other hand is packed

after dusk with carloads of families to have dinner. Despite Mc Donald‟s being

placed as a comfortable family eating restaurant, a person would come to the

restaurant to have a quick meal for lunch or dinner alone or with his family.

Nirula‟s had about 11 outlets all performing well, serving a wide variety of items

from thaalis to hotdogs to pizzas.

When Mc Donald‟s came up in locations where Nirula‟s was already established, it

affected the restaurant drastically in the initial few months. But as and when the

customers had tried the Mc Donald‟s product, they returned back, happy that

Nirula‟s offers a wider choice and tastier food.

Hence, Nirulas is still performing well in the market despite the coming in of Mc

Donald‟s. as far as Mc Donald‟s is concerned , its worldwide brand recognition is

enough to make it sustain in the market.

Variety

The range of items that each of these joints has can be seen in the following table.

Name Burger

(in

variety)

Pizzas

(in Variety)

Ice creams

(in variety)

Additiona

(includes assorted

items)

Nirulas 15 12 30 5

Mc

Donald‟s

12 - 2 2

No. of Meal Combos

Nirulas 15



35

Mc Donald‟s 7

The range of items given in the above table and no. of meal combos are standard

items which the restaurant has. In addition to this Nirulas comes up pizza of the

month and ice cream of the month. Mc Donald‟s comes up with a meal combo also

almost every month.

For all the product lines Nirulas takes the cake vis-à-vis other two joints. The

customer has a range of items to choose from at Nirulas. He is just not restricted to

a few items in the menu list. One has every thing from Indian to Western food at

most of its joints; Wimpy‟s too has a variety of items in the list, but nowhere near

to what Nirulas is offering. Though McDonald‟s has the least variety of items in its

menu, it is surviving in the market because of its world wide brand recognition.

The fact that McDonald‟s burger is famous all over the world is what that is

making it sell like hot cakes in India.

However if one wishes to just grab a bite one could go to McDonald‟s but if one is

looking for variety then Nirulas is the place to go to. From the market research

study conducted to know consumer preferences, Nirulas is the most preferred

eating place and variety is one of the unique attributes for Nirulas which attracts

customers to its restaurant. In the burgers category Nirulas has the maximum

variety, Mc Donald‟s has the least variety. For Pizzas Nirulas has more variety and

for ice creams too Nirulas has maximum variety.

Price

Each of the products at Nirulas and Mc Donald‟s are priced so as to suit everyone‟s

pocket.



36

When Mc Donald‟s opened its first restaurant in the country it adopted a price

strategy whereby all its products were priced lower than the domestic counterparts.

It had priced its chicken burger at Rs. 39, a rupee below Nirulas equivalent in

1996. Today, the burger is priced at Rs. 43 and Nirulas burger is for Rs. 49.

Though their veg burger prices are the same at Rs. 34/- each, 1998 prices of each

of the three restaurants for there chicken and veg burgers are:

Chicken Burger (Rs.) Veg Burger (Rs)

Nirulas 49 34

Mc Donald‟s 43 34

The prices of its products are very much competitive with a rupee or two below or

above.

Another interesting feature of these restaurants is the meal combos that they serve.

All the food joints offer these meal combos with a combination of burger + Pepsi

+ fries. Basic idea behind this is to offer meals at a very economical rate. The meal

combo rates of each of the three joints can be depicted from the following table:

Veg Meal Combo

(Veg Burger + Coke+

Fries)

Non-veg Meal Combo

(Chicken Burger + Coke +

Fries)

Nirulas Rs. 51 Rs. 72

McDonald‟s Rs. 65 Rs. 74

Again for these meal combinations too the prices are competitive for all the three

restaurants. Nirulas offers these meals at the most economical rates compared to

McDonalds



37

However, from the market research study conducted price is considered to be the

fifth most important variable while selecting a fast food joint. The emphasis is

more on quality of food, cleanliness, variety and speed of delivery. Therefore price

becomes an in significant characteristic to the extent that the product is affordable

by the consumer.

Accessibility

Every restaurant has to be placed at the right location such that it attracts the

maximum number of customer into its premises. All these restaurants in the city

are located at the most frequently visited places by the customer. Nirulas started

with its expansion plan by opening a joint in C.P. (the most frequently visited place

in the city). Soon more and more joints followed and all of them are located at

either the most popular markets in the city or cinema complexes or bowling alleys.

This way anybody going for shopping, watching a movie or just playing some

games doesn‟t have to go to another part of the city to have meals. McDonald‟s

opened its first restaurant in Vasant Vihar Complex to be accessible to the movie

watcher‟s coming there.

How ever, Nirulas has an added advantage in terms of accessibility vis-à-vis the

other two joints due to its home delivery services. Although the services are

restricted to the locality where the restaurant exists, still it has an advantage

because the customer if he does not feel like going to the restaurant and have a

meal he can still consider it if the home delivery services are made available.

Amongst the three restaurants Nirulas has the maximum no. of outlets in and

around Delhi. This is mainly due to amount of time for which it has been into the

business.



38

However, these entire restaurants are located at the most frequently visited places

by the people such as shopping areas, cinema halls, bowling alleys etc.

Service

McDonald‟s takes the share on this attribute for providing the customer with fast

and friendly services.

At Mc Donalds you get your order usually within 60 to 90 seconds from the time it

is placed. Providing the customer with fast and friendly services is under the

philosophy of McDonalds. This is one big advantage Mc Donald‟s has over

Nirulas pizza hut dominos is that MCD placed your order between two the three

min. but this is not by other three . It is not a standard rule everywhere, but at Mc

Donald‟s it is at every restaurant.

On this attribute, Nirulas has a disadvantage. Once a order is placed it normally

takes about 10 to 15 min. to get the order. This is probalcly because of the fact that

the kind of food served and the production facilities used by Nirulas differs from

the production facilities used by McDonald‟s McDonald‟s have an assembly line

approach to fast food where a certain number of orders are already

prepared/cooked, the idea is that as soon as the payment is made at one counter, the

food can be picked from the next almost instantly. On the other hand at Nirulas the

order is dealt with after it has been placed. But whatever may be the case,

provision of fast and friendly services to the customer is very important for any

fast food restaurant. In the market research study services is the unique factor for

McDonald‟s that attracts the customer to it‟s restaurant. The customer prefers

being serviced by a friendly counter assistant than someone who is arrogant and

least interested in entertaining the customer proper.



39

e) ANALYSIS PRODUCT

McDonald‟s is a specialist in burgers. Though McDonald‟s is famous throughout the

world for its juicy Beef Burgers, McDonald‟s in India keeping in mind the religious

sentiments of Indian has come up with a localized menu. It has special offerings such

as veg. burgers, for Indian market McDonald‟s has also introduced coffee, tea,

deserts, etc.

Pizza Hut is a specialist in Pizzas. It is know for its cheesy, soft pizzas. The recently

introduced twisted stuffed crust pizza‟ can be called its USP.

Niruals has the targets variety in food items ranging from burgers, pizzas, chole-

kulcha to Indian dishes. It also has the most variety of desert, ice-creams and pastries.

Dominos specialty is its frill cheese pizza and its special 3-topping pizza.

Price

McDonald‟s price is affordable and it is most popular among youngsters, kids and

middle class customers.

Pizza Hut has a comparatively higher price focusing on the premium segment of

society.

Nirula‟s prices are also affordable. It‟s an economical family food joint.

Domino‟s prices are affordable targeting mostly, youngsters and students. Dominos

are lowering their prices further.

PLACE

McDonald‟s is located at main markets and shopping malls accessibility is very good.

Pizza Hut has a less number of outlets and that too only at affluent markets.

Nirulas it has the maximum number of affluent and posh markets.

Domino‟s has outlets in posh areas and recent collaboration with Indian Oil

Corporation Power Stations.



40

PROMOTIONS

McDonald‟s special emphasis on kids

McDonald‟s lays a special emphasis on kid customer. So most of its promotional

strategies are targeted at them. McDonald‟s organizes special schemes such as games

with prizes, competitions, special birthday parties, play parks, toys and gifts to lure

children‟

McDonald‟s has also opened special parks, e.g. At G.K. I, and also organizes

community cleanliness derives e.g. litter patrol drive etc.

McDonald‟s also has special promotional schemes during special occasions such as

Diwali, Navrats, Valentines Day, Mother‟s Day, Father‟s Day, independence day etc.

McDonald‟s also calls celebrities at their outlets.

McDonald‟s also offers special discounts, combination meals, free drinks, special

packages etc.

Pizza Hut is promotional strategy basically centered around youngsters and family.

They have special dinners for family, Valentines Day specials for youngsters etc.

Recently Pizza Hut has also started paying attention to kid customers with special

schemes like “Pizza Pooch Birth Day Party”, free gifts, toys, crayon etc.

Nirulas promotional strategy also identifies children as their target customers. They

have special Birthday clubs, Special Menus, Special gifts during festivals e.g. Diwali

Dhamaka etc.

Domino‟s target segment is youngsters. So their important promotional strategy is

lowering down of prices. It also has special schemes during festivals such card party

during diwali, Christmas specials etc



41

Recently Pizza Hut has also started paying attention to kid customers with special

schemes like Pizza Pooch Birthday Party, Free gifts, Toys, Crayon etc.

Nirula‟s promotional strategy also identified children as their target customers. They

have special birthday clubs, special menus, and special gifts during festivals eg.

Diwali Dhamaka etc.

Domino‟s target segment is youngsters is youngsters so their important promotional

strategy is lowering the price .it also has a special schemes during festivals such as

card playing party during Diwali, Christmas special etc. another important step is that

of collaboration with Indian oil corporation.



42

Promotion analysis chart

Contains McDonald‟s Pizza Hut Nirula‟s Domino‟s

Product Specialist in

burger i.e.

Maharaja

Burger, Chicken

McGrill

Specialist in

Pizza‟s

Variety of

food and

deserts

Fill cheese

Pizza and

three topping

Pizza

Price Affordable Higher Affordable Affordable

Place Very good

accessibility in

main market and

shopping mall

Less out only

in affluent

market

Less out only

in affluent

market

Collaboration

with IOC

stations &

some posh

area

Promotion Targeted on kids Targeted on

youngsters

and family

Targeted on

kids and

family

Targeted on

youngsters



43



44

OBJECTIVE OF THE

STUDY



45

OBJECTIVE OF THE STUDY

Considering the importance of service quality dimensions and quality management in

services, the present study is concerned with measurement of service quality

dimensions in fast food sector in India. The research examines expectation, perception

and overall satisfaction from customer‟s point of view rather than the service

provider. It compares the services offered by an International and by an Indian fast

food restaurant. It is believed that, “service quality has no true existenc e outside the

customer‟s perception”. This study would help formulate service quality strategies. It

would be of use to regulators and policy makers for the fast food restaurant industry.

New entrants can also benefit from this study. The objectives of the study are:

To identify the importance of service quality dimensions in the fast food

restaurant Industry in India and if they differ with country of origin.

To analyze customer expectations (would- should) for fast food restaurants

and if they differ on the basis of their country of origin

To analyze the difference in consumers‟ perception for fast food restaurants

that differs on the basis of their country of origin.

To understand how perception of service quality dimensions are related to

overall service quality and customer satisfaction.

To analyze if customer satisfaction differs with country of origin.



46

LITERATURE REVIEW

2.1 Service quality

Service quality is a subtle and indistinct concept. Service quality is subjective in

nature and hence it is difficult to describe or measure. As a result not many

researchers have discussed this concept. There are number of service quality

definitions.

Service quality is defined as “customers‟ attitude or judgment about the superiority of

a service. Service quality is defined as (Lewis and Booms, 1983):-

“Service quality is a measure of how well the service level delivered

matches customer expectations. Delivering quality service means confirming to

customer expectations on a consistent basis”

The definition of service quality given by Parasuraman, Zeithmal and Berry,

(1985) has been widely adopted. Service quality is defined as the degree and direction

of discrepancy between consumers‟ perceptions and expectations in terms of service

quality dimensions. From previous studies it has been found that what the firm

delivers is entirely different from what the customer perceives. “Service quality can

be described in terms of seven perceived criteria”:

Professionalism and skills;

Attitudes and behaviour;

Accessibility and flexibility;

Reliability and trustworthiness;

Service recovery;

Serviscape; and



47

Reputation credibility

“Service quality is defined in a three-column format: minimum service level

(would expectations), desired service level (should expectations), and perceived

performance”.

Another commonly accepted definition of service quality is the level to which a

service meets customers‟ needs or expectations. Three-component structure of service

quality identified by Gronroos (1984) is as follows-

Technical quality: actual outcome of the service encounter.

Functional quality: interaction between the service provider and the consumer of the

service.

Reputational quality: consumers‟ perception about the service offered by the

organization.

Consumers evaluate service quality as the difference in the service they receive and

the service they expect. Service satisfaction is directly related to confirmation or

disconfirmation of expectations.

Services are intangible. Service cannot be measured or touched or feel. Service is

presentation rather than substance that can be counted. It is difficult to measure

service quality as the consumer‟s perception is difficult to evaluate. Standardization of

services is difficult as compared to manufactured goods. It is difficult to hide mistakes

in case of services and the services have to be provided at the right time. They cannot

be stored for later consumption. The services are not returnable in case they are not

satisfactory; services are unpredictable. Service attributes are more tentative than



48

products and they tend to be more interpersonal. They also reported that the customer

considers services more personal than products.

2.2 Service quality and customer satisfaction

Customer service plays a vital role in the service industry especially in fast food

restaurants. Service quality and customer satisfaction are two dissimilar constructs.

The relationship between service quality and customer satisfaction is not very clear .

“Service quality is a cognitive, left-brained, evaluation, objective concept while

satisfaction is a combination of an effective, right-brained, feeling based, and

subjective component”.

It is believed that service quality leads to customer satisfaction. Customer service is

delivering services to customers in accordance with their expectations. There is a

relationship between service quality and satisfaction. Service providers should

consistently deliver superior service as compared to their counterparts so that they can

position themselves successfully in the market. Service quality is unsatisfactory when

the expected service is more than the perceived service. Service quality is satisfactory

when expected service is equal to the perceived service. “Satisfaction is a function of

disconfirmation of performance from expectation”.

Service quality is an antecedent of customer satisfaction. Sivadas and Baker-Prewitt

(2000) demonstrated the same in their study about store services. Satisfaction/

dissatisfaction is the outcome of perceived service quality, expectations, and

disconfirmation.



49

2.3 Customer expectation

Customer satisfaction derives from the fact that the service providers must satisfy the

consumer‟s expectation. There are several definitional frameworks for consumer

expectation that exist, which has resulted in increase in the number of expectation

conce pts. Some of them are „predictive expectation; „ideal‟; „equitable‟ „deserved‟

„experienced- based norm‟; „desired‟; „minimum tolerable‟.

Service quality is a function of the differences between expectation and performance

along the quality dimensions. „Predictive‟ and „desired‟ expectations concepts are

used as „would‟ and „should‟ respectively. “Customers hold two types of

expectations: „desired‟, defined as the „wished for‟ level of performance, which is a

combination of what the customer believes „would be‟ and „should be‟ i.e.,

„adequate‟, lower level expectation that can be defined as the level of service the

customers will accept under any resource constraints (controllable and

uncontrollable). The adequate service level is always lower than the desired service

level because the desired service is less subject to changes as it is influenced by

several factors. The extent to which the consumers recognize and are willing to accept

this variation is called „zone of tolerance‟ (ZOT)”. Customer expectat ions are

influenced by several factors. These factors are: informal and formal

recommendations, personal needs, past experience, price, elements of promotional

mix, corporate image and external communication.

Parasuraman, Zeithaml, and Berry (1993) developed a model called „zone of

tolerance‟.



50

“The zone of tolerance is the difference between customer‟s „adequate‟ (would) and

customer‟s „desired‟ (should) service expectations. “

The customer evaluates the service performance on what they desire and what they

feel acceptable. If the service performance is below the customer‟s adequate level,

then the customer will be annoyed and their satisfaction with the service provider will

be destabilized. When the service performance is beyond the customer‟s desired

service, customer will be pleased. The range in which customers does not pay any

attention to service performance that is zone of tolerance. Zone of tolerance is

calculated by subtracting the adequate from the desired service level.

(Teas et al ., 1997), In defining desired service‟, “the term „can be‟ may mean what is

feasible for a company to provide, or it may refer to some evaluations of what a

company can provide based on past experience or an ideal level of performance. The

term „should be‟ may mean equitable performance based on past performance.

2.4 Customer perceived service quality

Overall service quality is determined by perception. Perception is defined as

“selection, organization and interpretation of marketing and environment stimuli into

a coherent picture (Assael, 1995). Customer‟s feeling about the service provided to

them is viewed as perceived service quality. Perceived service quality has been

viewed as “a glo bal judgment, or attitude, relating to the superiority of the

service.Perceived service is used to determine the service quality.“Service quality is a

function of ideal and perceived performance regarding quality dimensions”. The

overall quality perception is dependent on these service quality dimensions. Babakus



51

and Boller (1992), Cronin and Taylor (1992), and Brown et al . (1993) have also

discussed this viewpoint in their research.

2.5 Measuring service quality

Service quality dimensions are derived fr om customer‟s expected and actual service

delivered.Ten dimensions of service quality are: tangibles, reliability, responsiveness,

communication, creditability, security, competence, courtesy, understanding the

customer, and access.

These ten dimensions were later revised into five dimensions:

Tangibles: equipment, appearance of employees, physical facilities

Reliability: dependability, sincerity and ability to perform the promised service.

Responsiveness: willingness to help consumers and to provide prompt service.

Assurance: safety, trust, confidence, and courtesy

Empathy: attention, caring, operating hours.

Modifications were made to the service quality dimensions identified by Paraguayan

(1988). “Accessibility/ affordability” was added to these dimensions “Caring” and

“outcomes” were added to these dimensions. Based on these five dimensions, the first

and the most popular service measurement device, namely, SERVQUAL was

developed. SERVQUAL is used in service industry as a means of measuring service

quality. It consists of three parts. The first part has two sets of 22 attributes. These

attributes are classified under the above-mentioned five service quality dimension,

which aims to determine customer‟s expectation and customer‟s perception in a

service organization. The second section deals with measuring the gap between



52

expectation and perception (performance minus expectation). Gap model is discussed

below. The third segment of SERVQUAL measures the level of importance of the

five dimensions to the customer.

SERVQUAL scale may not be sufficient for measuring service quality across

different service sectors. The five dimensions in the scale may not include dimensions

required to measure service quality in other sectors. Zeithaml et al . (2001) put forth

11 service quality dimensions: access, ease of navigation, efficiency, flexibility,

reliability, personalization, security, responsiveness, assurance/ trust, site aesthetics,

and price knowledge. Service quality dimensions in online retailing are: accessibility,

communication, credibility, understanding, appearance, and availability. Barnes and

Vidgen (2001) proposed WebQual Index, an extension of SERVQUAL scale, with

24-measurement item. Out of theses seven customer service quality aspects are:

reliability, competence, responsiveness, access, credibility, communication, and

understanding the individual.

Gap model: is shown in figure 1. It shows linkages between the level of satisfaction of

the consumers and the service providers.



53

Figure 1: Quality Gap Analysis Model (Parasuraman et al., 1985)

Figure 2 is the model of service quality gaps. “The gap model is one of the best

received and most heuristically valuable contribution to the services literature”. The

first six gaps (Gap 1, Gap 2, Gap 3, Gap 4, Gap 6, and Gap 7) are the ways in which

service is delivered and Gap5 pertains to the customers:-

Gap 1: Customers‟ expectation versus management perceptions: the discrepancy

between the management and consumer expectation which results in loop holes in

delivering services up to the consumer‟s expectation.

Gap 2: Management perceptions versus service specification: customer evaluation

will have an impact because of the gap that exists between management perception of

consumer expectations and actual specifications established for a service.



54

Gap 3: Service specifications versus service delivery: consumer‟s viewpoint gets

affected because of the gap between service specification and the service that is

actually delivered.

Gap 4: Service delivery versus external communication: consumers‟ perception of

service quality gets disrupted because of the discrepancy that exists between service

delivery and external communication. External communication includes inadequate

information about service delivery aspects that intend to serve consumers up to their

expectation and/ or false promises.

Gap 5: The discrepancy between customer expectation and their perception of the

service: this discrepancy arises because of the short falls on the part of the service

provider and hence, customer expectations are not met. Customer expectations are

influenced by personal needs, past experience, word of mouth communication, and

advertisements by the firm.

Gap 6: The discrepancy between customer expectations and employees‟ per ceptions:

the service providers are unable to meet customer‟s expectation. This gap exists

because the service providers are unable to understand customer expectations.

Gap 7: The discrepancy between employee‟s perceptions and management

perceptions: this gap exists because the management is unable to understand customer

expectation.



55

CONCEPTUAL FRAMEWORK

The study undertaken has the following conceptual framework:

.

Service quality dimensions

Tangibles

Reliability

Responsiveness

Assurance

Empathy

Overall service quality

Customer satisfaction

Zone of Tolerance (expected should-

expected would)

Customer perception

Country of origin

Indian fast food restaurant- NIRULAS

International fast food restaurant- MC DONALDS



56

The study undertaken identifies the important service quality dimensions for fast food

restaurants and compares them. The service quality dimensions that have been

employed in the study are: tangibility, reliability, responsiveness, assurance, and

empathy. These dimensions have been identified . Following variables have been

measured using the five dimensions of service quality:

Customer „should‟ expectation

Customer „would‟ expectation

Customer perception of service quality

The difference between customers „would‟ expectation and customers „should‟

expectation is termed as zone of tolerance. This concept is used to identify the relative

importance of each service quality dimension for both Mc Donalds and Nirulas. Mc

Donalds and Nirulas both are of different country of origin. Customer perceptions and

expectations are measured to analyze the difference between the service quality

offered by them and identify the difference between them based on their country of

origin.



57

RESEARCH METHODOLOGY

4.1 Pre-test

A pre-test was conducted with a sample size of 90 consumers using a questionnaire.

These 90 consumers were those who often visit fast food restaurants. On a five- point

likert-type scale they were asked to rate their perception about fast food restaurant as

international or national. The consumers rated nine fast food restaurants on country of

origin as international or national. Based on the results, Mc Donalds (USA), Pizza

Hut, Domino‟s and Nirulas (India) were selected for further research and the survey

questionnaire was designed. Mc Donalds is one of the most valuable and well-known

brand in the world and holds a leading share in the fast food service restaurant

segment in virtually every country in which they do business. Nirulas was the first

and the only fast food chain existing in India. It has tremendous brand recognition in

the Indian fast food segment. Nirulas is priced economically so that an average middle

class person can afford to have a meal here.

4.2 Measurement

Five factors were used to measure the service quality dimensions in the fast food

restaurants. These dimensions as given by Parasuraman et al . (1988) are: tangibles,

reliability, responsiveness, assurance, and empathy. These five dimensions consist of

22 items and the final questionnaire was designed based on 18 items. Pilot testing of

the questionnaire was done to check the questionnaire. With the result, the 22

attributes were modified to 18-item scale.



58

The final questionnaire consisted of five sets of measures on Customer perception of

the service quality being offered to him/her, and customers‟ level of expectation on

both „should‟ and „would‟ parameters. A five-point likert scale was employed as

many researchers have recommended it does not increase respondent‟s frustration

level and response rate and response quality. All items were likert scale ranging from

1= „strongly disagree‟ to 5 = „strongly agree‟

With 3 = „neutral‟; neither agree nor disagree.



59

DATA COLLECTION

Data was collected from the consumers who had been to Mc Donalds and Nirula‟s in

one city in India. The research was carried in New Delhi.

A total of 100 questionnaires were distributed to the respondents. The

customers were requested to fill questionnaires once the service was provided

to them so that they can evaluate the services provide more effectively. Invalid

questionnaires were eliminated (including questionnaires that were not

answered completely).

A total of 4 invalid questionnaires were obtained out of 100 questionnaires.

The respondents belonging to the age group of „18-25‟ and were mainly

college going students who had more liking for fast foods.

The sample is based on convenience sampling and the survey was carried out

in the month of March 2007.

No demographics have been explored keeping in view the objective of the

study.



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ANALYSIS OF DATA

Microsoft Excel 2000 is used to analyze the data. The service quality data was

analyzed in two stages.

4.4.1 The raw data on „would‟ and „should‟ was used to calculate the difference

between the two expectation parameters for all service quality dimension.

Mean for each of these 18 variables was calculated and the mean of the

difference between „would‟ and „should‟ expectation was also calculated.

4.4.2 These 18 variables were grouped into the five dimensions: tangibles,

reliability, responsiveness, assurance, and empathy. The mean for each service

quality dimension was calculated.



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Analysis of Data has been done on the following basis:-

1. How frequently do you go to restaurants?

Attributes Score in %

Holidays 32

Special occasion 46

Weekends 16

Everyday 6

FINDINGS: We can see from the graph that out of 96 respondent majority near about

46% visit a restaurant only on special occasion 32% respondents prefer to visit in the

holidays

visit frequency

32%

46%

16%

6%

holidays

special occasion

weekends

everyday



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2. Which restaurants do you go to?

Attributes No of Respondents

McDonalds 37

Dominos 17

Pizzahut 32

Nirula's 10

FINDINGS: Inside Delhi 39% people prefer McDonald‟s whereas 33% prefer

Pizzzahut 17% prefer Dominos and rest of the 10% prefer Nirula‟s.

visit frequency

39%

18%

33%

10%

McDonalds

Dominos

Pizzahut

Nirula's



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3. What drives you to go to this restaurant?

Attributes No of Respondents

Quality 59

Better Service 27

Homely atmosphere 14

FINDINGS: Majority of the respondent visit the fast food joints due to good quality

of food and the percentage in the near about 59% and 27% of the people prefer better

service in the fast food restaurants.

Driving Factor

59%27%

14%

Quality

Better Service

Homely atmosphere



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4. What is your view about the hospitality provided by these Restaurant?

Rank Score in %

Avg. 6

Good 54

Very Good 31

Excellent 9

FINDINGS: 51% said that in McDonalds the hospitality shown by the employees of

McDonalds is good .9% of the respondent said that the hospitality in McDonalds is

excellent. 31% said that the hospitality is very good. So customers come and go with

a good image of McDonalds in mind.

Hospitality at Mcdonalds

6%

54%

31%

9%

Avg.

Good

Very Good

Excellent



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5. your satisfaction level is highest with ?

Restaurant Score in %

McDonald 34

Pizza hut 29

Nirulas 21

Dominos 10

Others 6

FINDINGS: 32% of customers are satisfied with McDonalds and others are

moderately satisfied and there are very few who are dissatisfied with McDonalds.

Hospitality at Mcdonalds

34%

29%

21%

10%6% Extremely Satisfied

Moderately SatisfiedModerately Dissatisfied

Extremely Dissatisfied

Satisfied



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6. What is the level of understanding of service problems of the customers?


McDonalds 34

Dominos 21

Puzzahut 29

Nirula's 10

Other 6

FINDINGS: The employees and authorities of McDonalds understand the service

problems as describes by customer. That is the reason why customers have given

“very good” remarks for this reason.

Understanding of service problems of customers

34%

21%

29%

10%6%

McDonalds

Dominos

Puzzahut

Nirula's

other



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7. Why do you prefer these restaurant?

Attributes McDonalds Dominos Pizza hut Nirula's

service differentiation 19 16 35 26

product differentiation 33 13 27 23

Price 64 12 8 12

Promotion 38 22 30 6

19

33

64

38

161312

22

35

27

8

3026

23

12

6

0

10

20

30

40

50

60

70

Mcdonalds Dominos Pizzahut Nirula's

reasons for prefering

service differentiation

product differentiation

price

promotion



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8. Cleanliness Score (Cumulative)

Attributes Score in %

McDonalds 28

Dominos 25

Pizzahut 28

Others 19

FINDINGS: Out of 96 respondent Majority 28% prefer Pizza hut and McDonalds in

cleanliness both have better cleanliness then other fast food Joints.

Cumulative

28%

25%

28%

19%

McDonalds

Dominos

Pizzahut

Others



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9. Employee Behavior score (cumulative)?


McDonalds 29

Dominos 24

Pizzahut 24

Others 19

FINDINGS: From the employee Behavior point of view 29% people said that

Mcdonalds is better then others. 28% said Pizza hut is better. Shows the big

competition between Both the fast food joint.

Cumulative

29%

24%

28%

19%

McDonaldsDominos

Pizzahut

Others



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10. Menu Composition Score (cumulative)?

Restaurant Score

McDonalds 24

Dominos 26

Pizzahut 22

Others 24

FINDINGS: Menu composition wise the other restaurants like Agarwal and sons the

local restaurants are having more flexibility then the other fast food joints like 70

McDonalds, Nirulas and Pizza hut.

Cumulative

24%

26%22%

28%McDonalds

DominosPizzahut

Others



71

CONCLUSION

Inside Delhi 39% people prefer McDonald‟s whereas 33% prefer Pizzzahut

17% prefer Dominos and rest of the 10% prefer Nirula‟s.(It is with reference

to the analysis of response of question no.7 find this question in questionnaire

attached in annexure)

54% said that in McDonalds the hospitality shown by the employees of

McDonalds is good .9% of the respondent said that the hospitality in

McDonalds is excellent. 31% said that the hospitality is very good. So

customers come and go with a good image of McDonalds in mind. (It is with

reference to the analysis of response of question no.4 find this question in

questionnaire attached in annexure)

The employees and authorities of McDonalds understand the service problems

as describes by customer. That is the reason why customers have

given“verygood” remarks for this reason. (It is with reference to the analysis

of response of question no.6 find this question in questionnaire attached in

annexure)



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Out of 96 respondent Majority 28% prefer Pizza hut and McDonalds in

cleanliness both have better cleanliness then other fast food Joints. (It is with

reference to the analysis of response of question no.7 find this question in

questionnaire attached in annexure)

Menu composition wise the other restaurants like Agarwal and sons the local

restaurants are having more flexibility then the other fast food joints like

McDonalds, Nirulas and Pizza hut. (It is with reference to the analysis of

response of question no.11 find this question in questionnaire attached in

annexure)



73

BIBLIOGRAPHY

Books & journal:

Philip Kotler (Marketing Management) .

Christopher Lovelock (Marketing of services)

Zeithmal (Marketing of services)

Sechiffman, LeonG.(Consumer Behavior)

C.R. Cothari (Research Methodology)



74

APPENDIX

ANNEXURE

1. How frequently do you go to restaurants?

a. Holidays

b. Special occasion

c. Weekends

d. Eeryday

2. Which restaurants do you go ?

a McDonalds

b. Dominos

c. Pizza hut

d. Nirula‟s

3. What drives you to go to this restaurant?

a. Quality

b. Better service

c. Homely atmosphere

4. What is your views about the hospitality provided by this Restaurant?

a. Avg.

b. Good

c. Very good

d. Excellent



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5. your satisfaction level is highest with ?

a. McDonald‟s

b. Pizza Hut

c. Dominos

d. Nirula‟s

6. What is the level of understanding of service problems of the customers?

a. Excellent

b. Very good

c. Average

d. Poor

7. why do you prefer this restaurant?

a. Service differentiation

b. Product differentiation

c. price

d. Promotion

8. How do you evaluate this restaurant cleanliness wise?

a. McDonalds

b. Dominos

c. Pizza hut

d. Nirula‟s

9. How do you evaluate these restaurants employee behavior wise?

a. McDonalds

b. Dominos

c. pizza hut

d. Nirula‟s



10.How do you evaluate these restaurants menu composition wise?

a. Mcdonalds

b. Dominos

c. Pizzahut

d. Nirula‟s

a study of consumer perception of fast food outlet in delhi & ncr

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