CHAPTER-1: INTRODUCTION

1.1 Background:

India is the world's second largest producer of food next to China, and has the potential of
being the biggest with the food and agricultural sector. The total food production in India is
likely to double in the next ten years and there is an opportunity for large investments in
food and food processing technologies, skills and equipment, especially in areas such as
health food. Health food supplement is another rapidly rising segment of this industry that is
gaining vast popularity amongst the health conscious.

The revival of the tourism industry in 2003 resulted in a positive spillover effect into the
consumer foodservice market'. India is one of the world's major food producers but
accounts for less than 1.5 per cent of international food trade. This indicates vast scope for
both investors and exporters. The Indian food industries sales turnover is Rs. 140,000 crore
(1 crore = 10 million) annually as at the start of year 2000. The industry has the highest
number of plants approved by the US Food and Drug Administration (PDA) outside the
USA.

The most promising sub-sectors include -Soft-drink bottling, Confectionery manufacture,

Fishing, Aquaculture, Grain-milling and Grain-based products, Meat and poultry processing,
Alcoholic beverages, Milk processing. Tomato paste, Fast food, Ready-to-eat breakfast
cereals, Food additives, flavors etc.

The liberalization of the Indian economy and its resulting effects on consumer habits is
leading to a higher incidence of eating out among the majority of consumers. This
emerging trend is especially prevalent among middle class Indians, as dining out is
increasingly perceived as a form of entertainment.

1
Constant value sales within the FSR sector are registering a slight increase of 7% over the
previous year. Major value shares in the market are largely held by Indian Multi-cuisine and
south Indian restaurants, which dominate with an 84% share of total FSR value sales in
2003. Independent operators hold more than an almost 90% value share of the Fast food
sector in India, offering a variety of menus catering to local tastes.

Therefore, value shares held by Fast food sub sectors such as burger and chicken are
comparatively low, and penetration is still limited.

The euro monitor forecasts an overall positive performance over the forecast period, with a
CAGR (compound annual growth rate) of 11.3% in terms of units, and forecast growth of
82.4% and 57.2% for transactions and constant value sales respectively. During the
forecast period, fast food units will experience nearly 60% growth over 2009.

The sizable Indian market has prompted many MNCs to set up shops in India. The few
who have succeeded had come to understand that the Indian market is different due to its
cultural diversity. Gaining local acceptance and blending in to the Indian culture s till
remains a challenge for many fast food restaurants. Most multinational-chained foodservice
companies adopted the franchising route to set up operations and expanded their market
presence, as opposed to direct investment or entering into joint ventures.

Most international brands, such as Pizza Hut and McDonald's, have revised their International
menus to suit the Indian pallet. This, along with aggressive marketing strategies such as
offering discount coupons, has significantly boosted their business and increased sales.

Every company has to adopt the principles of marketing for creating, promoting, pricing and
delivering goods. Marketing managers are the key to creating product awareness,
stimulating demand and meeting the objectives of the organization.

2
1.2 Statement of Problem:

Today's consumer is empowered to choose between many vendors when considering a

purchase. This is especially true where the market is limited and competitors fight
fiercely for market share.

In order to design effective product, promotion, pricing and distribution strategies, food
marketers need to understand the attitudes, perceptions, experiences and behaviours of
their consumers. However, currently there is limited information available about the food
consumption behaviour in urban India. Most of the people, especially the younger
generation from villages migrate in lakhs, every year, towards towns in search of good
jobs and better living. Unlike, International countries, in India predicting about the
buying behaviour of consumer's remains a difficult task, especially because of the urban-
rural divide and the constant migration of population from villages towards towns. Indian
consumers typically maintain their distinct food habits even after migrating to different
parts of the country.

The researcher wishes to study, how consumers in Chandigarh perceive and u t il iz e

i n t er na t io na l fast food offerings. Chandigarh is a Union Territory and the capital city of
two states in North India (Punjab and Haryana).

_____________________________________________________________________________________

Consumer Food Service in Ind ia , w w w .e urom onito r.com

(Accessed- August 2, 2009)
www.indianfoodindustry.net (accessed – August 2, 2009), See 'A bite of the Indian bazaar',
The Times
of India,Editorial, Pune edition, July 28, 2009.
3
1.3 Project Scope and Research Objectives:

The scope of the research project is focused on understanding consumer behaviour of the
residents of Chandigarh in respect of International fast food offerings. The key research
objectives are -

• To understand consumer behaviour with regards to International Fast food

offerings in Chandigarh, and identifying factors to be considered to encourage
buying.
• A comparison study between internationally originated fast food to traditional
local Indian cuisines.

The research will focus on how consumers in Chandigarh perceive and utilize
International fast food offerings in general as well as certain categories of it, not to identify
how to successfully promote one specific brand.

The results of this study must be as useful to the maker of Brand 1 in country A as they are
to the distributors of Brand 2 from country B. The study gains importance from both the
producer and consumer's point of view, as it will identify drawbacks, limitations and
constraints existing in the Fast food marketing structure.

1.4 Key Research Questions Addressed in the Study:

1. Who are the consumers of these International fast food offerings?

2. How did consumers in Chandigarh typically become acquainted with International
fast food offerings?
3. What are consumers looking for in International fast food offerings?
4. What could be done to encourage purchasing of International fast food offerings?
5. Why do consumers prefer Fast food to traditional Indian Cuisines?

4
1.5 Limitations of the Study:

• The research project concerns a pilot project on a limited number of individual

International fast food offerings only, which may be extended to an envisioned
continuous annual research program. After preliminary discussions with the major
international fast food sellers in Chandigarh three product categories have been
selected i.e. burgers, pizzas, and sandwiches.
• The study has the limitation of time, finance and other resource availability
associated with a student researcher.
• Further, because of demographic variations the results of this study are mostly
applicable to the regions and locations with similar conditions.

1.6 Overview of the Remaining Study:

The next chapters of the study will deal with the following issues:

Chapter II: This chapter discusses the literature review that the researcher has followed in
order to study the marketing strategies followed by International fast food retailers. It talks
about the current status and image of the Indian fast food industry, challenges and
problems for the industry and the present trends. Opportunities in the Urban Indian market
are examined in light of intense competition and growing market for International origin
fast foods.

The Indian market is conceptualized to clearly distinguish them from foreign markets.
Situations that reflect the growing interest and enthusiasm of Indian consumers with respect
to culture, food traditions and present trends have been clearly elucidated.

Chapter III: This chapter discusses the methodology adopted and challenges for the fast food
industry in India.

5
Chapter IV: This chapter deals with data analysis and interpretation of primary research
conducted by the researcher. The chapter analyses and evaluates the responses of the
questions put forward to consumers of International fast foods in Chandigarh. The responses of
the various factors of the consumers such as their demographic profile, the psychographic
factors and the behavioural factors have been considered, analyzed and presented on
percentage basis.

Chapter V: In this chapter, the researcher concludes and recommends that what should be
done to encourage purchasing of International fast foods. The researcher concludes as to what
are the preferences of consumers in Urban India on International fast food products on the
basis of data analysis of this report. Steps that are to be considered to encourage
purchasing of international fast food products are discussed in the Recommendation section of
this chapter.

Appendices: The Appendices apart from the questionnaire put forward to the consumers
includes the name of various fast food restaurants where the respondents were interviewed
for their response. It also includes the comparison of both the organized as well as
unorganized fast food outlets, model of consumer decision process by Dr. Thompson, and
international trends in the fast food industry. A full list of sources has been included in the
Bibliography to this report.

6
 CHAPTER-II: LITERATURE REVIEW

2.1 Introduction to Literature Review:

In order to provide a framework for the primary data research, first the key concepts about
food consumption behaviour have been set out. After which, information has been
gathered on the background and determinants of food consumption behaviour of Indians in
general and in Chandigarh in particular, followed by an overview of the food market for
International fast food products.

2.2 Food consumption behaviour

The key objective of this research project is to learn more about local consumer
preferences in Chandigarh in respect of International fast food products, especially the
way they perceive and utilize these products. In order to understand consumer preferences
one needs to understand the elements that drive consumer behaviour in the buying process.

The buying process can be summarized as follows:

The starting point of each buying decision is that the potential consumer needs to be aware
of the products involved i.e. International fast food products. Once aware, the consumer
will decide whether to buy a certain product or not, based on his/her beliefs and attitudes
which determine his/her preferences for a certain product. A belief is a descriptive thought
that a person holds about something or a perception, which can be based on knowledge,
opinion or faith.

7
An attitude describes someone's enduring favorable or unfavorable cognitive evaluations,
emotional feelings, and action tendencies toward some object or idea. Preferences are the
selections that people make when all food products are equally and simultaneously
available i.e. the final short-list of alternative products the consumer chooses from.
Perceptions, attitudes and preferences are all part of food consumption behaviour.
Awareness is a necessary condition for consumption behaviour to occur.

Food consumption behaviour is determined by underlying factors that drive this behaviour.
Literature shows different ways of looking at those driving factors, some of which are
discussed below. One view considers the food consumption process to circle around two key
elements, being the choice (decision to buy) and the actual purchase (exchange of resources)
which are determined by factors as who buys, what to buy, frequency of purchases, types of
foods which are eaten, who eats what, the time and occasion during which certain foods are
consumed, the symbolic meaning of food, and attitudes toward foods.

Others suggest that both cognitive and motivational factors must be considered when
studying food consumption behaviour. Cognitive factors are related to the question of how
people think about food including attitudes and preferences, meal patterns (e.g., the food
products that comprise a supper) and cultural availability.

-----------------------------------------------------------------------------------------------------
-

Axelson M.L. and Brinberg D; A Social-Psychological Perspective on Food-Related

behaviour,

New York: Spinger Verlag, 1989, pg-49.

Also See Appendix- IJ, pg 100, for A Model of Consumer Behaviour Process by Dr.

8
Thompson

Motivational factors relate to what a person induces to act. Motivational factors include
values, physical and social food needs, and obstacles to be overcome in buying and
preparing food. For example, tofu has been discussed as a food product that has faced
resistance in North America because the cooking skills required for using tofu are
relatively time consuming and complicated by North American food preparation standards.

Finally, another way of categorizing driving factors behind food consumption behaviour is to
distinguish between biological factors (such as age, gender, etc.), sociological factors (such
as ethnicity, education, religion, traditions, etc.), household familial factors (such as food
sharing behaviour, purchasing power, etc.) and cognitive factors (such as body image,
healthful foods, etc.).

Recent studies of food consumption behaviour of the people of India shows that India's
multiracial society with its large expatriate population drawn from all over has led to a
diverse and rich variety of food types being available to consumers.

The perceived important factors that have influenced the diversity in consumer tastes and
preferences are:

• Traditional Indian (local) culture

• Religion
• Newer trading relationships with North America, Japan, China and Europe
• Urbanization
• Free access to international media
• Available local foodstuffs and ingredients
• The scope of advertising and promotion
• Government policy and campaigns on food and health related issues

9
 • Social status of consumers and purchase decision makers

The first two categorizations discussed above have been used in gathering and analyzing
information in the primary data research stage. The last categorization of factors discussed
above has been used as a basis for gathering and analyzing information in the secondary data
research phase. Moreover, when designing the standard questionnaires for the primary data
research, specific relevant factors resulting from studies of the Indian food market have been
kept in mind.

Figure 2.1 Consumer buying process:

The study of consumers helps firms and organizations improve their marketing strategies
by understanding issues such as how

• The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products);
• The psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media);
• The behaviour of consumers while shopping or making other marketing decisions;
• Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome;
• How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.

10
Figure 2.2 Buyer Behaviour

The following figure clearly explains the consumer buyer behaviour. In the latter part of
the study, we shall analyze the same with regards to consumers buying behaviour towards
quick bites.

Consumer

Marketing Buyer Buyer Buyer

4Ps
Environment Characteristics Decision Process Decision

Figure 2.3 Marketing Stimuli

4 Ps

Product Price Place Promotion

We are all aware that every marketing activity begins with the 4P’s. This obviously
influences consumer buying process to a large extent.

Figure 2.4 Other Stimuli

Marketing
Environment

Economic Technological Political Cultural

11
The consumers’ buying process depends on the following factors:

• Product Choice
• Brand Choice
• Dealer Choice
• Purchase Timing
• Purchase Amount

Hence with regards to the fast food industry, the above mentioned factors will influence the
consumer buying process. We shall study the same in detail.

--------------------------------------------------------------------------------------------------------------

12
Images downloaded from http://www.flickr.com/photos/morville/84894866/sizes/m/

2.3 Food Traditions in India:

The role of tradition is particularly noteworthy when discussing food consumption

behaviour and the willingness to try unfamiliar foods, as it is often strongly linked with
eating habits.

In the mid 1990's, a spate of global fast food chains entered India to capture a part of
Indian fast food segment. But they found it difficult to establish themselves. Gaining
acceptance locally and blending into the Indian culture proved difficult. With regards to
their menu, positioning and advertising, MNC fast food chains had to face lot of problems
in getting accepted by the Indian consumer.

After initial problems they realized, I that it was important to combine the local tradition and
food habits of the consumers, with their products. Although few players were able to form
pan-Indian retail supply chains, the retail market is unlikely to be a single entity.

For example, food retailing in Chennai, Kolkata and Chandigarh is vastly different in terms
of shopping habits and consumer tastes and many such differences would continue to exist.

With more than five thousand ethnic communities represented, India has a very diverse
population. Each region and sub region in India has distinct food traditions and
preferences. Indian consumers typically maintain their distinct food habits even after
migrating to different parts of the country. In large cities and metropolitan areas, some
restaurants serve only specialty regional foods. Some regional fast foods such as samosa,
kababs, chola bhatura, pakoda, aloo-paratha, poori-bhaji, dosa, and sambarvada are
popular among Indian consumers and are available in both specialty and multi-cuisine
restaurants throughout India.

13
Most Indians prefer to eat home-cooked foods and take immense pride in the varieties of
food cooked at home. For most Indians, home-cooked foods are considered fresh, healthy,
and inexpensive. Given the distinct dietary habits and food preference of Indian consumers,
it is not surprising that until the early 1990s International fast food chains had largely
ignored Indian markets. As a result, Nirula's, the only notable Indian fast food chain, has
been able to dominate the Indian market in fast food service sales.

In an interview, Vikram Bakshi, MD, McDonald's Delhi, said that even though the Indian
outfit stuck to its core taste that grew on consumers from 'bland' to 'unique' in three years,
with no change factored in by the fast food chain, McDonald's menu still was about 75%
different from its global menu.

Similarly, Gautam Advani, Chief of Marketing, Domino's Pizza, in an interview said, "the
Indian palate is very definitive- people are extremely finicky and choosy, not too willing
to experiment. Food tastes vary from region to region."

14
-----------------------------------------------------------------------------------------------------------------------------------

http://www.indiainbusiness.nic.in/india-profile/ser-retail.htm (Accessed- September 24, 2008)

2.4 Fast Food in India:

The concept of fast food isn't new. Early in the 19th century, at the start of the Industrial Age
when people had to work 12 to 14 hours a day, there was scarcely any time for long breaks
for eating. The first snack bars and kiosks arose in front of factories. Today, quick meals
outside the home have become an essential part of our lifestyle.

2.4.1 Introduction to Fast food:

The boundary between fast foods and traditional dishes is fluid. In particular, it's difficult to
provide a qualitative distinction. Fast foods can also include salads and fruit in addition to
classic offerings such as hamburgers, hot dogs, sandwiches, patties, French-fries, pizzas,
chips and so on. The best way to distinguish fast foods is to use formal characteristics:
Time required - those who eat fast foods do not want to spend a lot of time selecting and
eating, and if necessary will eat standing or walking, on the bus, park bench, or at work.
The variety of foods and beverages is usually very limited. Fast food frequently does not
come with knives and forks, making it "finger food." When silverware, cups and plates are
necessary, they are disposable.

The characteristics of fast food, therefore, are that they require little time, offer a limited
selection, are finger food, and the silverware and plates are disposable. These characteristics
readily illustrate the difference from traditional dining culture. Many people equate fast
foods with convenience foods. This is incorrect since convenience products are often eaten
at home. They require active participation because they must be heated, stirred, baked,
thawed, etc., and are supplemented with other foods.

15
There are three general categories of fast food businesses:
• Self-service restaurants with a fast-food palette like McDonalds, Wendy's, Burger
King, Pizza Hut, Subway, Dominos, Pizza Corner, KFC etc.
• Take-out (or take-away) businesses that sell ready-to-eat foods and beverages.
• "On the street corner" snack stands with counters or a pair of stand-up tables.

2.4.2 Fast food Industry Overview:

Fast food is a food prepared and served quickly at a fast food restaurant or a shop. It is served
usually in a carton or bags in order to minimize cost. Fast food outlets often provide take
away or take out foods in addition to sit down services. Fast food is a multi billion industry
continuing to grow at a rapid pace in coming years.

Fast food is often highly processed and prepared in an industrial fashion i.e., with standard
ingredients, methodical cooking and production methods. Logistical planning and outsourcing
of ingredients are crucial factors in keeping the cost of operations low.

16
----------------------------------------------------------------------------------------------------------------------------

Professor Kishore Dash; "M cDonald's in India",

Case Study;2005 Thunderbird, the Garvin School of
International M anagement.
Vivek Gupta, "M cDonald's- Fast Food Fables",
Marketing Management,
Vol-1, pg 121-127,Publisher ICFA1 books.

2.4.3 The Start of Fast food Culture:

The concept of fast food pops up during 1920s. The 1950s first witnessed their rapid
proliferation. Several factors that contributed to this explosive growth in 50's were:

• America's love affair with the automobiles.

• The construction of a major new highway system.
• The development of sub-urban communities.
• The baby boom subsequent to world war second.

“Fast-food chains initially catered to automobile owners in suburbia. The notion of

"fast" food reflected American culture in which speed and efficiency are “highly
prized".

----------------------------------------------------------------------------------------------------------------------------------
17
-

Lane Kelsey, Fast food, Southern India style, Embarcadero publishing company, www.my-voice.com

(Accessed July 18, 2009).

Khurshid Anwar Warsi & Syeedun Nisa, Food Retailing: fast food industry, Publisher-Social Service
Research Network.

2.5 Challenges involved with Fast Food Industry in India:

Social and cultural implications of Indians switching to International

breakfast food:

Generally, Hindus avoid all foods that are believed to inhibit physical and spiritual
development. Eating meat is not explicitly prohibited, but many Hindus are vegetarian
because they adhere to the concept of ahimsa. Those seeking spiritual unity may avoid
garlic and onions. The concept of purity influences Hindu food practices. Products from
cows (e.g., milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can
improve the purity of impure foods when they are prepared together. Some foods, such as beef
or alcohol, are innately polluted and can never be made pure. But now, Indians are
switching to fast food that contain all those things that are considered impure or against
their beliefs. Some traditional and fundamentalist are against this transformation of food
habit and number of times they provoke their counterparts to revolt against such foods.
And that is what happened when McDonald's decided to enter the complexity of Indian
business landscape, counting only on its "fast food global formula", without any apparent
previous cultural training.

18
----------------------------------------------------------------------------------------------------------------------------

For more on this topic, see, McDonald's 'Beef Fries' Controversy; Business Ethics and Corporate
Governance

Volume 1, ICFAI publications, pg-36-50.

Positioning for the selected segments: Positioning is an integral part of strategy for a new
service provider. Once the target segment or market is clear, the service marketer has to position
itself appropriately for its target segment. Even in case of a mature business, a service marketer
needs to reaffirm its positioning in the minds of target customers. At times, a subtle shift in
positioning may also be necessary to keep up with the changing consumer preferences or to
cope with the challenges from the competitors.

Briefly, the positioning is a mental image or picture that a service provider would like to have
about itself in the consumers mind. It is a deliberate attempt at building an identity of a certain
kind for the service. For example, McDonald's in India has a slightly up market image than
in the US, where it is viewed as cheap American fast food. Since a hamburger is an
everyday item of American food, it made sense for McDonald's to develop the
positioning. In India that slot is already occupied by a variety of Indian alternatives. For
example, the idli-dosa corner food joints in the south, the parantha serving stalls in the
north, or the tea and samosa corners of Kolkata. Therefore the mind space that most of the
organized fast food restaurants had tried to occupy is of two types-One, the affluent
Internationalized teenager and, Second, the modern, upscale family which is possibly driven by
children who enjoy the feeling of eating outside their household. Positioning has lot to do
with the target segment to which we chose to market, and has elements like price,
packaging, communication and ambience, which reinforces the positioning, attempted by a
company.

Emphasis on the usage of biodegradable products: Glasses, silverware, plates and cloth

19
napkins are never provided with fast food. Instead, paper plates and napkins, polyurethane
containers, plastic cups and tableware, drinking cartons or PET (polyethylene terephthalate)
bottles are used, and these are all disposable. Many of these items are tossed in the garbage
instead of being recycled, or even worse, merely thrown on the ground. This burdens nature
unnecessarily and squanders raw materials. In order to reduce soil and water pollution,
government now emphasizes more on the usage of biodegradable products.

Retrenchment of employees: Most of new industries will be capital intensive and may drive
local competitors, which have more workers, out of business.

Profit repatriation: Repatriation of profits is another area of concern for Indian economy.
As when multinational enters any country, people and government hope that it will increase the
employment rate and result in economic growth. However, with the multinational operation,
host country experiences these benefits for a short time period. In long run neither employment
increases (because of capital intensive nature of MNC's) nor it increases the GDP or GNP
because whatever MNC's earn they repatriate that profit back to their home country.

2.6 India - Emerging Market for Global Players:

Organized food retailing industry is still at infancy stage with share less than 1% of food retail
market size in India (See Appendix-IV, pg- 115; Comparison of Organized and
Unorganized fast food Outlets). The percentage share held by foodservice of total
consumer expenditure on food has increased from a very low base to stand at 2.6% in 2001.
Eating at home remains very much ingrained in Indian culture and changes in eating
habits are very slow moving with barriers to eating out entrenched in certain sectors of
Indian society.

Traditionally, eating out was looked down upon in Indian society. The growth in nuclear

20
families, particularly in urban India, exposure to global media and International cuisine, and an
increasing number of women joining the workforce have had an impact on eating out trends.
Increasingly, eating out is becoming synonymous with entertainment. And very often, it is
preferred as a time saving option to cooking. Not surprisingly, takeaways are becoming
increasingly popular. India is among the top three countries globally having highest number
of people in the spending capacities in the age group of 25-49 yrs.

India is placed at the second rank in the 2004 global retail development index; an annual
ranking of retail investment attractiveness among 30 emerging markets. The lack of
consolidation and model retail concepts in India presents better opportunity to global
players. Over 400 shopping malls, multiplexes, fast food giants, restaurants etc. are in
planning or construction stage across the country.

2.6.1 Market Size & Major Players:

Fast food is one of the world’s largest growing food types. India's fast food industry is
growing by 40% a year and is expected to generate a billion dollars in sales by 2005. The
multinational segment of Indian fast food industry is up to Rs.6 billion, a figure expected to
zoom to Rs.70 billion by 2006. By 2006, the value of Indian dairy products is expected to be
Rs.l, 00,000 million. In last 6 years, foreign investment in this sector stood at Rs. 3600
million, which is about one-fourth of total investment made in this sector. Because of the
availability of raw material for fast food, Global chains are flooding into the country.

There are approximately 22,000 registered restaurants in India. In addition, there are more
than 100,000 dhabas (small roadside food stalls) that sell a variety of foods in cities and on
highways. By 1998, there were approximately 1,568 registered hotels in India, half of
which have their own restaurants14. In addition, large to medium-range canteens serve the
food needs of various institutions such as hospitals, prisons, defense establishments, schools,
21
colleges and universities, railways, airlines, government establishments, and private
companies. Since 1994, India's food imports have been growing more than 37% per year.
Half of India's food imports are agricultural items such as cereals, vegetables, fruits, wheat,
and nuts. One of the significant problems of the Indian food industry is an inefficient food
chain between farmers and consumers.

------------------------------------------------------------------------------------------------------------
-

Debashish Ganguly, The Market for consumer Food services in India (Dec 2002).

Euro monitor Publications. Publisher-just-food.com

About 20% of India's food production is wasted because of too many intermediaries, poor
infrastructure, and poor transportation facilities. Considerable inefficiency in the food
distribution system cuts farmers' income while raising consumer food prices. Although
India is the world's third largest food producer, its processing industry is very small
compared to other countries in Asia, Europe, and the United States. Despite the lack of a
well-developed food processing industry, India's imports of processed consumer foods have
traditionally remained low. Since the early 1990s, India's food service sales have
significantly increased. India's processed and fast food markets have shown considerable
potential for growth.

Dominated by McDonalds having as many as 75 outlets, Domino's pizza is present in around

100 locations. Pizza hut is also catching up and it had planned to establish 125 outlets at the
end of 2006; however, now there are 297 outlets across India and Subways have
established around 40 outlets. Nirula's is established in North India only. However, it claims to
cater 50,000 guests every day.

22
-----------------------------------------------------------------------------------------------------------------------------------------------

Consumer Food Service in India

(Accessed- Decem ber 2, 2008)

USDA Foreign Agricultural Services, GAIN report # IN9082, U.S. Em bassy, New Delhi; Annual 1999,

Pg-2-3Professor Kishore Dash;

"M cDonald's in India",

Case Study;2005 Thunderbird, the Garvin School
International
of M anagem ent.

Major players in fast food arc (specifically in North):

• McDonalds
• Nirula's Pizza hut
• Dominos pizza
• Pizza corner
• KFC
• Subway

Multinational fast food companies have given domestic competition a value for its money. While
McDonalds sells more than Nirula's, Pizza Hut and Dominos are doing more business than Pizza Corner.
Within 13 years of their existence in India since 1996, the multinationals have grown at a faster pace than
their Indian counterparts. According to industry estimates, in 2006, while McDonald's clocked a turnover
of about Rs 125 crore (Rs 1.25 billion), the home-grown Nirula's, which has been present in the country
since 1934, could only garner Rs 100 crore (Rs 1 billion) turnover. Also, both Domino's Pizza Hut and
Dominos clocked a turnover of about Rs 60 crore (Rs 600 million) but Pizza Corner lagged behind with a
turnover of Rs. 25-30 crore (Rs. 250- 300 million).

23
The main reason behind the success of the multinational chains is their expertise in product
development, sourcing practices, quality standards, service levels and standardized operating
procedures in their restaurants, a strength that they have developed over years of experience
around the world. The homegrown chains have in the past few years of competition with the
MNC's, learnt a few things but there is still a lot of scope for improvement.

We have applied our learning experience from other countries in all the processes including
consistency, marketing, distribution and training to the local market conditions. It's now that
the domestic chains have realized the importance of such practices. Nirula's is thus beefing
up its organizational structure. Another key reason behind the success of multinationals is
the ability to attract youngsters. While McDonalds has been able to attract people below 30,
Dominos is targeting the 'convenience-seeker.

Multinational chains like McDonalds and Pizza Hut are still on a learning curve trying to
customize their menu to the Indian taste and food preferences. Pizza Hut, for example,
launched its 'masala' range of pizzas and also opened the world's first 100 percent
vegetarian outlet in India. Domino, on the other hand, has launched its 'peppy paneer
pizza' keeping in mind the Indian taste buds. The foodservice market in India is estimated to
be around Rs.36, 000 crore (Rs. 360 billion), of which the urban fast food quick service
restaurants is around Rs. 1, 000 crore (Rs l0 billion). This segment is witnessing high
growth of around 25-30 per cent per annum so the market has a lot of potential to grow.

The Global Agriculture Information Report for the HRI food service sector by the US
Embassy (2008) states that there are approximately 500, 000 restaurants in the organized
sector (restaurants with more than twenty seats and restaurant menu), mostly serving ethnic
cuisines; this number is expected to grow at about 7-8 percent annually for next few years
because of increasing urbanization and increasing disposable incomes. After a slow start,
international-style fast food restaurants have grown impressively at 12-15 percent annually over
recent years. Most foreign chains (McDonald's, Dominos, Pizza Hut, Subway, KFC, and TGIF)
and local chains (Nirula's and Pizza Comer) are doing well in major cities, and are expanding into
smaller cities. Most of these fast food chains have developed a range of Indian-styled products to
24
 suit local preferences (such as the Maharaja chicken burger, veggie burger, etc.).

-----------------------------------------------------------------------------------------------------------------------------------

GAIN report no IN5066; Global Agriculture Information Report, HRI food service sector; Annual 2008;
US Embassy 2008.

Table 2.1: Profile of Restaurant Chains in India:

NAME OF THE CURRENT TYPE OWNERSHIP PURCHASING

CHAIN NO. OF TYPE AGENT
UNITS
McDonalds 221 Fast food Two regional Direct Imports
www.mcdpnaldsindia.com franchisees and Importers

Pizza Hut 100 Fast food A master Direct Imports,

www.pizzahut.co.in franchisee Consolidators,
operating and Importers
outlets through
Pizza Comer 90 Fast food Indian company Importers and
www.pizzacorner.com operating Distributors
through sub-
franchisees
Dominos Pizza Approx 120 Fast food A master Information not
www.dominosin.com franchisee available
operating
outlets through
Subway, 42 Fast food Franchisee Importers and
www.subway.com operating outlets Distributors
through sub-
franchisees

25
KFC www.kfc.com 97 Fast food Franchisee Consolidators
operating outlets and Importers
through sub-
franchisees
TG1 Friday's 5 Casual Dining All-India Consolidators
www.tKJIlndia.com franchisee and Importers

Nirulas www.nirula.com 63 Fast food/Casual Indian company Importers and

Dining with few Distributors
franchisees
Barista Coffee 105 Coffee Shop Indian company Importers and
www.barista.co.in (serves baked owned Distributors
goods and
sandwiches, too)

Cafe" Coffee Day 230 Coffee Shop Indian company Importers and
www.cafecoffeeday.com owned Distributors

2.7 Market for Internationally Originated Fast Food in Chandigarh:

2.7.1 Demand Side

Structurally Chandigarh is a very modern town, designed for 50 sectors with the exception
of the unlucky number 13! Each sector is a self-complete block about a Kilometer in length
by 0.5cms width. There are markets and shopping centers and basic utilities like schools in
every sector, which limits the total distance of travel for the basic necessities of life. The
sectors are connected by a citywide service of Chandigarh Transport buses, auto-rickshaws
and taxicabs.

In the recent survey carried out by the India Today, a weekly magazine, for the 'Best &
Worst States and Union territories in India', it rated Chandigarh as the best among all other
union territories. It states that Chandigarh is heads and shoulders above the other Union
territories and a city having highest per capita income in India Sandwiched between two of
India's most prosperous states, Punjab and Haryana. Chandigarh has the best of both the

26
worlds. Suburbs like Mohali are now hotspots for new economy Businesses.

As the population of Chandigarh is a melting pot of people from different parts of India
(mainly northern India), who have settled down in Chandigarh over the last few decades, North
Indian food traditions have a big influence on eating habits today.

Table 2.1 shows the ranking of Union Territories for Budget and Prosperity, where
Chandigarh has been ranked first. Table 2.2 shows the ranking of union territories for the
investment scenario, and Table 2.3 shows the ranking of union territories for the consumer
market where again Chandigarh has been ranked first.
----------------------------------------------------------------------------------------------------------------------------------

"India's Best And Worst States To Live In", India Today; August 15, 2008, pg- 41 Purnima Mankekar,
Cultural politics of food and eating, Blackwell publishing, Pg- 204.

27
 Table 2.1- Budget and Prosperity of the Union territories for the
year 2008-09:

SCORE RANK

YEAR 2009 2008 2007 2006

Chandigarh 5.27 5 1 1

Dam an & diu 3.02 3.02 2 2

Lakshadweep 2.96 2.83 3 3

Andaman & Nicobar 2.73 2.67 4 4

Dadra & Nagrhaveli 2.33 2.19 5 5

Source- India Today, Aug' 15, 2008

Table 2.2- Investment scenario of the Union territories for the year 2008-09:

SCORE RANK

YEAR 2009 2008 200 2006

7
Chandigarh 5.33 4.88 1 1

D am an & diu 2.68 3.64 2 2

Lakshadweep 1.9 1.71 3 3

Andaman & Nicobar 0.77 1 .1 7 4 4

Dadra & Nagrhaveli 0.42 2.42 5 5

Source- India Today, Aug' 15, 2008

Table 2.3- Consumer market of the Union territories for the year 2008-09.

SCORE RANK

YEAR 2009 2008 2007 2006

Chandigarh 6.12 5.97 1 1

D am an & diu 3.08 2.99 2 2

Lakshadweep 2.52 1.82 3 3

Andaman & Nicobar 2.41 2.42 4 4

Dadra & Nagrhaveli 2.22 2.13 5 5

Since the mid-1980s, Indian society has undergone a dramatic shift in social values. The
middle class in contemporary Indian society has challenged the traditional caste-defined
view of Indian life, which undervalues social and economic mobility, and the dominance of
the 'Brahinanical' culture's disdain toward commerce. Getting rich and enjoying a good
life has become the new mantra of social existence for the Indian middle class. With more
income and more purchasing power, the status-conscious middle class now seek to buy
good quality consumer products and spend more money on food and entertainment. In cities
like Chandigarh, extensive foreign media exposure and the Internet revolution have
contributed to the emergence of a new social attitude, which accepts International values and
culture.

The contemporary Indian society can be understood on the basis of a 70/30 dynamic.
While 70% of Indians are still traditional, poor, and live in rural areas, 30% of Indians
(more than 300 million people) have emerged as rich, modern, International-exposed, English
speaking, urban dwellers. In India’s metropolitan cities, the young and rich have
embraced the spirit of American culture.
America has come to be associated with success, productivity, and a good life. This
growing acceptance corresponds to the big impact of the American influence on Indian
business, education, and entertainment.

On an average, each household spends about 50% of income on food and beverages in
India (food prices are always a sensitive issue). Even the middle class, despite their much
improved income level, remains very price sensitive.

--------------------------------------------------------------------------------------------------------------------------------

For growing acceptance of American culture, see Sudeep Chakravarti, Nandita Chowdhury, and
Stephen David,

“Americana: Like, This is it!” India Today, February 9, 1998, Pg 17 - 18

Factors that have driven an increase in fast food sales in Chandigarh:

Gender roles: Gender roles are now changing. Women are a part of the corporate world as
well. Hence due to time constraints and busy schedules, fast food either cooked at home or
purchased from outside, is an easy and quick option.

Consumer Sophistication and Confidence: Consumers are becoming more sophisticated

now. They do not want to prepare food and spend their time and energy only in doing
household work. Hence they are building their confidence more towards 'ready to eat’
and ‘easy to serve' kind of foods.

Paucity of time: People have no time for cooking. Because of emergence of working
women and also more options for entertainment, most of the time either people work or
want to enjoy with their family.

Double income group: Emergence of double income group leads to increase in

disposable income. Now people have more disposable income so they can spend easily in
fast food and other activities.

Increase in per capita income: There is continuous increase in the per capita income of
the people. The city of Chandigarh is one of the cities having the high per capita income in
India.

-------------------------------------------------------------------------------------------------------------------

Professor Kishore Dash; "McDonald's in India", Case Study; 2005 Thunderbird, the Garvin School of
International Management.
2.7.2 Supply Side:

There are four U.S. food chains, MacDonald s, Domino's, Subway and Pizza Hut, in
Chandigarh and the fifth one 'Ruby Tuesday' is opening shortly which has 700 branches
across the globe. Besides these US food chains the popular local fast food restaurants are
Nirulas, Uttam fast food and restaurant, Degchi fast food, and Mandy's home delivery.
(See Appendix- V for the Fast food outlets in Chandigarh)

Although fast food products with North Indian flavors dominate the market, local tastes
are changing in recent years. Approximately 80-90 % of youngsters prefer to take lunch
outside their homes. With the continuous growth of restaurants and the change in eating
habits amongst the younger generation, International style fast food has become more
popular. This can be attributed to the advertising and promotional campaigns carried out by
food chains targeting different segments of the society. Substantial quantities of these
offerings have been given the local flavor to satisfy local demand.

2.8 Factors Affecting the Fast Food Industry in India:

Income distribution: The long-term growth trend in India is improving. The past three
decades have seen a steady acceleration. Average annual growth in GDP per head
climbed from 1.2% in the 1970s to 3% in the 1980s and 4% in the 1990s. From 1972 to
1982, GDP growth averaged 3.5% a year—the so-called "Hindu rate of growth." As a
result of India's decade-long liberalization of economic policies, the growth rate climbed to
6% from 1992-2002 and is likely to reach 7% by 2010. If this rate is maintained, GDP
per person will double in only 18 years. However, high GDP growth is confined to only the
few states with coastal access and high levels of urbanization.
The fastest-growing Indian states in 1991-2001 were Delhi, Maharashtra, Karnataka,
West Bengal and Gujrat. These states enjoyed annual average economic growth of 6-8%,
which is comparable to East Asian economies during the same period. But the economies
of poor states like Bihar, Uttar Pradesh, Madhya Pradesh, Orissa, and Assam grew by a
dismal annual average of 2% over the same period.

Not surprisingly, income distribution is highly skewed in India. Just 20% of the richest
Indians share more than 40% of the national income. According to a study by National
Applied Economic Research (2004), the number of households with an annual income
over Indian Rupees (Rs.) 1 crore (US $228,351) has grown by 26% since 1995-96 to 20,
000 in 2001-02. By 2009-10, it will increase more than seven times to 1,40,000
households. In the Rs. 50 lakh (US $114,180) to Rs. 1 crore (US $228, 351) bracket, the
number of households is expected to increase from 40,000 in 2001-02 to over 250,000 in
2009-10.

In the 11 years following 1989-90, the total number of households increased by 32%,
although the average size of Indian households has declined from 5.9 people per
household in 1990 to 5.2 in 2001. What is important is that the number of low-income
urban households has been approximately halved, from 14.9 million households in 1989-
90 to 7.6 million in 2001-02.

------------------------------------------------------------------------------------------------------------------------------
-

India's Best And Worst States To Live In, India Today; August 15, 2005, pg- 35

Tribune News Service, http://www.tribuneindia.com/2003/20031206/cth2.htm (Accessed- August 20, 2008)

Dani Rodrik and Arvind Subramanian, 'Why India Can Grow at 7 Percent a Year or More: Projections
and Reflections'; IMF Working Paper, July 2004.
Economic liberalization: With economic liberalization of 1991, more foreign and
private industries entered the Indian market that result into income generation of the
Indian residents. More income resulted into more savings, more savings resulted into more
investment, and more investment resulted into the overall growth of the economy.

Large Population Growth and Urbanization: According to the 2001 census, India's
population grew at a rate of around 2% a year during the previous decade. This was a
marked decline from earlier decades of population growth of around 3% annually.
Nevertheless, India added 181 million people in 1990-2001, more than the total population
of Brazil. According to the forecast of Goldman Sachs (an American investment bank),
the reason why India is expected to outperform Brazil, Russia, and China, as well as the
"rich world" (i.e., United States, Canada, France, Germany, United Kingdom), is that it is the
only country where the population will continue to grow for the next 50 years and where the
proportion of working-age people will increase well into the 2020’s. The percentage of urban
population in India has increased from 21% in 1975 to more than 28% in 2004. It is likely to
increase to 36% in 2025.

Most high-income Indians prefer to live in urban areas. Over 70% of affluent urban
Indian consumers live in the ten most populated and cosmopolitan cities in India:
Mumbai, Delhi, Kolkata, Pune, Chennai, Hyderabad, Bangalore, Ahmedabad, Ludhiana, and
Nagpur. The number of dual income households, where both husband and wife are employed is
slowly increasing in urban areas. Like their husbands, full-time working-women spend most of
their time away from home. As a result, there has been a dramatic change in the way Indian
working wives shop and organize family meals. Packaged rice, prepared yoghurt, packets
of flour, frozen chickens, and marinated mutton (goat or lamb meat) are fast replacing
curdling, grinding, and handling of market-bought fowls and haunches of mutton. Not
surprisingly, even some Indian consumers have started opting for meals away from home
on working days.
The growing popularity of Delhi's Waiters on Wheels (WOW), a supply agency
delivering meals to people's doorsteps from 30 different restaurants at the same price as
one would pay in the restaurants, is an example of India's changing food service
landscape28. High income and growing urbanization have also contributed to a shift in the
traditional Indian food habits. High-income urban dwellers are seeking variety in their
choice of foods and are willing to spend more on international cuisine, including fast
foods. Consequently, a growing number of domestic fast food outlets, home delivery,
take-away restaurants, and American restaurant chains, such as Kentucky Fried Chicken
(KFC), TGI Friday's, Domino's Pizza, Pizza Hut, McDonald's, and Baskin Robbins, have
opened in the last few years. India being a second largest country in terms of population
possesses large potential market for all the products/services. This results into entry of large
number of fast food players in the country.

Relaxation in rules and regulations: With the economic liberalization of 1991, most of
the tariff and non-tariff barriers from the Indian boundaries are either removed or
minimized. This helped the MNC's significantly to penetrate in to the Indian market.

Growth in number of women's in the work force: There is increase in the number of
women work force in the recent years because of the improvement in the literacy rate and
also because of the large number of jobs now available because of the entry of foreign and
private players in the Indian market.

Menu diversification: Increase in consumption of pizzas, burgers, sandwiches and other

kinds of fast food.

------------------------------------------------------------------------------------------------------------
"Looking on the Bright Side: India's Economy Is Revving Up," The Economist, February 21, 2004,
pg.- 13.
Visaria, Twnety-First Century India: Population, Economy, Human Development and the
Environment; Oxford University Press, 2004.
Adirupa Sengupta, "Living Up to the Choices Offered by the Free Market”, India Abroad.
2.9 Problems of Fast Food Industry in India:

Environmental friendly products cost high: Government is legislating laws in order to

keep check on the fast food industry and it is emphasizing more on the usage of
biodegradable and environment friendly products. But associated with this issue is the
problem that fast food player faces, which is the cost, associated with the environment
friendly product. They cost much higher than the normal products that companies use for
packaging or wrapping their products.

Balance between societal expectation and company's economic objectives: It

becomes important to balance a society's expectation regarding environment with the
economic burden of protecting the environment. Thus, one can see that one side pushes
for higher standards and other side tries to beat the standard back, thereby making it an
arm wrestling and mind-boggling exercise.

Health related issues (obesity): Studies have shown that a typical fast food has very
high density and food with high density causes people to eat more than they usually need.
Changes in diet coupled with stress-filled lives and more sedentary modern existences are
beginning to take their toll on the consumers' health. Basic nutrition is simple, yet there
is mass confusion about what to eat and what effects a particular food has, and the reason
for all of this misinformation is that it benefits food producers to have an innocent flock
of customers who are left uncertain of how to judge what is healthy and what is not.
A recent article29 states that India is becoming a nation of obese, increasingly exposed to
various food hazards, largely thanks to the lies and evil ways of large corporations that
will stop at nothing to increase their profits. There is an excessive consumption of pizzas,
noodles, ice-creams, beef/ham/cheese burgers, which constitute the universally available
fast food. These constitute junk food having empty calories, which means this kind of
food contains the calories that are not particularly helpful to one's body. These days there
is an emphasis on taste rather than nutrition.
Convenience foods are manufactured commercially and on a large scale, and consequently
are low in. nutrition. The result is that 25 per cent of males and 36 per cent females above
the age of 20 years are overweight.

Obesity was earlier the problem of the developed countries, but now even the developing
countries are facing the threat. Technology has made it easy to follow sedentary life styles,
which must be avoided at any cost.

Green Sensitivity: In India, there is a vocal group of environmental and animal activists who
oppose the entry of fast-food chains like KFC and McDonald's. Maneka Gandhi, former
environment minister in the central government, and Dr. Vandana Shiva, Director of the
Research Foundation for Science, Technology and Ecology, are the prominent leaders of
this group. According to this group's campaign, junk food chains like McDonald's and
KFC destroy ecological balance and cause severe behavioural disorders because of their fatty
and unhealthy foods, which have excessive levels of monosodium glutamate (MSG). Besides,
they also campaign that these food chains are anti-poor and cater only to the rich segment of the
Indian society.

2.10 Conclusion:

Multinationals in India often wonder why their marketing plans often come unstuck. The
answer usually given is: "India is different'. Serious inquiry begins when we ask how Indian
consumers are different. It is observed the success of fast foods arose from the changes in our
living conditions:

• Many women or both parents are employed.

• There are an increased number of single-parent households.
• Long distances to school and work are common
• Usually, lunch times are short
There's often not enough time or opportunity to shop carefully for groceries, or to cook and eat
with one's family. Especially on weekdays, fast food outside the home is the only solution.
Today, only 40% of young college-age people eat lunch at home. Mostly teenagers and
young adults use fast food facilities when there is shortage of time. According to studies,
66% of young men and 33% of women in Switzerland eat one to two hamburgers a week,
and half the teenagers eat French-fries once a week. The large chains have pulled out all the
stops of modern marketing, targeting primarily young consumers. They entice their
potential customers with TV spots, children's parties, gifts for small children, and an ambiance
that is generally child- and teenager friendly. Large distributors, bakers and butchers, snack
bars, and so on, also exploit the fast food trend and offer more take-out products.

It's obvious that these campaigns are at the expense of traditional home dining culture.
Experts have coined the term "Mc’Donaldization" to describe this phenomenon.

Some noticeable facts about fast food industry are: Fast food had experienced fast growth in past
decade. Changing lifestyles, breakdown of joint family system, increasing number of working
women's and International influence in urban areas are fuelling the demand for fast food.

India already has the entire requirement for a head start in Fast food industry. Basic
materials such as food, vegetables and meat can be sourced locally or easily imported if local
availability is not adequate.

Food outlets are just beginning to appear in India's big cities and this is a time for
international chains to set a foothold. There will be increase in competition in the near
future. Studies indicate that the highest percentage increase in units can be expected in the
unorganized street stalls/kiosks sector. The one who will better understand and get closer to
its target customer will win the game.

----------------------------------------------------------------------------------------------------------------------------------
Dr C.S. Gautam and Dr H.M. Swami, "Obesity: a nightmare of the future", Tribune News Service, Chandigarh;
April 1, 2004
 CHAPTER-III: RESEARCH METHODOLOGY

3.1 Introduction to Research Methodology:

The present research is based on both secondary and primary data collection. Since the
topic encourages facile projections and speculations for the future, the study has
attempted to quote hard data in order to support viewpoints. In case where qualitative
data and opinions have been used the researcher has made sure to present differing
perspectives before coming to a conclusion.

The study has been both exploratory and descriptive in nature.

3.2 Sources of Data:

The project work has been carried out in two phases:

• First phase involved the process of secondary data collection that was done by
studying issue related books, journals, articles, internet and company reports.
• Based on the results of the first stage, the second stage involved the process of
primary data collection through the questionnaire method. The standard
questionnaire covered the awareness, attitude and behaviour towards International
fast food products in general and three selected product categories in particular.
3.3 Data Gathering, Processing and Analysis:
3.3.1 Secondary Data:

Secondary data has been collected from company reports, websites, and literature and
company statistics. A full list of sources has been included in the Appendix. An in-depth
analysis of a number of case studies and reports has been carried out based on the
secondary data available from these sources

3.3.2 Primary data:

Primary data was collected from a selected sample of respondents following the Simple
Random Method. Responses were scaled according various variables and clusters were
formed to come to the findings, discussion and conclusion of the research. The sample
comprises of 115 consumers, selected at random. In this stage consumers were interviewed
near fast food restaurants and information was gathered about their awareness, attitudes and
preferences towards International fast food offerings.

To make sure that the sample represented the entire International fast food consuming
population in the city of Chandigarh, the sample has been selected on 'sector' wise basis. The
city is divided according to 'sectors' and fast food outlets were selected such that the sample
represented the entire population of Chandigarh. A full list of the fast food outlets has been given
in the Appendix to this report.

The interpretation and analysis, which comprises of both quantitative and qualitative nature,
is based on both the secondary and primary data, and may therefore be considered to be of a more
subjective nature.
The variables selected for consideration in the analysis are based on various factors of the
consumers in the town such as demographic factors like age, household income, and
occupation, psychographic factors such as attitudes and beliefs of the consumers towards
International fast food offerings, behavioural factors such as brand loyalty, price sensitivity,
and frequency of purchase and so on.

Once the initial variable list was developed, an analysis of the percentage response for each
variable was undertaken to find out the differences in each variable in the responses from the
consumers.

3.4 Location of the Study: Chandigarh

Chandigarh is a very modern town, in the northern part of India that is considered as one of
the beautiful cities in Asia. It is designed for 50 'sectors' with the exception of the unlucky
number 13! Each sector is a self-complete block about a Kilometer in length by 0.8 Km
width.

The Map shows the location of Chandigarh in India.

----------------------------------------------------------------------------------------------------------------------------------
Image downloaded from http://www.mapsofindia.com/maps/india/outlinemapofindia.htm

CHAPTER IV: DATA ANALYSIS

4.0 Consumer Analysis:

Based on the results of the secondary data collection 115 interviews were carried out to
quantify the awareness, attitudes and behaviour towards International fast food products in
the city of Chandigarh on the basis of a questionnaire. The questionnaire included questions
on international fast food in general and three selected product categories in particular.

4.1 Trends in the Indian Market:

Marketing to children: Fast food outlets in India target children as their major
customers. They introduce varieties of things that will attract the children's attention and by
targeting children they automatically target their parents because their parents always
accompany children.

Low level customer commitment: Because of the large number of food retail outlets and
also because of the tendency of customers to switch from one product to other (as food is
one area, where customer wants to try everything new that comes to the market), this
industry faces low level customer commitment.

Value added technology services: There is continuous improvement in the technology as

far as fast food market in India is considered. The reason behind that is food is a
perishable item and in order to ensure that it remains fresh for a longer period of time,
there is a need for continuous up gradation in technology. Earlier, Indian people preferred
eating at home but now with the change in trend there is also need for improvement and up
gradation of technology in food sector.

Attracting different segments of the market: Fast food outlets are introducing varieties of
products in order to cater the demands of each and every segment of the market. They are
introducing all categories of product so that people of all age, sex, class, income group
etc can come and become a customer of their food line.
4.2 Consumer Demographics:
4.2.1 Age wise breakup of the sample of consumers interviewed:

Age Number of consumers

15-25 45
26-45 40
46-60 21
>60 9
Sample Size 115

Percentage of consumers as per age group in Chandigarh:

Age Wise Break up of Consumers

45%
40%
Percentage of fast food

35%
consumption

30%
25%
20%
15%
10%
5%
0%
15-25 26-45 46-60 >60
Age group

The table reveals that 39% of consumers in Chandigarh in the sample size of 115 belong to
15-25 year age group. Likewise, with increasing age group the number of consumers of
International fast food is decreasing. The table indicates that most of the consumers of
International fast food offerings are younger. The maximum number of consumers lies
between the age group of 15-45 years.

4.2.2 Income wise breakup of the sample of consumers interviewed:

 Income Number of consumers
I0-15K 21
15 -2 5K 26
25-40 K 39
>40 K 29
Sample Size 115

Percentage of respondents as per household income in Chandigarh city:

Percentage of Respondents as per Household

Income

40%
35%
30%
percentage

25%
20%
15%
10%
5%
0%
I0-15K 15-25K 25-40 K >40 K

Household Income

The consumer survey indicates that though the maximum numbers of consumers are from
the age group of 15-25 years, the above table reveals that from the household income
perspective, most of the consumers are from higher income group (Rs.25,000 to Rs.45,000;
34%).

----------------------------------------------------------------------------------------------------------------------------------------------

Please see Appendix- I for sample of the questionnaire put to the consumers.

4.2.3: The qualification of consumers interviewed in Chandigarh:

 Number of
Income Consumers
Secondary Pass 2
Higher Secondary
Pass 22
Graduates 59
Post Graduate 32
Sample Size 115

Percentage of consumers as per the qualification in Chandigarh:

Percentage of Consumers as per Qualifications

60%
50%
Percentage

40%
30%
20%
10%
0%
Secondary Higher Graduates Post Graduate
Pass Secondary
Pass

Education level

The graph indicates that most of the respondents in the city of Chandigarh are
Graduates (51%) or Post graduates (27%). Hence, in the analysis of the consumers'
response, the researcher has not given much importance to this demographic
subgroup. The students who were Higher Secondary pass and were studying for their
graduate degree were taken as Graduates for this analysis.
 4.3 Awareness, Attitude and Behaviour of the Consumers in Chandigarh
towards International Fast Foods in General:

4.3.1 Awareness:
Awareness of International fast food products was measured by asking the consumer to
mention (unprompted) as many food products that come to mind when thinking of
International fast foods.

Q. If you think about internationally originated fast food, which of the products come to
your mind?

On an average 3 products are mentioned; however, Hamburgers (59%) and Pizzas (56%)
are mentioned most often.

Awareness of various Fast Food Products of

International Origin

Burgers

9% Pizzas
17% 59%
18% Hot Dogs
24% Chicken Roll
French fries

25% Sandwiches
56%
Patties
26% 34%
Pastries
Others

Burgers Pizzas Hot Chicken French Sandwiche Patties Pastries Others

Dogs Roll fries s
59% 56% 34% 26% 25% 24% 18% 17% 9%
 • The results above show that Burgers, pizzas, hot-dogs, chicken roles, French fries
and sandwiches are the products mentioned most often.
• Burgers, pizzas, French fries and pastries are mentioned more by younger, higher
income (Rs.25, 000 to Rs. 40,000) international fast food buyers.
• Sandwiches, hotdogs, patties are mentioned more by consumers between the age
group of 15 yrs. to 25 yrs. with monthly household income of Rs. 10,000 to 25, 000; 76%.
• On an average, product categories are mentioned more by female and younger
buyers (26-45 years) with average income of Rs.15, 000 to Rs.25, 000.
• French fries, pizzas and pastries are mentioned more by female consumers.

Q. How important to you is the brand name when purchasing internationally

originated fast food products?

• Most of the buyers (39%) find the brand name of international fast food offerings
neither important nor unimportant.

• Higher and average income consumers with income ranging between

Rs.15, 000 to Rs.40, 000 buyers find the brand name extremely important, whereas
buyers with income ranging between Rs. 10,000 to Rs. 15,000 find the brand name of
international fast food offerings important; however, can do without it as well.

• Both male and female buyers have more or less the same opinion when it comes
to the brand name of international fast food offerings.
4.3.2 Likes and dislikes towards International fast foods:

Q. What do you like about internationally originated fast food?

Likes Towards Fast Food

Taste
7% 1% Freshness
5%
9% 31%
Price
Easy to Eat
Quality
11%
Appearance and Packaging
8% 24% Nutritional Benefits
Don't like them

Taste Freshness Price Easy to Quality Appearance Nutritional Don't Like

Eat and Benefits Them
Packaging
31% 24% 8% 11% 9% 5% 7% 1%

• Taste is the most important factor why consumers like International origin fast
foods (31%).
• Higher and average income consumers with higher education like internationally
originated fast food because of its taste, freshness and quality.
• Female consumers like internationally originated fast food because of its freshness.
• Respondents from all the sub demographic categories rate taste the most
important factor why they like internationally originated fast food.
Q. What do you dislike about International fast food?

D is lik e s T o w a rd s F a s t F o o d

D o n 't lik e th e m
7% 4% 9%
3% N o t H e a lt h y
9% A p p e a ra n c e a n d P a c k a g in g
28% N o t E a s y to E a t
E x p e n s ive
L a c k o f F re s h n e s s
Ta s t e
30% 4% Q u a lit y
5%
O t h e rs

Don't Not Appearanc Not Expensive Lack of Taste Quality Others

Like Healthy e and easy Freshness
Them Packaging to eat

9% 28% 4% 5% 30% 9% 3% 7% 4%

• 9% of the buyers say they have no dislikes about international fast food offerings.
Most of these buyers were adult from both the sexes and average household income.
• 28 % of the adult educated buyers male as well as female consistently rated that
International fast food offerings were not healthy for them; the reason for their dislike for
International fast foods.
• 30% of the buyers rated that International fast foods were expensive for them to buy.
Most of the female consumers and young buyers, with average income of Rs. 10,000
-15,000 dislike the offerings because of its higher price. The reason for this is that these
consumers have limited resources.
Q. What are the most important factors that most often limit you in purchasing
International fast food products?

Limiting Factors Towards International Fast Food

3% 2% Not Healthy
8% 23%
Unfamilier
15% Expensive
Difficult to Find
Non Veg
3% No Limiting Factor
Don't Like Them
9%
28% Other

Not Un familiar Expensive Difficult Non Veg No Don't Other

Healthy to Find Limiting Like
Factor Them
23% 3% 28% 9% 15% 8% 3% 2%

• Several factors limit people of Chandigarh from purchasing International origin fast food
products. 28% of the buyers mentioned international fast food is too expensive and 23%
mentioned fast food as not healthy for them as the limiting factor.

• 15% of the buyer's mentioned that non-vegetarian ingredients in the offerings limit them from
buying the products.

• Most of the female consumers mentioned presence of non-vegetarian ingredients and

expensive nature of the offerings as the most limiting factor.

• Younger buyers in the age group of 15-25 years mentioned price as the most limiting factor
than the older people.

• Most of the older consumers say that they don't like international fast food offerings (taste and
not convenient to eat as the main factors) and the offerings are difficult to find.
Q. When comparing price of international fast food products with local fast food products
what would you say?

• On average 49% of the consumers feel that International fast food offerings are more
expensive than local fast food offerings.
• Most of the older consumers (above the age of 45 yrs.) and younger consumers (15-25 yrs.)
both male and female mention International fast food offerings as more expensive.
• Consumers between the age group of 25-45 years, with household income above Rs.25, 000,
both male and female consistently mention offerings having same price as compared to local fast
food offerings.
• Higher income consumers more often mention International fast food offerings as more
expensive.

4.3.3 Purchase behaviour:

Q. How often do you buy International fast food products?

Buying Frequency

19% 11%

Everyday
5 times a week
2 times a week
31%
less than twice a week

39%

Everyday 5 times a 2 times a less

week week than
twice a
11% 31% 39% week
19%

• On an average 39% of the International fast food consumers shop 1-2 times per week where
31 % of the respondents shop 4-5 times per week.
• The younger the buyers (both male and female), the more they buy International fast food
offerings.
• Higher income buyers most often mention that they buy International fast food offerings 1-2
times per week. This can be attributed to the health consciousness among the high-income
consumers.
Q. When you buy International fast food products in which manner do you consume it?

Consumption Behavior

26% 29%

consume as a snack
Eating outside (ambience counts)
Pack it home

45%

consume Ambience Pack it

as a Counts! home
snack
29% 45% 26%

• Most of the International fast food buyers (26%) consume the products as a snack. Younger
consumers irrespective of sex and income difference prefer eating fast food offerings outside
home. The main reason for buying fast food offerings as a snack is socializing and it becomes
a means of entertainment, as well as meeting with their peers at a fast food restaurant.
• Older consumers (45 years & above) of International fast food offerings prefer taking fast
food offerings home or prefer home delivery service provided by the restaurants.
4.4 Attitude and Behaviour towards Hamburgers:

4.4.1 Purchase Frequency:

Q. How often do you purchase hamburgers?

Purchase frequency of Hamburgers

18%
less than once a week
Everyday
24% 4-5 times a week

3%

Less than 4-5 Times Everyday

1ce a a week
week
18% 24% 3%

• Most of the consumers buy hamburgers 1-2 times per week. Purchase frequency of the younger
consumers (15-25 years) is higher and it keeps decreasing with the increase in age.
• Purchase frequency of hamburgers is higher in the income group of Rs. 15, GOO-25,000. It is
observed that most of the consumers in this group are servicemen or businessmen. Therefore the
higher purchase frequency of hamburgers can be attributed to the fact that these people spend
most of their time outside their home. On an average there is no much difference in the
consumption of hamburgers by male and female consumers.
• However it is noted that higher income people (Rs.45, 000 & above) less often consume
hamburgers (15%), instead they buy for their children.
Reasons for Purchasing Hamburgers:

• On an average convenient/easy to eat and 'as a snack' are the most important
reasons for buying hamburgers.
• Younger hamburger buyers (15-25 yrs.; 69%) mention 'as a snack' the important
reason for buying hamburgers
• Higher income buyers (71%) mention that they buy hamburgers mostly because their
children like burgers...
• Most of the female buyers (68%) and older people (45yrs. & above; 79%) mention
taste and freshness as the important reason for buying hamburgers.

Q. What are the most important reasons that most often limit you in buying
hamburgers?

• On an average 38% of the consumers’ rate, 'Taste good, but not healthy' as the
important reason that limits them from buying hamburgers. 78% of the male buyers
and 81% of female buyers share the same opinion.
• 11% of the buyers mention that hamburgers are too expensive for them to buy.
• 81% of these consumers belong to the age group of 15-25 yrs. and most of these are
students.
• Most of the higher income (25, 000 to 40, 000), female buyers (79%) find
hamburgers not very tasty, which most often limits them from buying.
4.4.2 Source of information, brand name, packaging, country of origin:

Q. Where or how did you learn about hamburgers?

Source of Information

15% 19%

8%
Personal Sources
Commercial Sources
Public Sources
Experience

56%

Personal Commercial Public Experience

Sources Sources Sources

19% 56% 8% 15%

• On an average 56% of the hamburger buyers learned about hamburgers from

commercial sources, such as, advertising, in-store promotions, and restaurants.
• 19% of the hamburger buyers learned about hamburgers from personal sources, such
as family, friends, neighbors, and acquaintances.
• It can be learned from the feedback that commercial sources and personal sources; word
of mouth being the most important factor, play a major role in promoting a particular offering.
• 15% of the consumers learned by their experience; out of curiosity to try
hamburgers.

Q. How important to you is the brand name when purchasing hamburgers?

 Importance of Brand

30%
38% Very Important
Neither important nor unimportant
Important
Not Important
8%
22%

Very Important Neither Not

Importan important Important
t nor
unimportant
30% 22% 8% 38%

• Higher income (Rs.40, 000 & above) buyers of hamburger find brand name very
important.
• People with the average income (Rs.10, 000 to 40, 000) find brand name important.
• 30% of the young hamburgers buyers find brand name as unimportant.
• Remarkably, both male and female buyers share the same opinion with respect to the
brand name of hamburgers.

Q. How important to you arc visual cues on packaging and clear labels on
hamburgers when making purchase?
 Importance of Packaging

10% 12%
Very Important
Important
Neither Important nor unimportant
4% Not Important

23%

Very important Neither Not

Importan important Important
t nor
unimportant
12% 23% 4% 10%

• 55% of the buyers of hamburgers find packaging for the hamburgers important. Again
higher income (Rs.40, 000 & above; 76%) consumers mention packaging of hamburgers
very important.
• Younger hamburger buyers mention packaging of hamburgers neither important, nor
unimportant.
• Most of the female buyers (67%) find packaging of hamburgers very important as
compared to male buyers (87%) who find packaging of hamburgers as just important.

4.4.3 Consumption and occasion:

Q. When you buy hamburgers in which manner do you consume?

 Consumption Behavior

28%

Eat it in the resturant right away!

Pack it Home

72%

Eat in the Pack it Home

Restaurant
72% 28%

The graph reveals that behaviour on an average 72% of the consumers of hamburgers like to
eat hamburgers right away, while 28% of buyers like to take hamburgers home.

Q. On what occasion do you eat hamburgers?

• Maximum consumers (59%) in Chandigarh, eat hamburgers as a snack.

• However, 65% of male consumers eat hamburgers as a snack and 71% of female
buyers prefer hamburgers as a meal.

• 79% of young consumers (15-25yrs.) eat hamburgers as a snack.

• 81% of lower income buyers (Rs.10, 000 to Rs.15, 000) eat hamburgers as a meal.
4.4.4 Alternatives and purchase intentions:

Q. When you could not buy hamburger what other product would you choose?

Alternatives to Hamburgers

17%

Anything International
Local Fast food

35%

Anything Local Fast Food

International
72% 28%

• 35% of the consumers prefer any kind of international fast food product as an
alternative for Hamburgers while 26% of buyers feel any kind of food as an alternative
for hamburgers.
• However, there is big difference in opinion with respect to household income
distribution. 89% of the lower income buyers (10,000 to Rs.15, 000) mention 'any kind of
food' as an alternative for hamburgers, whereas, higher income buyers (Rs. 45, 000 &
above; 71%) will not buy any product as an alternative to hamburgers.
• 79% of the younger buyers (15yrs. to 25yrs.) prefer any kind of international fast food
as an alternative to hamburgers.
4.5. Attitude and Behaviour of Consumers towards Pizzas:

4.5.1 Purchase Frequency:

Q. How often do you purchase pizzas?

Purchase Frequency of Pizzas

19% 19%

Never
12%
Everyday
4-5 times a week
1-2 times a week
16% Less than once a week
53%

Never Everyday 4 - 5 Times a 1 - 2 times a week Less than once a week

week
19% 12% 16% 53% 19%

• 53% of the consumers buy pizzas I -2 times per week, as seen in the graph above.
• Purchase frequency of the younger consumers (15-25 years) is higher and it keeps
decreasing with the increase in age.
• Purchase frequency of pizzas is higher in the income group of Rs.15, 000-25,000.
• The frequency of buying the pizzas is higher in females (65%) as compared to
males. It is observed that most of the females are not housewives. Therefore the
higher purchase frequency of pizzas can be attributed to the fact that these people spend
most of their time outside their home.
• However it is noted that higher income people (Rs.45, 000 & above) less often
buy pizzas (27%).
Q. Where do you buy pizzas?

• Most of the consumers (34%) buy pizzas from International fast food outlets.
• However, the outlet for buying pizzas changes with age. Most of the young buyers
prefer International fast food restaurants, while older consumers prefer going to a
local fast food or local food restaurant.
• Higher income buyers (Rs. 40,000 & above; 81%) prefer local fast food restaurants.
This can be attributed to the fact that there is less commotion, more quality
service as compared to the International fast food restaurants where, self-service is
dominant.
• Most of the student male consumers also prefer Snack shops for buying pizzas as
the offerings are cheaper compared to organized fast food outlets.

Likes and dislikes about pizzas:

Q. What are the most important reasons for you buying pizzas?

• On an average taste, convenient/easy to eat and 'children like it' are the most
important reasons for buying pizzas.
• Younger pizza buyers (15-25 yrs.; 56%) mention 'Taste' the most important reason for
buying pizzas.
• Higher income buyers (Rs. 40, 000 & above; 79%) mention that they buy pizzas
mostly because their children like it.
• Most of the female buyers (71 %) and older people (45yrs. & above; 81 %) mention
taste and freshness as the important reason for buying pizzas.
• 41% of the younger consumers mention that they like everything about pizzas.
Q. What are the most important reasons that most often limit you in buying
pizzas?

Reasons For NOT Buying Pizzas

2% 6%
13% Not Tasty
Not Healthy
Not Familiar
Difficult to Find
Too Expensive
29%
Prefer local food
17%
Lack of Freshness
2% 1%

Not Not Not Difficult to Too Prefer Lack of

Tasty Healthy Familiar Find Expensive Local Freshness
Food
6% 29% 1% 2% 17% 13% 2%

• On an average 29% of the consumers’ rate, 'Taste good, but not healthy' as the
important reason that limits them from buying pizzas. Astoundingly, most of the male
as well as female buyers share the same opinion.
• 17% of the buyers mention that pizzas are too expensive for them to buy. 71% of
these consumers belong to the age group of 15-25 yrs. and most of these are students.
• Most of the higher income (25,000 & above), female buyers (79%) and older
buyers (89%) mention that they don't buy pizzas too often. Most of these buyers prefer
local food. The most important reasons being expensive and 'not healthy'.
4.5.3 Source of information, brand name, packaging, country of origin:

Q. Where or how did you learn about pizzas?

Source of Information about Pizzas

1%
19%

38%
Experience
Personal Sources
Commercial Sources
Public Sources

42%

• On an average 42% of the pizza buyers learned about pizzas from Personal
sources, such as, family, friends, neighbors, acquaintances and 38 % of the pizza
buyers learned about pizzas from Commercial sources, such as advertising, in-
store promotions, restaurants.
• It can be learned from the feedback that commercial source and personal sources
(word of mouth being the most important factor), play a major role in promoting an
offering.
• 19% of the consumers learned by their experience, out of curiosity to try pizzas.
• Most of the younger consumers learned about pizzas from personal sources such as
friends, peers and acquaintances, where as higher income buyers (Rs.40, 000 &
above; 89%) learned from commercial sources such as advertising and media.

Q. How important to you is the brand name when purchasing pizzas?

 Least Not Neither Very Most
Importan Importan Important Importan Important
t t nor t
unimportant
12% 17% 26% 7% 38%

• Most of the consumers of pizzas find the brand name for buying pizzas as
important.
• Younger pizza buyers (15-25 years; 87%) find the brand name for buying pizzas
neither important, nor unimportant.
• Higher income (Rs.40, 000 & above; 89%) buyers of pizzas find brand name as
important.
• People with the average income (25, 000 to 40, 000; 79%) find brand name for
buying pizzas as neither important, nor unimportant.
• 53% of the young pizza buyers find brand name as unimportant.
• Remarkably, most of the female buyers (81%) mention that brand name is
important while making purchase of pizzas.

Q. How important to you arc visual cues on packaging and clear labels on pizzas
when making purchase?
 Not Least Neither Very Most
Importan Importan Important Importan Important
t t nor t
unimportant
7% 12% 18% 28% 42%

• 42% of the buyers of pizzas find packaging for the pizzas important.
• Higher income (Rs.40, 000 & above; 76%) consumers mention packaging of
pizzas very important.
• Younger buyers (15-25yrs) mention packaging of pizzas neither important, nor
unimportant.
• Most of the female buyers (79%) find packaging of pizzas very important as
compared to male buyers (87%) who find packaging of pizzas as important.

Q. When buying pizzas, do you have any preference for the country of origin?
• 41% of the consumers find the country of origin for the purchase of pizzas as important
where as 46% say it is not important.

• From the 46% who do have a preference for the country of origin, USA (59%) was the
most preferred country followed by Italy (28%) and other European countries (13%).

4.5.4 Consumption and occasion:

Q. When you buy pizzas in which manner do you consume?

Consumption pattern

34%

Take Home
Eat Right Away!

66%

Take Eat Right

Home Away

34% 66%

The graph reveals that on an average, 34% of the consumers of pizzas like to take Pizzas
home or order by 'home delivery' service while 66% of buyers like to share with others
right away at the restaurant. Ambience counts for most people.

Q. On what occasion do you eat pizzas?

 Occasion for eating Pizzas

5% 15%
No special occasion
29% when out in public
As a Meal
As a Snack and not Meal
21% Entertaining Guests

11%

No special When out As a As a Entertaining

occasion in Public meal Snack Guests

15% 21% 11% 29% 5%

• The graph indicates that on an average, 29% of the consumers eat pizzas as a
snack. This can be attributed to the fact that most of the population in the city of
Chandigarh spends most of their time outside their home as most of them work or
are students.
• There is a significant difference in the opinion of male and female buyers. 75% of
male pizza buyers eat pizzas as a snack while, 83% of female buyers prefer pizzas as
a meal.
• 62% of young buyers (15-25yrs.) eat pizza as a snack.
• Most of the lower income buyers (Rs.10, 000 to Rs.15, 000; 89%) eat pizzas as a
meal.

Q. According to you, what other products are necessary when consuming

pizzas?
 • 41% of the buyers feel that cold drinks are necessary in combination with pizzas.
• 39% of the buyers mention Dip sauce and ketchup necessary in combination with
pizzas.
• Higher income (Rs.25, 000 to Rs.40, 000; 89%), female buyers feel that salad in an
important product in combination with pizzas.
• Younger pizza buyers (15yrs. to 25yrs.; 83%) feel that Ketchup and cold drinks
are necessary in combination with pizzas.

4.5.5 Alternatives and purchase intentions:

Q. When you could not buy a pizza what other product would you choose?

Alternatives for Pizzas

3% 7%

Nothing Else
Any Snack
Anyhing International

78%

Nothing Any Anything

Else Snack International

7% 12% 18%

• 78% of the pizza buyers would not buy any kind of food as an alternative for
 pizzas.
• However there is big difference in opinion with respect to household income
distribution. Lower income buyers (Rs 10,000 to 15000; 11%) mention 'any other
International fast food' as an alternative for pizzas, whereas, higher income buyers
(Rs. 45, 000 & above; 78%) will not buy any product as an alternative to pizzas.
• 79% of the younger buyers (15yrs. to 25yrs.) prefer any kind of International fast
food as an alternative to pizzas.

4.6 Attitude and behaviour of Consumers towards Sandwiches:

4.6.1 Purchase frequency:

Q. How often do you purchase sandwiches?

Purchase Frequency

12%
35%
1 - 2 times a week
4-5 times a week
Everyday
less than 1ce a week
46%
7%

1 - 2 times a 4 - 5 times Everyday Less than 1ce a week

week a week
12% 46% 7% 35%

• Mainly two groups exist when looking at frequency of buying sandwiches.

 • 42% of the consumers buy sandwiches 4-5 times per week and 35% buy less than once
in a week, as seen in the graph above.

• There is no significant difference for the purchase frequency of sandwiches when

considering the age factor of the consumers.

• However, purchase frequency of sandwiches is higher in the income group of

Rs.10, 000-15, 000(89%).
• The frequency of buying the sandwiches is higher both in males as well as
females. It is observed that most of the females are not housewives. Therefore the
higher purchase frequency of sandwiches can be attributed to the fact that most of
these consumers spend most of their time outside their home and they do not
consider sandwiches as unhealthy as compared to other International fast food
categories.
• However it is noted that higher income people (Rs.40, 000 & above) less often
buy sandwiches (21%).

Q. Where do you buy sandwiches?

 Purchase Outlets

21%
31%
International Outlets
Local Resturants
Street Stalls
Snack Shops
29%
19%

International Local Street Snack

Outlets Restaurants Stalls Shops
21% 29% 19% 31%

Most of the consumers (31%) buy sandwiches from International snack shops. However, the
outlet for buying sandwiches changes with income. Higher income consumers prefer Snack
shops (67%) and fast food restaurants (59%). There is no significant difference for the choice
of International or local fast food restaurants. Most of the young buyers prefer snack shops,
while older consumers prefer buying from local fast food outlets. This can be attributed to
the fact that in Chandigarh International fast food restaurants are often crowded with
young buyers and middle age working people, where older consumers don't feel comfortable.

Most of the student male consumers also prefer Snack shops for buying sandwiches as the
offerings are cheaper compared to organized fast food outlets
4.6.2 Likes and dislikes about sandwiches:

Q. What are the most important reasons for you buying sandwiches?

Reasons for buying Sandwiches

25% 25%

Healthy
Tasty
Quick
10% Filling

40%

Healthy Tasty Quick Filling

25% 10% 40% 25%

On an average health and 'as a snack' are the most important reasons for buying
sandwiches. Younger sandwich buyers (15-25 yrs.; 76%) mention 'convenient/easy to eat 1
and 'freshness' the important reason for buying Sandwiches. 67% of the younger
consumers mention that they like everything about sandwiches. Higher income buyers
(Rs.40, 000 & above; 81%) mention that they buy sandwiches mostly because of
freshness. Most of the female buyers (87%) and older people (45yrs. & above; 81%) also
mention freshness as the important reason for buying sandwiches.
Q. What are the most important reasons that most often limit you in buying
sandwiches?

• On an average 41% of the consumer's rate, Mack of freshness' as the most

important reason for not buying sandwiches.
• 15% of the buyers mention that sandwiches are expensive for them to buy. 79%
of these consumers belong to the age group of 15-25 yrs.
• Most of the higher income male (40,000 & above; 81%) and older buyers
(71%) mention that they don't buy sandwiches too often.

4.6.3 Source of information, brand name, packaging, country of

origin:

Q. Where or how did you learn about sandwiches?

Source of Information about Sandwiches

26%
39% Personal Source
Commercial Sources
Public Sources
Personal Experience
14%
20%

Personal Source Commercial Sources Public Sources Personal Experience

39% 20% 14% 26%

On an average 39% of the sandwich buyers learned about them from personal sources,
such as, family, friends, neighbors, acquaintances and 26 % of the buyers learned about
sandwiches by their own experience to eat out of curiosity. There are no significant differences
between different demographic subgroups. However, most of the younger consumers
learned about sandwiches from personal sources such as friends, peers and
acquaintances, where as higher income buyers (Rs.40, 000 & above; 79%) learned from
commercial sources such as advertising and press media.

Q. How important to you is the brand name when purchasing sandwiches?

Importance of Brand Name in Sandwiches

Very Important
Important
7% 11%
Neither important nor unimportant
unimportant

26%
42%

Very Important Important Neither Important Nor Unimportant

Unimportant
11% 26% 42% 7%

• Most of the consumers (42%) find the brand name for buying sandwiches as
neither important, nor unimportant.
• Younger sandwich buyers (15-25 years; 81%) find the brand name for buying
sandwiches unimportant.
• Higher income (Rs.40, 000 & above; 89%), female buyers of sandwiches find
brand name as important. The most important reason being the use of fresh and
quality ingredients
 • People with lower income (Rs.10, 000 to 15, 000; 89%) find brand name for
buying sandwiches as neither important, nor unimportant.

• Remarkably, most of the female buyers (79%) mention that brand name is
important while making purchase of sandwiches.

Q. How important to you are visual cues on packaging and clear labels
on sandwiches when making purchase?

• 39% of the sandwich buyers find packaging for the sandwiches important.
• Higher income (Rs.40, 000 & above; 89%) consumers mention packaging of
sandwiches very important.
• Younger sandwich buyers mention packaging of sandwiches neither important,
nor unimportant.
• Most of the female buyers (83%) find packaging of sandwiches very important.

Q. When buying sandwiches, do you have any preference for country of origin?

Country Of Origin - Sandwiches

Yes
17% 11% NO
Neutral

72%

Yes Neutral NO

11% 17% 72%

72% of the sandwich buyers don't have any preference of the country of origin. From the
17% who do have a preference, U.S. is the most preferred country.
4.6.3 Consumption and occasion:

Q. When you buy sandwiches in which manner do you consume?

Consumption Behavior - Sandwiches

eat it right away

children like it
7% 11%
17% pack it home
when on the move

72%

Eat it Right Children Pack It When On The Move

Away! Like It Home
11% 72% 17% 7%

• The graph reveals that on an average 33% of the consumers of sandwiches like to
eat them at the point of purchase. 23% of buyers like to share with others right away.
• 87% of the female consumers like to share the sandwiches with others and
maximum number of them (25 yrs. & above; 72%) buy for children.
• Maximum number of younger consumers (15yrs.-25yrs.; 86%) like to eat the
sandwiches right away.
• Maximum number of older consumers (45yrs. & above; 84%) like to take
sandwiches home.

Q. On what occasion do you eat sandwiches?

 Buying Behavior - Sandwiches

As a snack not as a meal

Entertaining guests
8% when on the move - Public places
15% At an International Fast Food Joint
As a Meal

51%

20%
1%

As a Snack and Entertaining On the Move In the Fast Food Joint As a Meal
Not a Meal Guests

51% 1% 20% 15% 8%

• The graph indicates that on an average 51% of the consumers eat sandwiches as a
snack, and not during mealtime. The most important reason for this is that most of
the population in the city of Chandigarh spends most of their time outside their
home socializing and at work.
• There is no significant difference in the opinion of male and female buyers. Most of
the middle age (25-45yrs.) male as well as female buyers mentioned that there is no special
occasion for them buying sandwiches.

Q. According to you, what other products are necessary when

consuming sandwiches?
 • 43% of the buyers feel that beverages are necessary in combination with
sandwiches.

• 26% of the buyers mention chutney necessary in combination with sandwiches,

while 22% of pizza buyers prefer ketchup.

• Younger hamburger buyers (15yrs. to 25yrs.; 83%) most often mention beverages an
important product in combination with sandwiches.

4.6.4 Alternatives and purchase intentions:

Q. When you could not buy sandwiches what other product would you choose?

Alternatives to Sandwiches

Anything International
Local Fast Food
11% 7%
Any kind of food
nothing apart from Sandwiches

33%
49%

Anything Local Fast Any Kind of Food Nothing apart from

International Food Sandwiches

7% 49% 33% 11%

• 49% of the sandwich buyers would buy any kind of local fast food as an
alternative for sandwiches.
• However there is big difference in opinion with respect to household income
 distribution. Lower income buyers (Rs l0, 000 to Rs. 15, 000; 87%) mention 'any
• kind of food' as an alternative for sandwiches, whereas; higher income buyers
• (Rs.45, 000 & above; 91%) will buy any kind of International fast food product as
an alternative to sandwiches.
• 79% of the younger buyers (15yrs. to 25yrs.) prefer any kind of local fast food as
an alternative to sandwiches. This can be attributed to the fact that most of the
• International fast food products are much expensive as compared to local fast
food offerings.

CHAPTER V:
 KEY FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS

5.1 Factors influencing product choice:

In this section the main factors that influence choice (decision to buy) and purchases
(exchange of resources) of International fast food products are described based on the
results of the response from the consumers.

5.1.1 Who are the consumers?

• On an average, 60% of selected buyers have the influence of commercial and

personal sources as to how they became acquainted with International fast food products.
Housewives and elderly buyers tend to be more prices sensitive as they have limited budget
and time to make a purchase. Participants with children tend to spend more money on fast
foods, and they perceive the products are convenient/easy to eat, less time consuming, fresh,
suitable when socializing, having nicer and strong packaging, and are competitively priced
compared to local products.

• Almost 70% of the participants (across age groups) preferred to shop at organized fast
food restaurants rather than in street stalls for the following reasons:
• Shop premises is spacious and clean
• Good sales service
• Near to their work place
• A wide selection of food choices
• Safe to eat
• Fresh ingredients used

• However, they also find the International fast food offerings more expensive as
compared to local fast food offerings. Older consumers prefer local fast food restaurants as
compared to International fast food restaurants. The most important reason being that
International fast food restaurants are often crowded with youngsters, and they prefer visiting
restaurants where there is no self-service.

5.1.2 What to buy?

• Half of the participants are most likely to purchase products, which can be consumed
as a snack everyday having less fat. Fresh offerings are mentioned as items that participants
are likely to purchase because these food products are perceived as clean and hygienic.
Beverages are most often mentioned in combination with International fast food items. Most
of the participants are likely to purchase products that can be consumed as snack every day,
which is having fewer fats. Frozen pizzas are not bought because people rather preferred
fresh pizzas at International restaurants such as Pizza Hut.

• Consumers like fast food offerings with a light sauce such as tomato sauce or
with a special sauce (chutney) made from fresh vegetables for a healthier variant.
Consumers are least likely to purchase alcoholic (beer, etc.) items because they don't find it
suitable with International fast foods. Frozen offerings (frozen pizzas) also seem as least
likely buy. All the participants prefer beverages with the International fast food offerings.
Participants did not like too oily products and salads are also mentioned by most of the
buyers as a good combination with the offerings.

5.1.3 Time and occasion:

Around 70% of the participants in the age group of 15 – 45 consume International fast
food frequently. On an average, they consume International fast foods 3 to 4 times a week
at restaurants, mostly at breakfast or at lunchtime, but some of them consume International
fast food up to 8 times a week. Participants opt for International cuisine at fast food
restaurants such as McDonalds, Kentucky Fried Chicken, Pizza Hut and local organized fast
food restaurants as these are the places that they recognized from their childhood onwards
and are perceived to provide clean, quick, and reasonably priced food. If eating at home
most of them prefer ordering the offerings by 'Home delivery' service.

Having food with peers and family members is preferred by most of the respondents.
Therefore, they would purchase the best quality food provided that the food is fresh, not
expensive, has traditional flavors that satisfies their simple eating habits. Those who liked
International fast food as meal perceived it as cleaner and more hygienic, time saving, better
quality and less expensive because of in-store promotions, and above all other family
members, especially children liked the offerings.

5.2 General attitudes towards International fast food products:

Around 80% of the participants in the age group of 15 - 45 preferred International fast
food products above local fast food products for the following reasons (see also previous
paragraph):

• Food is fresher
• Food has better quality
• Food is clean and hygienic
• Food is convenient/easy to eat
• Food has better nutritional value
• Food has better/durable packaging
• Food is recommended by family members, friends or colleagues at work

5.3 Motivational factors behind buying behaviour:

In order to obtain a better understanding of consumer motivations behind their buying
behaviour most of the questions were kept open ended along with most often occurring
motives as understood from the secondary data. Participants ranked their most important
motives to try an International fast food product for the first time in order of importance as
follows:

5.3.1 Motivations mentioned:

• Word of mouth recommendation from friends/relatives

• Advertising outside the store (e.g. commercial ad on TV or print ad from
magazines, food magazines particularly)
• Natural curiosity
• Food wrapped in a nice packaging
• Special in-store promotional display
• Price cuts in the offerings
• Economic offerings for large groups (e.g. Happy price menus from McDonald's and
Combo meals from Pizza hut)

Other less important motivations mentioned by consumers include food freshness directly seen
from the packaging, country of origin, detail information about the ingredients and detail
information on the production process.

Factors that have the greatest influence on their eating and food buying practices are
family members, closed related friends, health issues, product information, in-store
promotions and advertising.

Most of the consumers agreed that International fast food products are hygienic/safe to eat,
easily available, time saving, convenient/easy to eat, ideal for social gatherings, enjoyable,
give value for money and is today's trend in Chandigarh.

Salient beliefs mentioned by respondents include cleanliness, safe to eat, time saying
convenience, is a trend in Chandigarh, good quality standard and eating habit, better
nutritional value and freshness.

Half of the participants agreed that a brand was important when choosing International
fast food products because of the following factors:

• The general image of the company; if the company has a good reputation, it is
preserved as a guarantee for high quality products.
• Standard guarantee in respect of safety and hygiene; well-known brands are
perceived as more reliable than less well-known brands.

The most important criteria for participants to pick up certain International fast food
products include taste, store cleanliness, freshness, nutritional benefits, food quality, and
price, country of origin, packaging and brand name. All participants are aware that the
price of International fast food products is higher than the price for local food products.
However, they are willing to pay more for an International fast food product over a
similar local food product because of the following reasons:

• Convenient/easy to eat
• Variety in offerings
• Food quality is more important than price.

They have better confidence in the quality of International fast food. On the basis of
sensory food characteristics, products having traditional Indian flavors are generally
preferred over all others. Depending on one's demographic traits, preference may be
based on money-saving or timesaving characteristics. Consumers also have a general
preference for variety in the diet, related to the willingness of most of the participants to
try new fast food products. Consumers also have a preference for freshness. As most of
the participants spend most of their time outside their home, food shopping tends to be
done daily. Because generally fast food products are consumed right away there is no
need for storage or preservation, therefore, products are always purchased extremely
fresh. When eating alone or in small groups, there is a tendency to eat International fast
foods, many of which are perceived as requiring less time and effort. Eating in
restaurants and/or eating Indian-style foods seem to be preferred in situations involving
larger groups (during lunch/dinner).

There are two reasons for this: cooking at home for large groups requires too much time and
effort; and Indian style meals involve the sharing of many dishes among everyone at the table.
The variety that results from this practice is greater with larger groups of people. The
adoption of International fast foods is related to the influence of significant others, such
as family members, the education system (hygienic/unhygienic), mass media and co-workers.
Social influences may encourage or discourage the adoption of international fast food.

Seniors are generally less likely to adopt International fast food consumption behaviours (home
cooked food is generally preferred by elderly people). The role of mass media in the
adoption of International fast foods is primarily to create awareness of the existence of
various food products, and to provide information. In-store samples of products are useful in
providing the trial of novel foods. However, attitudes towards International foods are
formed more through word-of-mouth, personal experience and messages of the media.

Several factors were found to motivate the retention of International fast foods. Perhaps the
strongest factor affecting the use of International fast foods is Indian traditions. Foods whose
qualities conflict with the sensory characteristics of traditional Indian foods are generally tried
more reluctantly. International foods are perceived to be having ingredients made from beef
and pork (tallow) by some of the consumers. In India cow is sacred to the Hindus and Pork
to the Muslims.

Price is also an important consideration when making consumption decisions. Low prices
may induce the trial of some International fast foods and may allow an International product to
be chosen over a similar Indian product.

However, the people's love for fast food is reflected in the overwhelming number of fast food
outlets, whether they are International fast food restaurants, local fast food restaurants, snack
shops or street stalls/kiosks.

5.4 Introduction to Conclusion:

In the course of carrying out the research study, very important aspects have emerged.
Despite being the city having highest per capita income and competing in every aspect
with a well-developed International town, the results show an astounding difference
between the consumption behaviour of the International consumers and urban Indian
consumers. Below listed are the preferences of consumers in Chandigarh for International
fast food offerings:

5.4.1 General:

The food market in Chandigarh is a large market, which offers opportunities for overseas
suppliers and producers as a significant number of fast food products are in big demand.
Chandigarh has a population of 6.5 million, comprising mostly of domestic households.

Shopping and eating habits of domestic households generally reflect Indian customs and
local circumstances. But, at the same time people love to associate themselves with the
International culture. Gender roles are now changing. Females have started working
outside. So, they have no time for their home, especially for cooking food. Fast food is
an easy way out because these are easily available and are convenient/easy to eat. Larger
families often dine out at dinnertime, and most working people dine out at lunchtime.

A
wareness of International fast food products among Hong Kong consumers is high. On
average shoppers mention 3.8 International fast food products (un-prompted), when
asked. Fresh pizzas, burgers, hot-dogs, French fries and sandwiches are mentioned most.

Local fast food restaurants are the main outlets for fresh food products, especially among
elderly grocery shoppers. However, as younger generations tend to adopt a more
International lifestyle, International fast food outlets are enjoying an increasing share
of the market.

The market for International fast food products is a highly competitive market in Chandigarh,
due to its free and open nature. Fast food chains are originating from all over the world, but
the dominant fast food chains are from the U.S. Due to the ambience and better service
conditions, local fast food outlets are preferred by the elderly consumers.

5.4.2 Who are the Consumers of International fast food products?

International food products are mostly bought by consumers in the younger age group or are
bought on behalf of them by family members/older relatives in the same household. The
maximum number of consumers of International fast food products are from the age group of
15-25 years, and from the household income perspective, most of the consumers are from the
average income group (Rs.15, 000 to Rs.25, 000; 34%). Consumers are relatively open to
try out new products and tastes. Differences in age and income are important determinants
of attitudes and preferences towards International fast food products.

Hamburgers:
Purchase frequency of hamburgers is higher in younger consumers (15-25 years) and it keeps
decreasing with the increase in age. Higher income people (Rs.45, 000 & above) less often
consume hamburgers (15%), instead they buy for their children. However, 22% of the average
income (Rs. 15-25, 000) people eat them 3-4 times a week, while most other people buy
them only once or twice a month. On an average there is no much difference in the
consumption of hamburgers for male and female consumers.

Pizzas:

For the consumption of pizzas the level of income and gender difference has a major
impact on the purchase penetration rate. Purchase frequency of pizzas is higher in the
income group of Rs.15, 000-25, 000. Higher income consumers (Rs.45, 000 & above) less
often buy pizzas (27%). The penetration is much higher under the younger buyers than
under older buyers. Female consumers are more health conscious and therefore, their purchase
penetration is lower than male consumers.

Sandwiches:

There is no significant difference for the purchase frequency of sandwiches when

considering the age factor of the consumers. The frequency of buying the sandwiches is
higher both in males as well as in females. Purchase frequency of sandwiches is higher in the
income group of Rs.10, 000-15, 000; 89%. However it is noted that higher income people
(Rs.40, 000 & above) less often buy sandwiches (11%) instead they buy for their children.

5.4.3 How consumers became acquainted with International fast food

products?

The influence of International culture through media or recommendation from relatives or

close friends is an important factor of how people get acquainted with International fast food
products. Another important way for consumers to learn about International fast foods is
dining out in one of the many International restaurants. Especially fast food chains as
McDonalds and Pizza Hut are well known by consumers. Other important direct triggers are
advertising, in-store promotions in fast food outlets such as happy meals, free gifts for kids
and so on.

Hamburgers:
Consumers became acquainted with hamburgers by:

• Commercial sources, such as, advertising, in-store promotions, restaurants (56%)

• Personal sources, such as family, friends, neighbors, acquaintances (19%).
• 15% learned by their experience to try hamburgers out of curiosity.

Pizzas:

Consumers became acquainted with pizzas by:

• Personal sources, such as, family, friends, neighbors, acquaintances (42%)
• Commercial sources, such as advertising, in-store promotions, restaurants (38 %)

Sandwiches:

Shoppers became acquainted with sandwiches by:

• Personal sources (39%), such as, family, friends, neighbors, acquaintances and 26%
learned by their experience to try sandwiches out of curiosity.
• Advertising, in-store promotions (20%)
5.4.4 What are consumers looking for in International fast food products?

Generally, international fast food products are preferred above local fast food products
for the following reasons:

- Freshness - Better/durable packaging

- Better quality - Easy and quick to consume
- Clean and hygienic - Variety in offerings
- Better sales service - Better nutritional value

Consumers think that the price of International fast food products is higher than the price
of local foods, but they are willing to pay more for quality and service. Average and
higher income shoppers are more aware of the price differences, because they buy it more
often. However, 49% of the respondents mention that International fast food products are
too expensive. Younger people mention more often than older people that price is a
limiting factor when buying International food products, because they buy them more
often.

Taste appears to be strength and a weakness for different products. 49% of all
respondents, regardless of gender, age or income; rate taste as the most important factor why
they like International fast food products. However, when inquiring the dislikes towards
International fast food products, price and 'unhealthy to eat' are rated by most of the
participants as the main 'dislike'. Younger people like International fast food products more
because of its taste, convenience (easy to eat) and quality. Higher income shoppers like
International fast food products more because of its taste, quality, its appearance and
packaging. However, most of the female consumers dislike the offerings because of its higher
price.
Purchasing a branded product is considered important when choosing International fast
food products. Consumers associate these with the general image of the company as a
guarantee for the quality, safety and hygiene of the product sold by that company. Well-
known brands are perceived as more reliable than less well-known brands; whether it is a
foreign brand or a local brand, doesn't makes a big difference to the consumers.

Hamburgers:

• International hamburgers are mainly bought in International fast food outlets.

Convenient/easy to eat, 'children like it' and taste are the most important reasons for buying
hamburgers. Female and older buyers rate taste and freshness as the most important motive
for buying hamburgers. The other most important reason to buy hamburger is that
hamburgers are considered as a snack (bod, which is rated high by both the younger and
higher income buyers.
• Generally, brands are not important when buying hamburgers. Younger people find
brand name even less important than the average consumer. However, 55% of the
hamburger buyers find it important to have some visual cues on the packaging, especially
female and higher income hamburger buyers. The country of origin is important to most
consumers.
• Most hamburger buyers consume hamburgers right away and eat them as a snack;
especially younger hamburger buyers. Lower income hamburger buyers tend to eat them as
part of their meal. The most important products preferred in combination with the
hamburgers are beverages, ketchup, and salads. When hamburgers are not available, some
buyers would buy any kind of fast food product, whether International or local, as an
alternative, while others would end up not buying anything at all.

• The number of people who intend to buy less or same number of hamburgers this
year is larger than the number of consumers who intend to buy more. If intend to buy less,
reasons to buy less are that buyers feel the hamburgers are:
1. Expensive
2. Lack in nutritional benefits
3. Freshness.

If intend to buy more, reasons to buy more are:

1. Taste
2. Quality
3. Children like it and
4. Convenient (easy to eat).

Pizzas:

• 53% of the consumers buy pizzas 1-2 times per week and purchase frequency of
pizzas is higher in the income group of Rs.15, 000-25, 000. Pizzas are mainly
bought in International fast food outlets. Taste is the most important reason for buying
pizzas. Taste and having too much caloric value are also the most important
reasons people less often buy pizzas. The second most important reason to buy
pizzas is convenient/easy to eat, which is rated by younger buyers as the most
important reason.

• Most of the pizza buyers find the brand name neither important/nor unimportant,
whereas female buyers rate brand name as important. About 42% of all pizza buyers find
it important to see visual cues on the packaging, but they are not interested in the country
of origin.

• Most pizza buyers eat pizzas as a snack. This can be attributed to the fact that
most of the population in the city of Chandigarh spends most of their time outside their home.
Most of the lower income buyers (Rs.10, 000 to Rs.15, 000; 89%) eat pizza as a meal. 75% of
male buyers eat pizzas as a snack while 83% of female buyers prefer pizzas as a meal.
However, female consumers like to share the pizzas with others and maximum number of
them buy for children. Most of the younger consumers like to eat the pizzas right away.

• Most buyers would not buy another substitute in case of unavailability of a pizza,
although 79% of the younger buyers (15yrs. to 25yrs.) would prefer any kind of
International fast food as an alternative to pizzas. The most important products
preferred in combination with the pizzas are beverages, ketchup, dip sauce and
salads.

• For the next year, the number of consumers who intend to buy fewer pizzas is
larger than the number of consumers who intend to buy more. If intend to buy less the most
important reason is: (1) not healthy, (2) expensive. The most important reasons to buy more
are: (1) convenient/easy to eat, (2) as a snack, (3) children like its (4) freshness. The number
of female buyers who intend to buy fewer pizzas next year is larger than the number of male
buyers. This can be attributed to the health consciousness among females.

Sandwiches:

• Purchase frequency of sandwiches is higher in the income group of

Rs.10, 000-15,000; 89% and they are mainly bought in snack shops. The most important
reasons for buying are (1) as a snack, (2) convenient/easy to eat, (3) healthy. The second
most important reason to buy sandwiches is freshness, which is rated by most of the
female buyers and older consumers as the most important reason. 'Lack of freshness' is
also the most important reason people never buy sandwiches (41%) followed by not
very tasty (18%).

• Almost half of the buyers find the brand name neither important, nor
unimportant; whereas higher income (Rs.40, 000 & above; 89%), female buyers of sandwiches
find brand name as important. The most important reason being the use of fresh and quality
ingredients. However, most buyers (39%) find packaging important. Younger sandwich
buyers mention packaging of sandwiches neither important, nor unimportant.

• If sandwiches would not be available, most buyers would replace them by

local fast foods. For the next year the number of people who intend to buy same/more
sandwiches is higher than the number of consumers who intend to buy less. If intend to
buy more the most important reasons are:
• Less calories/healthy
• Cheaper as compared to the products in the same category
• Convenient/easy to eat
• As a snack
• Freshness

5.5 Introduction to Recommendations:

The Fast food industry in India is poised for significant growth over the next few
decades, particularly in urban India. Gaining local acceptance and blending in to the
Indian culture still remains a challenge for many fast food restaurants. The study was
undertaken with an objective to understand the preferences of consumers in Chandigarh on
International fast food offerings and based on the results of the study the main objective
was to identify factors to be considered to encourage buying of international fast food
offerings.

Following are some of the recommendations that can be adopted by various brands
to encourage the buying of international fast food products:

India's fast food industry is growing by 40% a year and is expected to generate a billion
dollars in sales by 2006. Marketing of fast food and getting a foothold in India is going to be
highly competitive in the near future because of the high potential of the India's
processed food sector. On an average, each household spends about 50% of income on food
and beverages.

Following factors should be considered to encourage purchasing of international fast food

products:

• Price appears to be a critical factor in the choice making process of consumers,

especially younger people. A typical Indian is price sensitive because of his modest
disposable income and he has comparable options in local food. Globally fast food chains
only succeed when they bring their prices down to the same level as the street food. The trick
can be to make the offerings better than the local food, and price them competitively. Most
of the times this becomes impossible, so this can be counterbalanced by concentrating more
on data base marketing and below-the-line activities and special offers.

• Increasingly, eating out is becoming synonymous with entertainment. A clean and

well-organized store atmosphere appears to be an attractive feature. The trend towards
takeaways is also fast gaining popularity among Indian consumers. Most of the consumers of
fast food products are from the younger age group; therefore the potential consumers should
be enticed with TV spots, children parties, gifts for kids, and an ambience that is child and
teenager friendly.
• Older consumers prefer to visit local fast food restaurants instead of self-service
International style restaurants; hence addressing such need can be an added feature. In
India, social and cultural values have a very strong hold on the people. The fast food
culture has imposed greatly on the views of youngsters and the desire for a large family
meal. The marketers should focus more on positioning themselves as family restaurants
highlighting their Indian menus.

• Curiosity and an overall willingness to try new food and the value placed on
variety in the diet indicate that International origin fast foods are relatively likely to be
tried and eventually accepted into the diets of consumers. The marketers should
gauge to what extent preferences converge between the west and India with
respect to product category. Fast food outlets should introduce varieties of
products in order to cater the demands of each and every segment of the market.
Fusion of Indian flavors with International products can be offered to counter
competition from local products, and also strike a good hybrid culture, which will be
highly acceptable to the International friendly youth in India

• All categories of products should be introduced so that people of all age, sex,
class, and income groups can become customers of manufacturer’s food line.
Products should be developed and marketed to be compatible with Indian flavor
principles and cooking methods, taking into consideration Indian culture and
religious sentiments. An ethical sensitivity regarding the social legitimacy of
consumer influence should be there.

• Visual cues on packaging and clear labels (i.e. name of food, list of ingredients,
logos) in stores are important. Most consumers prefer products with nutritional and
caloric value printed on the packaging of the products. Nutritional information
should be posted in prominent locations and online. Apart from salads, vegetarian
offerings should be given high priority catering to the demand of the potential
consumers.
• The time and effort required shopping for and convenience/ease of eating food
becomes more important in the decision-making process. An increased popularity of easy-to-
eat products may therefore be anticipated. More take-out products can be added to the
present variety of offerings. A brand should invest more and concentrate on having a more
efficient distribution system in par with existing global standards. It needs to expand in
India in parallel to the new trend in fast food chains, setting out tiny outlets such as express,
takeaway, delivery and small dine-ins by fuel stations, in multiplexes and other highly
frequently visited locations.

5.6 Implications for Future Research:

The following issues are suggested for future research to fill the existing research
gaps:

• The research project concerned a pilot project on a limited number of individual

international fast food offerings only, which may be extended to an envisioned
continuous annual research programmed. The scope and content of the study could be
widened if similar research is conducted with more different product categories in the
market having similar conditions.

• The study was conducted in the city of Chandigarh, where it is estimated that
consumers spend most of their time outside their homes. Therefore, the
consumers were interviewed at various fast food outlets in the city. The trend
towards takeaways and 'home delivery' is also fast gaining popularity among
Indian consumers.
 • Therefore, the scope of the study can be extended if questionnaires are put forward
to consumers at their residences, offices, etc. Such a study would be very useful in
understanding the preferences of consumers for the various offerings, and services
(e.g. home-delivery service, etc.). It will give a deep insight about liking and buying
behaviour of consumers towards International fast food offerings.

• More intensive and time bound location specific research efforts are needed to get a
foothold in a highly competitive fast food market like India.

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21. Mello, M.M., Rimm, E.B. & Studdert, D.M; The Mclawsuit: The Fast Food
Industry and Legal Accountability for Obesity; Health Affairs- Vol. 22, No. 6; source
22. Balasubramanian, D. "Changes in the Indian Menu over the Ages," The Hindu,
October 21,2004
23. Campbell Polly, 'Quick and casual' Gratzi -will test area market for a new
restaurant concept. Source- cincinnati.com
24. American Heart Association, "Fast Food and 'the tube'; A Combo for Heart
Disease Risk, 8th March 2003; source- sciencedaily.com
25. Khurshid Anwar Warsi & Syeedun Nisa, Food Retailing: fast food industry,
Publisher-SSRN.com
26. India Today; India's Best And Worst States To Live In, August 15, 2005.
27. Sudeep Chakravarti, Nandita Chowdhury, and Stephen David, "Americana: Like,
This is //!" India Today, February 9, 2008.
28. Dani Rodrik and Arvind Subramanian, Why India Can Grow at 7 Percent a Year
or More: Projections and Reflections; IMF Working Paper, July 2004.
29. EIU, Business India Intelligence, January 26, 2005, Vol. 12, No. 2.

30. NCAER (National Council of Applied Economic Research) survey report, March
9, 2004.
31. "Looking on the Bright Side: India's Economy Is Revving Up," The Economist,
February 21,2004.
32. Adirupa Sengupta, "Living Up to the Choices Offered by the Free Market, " India
Abroad, August 2
33. Dr C.S. Gautam and Dr H.M. Swami, Obesity: a nightmare of the future, Tribune
News Service, Chandigarh; 01 / 04 / 2004.
34. Goldman Sachs, Global Economic Paper No 99: Dreaming with BRICs: The Path
to 2050, October 2003.

Appendix – I – Questionnaire

I, Adarsh Kumar, am a student of university of Wales studying in TASMAC at Pune,

India. I am pursuing MBA in Marketing and working on a dissertation in Consumer
Preferences in Chandigarh on International fast foods. I request you to fill up this
questionnaire giving your valuable time. Your response to this questionnaire would help
me to carry out my research effectively. A ll the information provided by you will be kept
confidential.

1. Personal

• Name:
• Address:
• Contact number:
• Gender:

2. Age
• 15-25
• 26-35
• 36-45
• 46 & above

3. What is your household income per month?

• Rs 10,000-15,000
• Rs.l5,000 - 20,000
• Rs.20,000 - 40,000
• Rs 40, 000 & Above

Part I: International fast foods general: Awareness and attitude:

1. If you think about International originated fast food, which of these products come to
your mind?

• Burgers
 • Pizzas

• Sandwiches

• Subs

2. How important to you is the brand name when purchasing International originated fast
food?

• Extremely important
• Important
• Neither important. nor unimportant
• Unimportant
• Don't know

Likes and dislikes about International fast foods:

3. What do you like about International originated fast food? Please tick one or many and
rank them in order, 1 being the highest and 5 being the lowest.

• Taste • I don't like International fast

• Quality food

• Freshness • Convenient/easy to eat

• Appearance/packaging • Nutritional benefits

• Price

4. What do you dislike about International fast food? Please tick one or many and rank them in
order, 1 being the highest and 5 being the lowest.

• Taste
• Quality
 • Lack of Freshness
• Appearance/packaging
• Too Expensive
• Not Convenient / easy to eat
• Other
• Lack of Nutritional benefits

5. What factors most often limit you in purchasing International fast foods? Please tick the appropriate
ones.

• Not very Tasty

• No limiting factor
• Difficult to find them

• Unhealthy
• Too expensive
• Prefer local food
• Not familiar with them

Price:

6. When comparing price of International fast food products with local fast food products what
would you say?
 • International fast food is more expensive
• International fast food is less expensive
• Same price
• Don't know

Purchase behaviour:

7. How often do you purchase International fast food products?

• Every day
• 4-5 times per week
• 2-3 times per week
• 2-3 times a month

8. When you buy International fast food products in which manner do you consume it?
• As a snack, not as a meal
• As a meal
• Entertaining guests
• Other public locations
• Take Away

Part II: Hamburgers:

1. How often do you purchase hamburgers?

 • Every day
• 4-5 times per week
• 2-3 times per week
• Less than once in a week

2. Where do you buy hamburgers?

• International Fast Food restaurants

• Local fast food restaurants
• Local restaurants
• Street stalls
• Snack shop
• Others

Likes and dislikes about hamburgers:

3. What are the most important reasons for you buying hamburgers?

• Taste
• Freshness
• As a snack
• Convenient/easy to eat
• Children like it Quality
• Curiosity
• I like everything
• Nutritional benefits
• Others

4. What are the most important reasons that most often limit you in buying hamburgers?

• Not very tasty

 • Prefer local fast food
• Tastes good, unhealthy
• Lack of freshness
• Not familiar
• Don't like it
• Too expensive
• Too much calories
• Don't buy it very often
• Others

Source of information, brand name, packaging, country of origin:

4. Where or how did you learn about hamburgers? Please tick the appropriate one.

• Personal sources - family, friends, neighbors, acquaintances

• Commercial sources - advertising, promotion, restaurants
• Public sources - mass media, consumer ratings
• Experiential sources - using/ consuming

6. How important to you is the brand name when purchasing hamburgers?

• Very important
• Important
• Neither important nor unimportant
• Unimportant
• Very unimportant

7. How important to you are visual cues on packaging and clear labels on hamburgers when making
purchase?
 • Very important
• Important
• Neither imp. /nor unimportant
• Unimportant
• Very unimportant
• don’t know

8. When buying hamburgers, do you have any preference of the country of origin?

• Yes
• No Please mention the name of the country, if yes
________________________________________________________________
• Don't know

Consumption and occasion:

9. When you buy hamburgers in which manner do you consume?

• Take home

• Eat self right away

• Give to children

• Buy it but not eat myself

10. On what occasion do you eat hamburgers?

• As a snack, not as a meal

 • Entertaining guests
• Outside home, in office
• As a meal
• No special occasion

11. According to you, what other products are necessary when consuming hamburgers?

_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

Alternatives and purchase intentions:

12. When you could not buy hamburger what other product would you
choose?
• Any available International fast food
• Local fast food
• Any kind of food
• No other product/ then I don't buy

13. Do you intend to buy more hamburgers for the next year?

• Same as this year

• Less than this year
• More than this year
• Don't know

Part III: Pizzas:

 1. How often-do you purchase pizzas?

• Every day
• 4-5 times per week
• 2-3 times per week
• Less than once in a week

2. Where do you buy pizzas?

• International Fast Food restaurants

• Local fast food restaurants
• Local restaurants
• Street stalls
• Snack shop
• Other____________

Likes and dislikes about pizzas:

3. What are the most important reasons for you buying pizzas?

• Taste
• Freshness
• As a snack
• Convenient/easy to eat
• Children like it
• Quality
• Curiosity
• Nutritional benefits

4. What are the most important reasons that most often limit you in buying pizzas?
• Not very tasty
• Taste good, but not healthy
• Not familiar with them
• Too difficult to find
• Too expensive
• Too much calories…
• Prefer local, traditional fast food
• Lack of freshness
• Don't like it
• Don't like the appearance
• Don't buy it very often

Source of information, brand name, packaging, country of origin:

5. Where or how did you learn about pizzas? Please tick the appropriate one.

• Personal sources - family, friends, neighbors, acquaintances

• Commercial sources - advertising, promotion, restaurants
• Public sources - mass media, consumer ratings
• Experiential sources - using/ consuming

6. How important to you is the brand name when purchasing pizzas?

• Very important
• Important
• Unimportant
• Very unimportant
• Don't know
• Neither imp. /nor unimportant
7. How important to you are visual cues on packaging and clear labels on pizzas when making
purchase?

• Very Important
• Unimportant
• Neither important nor unimportant

9. When buying pizzas, do you have any preference of the country of origin?
• Yes
• No
• Please give country name, if yes ———————————
• Don't know

Consumption and occasion:

10. When you buy pizzas in which manner do you consume?

• Take home

• Give to children

• Eat it right away

• Buy it but not eat myself

• Don't know
10. On what occasion do you eat Pizzas?

• As a snack, not during lunch

• Entertaining guests
• Outside home
• As a meal
• Other public location
• No special occasion
11. According to you, what other products are necessary when consuming pizzas?

__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________

Alternatives and purchase intentions:

12. When you could not buy pizzas what other product would you choose?

• Any available International fast food

• Local fast food
• Any kind of food
• No other product/ then 1 don't buy

13. Do you intend to buy more pizzas for the next year?

• Same as this year

• Less than this year
• More than this year
• Don't know
Part IV: Sandwiches:
1. How often do you purchase sandwiches?

• Every day
• 4-5 times per week
• 2-3 times per week
• Less than once in a week

2. Where do you buy sandwiches?

• International Fast Food restaurants

• Local fast food restaurants
• Local restaurants
• Street stalls
• Snack shop
• Other_________________________________________________________

Likes and dislikes about sandwiches:

3. What are the most important reasons for you buying sandwiches?

• Taste • Others, __________________

• Freshness
• As a snack
• Convenient / easy to eat
• Children like it
• Quality
• Curiosity
• Like everything
• Nutritional benefits
3. What are the most important reasons that most often limit you in buying
sandwiches?
• Not very tasty
• Tastes good, but not healthy
• Not familiar with them
• Too difficult to find
• Too expensive
• Too much calories on diet
• Prefer local, traditional fast food
• Lack of freshness
• Don't like it
• Don't like the appearance
• Don't buy it very often
• Other reason __________
Source of information, brand name, packaging, country of origin:

5. Where or how did you learn about sandwiches? Please tick the appropriate one.

• Personal sources - family, friends, neighbors, acquaintances

• Commercial sources - advertising, promotion, restaurants
• Public sources - mass media, consumer ratings
• Experiential sources – consuming

6. How important to you is the brand name when purchasing sandwiches?

• Very important

• Important

• Neither imp. / Nor unimportant

• Unimportant
• Very unimportant
• Don't know

7. How important to you are visual cues on packaging and clear labels on sandwiches when
making purchase?

• Very important
• Important
• Neither imp. /nor unimportant
• Unimportant
• Very unimportant
• Don't know
8. When buying sandwiches, do you have any preference for the country of origin?

• Yes
• No
• Please give country name, if yes ———————————
• Don't know

Consumption and occasion:

9. When you buy sandwiches in which manner do you consume?

• Take home
• Eat self right away
• Share with others right away
• Give to children
• Buy it but not eat myself
• Don't know

10. On what occasion do you eat sandwiches?

• As a snack, not as a meal

• Entertaining guests
• Outside home, in office as a meal
• Other public locations
• No special occasion

11. According to you, what other products are necessary when consuming
sandwiches?

____________________________________________________________________
__________________________________________________________________________
Alternatives and purchase intentions:

12. When you could not buy sandwiches what other product would you choose?

• Any available International fast food

• Local fast food
• Any kind of food
• No other product/ then I don't buy

13. Do you intend to buy more sandwiches for the next year?

• Same as this year

• Less than this year
• More than this year
• Don't know
 Appendix-II
Model of consumer decision making process

According to Dr. Thompson, to arrive at a process of decision making, a

customer normally follows the above process. When stimuli, often information
from companies, reach an intended customer the decision and evaluation process
begins. By a complex interaction between the individual and environment
factors and the marketing mix the individual evaluates the stimuli. On
completing the process, the consumer reaches a decision on the product or
service. Even if the decision is positive it does not necessarily mean that
consumer will make a purchase. Attitudes formed directly are proved to be
much more stable and foreseeable than indirect formed attitudes like
questionnaires. It is intention that determines what behaviour the consumer will
choose…

--------------------------------------------------------------------------------------------------------------------
Dr. Thompson Kenneth N, A Model of Consumer Behaviour Process. Smith R, Psychology;
Pg 579
 Appendix-Ill

International Trends in the Fast food industry:

USA:

• Fast food chains are under fire from legal action.

• A Fat tax is being considered for implementation.
• North America, International Europe and Japan together account 86% of total
fast food market.

UK:
Fast food has grown by 5% since 200land reached to $10.1 billion. Bakery sector
dominates in fast food. Largest market is of sandwiches. Burgers is one of the
weaker performing sectors.

Germany:
• Grown by 2% since 2001
• Primarily younger generation and single ones visit such outlets.
• Burger is the largest sector.
• Government policy is towards the reduction of garbage.

Japan:
• Grown by 1.5% since 2001
• Japan has tailored its fast food to its countries population without sacrificing
nutritional value.

-----------------------------------------------------------------------------------------------------------------------

Khurshid Anwar Warsi & Syeedun Nisa, Food Retailing: fast food industry; pg- 6
 Appendix- IV

Fast food outlets in Chandigarh where consumers were interviewed for the
study:
• Uttam Fast food and Restaurant, Sector 62, sector 46C- Chandigarh
• Fast food 47, Sector 98, sector 47- Chandigarh
• Emm ell fast food, Sector 68-70, sector 17C, Chandigarh
• Degchi fast food, 35 sector 8-B. Chandigarh
• Hot Millions, Sec 17, Chandigarh
• McDonald's, Chandigarh Chd-Manimajra Fun Republic, Dhillon Complex, Chandigarh.
• Subway, 142-144 Sector 17C Chandigarh PU 160017
• Domino's Pizza, Sec 17, Chandigarh
• Tingu's, Sec 9, Chandigarh
• Pizza Hut, Sec 26, Chandigarh
• Nirulas, 142-144 Sector 17C Chandigarh PU 160017

Besides these restaurants some of the consumers were also interviewed at the popular
snack shops and street stalls/kiosks.
 Appendix-V

Percentage of Vegetarians according to the States in India (2009):

Name of State Percentage of Vegetarians

Gujarat 69%

Rajasthan 60%

Punjab & Haryana 54%

Uttar Pradesh 50%

Madhya Pradesh 45%

Kamataka 34%

Maharashtra 30%

Tamil Nadu 21%

Andhra Pradesh & Delhi 16%

Assam 15%

Kerala, Orissa, Bihar & West Bengal 6%

Manipur, Mizoram, Nagaland, Arunachal 5%

Pradesh
Indian Food Preferences - Vegetarian vs. Non vegetarian

• Beef-eaters 17%
• Non Vegetarian 80 %
• Vegetarian 20 %

----------------------------------------------------------------------------------------------------------------------------

Tim Dyson, Robert Cassen, and Leela Visaria, Twenty-First Century India: Population,
Economy, Human Development and the Environment; Oxford University Press, 2004.
Source: "The Rediscovery of India," India Abroad, January 2, 1998. This report is based on a
decade-long nationwide ethnographic survey of Indian people, which was published by
Anthropological Survey of India, New Delhi, December 1997, under the title "People of India."