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UNIVERSITY OF WALES
MODULE NAME: DISSERTATION (MARKETING)
COURSE: MBA – UNIVERSITY OF WALES
NAME: HARSH DEVANG DESAI
KCB ID: 14779
DATE OF SUBMISSION: 12-12-2011
KENSINGTON COLLEGE OF BUSINESS
MBA DISSERTATION REPORT
It takes a combined effort of many to complete this report. Through this brief note, I would like to express my gratitude to all those who contributed to the making of this report. This report is a small step to pen down whatever I have learnt while working on this project.
I would like to thank our Principal, for providing us such a wonderful opportunity to work on this project. Moreover, I thank my college KCB for availing me such an efficient infrastructural facility throughout the process.
This enriching experience would not have been possible without the personal attention and training of
I have thoroughly enjoyed this learning experience. Last but not the least I take this opportunity to thank all the readers of project. I hope it would be interesting to you.
DECLARATION BY THE CANDIDATE
I hereby declare that the dissertation report entitled “A critical analysis of the factors which are influencing consumer behaviour in UK’s fast food industry taking example of MacDonald’s and how it is responding to this change and its consumer behaviour process”, submitted in partial fulfilment for the award of Master of Business Administration to the University of Wales, UK is a record of independent research work carried out by me under the guidance of . I also declare that this dissertation report is the result of my own effort and has not been submitted earlier for the award of any other degree / diploma / associate ship and prize by any other university.
TABLE OF CONTENT
EXECUTIVE SUMMARY.. 08
CHAPTER 2 - LITERATURE REVIEW... 18
CHAPTER 3 - RESEARCH METHODOLOGY.. 41
CHAPTER 4 - FINDINGS AND ANALYSIS 52
CHAPTER 5 - CONCLUSION AND RECOMMENDATION 74
CHAPTER 6 - BIBLIOGRAPHY.. 79
CHAPTER 7 - APPENDIX.. 87
The sole aim of this research dissertation is to examine the factors, which are shaping up the consumer decision-making processes in terms of the fast food industry of United Kingdom. Furthermore, it aims to investigate how a company like McDonald’s is responding this change in consumer behaviour and environment. This is an interesting topic to explore considering the high public and political debate about obesity in UK and its after affects especially in young children.
A thorough observation of various online journals, articles and website was conducted to understand the background and problems relating to the fast food industry issues and also in regards to the process of consumer decision making which are compiled in the chapter of literature review. Also, a focus group was conducted for the purpose of qualitative analysis with an aim to understand the consumer attitudes towards McDonald’s and fast industry, in general. Thereafter, key themes from these focus groups were used to create questions for the survey questionnaire. This survey was scrutinized to comprehend whether the respondents views are indeed the voice of a large group.
Furthermore, to examine McDonald’s as a company and how it is evolving, along with to understand the key change drivers that could influence the future European fast food industry, PESTEL framework was conducted. Out of the many attributes, the ever changing consumer lifestyle and Governmental influence were pointed out as the two major drivers of change.
To list the key themes from the focus group, they are: Fast food quality, Ethics (animal/crop welfare) & Trust worthiness of company brand and its impact on consumer behaviour among many others.
Out of the many adjectives that were associated by the questionnaire respondents, some of them were unhealthy, cheap, tasty and fatty. Respondents ranked McDonald’s food (with complete exception to its salad and fruit menu) as worst quality. A third majority listed the ethical issue related to chicken processing as a the main cause for avoiding chicken at McDonald’s.
Also, nearly 27% of respondents who were familiar with the current public debate about obesity in UK have given or reduced their intake of fast food especially from McDonald’s. A great 35% of the respondents claimed that the documentary “Super Size Me” has stopped them from eating in McDonald’s anymore. Majority of the fast food purchases are termed as impulsive decision, since the knowledge of fast food consumer about it is negative and therefore their attitudes are also negative.
There are strong external influences that are having negative impact on consumer decision making process such as the current high political or public debate about obesity in UK and other media initiatives about having healthy lifestyle. McDonald is as a responsible corporate house is responding well to these environmental changes by introducing healthier menus and ingredients. Negative influences to the consumer are resulting in it not trusting McDonald’s and affecting consumer decision making process. However, the marketing team at McDonald’s are trying to negate this risk of negative consumer decision process by providing information about their food. The research provides recommendation and conclusion to McDonald’s and about influencing the consumer decision and other environmental processes to retain its brand equity and trust among its ever growing consumers.
1.1 Research Topic
A critical analysis of the factors which are influencing consumer behaviour in UK’s fast food industry taking example of McDonald’s and how it is responding to this change and its consumer behaviour process.
1.2 Research Aim
The sole aim of this research dissertation is to examine the factors which are shaping up the consumer decision making processes in terms of the fast food industry of United Kingdom. Furthermore, it aims to investigate how a company like McDonald’s is responding this change in consumer behaviour and environment. This is an interesting topic to explore considering the high public and political debate about obesity in UK and it’s after affects especially in young children.
1.3 Research Objective
McDonald’s has been a victim of generalization by the market forces which are negatively influencing the consumer decision making process. These factors are driving consumer towards a negative attitude curve which are effecting the revenue generation of McDonald. The objective of this dissertation research is to critically examine the various factors responsible for the negative influence over the loyal consumer of McDonald’s and offer recommendation to the case study about how it can overcome this challenge and increase its market share.
1.4 Research Questions
Our topic “A critical analysis of the factors which are influencing consumer behaviour in UK’s fast food industry taking example of McDonald’s and how it is responding to this change and its consumer behaviour process” is further divided into three main areas of research in order to provide the targeted questions. The three main research areas are listed below for your kind perusal.
A selective application of PESTEL Framework will be applied so as to identify the various major key change drivers that might have an impact on the future of UK fast food industry. .
An examination of the Consumer Decision Making Process will be conducted, in particular to the psychological areas, primarily focusing on fast food consumers attitudes towards McDonald’s products. Furthermore, the various socio-cultural environmental attributes will be observed that had an influence on consumer decision making process.
Learning about how McDonald’s is responding to these changes using its unique marketing mix and communication strategy. The researches also seek to propose certain recommendations aiming at future marketing actions of McDonald’s corporation.
1.5 Research Benefits
Any study that is related to the consumer helps the organization to improve its marketing strategies and overall development by comprehending issues such as the following:
The consumer psychology of how it thinks, reasons, feels about, and makes a choice between different provided alternatives (i.e., brands, products, and retailers).
The consumer psychology of how it is getting influenced by his/her environmental factors such as culture, family, signs, media).
The consumer behavior and its decision making approach while shopping or making other marketing decisions.
To understand the limitations of consumer knowledge or its information learning abilities thereby hampering its decisions and marketing outcomes.
How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer.
The most important of it about how the marketing team can change and adapt themselves to further achieving proximity to the consumer.
1.6 Reason for Selecting McDonald’s
McDonald's is a pioneer in the fast food industry and today world leader in the sector. The company has over 31,000 fast food restaurants in over 120 countries. The company operates primarily in the US and the UK. It is headquartered in Oak Brook, Illinois and employs 447,000 people all over the world. McDonalds currently operates in more than 1,316 restaurants throughout the UK. Its profits grew by 55% in 2010. (Datamonitor, 2010)
In 2003 the company was loosing money for the fist time in its five-decade history, as it was serving mainly greasy food and therefore fuelling obesity epidemic. Moreover the company was losing important consumers trust due to release of the documentary ‘Super size me’ and critical book “Fast Food Nation”. However, McDonalds introduced healthier menus and just recently in Annual Financial Report of 2011 has announced that its sales had rocketed, sending its shares soaring to a six year high. British restaurants were singled out among the biggest improvers in performance (Clark, 2008).
1.7 Consumer Behaviour
Consumer behaviour can be defined as the analysis of the functions/processes which are engaged when an individual or a collective set of individuals decides to choose, buy, use or give away products/services/ideas or their shopping experiences. The core focus of this behaviour pattern is based on various methods using which individual or a collective set of individuals take decision for spending their accessible funds on items related to consumption (Solomon, 2006). That includes what they buy, why they buy, when they buy, where they buy it, how often they buy it how often they use it, how they evaluate it after they purchase and the impact of such evaluations on future purchases, and how they dispose it (Schiffman and Kanuk, 2004).
A variety of factors influence the decision making process of a consumer. The key factors are listed below for reader’s ease and reference.
All the above factors are critically important due to their influence on the consumer behaviour and therefore it becomes extremely important to consider each of these factors for a research involving consumer behaviour.
Boseley (2008) has demonstrated in his research that it is nowadays very common to be fat or obese in UK; which is proven by the official statistics that shows that approximately two third of men and nearly 58 percent of women are extremely overweight in UK. The research further reveal that UK is the state which ranks number one for the highest number of obese or fat population across all the 27 states of Europe which was termed as grotesque by the UK health secretary.
It is surprising to hear that that even though there are numerous serious concern against fast food in UK and for it being linked with various issues such as obesity, diabetes, heart burning, food poisoning, scares and animal cruelty adverts, the UK fast food industry still remains the fast growing industry during the last few years. In terms of per capita expenditure, between 2005 and 2010, the fast food outlets have been growing at the fastest pace within the consumer food service sector (Euro Monitor, 2010).
As per Euro Monitor report (2010), McDonald's Corporation is ranked as the number one restaurant offering fast food items across all parts of UK, with an approximate 32 % of market share which proves that it has a wide lead over its nearest rival i.e. KFC (under the Yum brand leadership) and Burger King which has a market share of just 11 percent across UK.
Market share in percentage
KFC (i.e. Yum Brands)
Burger King Corporation
Eat/Pret-a-Manger Europe Limited
Compass Group Plc
Nando's Group Holdings Limited
Figure 1.1: Share of McDonald’s across all region of UK (2010)
Source: Euro monitor report, 2010
To build up conceptual structure for the research, study will be divided into the different chapters. This framework would be helpful to the reader for easy navigation and study of this research report. A brief summary of each of the dissertation chapters are provided below to simplify the dissertation structure.
The first chapter of this research report will provide clear and lucid information about the research aim/objectives, research questions, problem statement that is targeted in this research. A brief introduction of the chosen organisations background, key terms of research, fast food industry, obesity issue of UK will be presented.
The literature review provides readers with a background for understanding current knowledge on a topic and illuminates the significance for the new study. It will help the reader to understand and identify research procedures and instruments that have been utilized successfully in the past. Thereby, it identifies, does comparisons and contrasts views and theories of other writers in relation to the research topic. Furthermore, it provides the stepping stone towards the research methodology chapter of this research work.
This chapter is solely devoted to provide insights into the various research methodologies that are available and thereby develops into providing the design and the research methodology which is used to answer the research question in this dissertation. Furthermore, it provides a clear descriptive analysis of the research models and concept.
Findings & Analysis
This is one of the most important chapters of this dissertation research work and provides detail presentation of the information and data which was obtained using the various research tools and methodology. To make it further simple to understand, this chapter is divided into parts, firstly, the PESTEL analysis is applied in order to explain the evolvement of McDonald’s and secondly the key factors which are influencing the process of consumer decision making is analysed and discussed
As the name suggests, this chapter is concerning the providing recommendations to our chosen case study i.e. McDonald’s in order to face the challenges of changing consumer behaviour.
Scope for future research
Various areas of research that could have been explored during the course of this dissertation are listed in this chapter to provide the reader a view for further research reading.
The dissertation is concluded with this chapter which provides conclusive evidence in answering the research question.
CHAPTER 2: LITERATURE REVIEW
This literature review will provide pointers towards formation of probable marketing strategies and recommendations that our case study organization might pursue so as to provide a strong and positive response to the changing consumer behaviour and environment. This review will provide the reader with an insight into the following theories related to:
Process of consumer decision making.
Change and formation of consumer attitude.
Innovative mix of marketing.
Figure 1.2: European market position of McDonald’s as of 2010
(All financial values listed in pound sterling and published as of September 2010)
Source: Retail Index Website, 2011
As we can clearly understand from the above figure that McDonald’s remains at the peak of the market share across European Union. It has an yearly turnover which is massively ahead of its nearest competitors and therefore leaves no doubt how critical it is for McDonald’s to maintain this top position.
2.3 McDonald’s Financial Performance
Figure 1.3: Company Financial Results for the year 2011
The above figure is accessed from the annual report 2011 of McDonald’s as published on the msn website. The company has shown more than 20 percent net profit margin which is a great achievement in this fast paced fast food market. As mentioned in the financial report, the company has announced bonus along with dividend payouts. Above information clearly signifies the strong growth and success of McDonald’s.
2.4 International Presence
Majority of the sales of McDonald's products occur outside the regions of United States of America as it has a substantial and sizeable international visibility. Along with the highly developed countries such as Australia, Japan, Canada, UK, North & South Korea, McDonald’s also sell in upcoming or emerging economies such as India, Russian, Brazil, China and Eastern European states. By cashing into the growing trend of international middle class, McDonald’s global operations have repeatedly posted positive and strong sales revenues, especially in China and India as both countries have offered immense fast food potential.
As per the AT Kearney report (2010), particularly the regions of Asia pacific, Central Africa and Middle-East were the chief revenue generator for the McDonald’s brand along with China, Australia and Japan showing growing and strong promise. These strong financial results have laid emphasis on the significance of McDonald’s core product offerings i.e. Value meal and multiple choice in the breakfast menus. Particularly, McDonald’s attempt to grow in the international markets signifies that it can break into the market segment which is lesser concerned about the health consciousness thereby allowing McDonald’s to make use of product offerings which is less dependent on costly regular change of products.
As we have seen above from the market share position from the figure 1.2 that McDonald’s is a clear topper in this list in terms of turnover and market presence, it faces great competition from other fast food retailers in terms of product innovation, launches and price. If we single out a product i.e. Hamburger and try to analyze its competition in the international market we will see that a specific pattern in this market. As listed below, the major competitors for Hamburger market in fast food industry are:
PART 2 – KEY RESEARCH CONCEPTS & THEORIES REVIEW
As it’s evident in the field of marketing that the purchase decision of a consumer whether its to buy or not to buy is extremely vital for any organization. This is a parameter to judge whether the marketing strategy had the true wisdom, insightfulness and effectiveness or whether it completely miss the consumer’s imagination as being poorly executed. Therefore the marketing teams are extremely keen on closely watching this whole process of consumer decision making process (Schiffman and Kanuk, 2004). During any point of time all through the consumer decision making process, opinions and selections/choices are influenced by a number of stimulus factors from the external and internal environment along with the internal and characteristics and process of the individual consumer (Ayarts, 2008).
Brian (2009) offered a categorization that listed 3 different types of factors of influence defined as Service related factors, Food property based factors and Environmental factors. Larossi (2010) demonstrated the notion of influences over the consumer’s decision making process amongst which he highlights the actual stage of buying being one of the key factors that persuades the consumer decision making process.
While a research was performed by Morgan and Ramford (2009), analyzing and observing the influence of corporate social responsibility values of companies such as McDonald’s and KFC over their immediate consumer purchasing behaviour, they proposed that the purchase of any fast food item is purely based on impulsive binge and therefore suggested a very low influence in each of these case. Also, they suggested that the consumer decisions among the younger age groups are influenced by knowledge of nutritional awareness. This information of knowledge is acquired by these youngsters during school, college or other social involvements. Furthermore, they indicated that education plays a vital role in modelling the behaviour of consumer purchasing decisions.
In their study of consumer decision behaviour, Noir et al. (2010) proved that the existing consumer decision models are insufficient to counter the current complex behaviour of consumer buying decisions. The limitations of consumer decision understanding fail to provide correct purchasing behaviour. Therefore, the existing models were proved to be insufficient and out of date for offering the correct and current research outcome.
However, the analysis of various decision making process and theories would offer the reader a meaningful insight into the general overview of the various major factors that influence consumer purchasing behaviour. We will make efforts to identify and focus on consumer attitudes and also other socio-cultural aspect of the consumer decision making process for e.g., influence of various media channels such as print, electronic and mass media highlighting negative aspects of fast food, public debate about obesity etc.
The phenomena of consumer behaviour depend upon the consumer choice. To understand this phenomenon we need to understand the factors which influence consumer to change its behaviours toward the products or services. There are two theories which influence the consumer choice and behaviour, one is attitude theory and second one is social physiology theory. Therefore, by merger of these two theory new concept of “change” emerge. The Social Physiology theory depends upon the cultural and society trends and attitude theory depends on the perception about the product. These two theory combine together facilitate the consumer to take decision and make a perception about the product. But the theory of economics does not believe the consumer behaviour and perception; it believes the process which influence consumer to select the product or service.
Attitude theory also inter related with the theory of information. In theory of information search, consumer search for the information which satisfies its needs. There are two types of information available for the consumer External information and Internal Information. In External information, there are two types of approaches work, Economic approach and psychological/information processing approach. The economical approach search information on basis of cost/benefit. Consumer select the product which is less costly with good quality and it fulfil the requirement of its needs. In psychological approach, consumer goes through various sources to find the information or data, then it process the data or information and take a decision. In this approach, consumer also consider the product characteristic and situation which fit for its needs (Kiel and Layton, 2010).
Initially the consumer verifies the internally information available, the past purchases and outcome of that product. “If that product satisfied it needs and fulfil the minimum requirement then it purchased again” (Larossi, R., Tami, P and Muller, J. (2010); Gays, P. & Cummins, S. 2008). Also, when consumer feel empowered and additionally confident with regards to their capability to make judgement, they start acquiring further information. This signifies that the relationship between quality and knowledge is directly proportional to each other (Collins & Michael (2009); and Blois, Rothschild and Michelle, 2009).
External information about the product or services are availed by the consumer by individual/personal inspection or through other relevant sources such as like wholesalers, store assistant or product description and comparing with competitive products in the market. Another type of consumers who are not interested in the gathering of information or description they follow the trend. The last of consumers who already have enough information and they do not want more information on their past experiences take the decision.
Experience also matter when consumer is gathering information about the product. The experience consumers take decision by comparing different products. They compare the product with alternatives and reach on conclusion, where as new consumers first get the information and make their mind. The situational and Time constraints are also important for making decision. A consumer always takes decision in particular situation, where situational constrain focus on the quantity and quality and time factor crates a pressure on consumer to buy a product.
In consumer decision making processes there is important factor of “Alternative or assessment of alternatives”. In an existing market, searching through all the available alternatives for the information is next to impossible, so consumers always gather information about renowned products and limit their search. The reduction in consumer choice is also being said as consumer behaviour (Anne and Noel (2009). It depends upon the consumer to decide which criterion sh/e adopts to reach on final decision. In some cases consumer face confusion about the product where many product fit in the criteria of consumer, in the case consumer analyze the attributes of the product and find new attributes.
Attitudes are classically proven to be the foremost influencing factor of consumer behaviour intent. In context of this research study which is based on the consumer behaviour, it can be said that attitude is an educated inclination to conduct in a consistently unfavourable or favourable way with regards to a specified product or service (Balkisson, 2008). Also, majority of the academicians have an agreement over the theory that consumer attitudes consists of 3 distinct attributes such as Affect (its about the consumer feelings and emotions about the offered object), Behaviour (its about the consumers intention to act with respect to a specified attitude object) and finally Cognition (attitude which is self developed by the consumer).
An examination towards a consumers influence towards making a decision for purchasing a meat product, it was revealed that a consumers mind go through various mental stages which are set in a hierarchy which in itself are responding to various commercial and marketing messages of various brands and companies. In context of this research, wherein the attitude object is a fast food product, in addition to the consideration that fast food is deemed to be an involvement product of lower level, the low involvement hierarchy of effects would take place.
As we have read in the above paragraphs that the knowledge/information and perceptions (which are cognitive component) of an attitude plays a vital part. In addition, the characteristics of the production and processing of fast food are becoming additionally significant to the consumer. Furthermore, the perspective of ethical production with regards to the human and animal welfare and the protection of environment are getting of highest significance (Collins, 2005).
Moreover, the rising importance of quality standards, sensory and biological properties of fast food and concerns relating to safety of food and human health have already achieved substantial attention and significance (Zavier et al. 2008).
An attitude can be formed in a number of different ways, depending on a singular hierarchy of effects in operation and hence; the consumer attitude formation is deeply impacted by individual experience, influence of friends and family, mass media and channels of direct marketing (Wild, 2010). The author will yet again attempt to connect the current human health and concerns relating to obesity and overweight issues which have direct effect on formation of attitudes.
An investigation by Holes in 2010 who investigated the influence societal values in respect to fast food related attitudes, clearly observes that marketing team, consumer psychologist and various Government decision makers have a distinct interest involving consumers personal and social values. It also involves what is important in consumer lives in terms of consumer attitude and decision making behaviour. Highlighting the desired end-states or ways of living, values may in part symbolize few of the essential and fundamental reasons that influence and drive the consumer behaviour. It was noted by Homer and Hummings (2009) that the impact of values might not necessarily limit to the life’s over involvement aspects, but also directly influential to the least involving areas including fast food consumption.
Consumer attitudes towards consumption of fast food purchase are also determined by fear of risk and benefits as well. Therefore, when the assumed fear of risk is considerably high, it influence badly on consumers purchasing behaviour. This directly relates to fast food consumption as well, as eating greasy food risk of obesity and other fat related diseases.
Every consumer possesses a different type of mental and emotional characteristics which allow him to take decision and think differently. These internal characteristics would be Motivation, Attitude, Perception, Personality, self confidence and life Style. In this Section we are analyzed these factors which influence consumer to take effective decision and what forces operating on consumer at the time of decision.
Motivation is a key factor to bringing consumer in the market. When need arise consumer start think which product and which location I need to go. The need is a source of motivation. The initial state when consumer not bothers about the need and just in the state of no motion, then the motivation invoke consumer to start search desired need and acquire their goal. It is difficult for the consumer to get the desired product but by motivating we can achieve our goal. Our goal is to motivate the consumer to buy our product and that product satisfies the consumer needs. The only power is motivation which achieves the desired results. Needs can be categories into Utilitarian and hedonic/Experiential needs. Utilitarian needs always consider the attributes and benefits of the product and consider the product related issues. However, “Hedonic/Experiential needs believed on subjective responses, pleasures and aesthetic considerations” Diwakar & Dolon, 2008). The gap between desired and actual state is increased but due to motivation it decreases. The huge advantage of motivation is bringing consumer from initial state to a state of done.
Attitude is referred to an overall consumers believes, behaviours and cognitive believes. Attitude has many attributes like it could vary in strength, positive or negative directions or stability (Hawkins, 2009). Attitude does not have same degree of trust and they vary consumer to consumer. Also attitude based on the consumer behaviours, when experience is good then attitude is different when experience is bad then attitude is bad or approach is different. Consumer wants more information about the product before making any type of decision because they are not confident in attitude. With less attitude the confidence of the consumer is always be suspected about the product, in the case of McDonald consumer attitude vary because of products and services they offer. The best defined by the Extended Fishbein in his model where he claimed that attitude revolved against the intention and he built his whole theory about it (Mathew & Penguin, 2009).
Perception related to recognizing, understanding, point of view, thought, interpreting, and stimuli to make the sense about the world (Le Anre, 2010). Consumer always believe on their perceptions about the brand or product but they do not understand the needs, attitudes, believes and actions. Before making any sort of perception about the product it important to understand that it not conflict with attitude, aspiration and motivations. If consumer initial perception is positive then customer will see the menu otherwise it ignore the product and pass away.
Personality is a key feature of the organization and decision making process. First impression is a last impression, customer always go in that place where staff is friendly and helpful. In this criteria Personality of staff and management matters. If sales man personality is not good then nobody will come to him and it effect the sales. Personality represents the culture of the organization and standard at which organization stands.
As per Hawkes & Merlyn (2008), life style gives the idea how the consumer lives, thoughts and take decision. It also gives the insight that how consumer spends the money, time and what they consider the important factors and their activities. Consumer interests and Opinions are also comes in the light of life style. There are different factors which related to the lifestyle like population, if population increase it increase the submarket and new phenomena emerge of competitions and it difficult for the consumer to take decision about the product.
In above we describe the internal consumer behaviour characteristic which influencing consumer to make decision but there are external consumer behaviour factors also which has their own impact and weight age.
Consumers not live in isolation. The surrounding environment effect the consumer decisions like values, believes and opinions. The external factors which influence the customers are culture, social class, family and social groups.
Culture consist of traditions, customs, social believes, norms, and artefacts. Values can be shared peoples follows the trends. People discussion and thought become the cultures. If parents bring their children to McDonald and then it share where we did dinner to his friend (Fitzgerald, Chatrier and Ralph, 2010). This trend becomes a culture so other peoples start following this trend. Values are inter related with the cultures and values define the nation character. Values influence the society and at the end it become culture like there was a trend to go to fast food outlets but know it is a part of the culture people went there eat food and discuss their issues. These restaurants become a part of their culture and meeting point. By selecting a good fast food out let represent the decision making by the consumer and mostly consumer take the decision on the basis of the culture and values.
Classes always describe the social categories of the people. It also indicates the people power, prestige and status which they belongs too. There are many variables which emerged from research in which social class based on. Economical and Political factors are important which describe different types of classes (Haysman, 2009). There are main there classes, upper, middle and lower class. What upper class adopts, the other two classes also try to be copied. This class culture identified the consumer purchasing power and but in the case of McDonald this class culture not important because this fast food restaurant has number of items which are reachable to lower class consumer.
The family is most influential group where everyone influence each other decision. Selecting the restaurant or menu everyone has its own choice but family always believe the rule of majority is authority. Family values and believes are very important ,some people do like public gathering and some people like public gather, some people like privacy and some people enjoy with everyone. So mostly the decision is so controversial and delayed. The consumer behaviour is so complicated in the case of the family. Clarke (2008) believes that families changes over time and this is called a family life cycle where new members of family added so there point of view with time is different too and varies according to the needs.
Number of people who has same school thought make a group and implement their point of view on whole society. In this type of consumer behaviour where collections of people take decision heavily impact on the business. If consumer belongs to some influential group then it insist the other members of the groups to follow its experience about the product or avoid the product. These types of groups work on make or break who make their own perception and strictly follows the rules.
In this section we discuss in detail that consumer behaviour change due to environment friendly products. One of the major factors in consumer point of that product should be environment friendly and according to the health principles. Therefore, nowadays it is a one of major factor which influence consumer behaviour.
It is important to realize that how knowledge effect the consumer and ecological behaviour. In some of the cases it is noticed that on the bases of the knowledge consumer gather a information, organize and evaluate the information (Schiffman & Kanuk, 2004). Consumer also fined that product which has environment friendly behaviour (Wright, 2010). Knowledge is important to make a right decision but wrong information causes a less favourable choice. The very renowned example that soapsuds clean the clothes very effectively but actually it give the “impression to the consumer that it will clean. But actually it harms the environment (Zavier, 2008). In fast food industry also face criticism about the product which are not accordingly health and safety or environment friendly. It is also important educate consumer about recycle products, in fast food industry mostly material is used from recycling material and consumers have many misconceptions about the material which used in packing and serving.
In this research I want to include the green consumers. We know that on this issue so much research has been done but it is very important factor. Based on past studies, demographic consumers fall into these categories: Education, Age, Gender, Income, Intentions.
Education is very important for the consumer. The education about the product or Consumer personal education both related to green consumer behaviour and attitude. Most of work already done on the green consumer education where behaviour and education is correlated with each other positively (Fitzgerald, Chatrier and Ralph, 2010). Education gives the idea to choose between good or bad and distinguishes your choice. McDonald offers number of items or deals in their outlets but if the consumer is educated then it chose the right choice and save the money. It is also good for the company as well as because the perception of consumer is very important after leaving the outlet. McDonald also gives details in their Menu list to avoid from any sort of misunderstanding or confusion.
Aging affect the consumer behaviour and choice. Demographic profile of young people base on uncertainty. The choice and behaviour of young people cannot be predicted so long period and they switch the services in very short time. Aging affect mostly business and in fast food industry mostly focused the consumers between 5 to 20 years. Therefore, Fast food industry never trusts these customers and for motivation brings new deals and services. Green consumers are older than these consumers and the relationship between behaviour and choice is negatively correlated between them. It is also found that the relationship between these aging groups is uncertain and more research needed in this area.
Gender relates studies are very difficult because it involves number of areas in which you need to look into and then you reach at any conclusion. It also noticed that females are more like to be ecologically conscious (Baines, Pomael and Joel, 2009). The relationship between gender and environment is concern and their relationship would be significant (Abraham, 2009). The female consumers are more conscious about the environment and they purchased products which are more environments friendly. In fast food industry also care the environment and bring new campaign to attract these consumers.
The power of purchasing and income is directly proportional. If the consumer earns more than they spent more. It also be noticed that consumers are price conscious in every industry. Especially in food industry consumer want good food in low price, so competition in fast food industry is high as well. McDonald offers good food in less price but it need to keep eye in market competitors like KFC or Burger King which also provides a fast food in low price. There is theory which describe, if consumer spent less then there are more chances to save the environment. So some people this theory and give alternative ways to save the environment and not relate this theory with Income. Sales also affect from the income and if the inflation rate is not controllable then consumer behaviour is also changed.
Intention defined the actions and actions are taken due to intentions. If consumer has an intention to save the environment they it purchase an environment friendly product. Intentions are internal feelings which motivate consumer a thing which going to be wrong or un predicted event. It is also said that intentions are decisive factor to take decision. There are many studies who distinguish between Intentions and actual behaviour (Ayarts & Doris, 2008). Some companies take more money from the consumers in the name of environment friendly product but some critics said it’s a company responsibility to give environment friendly product without taking extra money.
There are two Intervening variables which affect consumer’s intentions:
“Labelling is Confusion”, is it labelling give two thoughts? Yes some times in consumer perspective. The improper labelling always confuses customers and some products are labelled that they are environment friendly. If some companies attaching labels with their product, it does not mean that consumer proper understand it too. (Baker and Bayer, 2009). The approach to create awareness in consumer are used is called holistic approach. This approach used to educate consumer using eco labelling, the impact of product on environment. Companies need to understand that environment labelling gives them support to increase a sale but actually they need to contribute by dumping wastage product and in development process. Past studies shows that labelling play a important part when consumer taking purchasing decision and if the message convey properly then consumer trust the product more.
Every one claims that, their products are environment friendly or part of the green environment. According to the research of Fairbrother (2010), 63 percent of consumers think that product are not environment friendly and their manufacturing in suspicious. By claiming every company that they are environment friendly, consumer are confused. Know they do believe on their saying. Media played an important role to expose these companies and create confusion in the mind of consumers. People are resisting to give more money which products are tagged environment friendly because their trust is shatter due to miss trust. Peoples think that companies are misleading and take advantage of nature (Brooks and Javier 2009).
Marketing mix referred as a variable, by controlling this variable manager’s control the brand sales and market share. Traditionally, we recognize them as four P’s of marketing involving Product, Price, Promotion and Place (Vladimir and Essex, 2009). The main objective of the marketing is to deliver the product in the market which fulfils the customer needs. This involve of number of decisions like the product or products at which they need to offer to sale and the market where these products are going to be sale it out, it means that communication with customer is very important. All these decision form a decision Mix.
However, due to the growth and importance of service in recent years, a special attention is concentrated towards marketing of services. Various academicians have suggested and theoretically recognized additional variables, that can be easily supplemented to the existing four P’s of marketing. Also, the added variables are now an integral part of the marketing mix i.e. Process, Physical and People (Morgan, 2009). We are trying to apply the seven P’s for interpreting the marketing mix of this research case study i.e. McDonald in the following way:
The reader should note that in this research dissertation, the author will not be elaborating each of this marketing mix from the 7P’s, as not all are relevant to our research investigation. The real focus would be emphasized on Product, Promotion and Physical features of the marketing mix.
As demonstrated earlier, that the consumer purchases the products related to fast food category rather impulsively, therefore they are deemed products of low involvement. It is acknowledged that the extent of consumer involvement in a product category has turn out to be a chief factor pertinent to strategies of promotion and advertising (Diwakar & Dolon 2008).
Therefore, we can safely suggest that McDonald’s would want hire expert advertising and marketing professionals so as to positively influence the consumer attitudes.
The processes of Marketing and distribution products are very important and it is management responsibility to give attention until the product is not sale out. Marketing mix is the process in which number of elopements is integrated and design in this way that it achieve an enterprise objective. These elements are stated as Product, Price, Place and promotion. The Marketing Mix term also be described that number techniques and tactics used to achieve goal by marketing its products or services. It is important for every company that ensures them marketing right product, right place, right person, right price and right time. For example in McDonald, The burger is a product, Low price (price), Selling at McDonald Outlets (place), promoting it by distributing leaflets. In marketing targeting an audience is very important. So choosing a right group of people and selling the product is real task in marketing.
In 4p’s, decision which related to the product include number of decision in which labelling, production and packaging of the product. Decision relating to price is very important, because sale is directly affected by this element of Marketing Mix. Managers need to take decision about taking uniform price for the product or different prices for the same product in different markets. 3rd element is Place where this product is going to be sale it out. Therefore, Identification of market is key of success. Last element is Promotion, in what ways sale could be increase. Managers need to think about the promotion of product and need to adopt different techniques and tools which improve the sale of the product.
Manager also need to consider the consumer behaviour which is external force, like in the case of the McDonald new deals are offered and for attracting children toys are offered by the company. Consumer behaviour is important for the managers and company and other market competitor strategy as well.
Number of elements are involved in the marketing mix, so each element has its own weightage. Anne (2009) believes that mixing in way that each element do not lose it weightage and not exceed from it weightage give us desired result. So it important for the managers keep balance between these elements and not ignore any of the element.
The constantly changing factors of the markets need to considered by the management as a priority. Changes such as change in price of a product or service belonging to a competitor should be instantly upgraded in the marketing mix elements for offering competition to this new change (Bernard, 2008). Regularly revisiting the marketing strategy is the actual key to success and which give newer ideas for improvement of a companies product and services in turn increasing the revenues.
As per Noir (2010), external Environment never remains constant all the time. The most important factor in external environment is consumer. The change in behaviour of customer in product approach always create problem for the managers. Managers need to understand the customer’s needs and react timely to fulfil the customer requirement.
The marketing mix calls for an action of change due to the change in internal environment as it is equally important as external environment. Some of the internal environment changes includes change in technological attributes, product line, sizing and scalability of internal operations. All these changes require immediate change in the marketing mix and related processes of a company (Wright, 2010).
There are 7 major elements as listed below
Marketing is about identifying the customer needs and fulfilling the customer needs. It is important for the manager to choose right menu in fast food industry. Like in McDonald number of items are included in menu list but manager need to understand that customer spend a money where he get good food and at low price. Adding items in list is not a big thing but it important that what customer want. Therefore, in case of McDonald it emphasizes on menu list and adds more items which is highly demandable by the customers. It is important to understand the customer psychology, an item today is very demandable and part of the fashion, may be discarded tomorrow. Marketing mean to continuous analyzing customer demands and needs.
Product can be physical or services or idea which fulfils the consumer needs which he willing to pay (McCarthy, 1996). Product is Key element of the Marketing Mix in which we need to consider these factors:
Attribute related to product are quality, design and size. Like in McDonald, it is very important the quality of burger should be better than other competitor’s burger. The design in which product is made means in the case of burger shape is important and the size of burger is important because against all these consumer is paying for it. In competitor market product is distinguish based on the taste as if McDonald and KFC burger have different taste.
Branding is another factor which is very important in product element. Some of the products are recognized by the brand name. Like Cheese burger, saver menu and other products which are renowned by the brand name and consumer always remember the brand name of the product. When branding a product, it is important for managers that it should be easy to pronounce, easy in reading and it has appeal which attract customers to bring them into restaurant.
Packaging is another important factor which attract customer and it related to the product. Packaging and labelling is a quite difficult decision and packaging means that putting product in box or packet like we have big boxes are available at McDonald when we purchase a burger. Packaging is important because in this way product remains protected and easy to carry. Polythene and Plastic is not considering as a good material to pack the food product so it better to use the soft material. The plastic bags usage should be avoided.
Another factor which is part of the packaging is labelling. Labelling indicates the name, size, manufacturing date, expiry date and ingredients which used to develop the product. All the information is given by the company should be authenticated and consumer who are health conscious or not used some of the medical reasons need to know what they are eating. Consumers also consider the expiry date because fast food cannot be prevented so long.
In the context of fast of industry services in outlets are very important. After placing an order customer want quick food in their table (Schwartz, 2009). Due to modern technology product is order by phone or online ordering. In this context managers need to provide quick service to reach product at destination so Service are directly related to the Product. If the product is food then it is very important that order reach at destination as soon as possible because of hygienic reasons.
Another decision about the product is where this product is offered. Finding a market for the product and location of outlet need research. It depend upon the company where this product is offered, sometime it happened that many product are launched simultaneously and some time new product is launched in replacement on any product. This type of decision is called a mix decision and product line decisions.
As per Kiel and Layton (2010), there are two main objective of Promotion:
It is very import element of marketing mix because without doing any type of communication with customer we cannot increase sale and customer need to know, is this product fulfil my needs?. The decision about the selecting the tool for promotion depends upon the company. There are main four tools of Promotion Mix:
Every company has many products so each company in nature is different. For each product there is different promotion mix. Like fast food industry it is good for personal sale technique to adopt but for industrial goods this technique is not good, because they need more technical knowledge.
If the market is spread over large geographical area then advertisement technique is good because there are large number of customers who spread all over the areas. But if customer is not spread in large geographical area then personal selling or sale promotion techniques are good.
All the stages are important for the product, the author has described in detail Product life cycle in Product section.
In this strategy companies pushes the product into the middle man and he push the product towards the consumer, it is called a push strategy. In this type of strategy personal selling or display technique would be better as compare to advertisement. In pull strategy company directly approaches to consumer without involving middleman. Advertising consider more appropriate in this case. In combination with proper tools we can achieve our results.
CHAPTER 3 – RESEARCH METHODOLOGY
This chapter define the research design and the research methodology use to answer the research question, which explained and justified. It provides a clear description of models and concept used for the analysis.
Research means a systematic and objective study to find facts, which can be answer to questions and solutions to problems. The unexplained phenomenon is which have not been explained by anyone are explained by research. Therefore, research explains unexplained phenomenon to clarify all doubts and correct misconceived facts. The facts which are not exposed to the world are exposed with the help of research to the world for betterment. Research unfolds many facts to the society, business organizations for their progress (Solomon, 2006). Research is important for studying the behavior of the consumer. Different country people have different behavior and this can be study by doing the research.
Quantitative approach and qualitative approach ate two main approaches for data collection. When data is quantified for analysis, quantitative approach is the best approach which includes collection of data for quantitative analysis. Techniques like depth interviews, focus-group-interviews and projective analysis are used for data collection.
During this dissertation research report, I would first start by gathering information followed by the development of theory after the results are published. Also, the research will have a special concern for the context in which the events are taking place as we are genuinely interested to understand the context in which the events are taking place. This research is vying more to understand why some things are happening rather explaining what is happening. This justifies why this methodology will be inductive rather than deductive.
Research elements based on two main approaches which are empirical & non empirical. For non-empirical approach we have three main areas need to see in which:
These three approaches can be defined separately and each approach has its own way of explanation.
During the initial part of this research work, the intent would be exploratory and explanatory as well as this research aspires to explore consumer behaviour, attitudes and aspects which are having an impact on the process of consumer decision making in the UK fast-food market.
The second part of this research work is all about analysing our chosen case organizations potential responses for the changing environment and the evolving consumer behaviour. Once we get our needed understanding of the analysis of the fast food industry and consumer behaviour we will be able to provide appropriate marketing mix to generate a set of practical recommendations for MacDonald’s business.
The strategy that is used in this dissertation research basically involve the empirical examination of a modern phenomena based in its actual live settings utilizing multiple evidence sources. Considering these factors, the strategy that would be selected will be based on case study.
Non Empirical research based on pre existence body of knowledge which is already exists in a particular field. This research also required the source of reference a work which is already done or any one given a theory about that research. This source of reference define the real work because we taking logical thoughts or inspiration from his work then we need to reference his work (Collins, 2000). Some of the research based on research method and it need detailed study of literature review and searching on a particular topic. When we are conducting the Non Empirical research then we need to care of referencing the actual work and most important the way we adopt the idea from other work. If research nature is historical than it doesn’t need too much investigation. According to the Stake (2007), literature review included:
Selection between qualitative or Quantitative approach is difficult for the new researcher. Myers (1997) distinguishes between these two approaches in this way: “Quantitative research method is developed for natural sciences for examining various scientific phenomenons. The applications of Quantitative research methods seen in survey, laboratory experiments, mathematical modeling, formal method, numerical method and social sciences.
Qualitative methods were design to analyze in social science by conducting research on aspects of society and culture. Qualitative data is achieved by observations or participants observation also called field work. This data is not in the form of number but it based on interviews and questionnaire, document and texts, arguments and conclusion written in the form of alphabets” (Myers, 1997).
The qualitative data is gathered in the context of social, cultural and people where they live. The qualitative approach also defined by the Hussey (1997) as it is a subjective approach by getting better understanding human and society. He also defined the behavioural theory of people and using qualitative approach he analyzed the results.
Hussey and Hussy (1997), defined the deductive research approach as a deductive approach in which we develop an intangible and hypothetical framework and examined it using empirical observation, only particular points are deductive using common theory”. The deductive method is used for the general idea to a particular idea where we look more precisely and in depth.
The inductive approach is used for the developing theory in which, “It is a reverse method of deductive approach in which from particular instance we induced general instances. In this approach we move from selected point to general point and establish our hypothesis”. Myers (1997) establishes a point where no one agrees or no one disagree from its point of view and using both inductive and deductive approach he establish a hypothesis.
Another approach is available which tells about the researcher , if the researcher is subjective then need to consider what type of impact on the research and if the researcher used objective approach then it is independent and this type of approach is used in fieldwork where everyone give his observation and participants has a independent point of view. Collins (2000) explained in his book that “researcher should conduct the research independently otherwise validity of research will be questionable. Phenomenological paradigm is very natural and subjective. The paradigm naturally requires both real world scenario and researcher observation as well. Researcher needs to understand the concept of object or subjective approach and he need to decide which approach is appropriate for him self. He also relates both real world and outcome of his research for better and good results. In subject approach any type of influence or observation which impact researcher results or findings. The most important understanding about phenomenological research that it is totally depends upon the subjective approach.
In empirical Research it need a evidence and it does not matter that what is purpose of research but evidence needed for conducting a empirical research (Hussey and Hussey, 1997). Empirical evidence can be also be explained as collection of knowledge based on observational experience. The data base of observation or experiences research only achieved when researcher do field work. In which he need to conduct the research according to the requirement and it should be related to the topic and company requirement. In our case empirical data is not required because we are doing case study based research in which field work not necessary and we take the information from other peoples works. We compare the results and reach at any conclusion so it better for us by saving a time and resources to do a case study research.
The objective or the purposes any of research are as follows:
As evident from past researches that age group belonging to 17 to 25 years generally forms the major target market for fast-food businesses in United Kingdom, the research sample was carefully selected to stay within this age group. I along with my 5 friends will distribute and record responses from 100 respondents in diverse areas of Greater London.
The data collection technique for this research work is based on Non Probability sampling technique as we will make groups of about 40 women and 60 men out of 100 and taking their interviews. So in our case we used a sub type of probability sampling is Quota sampling. The nature of data is qualitative in our research and some part of the data is qualitative too but as a whole we consider qualitative so due to data nature we selected the Non probability sampling techniques and this sampling technique give broad view to analyze the consumer behaviours and most products are offer in menu are written in text form.
GROUP INTERVIEWS – FOCUS GROUPS:
To get a better understanding of consumer behaviour, the qualitative data collection technique was used in this dissertation research. To refer the questionnaire which was discussed during focus groups and the related information, readers are requested to refer Appendix A. Also, while the questions were designed for the focus groups, a special attention was paid to make sure that the questions focussed primarily on the following two aspects of the research:
Also, the consumer’s knowledge about the fast food and various different perceptions will be examined. Furthermore, consumer attitude and belief towards different fast food providers will be examined as well. Finally, the influence of highly debated anti-obesity campaigns on consumer will be examined.
As the respondents to the questionnaire were not randomly selected for this study, we cannot generalize from the resulting responses. The research aim was clearly mentioned in the beginning of the questionnaire so as to clearly inform the respondents. The key highlighter issues or themes were identified from this focus group study and later on used as a basis to form the close ended questions. The important or the key themes such as fast food quality, cruelty towards nature/animals, Brand equity, and Media influence on consumer behaviour formed the crux of the questionnaire. The reader can refer to the appendix B for gaining more information about the questionnaire.
Most of the theories of consumer behaviour were based on the theory of economy stating that the individuals are truly realistic for maximizing their satisfaction or benefits while making purchase for a good or services. Further researches demonstrated that individual consumers are more likely to make a purchase decision which is impulsive in nature and this decision is not only influenced the consumer’s friends, families and advertisement exercises but also by the emotional quotient, mood and situation during purchase. Each of these attributes finally combine to offer a formation of exhaustive consumer behaviour model reflecting both the emotional and cognitive aspects of consumer decision making process (Baines, Pomael and Joel, 2009). This model of consumer behaviour is further simplified and illustrated in figure 1.4, combining all together social, psychological and cultural theories of consumer behaviour in a more lucid framework.
Figure 1.4: Simplified model of Consumer decision making process
The above illustration would offer reader and researcher alike, the critical information about the factors which have deeper impact on the process of consumer decision making. As we have seen in our literature review that most of these models are insufficient under current complex consumer behaviour, we are still using these models to understand the basic understanding of this process.
Hierarchy of Effects Concept:
When it is evident that all the 3 components of an attitude are significant, their associated significance would vary as per the motivation level of consumer with respect to the attitude object. This is the reason why the hierarchy of effects concept was evolved and developed so as to offer explanation about the respective influence of these 3 components. Researchers analysing the attitude aspect fundamentally assumed that the attitudes were prearranged sequence, having beginning of the beliefs formation (cognitions) with respect to the attitude object, which was followed by an analysis of that object (affect) and finally ending with certain action (behaviour). However, it is also proven that depending over the level of involvement of a consumer and the circumstances, attitudes could result from different or other hierarchies of effects (Abraham, 2009).
Therefore, in this research work it is proven that the attitude object is nothing but a purely fast food product, which is also deemed to be a low involvement product, and hence hierarchy of low involvement can be illustrated as in the figure 1.5.
Figure 1.5: The low-involvement hierarchy
Source: Abraham (2009)
As evident from the above illustration, in this sequence, the consumer generally do not show any initial strong preference towards a single brand in comparison to another, but in its place actions on the foundation of limited information and then later form an analysis/evaluation only after s/he has made the purchase of the product or used it. Therefore, considering the above scenario, it can be said that the consumer is influenced primarily by the behavioural learning principles (Gilmour, 2009).
Therefore, in this dissertation research work the author has assumed that the fast food consumer would form attitudes through the concept of hierarchy of effects (low involvement) and in the end this concept would be interpreted in this research to offer recommendation to the case study i.e. McDonald’s.
External environment influencing the research case study would be analysed through the application of PESTLE framework, which offers division of external environmental factors across four diverse categories such as Political, Economic, Socio, Technological, Legal and Environmental (Knowles and McMillan, 2009). The environmental influences which are affecting McDonald’s are observed using this framework. This framework is extremely useful when the influences of these factors are studied in current and future perspective instead of providing a generic list of influences.
In this PESTLE analysis, the highest priority is given to identifying key drivers of change so that we can learn about the important issues which fast food industry is facing and how it might affect it in the future. However, not all the factors are important considering our dissertation research, therefore, economic and technological factors will be excluded from our analysis. The important factors would be Political and Socio-Cultural as they directly influence the fast food industry.
Figure 1.6: PESTLE Framework
Source: Solomon et al. (2006)
Like all experiential research studies, this research also has certain limitations and conveniences. The major limitations, which the author has faced, include difficulty in gathering the latest year references and statistics, also restrictions in terms of time availability during for conducting the survey and the time which was provided to the respondents for answering the survey analysis.
Furthermore, the research sample size is restricted to 108, which offered a very limited response validation, and therefore there is a high probability that the conclusions and the results of this research would have been different in case the sample size would have been larger and more diverse. Also, this research was conducted in the city of London which is a cosmopolitan city and therefore caution should be utilized before generalizing the conclusion due to the fact that the consumer perception are drastically different in other lesser cosmopolitan cities.
This chapter is collated to offer the results of the data analysis and findings of primary and secondary research. The chief objective of these findings is to provide the data analysis result and to distinguish it from the market research so as to avail the findings related to the investigative data, which was performed historically. This reader will be provided with a simplified presentation of data and its analysis which was processed using the methods and tools discussed in the previous chapter.
In order to provide analysis in an easy format, we have divided the data presentation into two parts. First analysis is about the external factors which are influencing McDonald’s and the second part is about the key factors which are influencing the consumer decision-making process.
In data analysis, we consider many factors but it important to understand the nature of qualitative data we gathered and analyzed. We consider following point in our research to analyze the data:
As mentioned previously, this section is for understanding the external influences and therefore, results and information from the PESTLE Framework will be applied. This information will be utilized for further research later in this dissertation.
The fast food market of UK garnered a total revenue in the range of GBP 5.9 billion during the trading period of 2009-2010. As compared to 2008-2009, the revenues have significantly increased from the earlier levels of GBP 3.5 billion. Moreover, the sales of fast food offered to restaurants of quick service corresponded to be the most profitable segment of the UK, generating revenues in range of GBP 3.6 billion in 2010, which is nearly equivalent to a overall market share value of 61 percent (Euro monitor report, 2010).
GBP Value in Billions
Percentage of Growth
Figure 1.7: United Kingdom Fast Food Market Value: £ and $ billion, 2009-2010
Source: Datamonitor, 2010
In spite of the numerous fears and concerns about the fast food being linked to obesity, heart diseases and other health problems, the fast food industry in UK has shown strong growth during the last five years. If we consider the per capita expenditure, between 2006 and 2010, than we will see that the fast food industry is one of the fastest growing segment across all the service industry segments across UK (Euro monitor report, 2010).
Figure 1.8: Expenditure on eating out by sector (growth): 2005 - 2009
Source: Euromonitor, 2010
As per Euromonitor report (2010), McDonald's Corporation is ranked as the number one restaurant offering fast food items across all parts of UK, with an approximate 32 % of market share which proves that it has a wide lead over its nearest rival i.e. KFC (under the Yum brand leadership) and Burger King which has a market share of just 11 percent across UK.
Figure 1.9: McDonald’s UK market share report (2009)
Source: Euromonitor, 2010
To summarize its performance, McDonald's is presently operating fast food restaurants across majority of the global market locations.
4.3.2 Pestle Framework Analysis
Boseley (2008) has demonstrated in his research that it is nowadays very common to be fat or obese in UK; which is proven by the official Government statistics that shows that approximately two third of men and nearly 58 percent of women are extremely overweight in UK. The research further reveal that UK is the state which ranks number one for the highest number of obese or fat population across all the 27 states of Europe which was termed as grotesque by the UK health secretary.
Now let us study some of the important analysis of the PESTLE framework which is mentioned below:
Rising NHS costs due to obesity:
As per Stake (2007), in a reference to the health department of the Government, it is proven than the fast growing crisis related to fatness and obesity is expected to involve more thousands people in its stride thus causing more obese people. As per the recent survey by Guardian newspaper, currently 10% of NHS resources are devoted to look after ailments such as diabetes and obesity related cases and is predicted to be nearly double in the next 3 years.
NHS in a unique way has introduced top up fees for those patient who are measured to be obese as per clinical terms (Kiel, 2010). Fatness or obesity is proven to reduce life expectancy by almost 8 years and is expected more in obese smokers. This is grave concern as along with the human cost associated to the individual, there is another associated direct cost due to obesity to the nation and is bared by tax payer’s money. Nearly GBP 1 Billion is spent every year by the Government to control this crisis of obesity and fatness across UK as per the Newsweek magazine survey (2009).
The White Paper:
During the year 2009, the Health Department of Government of UK published an exhaustive White Paper with the topic “Health Choice – Easier Health Choices for Life” and which actually recommended a variety of suggestions targeting citizens following a sedentary lifestyle for steering towards a better and healthy life pattern as per the guidelines of UK Diet & Health analysis (Schmidt and Roger, 2010).
Some of the important points that came out as per the PESTLE framework conducted by the Government of UK are listed below for reader’s reference:
As per the Telegraph Archive Report (2010), one of the landmark policy that is being discussed by the Government bodies is the introduction of Fat tax to be applied on every junk food for controlling the menace of obesity and fatness in UK. The strategy unit from the office of UK Prime Minister have eagerly raised the need to apply additional duty or VAT on most of the fatty foods after the NHS report (2009) revealed that the obesity related heart attack are now UK’s biggest killer overtaking the dreaded cancer deaths and many youngsters in the age group of 25 – 34 years are developing diabetes syndrome. This steps and actions by the UK Government should be an actual warning to the producers of junk food and to consumers alike serving them a warning that the nutrition and vitality is the most important factor in any food product and consumption. To further support this claim, the British Medical Journal research claimed that the application of Fat Tax could assist in saving nearly 1000 premature deaths in UK which happen to cholesterol related heart diseases each year (BBC Archive, 2010)
Change in Socio-Culture:
According to the most recent survey by Consumer Lifestyles in London indicated that the three most important family eating events of breakfast, lunch and dinner have turned into sole events which are very much less structured. On the other hand fast food products and snacking have replaced family events.
The factors which are influencing these changes are:
The above mentioned factors have led an increased demand in food which is easily available, ready for eating and do not need any cooking. This includes fast food items, junk food, snacks, confectionary items, take away food and anything that has replaced the home food products.
As per the Euro monitor survey (2010), one of the biggest positive influences on the society in terms of awareness of healthy food is through the public appearances of Chef Jamie Oliver. All his television appearances, books and series have a section that highlights the immense negative aspects of junk food consumption and about how to improve the school food quality in UK. This has created immense awareness among the consumers to adopt a healthy life style. Also, it has given opportunities to the Government of UK to create new policies and structure controlling the epidemic of obesity in UK.
According to the BBC survey (2010), Chef Jamie Oliver is being chosen as the single biggest factor responsible for the great improvement in the quality of school lunches. Jamie Oliver is perceived to be having a larger influence than the UK Government, Education authorities and locals school themselves.
As we have seen in the literature review chapter that various lifestyle changes have led to an increased demand for fast food restaurants across UK, however, fast food industry is still plagued by the negative publicity currently prevailing in the society. The major reason that is evident is the association of these products with the tag of unhealthy food and negative influence about child hood obesity syndrome. Therefore, eventually the traditional growth in fast food sector of burgers, chips etc have been deeply affected by innovative food concept sellers like Pret-a-Manger, Subway, etc.
4.3.3 Key Drivers of Change
The key drivers of change which have arisen due to the external environment and which could have definite impact on the future fast food industry are analysed below:
The lifestyle in UK is becoming ever increasingly busy with less free time, high disposable income which is resulting in more consumers opting for take away food service than preparing their own food. Also, the unstructured family events and lifestyle changes have lead to unstructured meal pattern with consumer choosing easily available fast food products. The above factors related to the lifestyle changes of the UK consumer support the fast food industry growth in UK, however, at the same time the junk food consumer is getting aware of the negative aspects of the junk food consumption and getting more health conscious. Therefore, with this slow awareness of health conscious food intake, the next key driver of change could be Government interference.
High profile Chef Jamie Oliver (2009) has acknowledged the fact that the current high profile public and political debate about the epidemic of obesity and related health concerns has been continuing for a long time and will probably continue until a reasonable solution is drafted which is in equal favour of the consumer and businesses. However, he adds that this debates and public awareness would definitely affect the pizza, hamburger and chicken/chips sales of UK region. To support the above claim and make is more plausible, Hawkes (2008) demonstrate that the Government of UK has still not being able to control the fatness or obesity epidemic for the last 9 years of this campaign. Maybe the importance of the circumstances has at last persuaded the UK Government to take additional domineering approach by ignoring the allegations of being running a “soft state”.
These key drivers of change will surely affect the fast food industry; however, it is not easy to predict what would be the impact in times of changing consumer demands and lifestyle changes. These changing consumer patterns are strongly favouring fast food industry, or escalating healthy living trend underpinned by a probable new legislative government having negative impact on the fast food industry.
Now after analysing the various patterns of external factors and key drivers of change, it is important to examine the consumer attitude towards fast food so as to develop possible theories and strategies that would help McDonald’s to improve its brand equity.
Focus Group (Analysis of Key Points)
As mentioned in the chapter of Research Methodology that the focus groups would be divided into two sections. The initial 3 questions are particularly designed to order to focus on exploring and understanding the attitude of consumer towards the offerings of the case study i.e. McDonald’s. Whereas the final 3 questions were developed to seek any influence arising from the external environment which would have any impact on the decision making process of the consumer with respect to fast food consumption. The necessary list of questions which were discussed during the focus group exercise were listed in the Appendix chapter in the end of this research report.
4.4.1 Part 01: Investigate attitude of consumers’ with respect to fast food
Quality of Fast Food
A fairly long debate took course with respect to the quality of McDonald’s fast food. Majority of the participants categorized them as extremely low on food nutritional scale. The debate continued about what sort of things beef burgers consist of. Majority of the participants agreed to the fact that meat quality that is used in the in the hamburgers and other McDonald’s product is of very poor quality. Some of the participants also emphasize that they have heard about McDonald’s putting all different kinds of animals parts to take advantage of economies of scale.
As pointed by one of the participant: “I do not think there exist any fast food restaurant that offers quality food that would qualify as clean, nutritional and hygienic as per the food safety guidelines.”
“The quality of vegetables which is used in the hamburgers or the double cheese burgers is atrocious, when I open a burger and what I see is a lettuce which as turned yellow, if not ugly brown. I do not understand how hard is for a company like McDonald’s to make sure that the vegetables are kept fresh all the time”?
Furthermore, another interesting issue with regards to the product ingredients was highlighted by one of the participant who said: “I have real evidence about the apples which McDonald’s use in their Apple pie, I have heard that they are not actually made from pure apples but with a mix of small quantity of pure apples and some cheap chemical stuff. After which they add some apple syrup and cinnamon for making it taste like a pure Scottish apple”.
This insight generated another short debate about the business interest of some huge food flavouring and chemical companies which was rightly followed by this statement: “I am real love with the taste ofo the McDonald’s fast food, but I am not going to touch it again if I knew what it actually contain than what it says on the menu.” This statement followed by another participant who said: “Never in my life did I ever see any real nutritional facts in any of the McDonald’s products or restaurant and to be honest with you guys I will never trust such information even if it is shown to me.”
The debate was than diverted towards discussion about the ethical issues involved with respect to fast food restaurants especially McDonald’s.
One participant added saying that “The most important for me is the ethical aspect of a fast food business and its product quality. I cannot believe that mass production of chickens from the stage of hatching until full size takes about 3 months, which is absolutely rubbish as the natural way is nearly 16 months for all these stages to fulfill. I am disgusted to believe that the chickens are fed with steroids for the greedy gain of the fast food businesses.”
Another added saying: “As a consumer I will never know how the animals were raised which were consumed for fast food industry, the mystery will continue about the conditions in which they live and it will never be disclosed what is actually inside our Burgers.”
Someone said: “I am not going eat chicken anymore in fast food restaurants with respect to the information I gained today in the research workshop on the basis on my individual principles and conscience.”
Majority of the participants agreed that the fast food companies are not respecting the ethical and moral issues with respect to the welfare of our ecology that includes animals as well. As some of the participants responses or feedback seems biased, author personally verified the content by visiting the McDonald’s website.
Regardless of the fact as what McDonald’s profess to use in the production of their products, the majority of the focus group participants surely did not want to believe it or they were not aware of such information. The actual truth is that the participants perception, knowledge and attitude towards fast food is extremely negative and of suspicious belief. However, it can be observed from the debate that though nutritional value of fast food products and the ethical aspects related to fast food restaurants is of significant to them, it will surely not determine the decision to visit a fast food restaurant or not. Also, during the debate, the author noticed that the usage of the word “Junk Food” was used most frequently than Fast Food signifying that the participants have a set attitude of treating fast food as of low value and unhealthy for masses.
Fairbrother (2010) argues why the term “Junk Food” is only applied to a selective range of food products and why not as per the nutritional balance or content of the actual product line. It is evident from the secondary research findings that the Government departments and celebrity chefs constantly discourage consumers from eating French fries, however at the same time it can seen that they do not stop people from eating a dish such as Duck a L’orange. The point to be noted here is that the French fries servedin McDonald’s restaurants contains about 5 grams of fat whereas the Duch a L’orange dish contains nearly 15 to 20 grams of fat in a single serving. Also, the ice creams scoop commonly available in markets contains much more fat content than McDonald’s French fries. The question now arise why the term of Junk Food should be applied selectively. As per Peter Marsh (Researcher at Social Issues Research Centre in Oxford) who studies the impact of unhealthy food on human bodies, describes that the term Junk Food has become a simple matter of aesthetics, if said in a simpler terms than a way of offering our polite disapproval to a particular brand of food items. The term Junk Food is extremely unfortunate if clearly not misleading.
The above critical analysis and arguments proves that McDonald’s product offerings are not cause of obesity or fatness as evident from the comparison from other food products (in fact in some case the McDonald’s food products are less fatty than other commonly available food items), however, the majority of the participants still described fast food as to be simple junk food and indirectly associated them to unhealthy and fat, cholesterol increaser and greasy food. This eventually influences the consumer decision making process towards fast food as extremely negative.
The majority of the group uttered mix emotions and feelings with respect to the McDonald’s product offering in the market. Some of the participants loved it whereas some of the participants hated it.
As mentioned by one participant about his reason for visiting McDonald’s as: “I am on the verge of dying by hunger and there is nothing else in sight for me to eat and therefore I eat in a McDonald’s restaurant.”
Other said: “It’s like a different feeling coming from nowhere, you know that you are being driven by something towards McDonald’s and you cannot stop this craving, this is the time when I head towards a McDonald’s restaurant”.
However, most of the participants described eating in a McDonald’s restaurant as extremely convenient and economical: “Eating out in a McDonald’s restaurant is very cheap an convenient for me, where else do you think you can eat a filling meal which includes a chilled drink for less than 5 pounds in UK”?
Another participant added: “You are fairly tired, its midnight and you are on your way home and than suddenly you see McDonald’s on your way and you decide to walk inside….sometimes to be honest with you I smell McDonald’s”.
Similarly someone added: ”Most of time I go to a McDonald’s when I see that glowing golden Arch….nothing else…simple…I am in love with the Arch..”
In spite of the fact that the focus groups participant described fast food as low on nutritional and very unhealthy for a lifestyle, they are still enjoying eating out in such fast food restaurants, though not very often. Maybe the occurrence of going to such restaurants is presumably associated with emotional and psychological attributes and linked with the internal determinants of consumer behaviour as discussed in the literature review. This proves that eating fast food comes as a craving from certain internal and external pattern of consumption. Having said that, the researcher would like to associate the craving for fast food as the craving for chocolates as proved in past researches in both men and women. This would perhaps offer the link between the conclusion of the infamous documentary “Super size me” with respect to McDonald’s and fast food showing how its central character gains nearly 12 kilograms in a month of eating out on a McDonald’s diet (this would be discussed in more detail in the next section of this focus group findings)
It was suggested by the central character in the documentary that the fast food is more or less an addiction. To underpin this theory, it would be important to quote the scientist from the NHS research labs, which proved that addiction to fast food is more or less similar to addiction to drugs. As per researches it has been proven that consumer can over rely on sugar and fat good out of craving or addiction (BBC Archive, 2009). As per Schiffman and Kanuk (2008), the extent of risk, which the consumer perceives for a certain situation along with their individual tolerance to such risk, is the true determinant which influence its purchase decision and strategy. As a company, McDonald’s tries with all its effort to provide the necessary information with regards to the risk and benefits associated with its products and it is very easy for a consumer to view such information on its website. For example, a consumer can actually calculate the risk involved before consuming a certain food product by calculating its nutritional values on the website and can also compare with other available products which are commonly used in real life. Furthermore, the website also offers information with regards to the information pertaining to the animal and ecological welfare and all its associated stake holder. These efforts are directed towards reducing the perceived risk by the consumer. Also, McDonald’s is aggressively promoting active lifestyle by sponsoring various outdoor activities such as Olympic games and football sporting events.
The above analysis and the participant statements prove that purchase of a fast food item is usually out of impulse, whereas people generally decide to eat at McDonald’s due to various emotional and psychological reasons, not to miss the physical reason when the actual product on offer tempt towards making a purchase suggesting that products related to fast food category are actually low involvement product.
Considering these situations, it can be said that consumers are generally influenced by the behavioural learning principles than anything else (Le Anre, 2010). That is the reason why marketers at McDonald’s are focussing more on offering the information in their restaurants and websites and also on how this information is presented. The Model of Elaboration Likehood (ELM) points out that the consumers involvement level while processing of message is an important factor for determining the actual route leading to persuasion is most likely to be effective. In cases when the involvement is very low, sucha s fast food products, consumers are likely to follow the route of peripheral relying increasingly on other elements of the message for formation of their attitude towards making product choice (Schiffman and Kanuk, 2004). This is one of the chief reason why McDonald’s is still using the famous jingle in all their endorsement “I’m Lovin’ it” which is again backed up another mainstream artist such as Justin Timberlake, as they company makes efforts to increase the involvement of consumer using celebrity and catch jingles.
4.4.2 Part 02: Impact from External Environment (Obesity campaign, Media influence) over Consumer Decision Making Process with respect to fast food
Super Size Me & Obesity Epidemic
It was a common fact among the focus group participant that they were aware about the current obesity campaign in UK and also they admitted that it is not affecting them in any way.
One participant said: “It is an obvious fact that people do not how to eat…when to eat and how much to eat…you can live on a great fast food diet without getting fat or obese if you have a disciplined life style involving exercise and other balance”.
Other said: “After watching the Super size documentary it has influenced me so much that I am afraid to go into a McDonald’s again …”
This debate went to a interesting stage when participant said: “It is more to do with your lifestyle..being couch potato and eating any food that taste good and stuffing your belly without having the knowledge of what this food can do to your body…I believe its more about making an educated choice than just blaming someone for this situation”.
Furthermore someone added: ”If the parent are ignorant themselves and do not educate their children about the benefits and drawbacks of eating out of control or in control then they will become the same and will end up replicating the same things later in their lives”.
It was very insightful while investigating the response of McDonald’s with respect to the documentary Super Size Me. To everyone’s surprise, McDonald’s has mentioned on their website that the they agree with the what is shown in the documentary and completely endorse the message which says that everyone should follow a balanced diet and lifestyle. Further, they argued that the central character ate a one-dimensional meal for nearly 30 days which consisted on 5000 calories per day and which is double the recommended amount for an adult. Also, he gave up an active lifestyle to a more sedentary lifestyle stopping all his physical activities. On the contrary McDonald’s supports all their consumers by offering healthy living guidance available in restaurants and websites. McDonald’s also launched a website in response to the documentary to offer various reasoning to the same.
Referring to WHO Report (2010), the education can play a vital part towards pursuit of a greater understanding by consumer with respect to healthy food habits and lifestyle and could take place within home, social environment or school. This could be reason why among all the general participants, the group who has finished their final year studies do not eat at McDonald’s.
A very lengthy discussion took place concerning Government’s intervention for bringing in laws to manage or regulate the fast food industry or to let the industry self regulate itself and let the consumer be left to have a free choice. Majority of the group supported the regulation in terms of issues related to children and advocated to leave the adult for making their own choices.
Role of Fast Food Restaurants
There was a final debate over the last question that talks about fast food companies being held responsible for the current obesity epidemic in UK, almost everyone except one participant said yes and added his defence by saying: “Fast food companies are well aware about the products which they are serving in their restaurants and what impact it had on the consumer….but they are more concerned about the adverse impact on the people as they are busy making money for their business…these companies should know where to draw the line…to be aware of what is wrong and what is right”.
Now reaching the final part of this research dissertation which is about understanding the results of the analysis from the questionnaire, which was developed using the Focus group interviews. It should be noted that the first three questions are designed to focus on consumer’s attitudes towards fast food and McDonald’s as a company. While the last three questions are exploring the impacts that might come from external environment having influence on consumer decision making process in regards to the fast food items. The complete questionnaire can be accessed in the Appendix chapter.
4.5.1 Questionnaire (Findings Analysis)
Though we conducted 100 surveys, only 71 participants proved to be legitimate as the answers were logical and completely filled in. The ratio the gender was divided equally between male and female (coming to as 49 percent for male and 51 percent for female). As evident from the literature review that the fast food marketers target the consumer age group of 17 years to 25 years, therefore, it was made sure that the majority of respondents of this research survey nearly matched this global ratio with 88 percent falling between the age group of 17 and 25 years.
As per the research results conducted by Mark & Jacob (2008), the actual international target segment for fast food industry is between the age group of 17 and 25 years of age. As evident from the survey result from the above question that which corrected matched the respondent profile of the research questionnaire, with nearly 88 percent falling between the age group of 17 and 25 years of age. Also, the survey result shows that 30 out of the 71 survey participants (i.e. 42.3 percent) ate fast food related products every month every at least once.
Determining consumer’s trust in McDonald’s brand equity and product quality.
This research uses the “Selected Evaluative Scale” to understand consumer’s attitude towards quality of fast food. Majority of the respondent ranked on every type of fast food except Salad, Fruit as worst quality. This poor quality remark given by majority of respondents clearly proves that consumer’s value nutrition of fast food as indeed extremely poor.
A good 34% respondents have viewed the nutrition list in McDonald’s restaurants at least once. However, whosoever have seen it they do not trust it. (Appendix C)
Surprisingly 83% of the consumer’s agreed that McDonald’s is indeed using chemicals in their fast food products. (Question no 7)
Also, while putting remarks on the scale of 5, a good 31 out of 71 respondents believe what McDonald’s has published on its website about usage of high quality ingredients and best raw materials as utterly untrue. (Question no 8)
After the respondents were in formed that McDonald’s is actually using 100 percent beef along with fresh vegetables and apples in their apples pies, than 34 percent answered positively for visiting McDonald’s more often. 50 percent of the respondents who have visited the McDonald’s website did not found it useful enough and it could not engage its visitors. Moreover, 61 percent of respondent still not have any desire to visit the McDonald’s website in near future.
Majority of the participants selected the option one signifying that visiting McDonald’s was not the chosen option and was instead out of craving for fast food. Furthermore, 27 out of 71 participants that are nearly 38 percent selected option over convenient.
E) QUESTION: REASON FOR VISITING MCDONALD’S?
A slight majority prefer going in McDonald due to having no other option, however, there is a second majority that signifies that McDonald offers good value for me. This is quiet contrasting to the majority as a company which is offering value for money cannot be ignored in todays money crunch economical times. Also, it is interesting to note that nearly 20% of the participants admitted that they do not go to a McDonald’s restaurant which proves the inference from the focus group that the education people do not eat fast food.
Determining consumer’s ethical concern in regards to fast food industry.
Majority of the respondents were aware of the ethical aspects in regards to animal welfare especially concerning chicken. On the other hand, merely 31 percent of respondents didn’t had any clue about this aspect. It came out as a conclusion that a decent 25 percent of respondents believed this reason for not eating chicken in any McDonald’s restaurant.
The important highlight that must be noted here is that when the respondents were informed that McDonald’s would be using naturally raised chicken ingredients than a whopping 39 percent agreed to go and eat chicken at McDonald’s.
Determining impact of Government and Media on consumer’s buying behaviour.
A big majority of 76 percent agreed to have read about various Government campaign against obesity and Jamie Oliver campaign. A small yet significant number of 15 percent agreed to have changed their outlook towards fast food after these awareness campaigns. Furthermore, 28 percent have reduced their fast food intake after gaining awareness from these campaigns.
The popular documentary “Super size me”, which 84 percent agreed to have seen had a strong influence on their outlook towards fast food and out these 84 percent respondents, 35 percent gave up eating in McDonald’s restaurants.
Majority of respondents chose junk food to be the reason for UK being chosen as the fattest country in Europe.
Majority of the respondents agreed that products associated with McDonald’s are extremely unhealthy, cheap, tasteless and greasy. Except fruits and salads from its menu, rest everything else was considered as of worst quality. Consumer are indeed affected and influenced by ethical issues, obesity debates and documentary message in recent times.
As we have seen that the desire or need for fast food products comes impulsively. It is also proven during our questionnaire that people do not spend any time analysing whether they should go into a McDonald’s restaurants or not. Consumer attitude towards McDonald’s is basically due to the limited knowledge they have about fast food. Also, the knowledge which majority of the consumers have is predominantly negative which eventually results in negative outlook towards fast food industry. This research has conclusive evidence that consumer treat McDonald’s food as unhealthy, cheap, and of worst quality. Eating in McDonald’s restaurant is treated as the last option and not out of choice, underpinned by the fact that McDonald’s is still perceived as a typical junk food restaurant.
There are various external factors that have influenced consumer decision making process which had a direct negative impact on consumer mind, which eventual results in a behavioural change in consumer attitude and perceptions. One of the major influence is obesity stigma and debate which is currently doing rounds in various media avenues. This research report also revealed that consumer’s do not trust McDonald’s, and thereby resulting in negative consumer decision process for eating in fast food restaurants.
Further into this research report it has been witnessed how McDonald’s is responding to these changes in consumer behaviour and environment factors. Marketers at McDonald’s are trying hard to minimize the negative perception by providing maximum information to its consumers regarding its food line. They are also trying to regain their consumer trust in its brand equity and attitudes to increase market share and revenues. As per the PESTLE framework analysis it has been understood that one of the major drivers of change that might affect the future of fast food industry perception are obesity debates and various other health related awareness campaigns in UK.
However, McDonald’s have seen it all, it has been battered badly by numerous books written against its unhealthy food, numerous health experts warnings, wide criticism by celebrities, documentaries revealing uglier sides of McDonald’s fast food. Moreover, it has faced numerous law suits which never succeeded. Though, these factors had huge impact on its brand image and negative effects on consumer behaviour and attitude.
In a response to such ill publicity, McDonald’s came out with healthier menus, reduced unnecessary fat from its cooking ingredients, and published its side of story on its website in response to the Super Size Me documentary. Considering its last years sales performance it can be easily seen that it has succeeded in its efforts to conserve its brand equity. Company shares have peaked during last 3 years and share holders are happier to receive dividends and bonus as well. This has perhaps in fact made McDonald’s more immune to the allegations against its reputation and made it more stronger than before after all these years of naming and shaming business. Maybe in another ten year of period, we might see McDonald’s popular for its organic fresh fruits and Salad menu just like its current burger and fries popularity.
To conclude this part of research, it can be safely said that there was nothing to explore with respect to the to consumer behaviour or attitude. Consumer still consider McDonald’s as unhealthy, greasy and cheap, however, its sales performance signifies its still available to exceed its selling targets. McDonald’s cannot control consumer’s view towards its brand, however, what it can do is work toward providing as much information about its product to its consumer. Finally it can just leave it up to the consumer to decide whether they would like to trust its quality or not.
After reading the analysis of the various factors which influences the consumer behaviour, it is very clear to us that various internal and external factors have diverse affects on consumer decision making process in regards to fast food industry. Therefore, we propose the following recommendation to McDonald’s to pursue in its quest for retaining its consumer trust and confidence.
Since beginning of this research dissertation it is evident that though McDonald’s have a negative image due to its fast food association, its profits have shown excellent growth over period of time. However, there are still various areas in which it can improve its image and brand equity, so as to boost its current sales level and share holders profit.
McDonald’s can actually offer various options like increasing quality awareness of its products, promoting active lifestyle through endorsement by celebrity sportsmen, creating innovative healthier menu corresponding to today’s taste and likeness, redoing its restaurants and its ambience and hiring celebrity chefs for brand promotion.
During this research, it has come to authors attention that consumer attitude towards McDonald’s fast food products are always negative and various external and internal factors are influencing it still further to be negative and unhealthy. Therefore, it become very important to provide its consumer’s with the necessary nutritional information about its food content. This can be attempted in various ways. It can persuade its customer’s to visit its website. As evident from the questionnaire results that a whopping 61 percent of respondents do not have any desire to visit its website and therefore, it must provide some kind of incentive for its consumers to visit its website.
It can promote a discount in which the consumer must visit its website to gain a secret code before availing this discount. This way it will might be able to persuade its customers to visit its website and offer the necessary information.
Also, the website must be able to engage the consumer who visits it for recording the secret promotion code. There should be some kind of games or puzzles offering some more discount vouchers. These applications can be developed using information about its products and nutritional values.
Also, as per the survey questionnaire, it is evident that a good 34 percent of respondents are ready to visit McDonald’s restaurants if it informs them that 100 percent beef or chicken is used in its burgers. Therefore, when a consumer reaches its website, numerous benefits can be achieved by the company.
Furthermore, interesting fliers and discount coupons can be distributed outside or nearby its restaurants to connect with non-customers. Also, in the serving tray, it can publish interesting facts about the nutritional elements of its products, providing a chance to its consumer to know its nutrition intake thereby gaining consumer trust. It was evident from the analysis that consumer want to know what s/he is eating and therefore by offering all these information, McDonald’s would build up a great rapport with its consumer’s.
Moreover, as nowadays consumers are demanding quality and healthier food, therefore, McDonald’s should increase its frequency of launching innovative healthier food items such as healthier sandwiches, salads. For its popular fries, it should offer an alternative of oven fries instead of oil fry thereby promoting oil less food items. It can also switch from offering white bread to a healthier brown bread. This would position them as a healthier fast food company.
If McDonald’s is able to implement at least 50 percent of the above mentioned recommendations than the author believes that they will be able to capture more market share and retain its age old customers as well.
5.3 Areas of further study
Listed below are some of the research areas that can be explored to gain further insight into this interesting topic of consumer behaviour of fast food industry. Due to words limitations and time constraints, it was impossible to explore these areas of research and therefore the author would like the reader to proceed further with these suggested topics of research.
The following is a research project conducting by students of MBA and we want to study about the effectiveness of consumer behaviour in fast food industry and how McDonald’s is able to counter this changing environment and consumer behaviour. This research is for academic purpose only. The information will be kept confidential and your name is not required. Your cooperation in completing this questionnaire by responding to the following questions will enrich our understanding and would be greatly appreciated.
Focus group took place at Guildhall library garden on 27th of November 2011. The group had participant of all age and background and ethic orientation.
QUESTIONS ASKED DURING FOCUS GROUP
1) Your general view about fast food industry (McDonalds) and its typical products?
2) What do you feel about the fast food restaurants and fast food products in general?
3) Reason that drive you to eat in McDonald’s?
4) Have you heard about the current obesity issue in UK (e.g. the government anti-obesity policy/Jamie Oliver campaign etc.), and does it have any affect on you?
5) Should there be a regulation on these fast food companies?
6) Are these fast food companies responsible for rising obesity in UK?
Under 15/16-25/26-35/36-45/Over 46
Every day/3 times a week/Once a week/3 times a month/Once every month/I don’t eat fast food
Beef Burgers/Vegetable burgers/Salads/Fruit/Pies/Chicken Sandwiches/McDonald’s MacNugget’s/ Fries.
Nothing else but dying of hunger/Simply a convenient option/It offers great value for money and health/Because I love its burgers taste/I have never been to McDonald’s
Very familiar/Quite familiar/Don’t know what that is
Yes it does/Yes it does, but I eat my chicken/It doesn’t bother me/I don’t eat chicken
Yes, now I think differently about fast food and don’t eat anymore/Yes, but I still got to eat but not as often as before/No, it didn’t affect me in any way/I never use to eat in such restaurants
Yes indeed/Yes, for while, but now I go as often as before/Not at all
Busier lifestyle/Sedentary lifestyle/Lack of education/Eating too much “junk food”
Using a scale of 1 to 7 (1 being worst quality and 7 as best quality) value nutrition of McDonald’s products?
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