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B R M P r o j e c t Page 2

ACKNOWLEDGEMENT

January 10, 2011

We take this opportunity to thank Professor Ritesh Tiwari ,our worthy BRM faculty, whoaccepted the proposal of this project and guided us throughout with his valuable ideas and

suggestions. We are also grateful to him for helping us out at each stage and solving each little

query and doubt with patience. He also explained to us all the functions and complexities of the

SPSS software.

We would also like to thank our student friends at IBS Hyderabad for sparing their valuable time

in filling out our questionnaires with lot of patience.

Finally, we would like to thank each other for our determination to complete this project and our

undying support to each other.

Group Members

Arushi Goyal 10BSPHH010162

Mohammad Bohra 10BSPHH010412

Parth Tripathi 10BSPHH010517

Ayushi Garg 10BSPHH010178

Ashish Tripathi 10BSPHH010168

Nitin Kumar Rana 10BSPHH010497


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TABLE OF CONTENTS

S.No Topic Page no.

1 ABSTRACT 4

2 OBJECTIVE 4

3 INTRODUCTION 5

4 LITERATURE REVIEW 8

5 RESEARCH METHODOLOGY & DESIGN 12

6 DATA AND SAMPLE SIZE CONSIDERATIONS 13

7 QUESTIONNAIRE DEVELOPMENT 18

8 DATA REPRESENTATION & ANALYSIS 21

9 FACTOR ANALYSIS 25

10 REGRESSION ANALYSIS 31

11 LIMITATIONS 34

12 RECOMMENDATIONS & CONCLUSION 35

13 REFERENCES 36


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ABSTRACT

This research project is an attempt to analyze the factors affecting the annual consumption

pattern of Mc Donalds burgers in Hyderabad.

The impact of various factors such as Timely Delivery of the food, Quality of the food served,Location of the fast food restaurants, Customer Service, Diversification of Menu, Promotion and

Brand Image, Price, Hygiene, Seating Capacity, Opening Hours, Ambiance, Menu

Diversification have been analyzed.

The study is based on primary data collected from people at Mc Donalds City Center,

Hyderabad and IBS Hyderabad with the help of a structured questionnaire. Data analysis has

been done using SPSS software. The statistical analysis method employed in this study is Factor

Analysis and Regression Analysis.

OBJECTIVE

Research Objectives:

1. To find out the factors affecting the consumption pattern(in terms of no. of burgers consumed

annually) of McDonalds burgers in Hyderabad.

2. Predicting the extent of variation in consumption pattern if any or many of the factors

affecting it are changed by a certain amount.


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INTRODUCTION

A Locally Owned Company:

McDonald's is the world's leading food service retailer with more than

31,000 restaurants in 119 countries serving more than 50 million

customers each day. In India, McDonald's is a joint-venture company

managed by two Indians. While Amit Jatia, M.D. Hardcastle Restaurants

Pvt. Ltd. owns and spearheads McDonalds in west & south India,

McDonalds restaurants in North & East India are owned and managed by

Vikram Bakshis Connaught Plaza Restaurants Private Limited. Celebrating over 12 years of

leadership in food service retailing in India, McDonalds now has a network of over 160

restaurants across the country, with its first restaurant launch way back in 1996. Prior to its

launch, the company invested four years to develop its unique cold chain, which has broughtabout a veritable revolution in food handling, immensely benefiting the farmers at one end and

enabling customers to get the highest quality food products, absolutely fresh and at a great value.

Local Sourcing Is Key for Truly Indian Products:

McDonald's India is committed to sourcing almost all of its products from within the country.

For this purpose, it has developed local Indian businesses, which can supply them the highest

quality products required for their Indian operations. Fresh Lettuce is sourced from Pune, Delhi,

Nainital and Ooty; Cheese from Dynamix Dairies, Baramati, Maharashtra; fresh Buns from Mrs.

Bector Foods, Phillaur, Punjab & Khopoli, Maharashtra; Sauce from Mrs. Bector Foods,

Phillaur, Punjab, Chicken Patties, Vegetable Patties, and Veg.Pizza McPuff from Vista

Processed Foods, Taloja, Maharashtra. Dairy Products are sourced from Amrit Food, Ghaziabad,

UP. All our suppliers are HACCP certified.

Respect for the Indian Customs and Culture:

McDonald's worldwide is well known for the high degree of respect to the local culture.

McDonald's has developed a menu especially for India with vegetarian selections to suit Indian

tastes and culture. In line with its respect for local culture, India is the first country in the world

where McDonalds does not offer any beef or pork items. McDonald's has also re-engineered its

operations to address the special requirements of vegetarians. Special care is taken to ensure thatthe vegetable products are prepared separately, using dedicated equipment and utensils. This

separation of vegetarian and non-vegetarian food products is maintained throughout the various

stages of procurement, cooking and serving. So much so that the mayonnaise and the soft serve

are also 100% vegetarian. Also in India, only vegetable oil is used as a cooking medium.


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An Employer of Opportunity:

McDonald's India is an employer of opportunity, providing quality employment and long-term

careers to the Indian people. The average McDonald's restaurant employs 60-80 people from

crew to restaurant manager. McDonald's world class-training inputs to its employees can be seen

in the present close to 4000 employees in India.

Quality, Service, Cleanliness & Value

The USP of McDonalds is Quality, Service, Cleanliness & Value for money which means we

focus on providing our customers high quality products, served quickly with a smile, in a clean

and pleasant environment at an affordable price. The McDonald's philosophy of QSC&V is the

guiding force behind its service to the customers. McDonalds menu is priced at a value that the

largest segment of the Indian consumers can afford. McDonalds does not sacrifice quality for

valuerather McDonalds leverages economies to minimise costs while maximizing value to

customers.

MENU LIST

Vegetarian list

- Mc Veggie:

- McAloo Tikki

- Paneer Salsa Wrap:

- Crispy Chinese:

- Veg McCurry Pan:

- Pizza McPuff:

The Non-Vegetarian Fare at McDonalds India:

- Chicken Maharaja Mac:

- McChicken:

- Filet-O-Fish:

- Chicken McGrill

- Chicken McCurry Pack

- Chicken nuggets

- Chicken Mexican wrap

Apart from these specials that appear mainly in the Indian McDonald's here there are a couple of

things that are exactly the same in India as what you would consume at a McDonalds in the U.S.

or anywhere else.


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Few of the extra menus included are:

-Fries,

-Shakes,

-Soft-serve ice-cream: both sundaes and cones,

-Happy meals

-Combos.

OUTLETS IN INDIA

McDonalds in India currently runs a total of 170 quick service restaurants. Between the two

franchisees, we will be spending around Rs 400-500

crore (Rs 4-5 billion) over the next three years to open

120 outlets. McDonalds serves 180-200 million peopleevery year across India, which boils down to five lakh

customers per day.

The list of outlets in Hyderabad are:

1. Madhapur phase V

2. A.S Rao nagar ECIL Road

3. City centre mall- Mcdonalds family restraint

G8 first floor, Banjara hills, road no -1 opp. Taj Krishna, Hyderabad 500034, ph-9642325025

4. GMR Airport

5. Prasads IMAX

6. Sanali mall

7. Rainbow mall, Secunderabad,

PRICE LIST

Menu Items Net Price (Taxes included) With cheese -Net Price

Veg Pizza McPuff 19.00

Veg Surprise 20.00McAloo Tikki Burger 29.00 35.00

Crispy Chinese 32.00

McVeggie Burger 38.00 44.00

Chicken McGrill 28.00 34.00

McChicken Burger 49.00 55.00


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Chicken Maharaja Mac 59.00

Filet - O - Fish 49.00

Paneer Salsa 45.00

Chicken Mexican 55.00

Mc Curry 49.00

Mc Curry 59.00

French fries

Regular 20.00Medium 28.00

Large 36.00

Cheese Slices 6.00

Extra Sauces 5.0

LITERATURE REVIEW

Introduction

The study of consumers helps firms and organizations improve their marketing strategies by

understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different

alternatives (e.g., brands, products, and retailers);

The psychology of how the consumer is influenced by his or her environment (e.g.,

culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions;

Limitations in consumer knowledge or information processing abilities influencedecisions and marketing outcome;

How consumer motivation and decision strategies differ between products that differ in

their level of importance or interest that they entail for the consumer; and

How marketers can adapt and improve their marketing campaigns and marketingstrategies to more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of products, services,

experiences, or ideas to satisfy needs and the impacts that these processes have on the consumerand society." Although it is not necessary to memorize this definition, it brings up some useful

points:

Behavior occurs either for the individual, or in the context of a group (e.g., friendsinfluence what kinds of clothes a person wears) or an organization (people on the job

make decisions as to which products the firm should use).


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Consumer behavior involves the use and disposal of products as well as the study of how

they are purchased. Product use is often of great interest to the marketer, because thismay influence how a product is best positioned or how we can encourage increased

consumption. Since many environmental problems result from product disposal (e.g.,

motor oil being sent into sewage systems to save the recycling fee, or garbage piling up at

landfills) this is also an area of interest. Consumer behavior involves services and ideas as well as tangible products.

There are several units in the market that can be analyzed. Our main thrust in this course is

the consumer. However, we will also need to analyze our own firms strengths and weaknesses

and those of competing firms. Suppose, for example, that we make a product aimed at olderconsumers, a growing segment. A competing firm that targets babies, a shrinking market, is

likely to consider repositioning toward our market. To assess a competing firms potential threat,we need to examine its assets (e.g., technology, patents, market knowledge, awareness of its

brands) against pressures it faces from the market. Finally, we need to assess conditions (themarketing environment). For example, although we may have developed a product that offers

great appeal for consumers, a recession may cut demand dramatically.

Consumer Research Methods

Market research is often needed to ensure that we produce what customers really want and notwhat we think they want.

Primary vs. secondary research methods. There are two main approaches to marketing.Secondary research involves using information that others have already put together. For

example, if you are thinking about starting a business making clothes for tall people, you dont

need to question people about how tall they are to find out how many tall people existthat

information has already been published.

Primary research, in contrast, is research that you design and conduct yourself. For example,you may need to find out whether consumers would prefer that your soft drinks be sweater or

tarter. so you personally carry out the research yourself. It can be done by various methods such

as :

Surveys, focus group discussions, personal interview, projective techniques, observations, online

research methods.

Research will often help us reduce risks associated with a new product, but it cannot take the risk

away entirely. It is also important to ascertain whether the research has been complete.

Surveys : are useful for getting a great deal of specific information. Surveys can contain open-ended questions (e.g., In which city and state were you born? ____________) or closed-ended,

where the respondent is asked to select answers from a brief list (e.g., __Male ___Female. Open ended questions have the advantage that the respondent is not limited to the

options listed, and that the respondent is not being influenced by seeing a list ofresponses. However, open-ended questions are often skipped by respondents, and coding them
http://www.consumerpsychologist.com/cb_Research_Methods.htmlhttp://www.consumerpsychologist.com/cb_Research_Methods.htmlhttp://www.consumerpsychologist.com/cb_Research_Methods.html


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1. RESEARCH METHODOLOGY

RESEARCH DESIGN


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Factors affecting the consumption of McDonalds Burger

Problem Discovery

Selection ofexploratory technique

Secondary DataFocus group

Discussion (FGD)

Selection of basicresearch method

Survey & Questionnaire Observation

Selection of SampleDesign

Probability Sampling

DataCollection,Editing,Processing

&Data Analysis

Factor Analysis

MultipleRegression

Analysis

Interpretation offindings

Final Report

(Obtain consumption pattern of burgers)

Statement ofResearch

Objective

(To find consumpton pattern (in terms of no. of units consumed anuallly) ofMc Donalds burgers in hyderabad )

Flowchart of the overall Research Process

Target population:Population of hyderabad

Sample size = 100-125

Clubbing of highly coorelated factors

Establish dependency relationships

(by visiting McDonalds restaurents )

(From websites,magazines etc )

(of IBS Research scholars )


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DATA AND SAMPLE SIZE CONSIDERATIONS

Target Population:The target population is the collection of elements or objects that process the information sought

by the researcher and about which inferences are to be made. Our target population is the entire

population ofHyderabad City who consumes burgers from McDonalds.

Sample Size:It denotes the number of elements out of the target population to be included in the study. We

took the sample size more than 10 times as many observations as there are variables (We have 11

variables in our study) according to general rule ofGENERALIZIBILITY.According to this, we initially took a sample size of 119, but since the KMO measure for this

size will was less than that for 102 we finalized the size at 103.

RESEARCH METHODOLOGY

Preliminary Investigation: - This phase involved preliminary investigation of the variousvariables which could possibly affect the consumers preference towards burger consumption.We primarily used focus group discussionto identify the various variables thatconsumers find important when they go for a food outlet.

1. Focus Group Interview:

A focus group discussion (FGD) is a qualitative research tool often used in business andmarketing. Focus groups are "small group discussions, addressing a specific topic, which

usually involve 6-12 participants, either matched or varied on specific characteristics of

interest to the researcher.

Advantages: It is relatively easy to assemble, inexpensive and flexible in terms of format, type of

questions and desired outcomes.

Open recording allows participants to confirm their contributions.

Provide rich data through direct interaction between researcher and participants.

Spontaneous, participants not required to answer every question; able to build on oneanother's responses.

Disadvantages:

Findings may not represent the views of larger segments of the population.

Requires good facilitation skills, including ability to handle various roles people may play

(expert, quiet, outsider, friend, hostile, etc.). Tough rich, data may be difficult to analyze because it is unstructured.

Possible conformance, censoring, conflict avoidance, or other unintended outcomes of thegroup process need to be addressed as part of the data analysis.


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FGD Questions

What do you think are the factors affecting the success of fast food chains?- Response: The factors they emphasized most on were quality and timely delivery. As its a fast

food chain they have to deliver best quality food within shortest possible time. The otherfactors they thought would contribute were high Customer Value Proposition, Smart Service,

Capacity Management, menu for Vegetarian people as India has a predominantly vegetarianpopulation. Advertisement, Number of outlets in a city; were some of the other factors that

came up in the discussion.

What would you prefer price or quality?- Response: All were in consensus that there has to be a trade off between price and quality, but

in such a highly competitive market where big players like KFC and Burger King exist and

brand loyalty has reduced, they have to provide best quality at competitive price. Since there

has been a constant price war in this sector, so Mc Donalds has been forced to reduce the priceof its burgers maintaining the same or better quality. They even provide seasonal discounts at

times.

What do you think is/are the indicators of success of fast food chains? How do you proposewe can reach these measures?- Response: The most appropriate indicator of success according to them was Number of

Footfalls. Since it suggests the number of people which enter the store on a particular day at a

particular time it can be used to measure success of fast food chains assuming the fact that the

people who enter end up buying the burger. But some people were of a different opinion. Theythought that customer satisfaction was a better indicator. Until and unless your customers are

not satisfied they are not going to purchase burgers. According to them sales and number of

outlets werent the correct indicators for measuring the success of fast food chains as sales varywith location, time and season.

Which is the best way to gauge success of fast food chains?o Interviewing\o Questionnaireso Observation

- Response: There was a divided opinion in the group about the way to gauge the success. Somepeople felt that interviewing was a better option as easy to get more insight about the topic.

Others felt that questionnaire was a better measure as we would be able to get the response of

more number of people. Some felt that Observation was a better measure as the actual behavior

of customers could only be gauged via observation and it would be relatively free from biases.

Does rumor affect your preference for fast food?- Response: As quality and price are main determinants of consumption pattern. So any rumor

regarding them, severely affect the consumption pattern. By advertisement and promotion

customers develop a trust on the brand. So when negative rumors pop up the customers feel

that their trust has been breached which reduces the brand loyalty.

Do your peers have a role in influencing your decision regarding fast food? If yes then towhat extent?- Response: Everybody was of the opinion that your peers have a great influence on your

personal consumption pattern as in India fast food chains are also centers of social bonding.


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Word of mouth also plays an important role in deciding your consumption pattern as people

trust their peers more than the company advertisements.

What is the one thing that can contribute to the success of fast food chains (which are notalready taken care of by them)?- Response: Participants while discussing their personal experiences suggested that the

employees at Mc Donalds should be smart as they the face of the company with the customerand they directly interact with the customers. Another idea that came up was that Mc Donalds

can set up a karaoke to rank their experience at Mc Donalds as it would give a clear picture oftheir satisfaction levels and is not even time consuming.

Due to above mentioned advantages we selected to conduct FGD ahead of Pilot Study to bringout the factors involved.

Six Research Scholars from IBS Hyderabad participated in the FGD. We first introducedthe topic to them and then asked them about their opinion regarding topics such as:

Variables identified from Focus Group Discussion are:

Delivery Time

Taste

Quality

Hygiene

Ambiance

Location

Number of outlets

Customer Service

Price

Variety of Food Items

Primary Data collection: Primary data will be collected using survey that will be

conducted by distributing questionnaires taking the variables into consideration to the

people visiting Mc Donalds in Hyderabad.

The rationale behind the questionnaire thus designed is as follows:

To know the frequency of burger consumption so that we can understand what is its share

in the regular consumption pattern of the population of Hyderabad. Here we will be

quantifying the response by assigning 1 to daily and 5 to never. We know how important it is for the consumer to get his food delivered in time. This is

one of the most important factors due to the changing lifestyles in todays world. This is

the factor that distinguishes one fast food chain from another. We asked this question to

get insights about the impact of delivery time of Mc Donald on the consumption pattern

of consumer. The responses will be evaluated by rating very fast as 1 and very slow as 5.


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Consumers, these days are willing to pay a premium if they are assured of the food

quality. We asked this question to know whether they are satisfied with the quality of

burgers being offered by Mc Donald. Responses are weighted such as 1 for very good

and 5 for very poor.

In this era of cut- throat competition between Fast food chains in India, it is expectable

that the customers will visit new chains which are in their close proximity. Hence, we

asked this question to know how loyal customers are towards Mc Donald. So that we can

get to know weather location can change the preferences or consumption pattern. Here

close proximity is rated higher than far. So 1 is for less than 1 Km and 4 is for more than

10 Km.

Change is the order of the day!

The tastes and preferences of the customers do not remain same over a very long period

of time. They do need a change in taste. So, we asked this question to judge that does

change in menu effects the consumption pattern. Here we will quantify very often as 1

and never as 5. Be it any product in any category, marketing and promotion are two important factors

that helps the fast food chains to communicate about themselves to the world at large. We

asked this question to know to what extent advertisements of MC Donald influence

consumers to consume burgers of Mc Donald. Here highly influenced is 1 and never

influenced is rated 4.

The first thing that attracts a new customer towards a product is a reasonable priced.

Hence, we asked the consumers how reasonable they find the price of Mc Donald burger.

So that we could study the impact of price on consumption pattern. Quantifying measure

for this question is such as we take highly priced as 1 and very low priced as 5.

What makes a product complete are the services that come attached with it. And

employees are the ones who come in face to face contact with the consumers to deliver

the product along with service and best way to retain customers is through best services.

So we are trying to know how competent and motivated their employees are to provide

customers with best services and does this effect consumption pattern of consumers.

You always judge a book by its cover!

A Food outlet is the favorite hang out place for almost all the generations today. So, it is

important to make the place pleasing, comfortable and conducive. So we asked this to

have insights about the role of ambience on their consumption pattern.

Life in on 24X7!With a major part of our youth employed in MNCs, their working hours have almost

become undefined. They are bound to feel hungry irrespective of the time. Hence we

asked this question to know whether the opening hours of Mc Donald are apt.

How many times it has happened that we visit an outlet of our choice and we are forced

to go to another just because of already full seating capacity. Hence, we asked the

consumers what they feel about the seating capacity of Mc Donald.


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Health comes first!

Could we ever think that some day we will have to pay even for drinking water ?

People these days have become very health conscious. They are focusing more on

hygiene more than taste. So we are trying to find out do the customers find Mc Donald

hygienic enough.

People go to Mc Donald mostly with their friends, relatives or colleagues, at times they

do go alone. So the number of burger they buy depends on the situation. We asked the

average number of burgers purchased each time so that we can get an idea of number of

units consumed each time. In response to this we will directly get a value which will be

used in our dependent variable.

Priorities are different for different individuals. Different factors influence consumption

pattern of different individuals. So we asked them to rate the various factors which we

came across. By analyzing the results we will be able to make out which are the factors

which effect the consumption pattern more. Response to this will let us know that what

weights different factors attain in determining the consumption pattern. This question was framed to ask for suggestions for any other factor which effect

consumption pattern. As there might be some other factor which we may not have

covered in our exploratory research. Suggestions from this will help us evaluate some

more factors which can affect the consumption pattern.

Note:- Questions having answer as Yes/No will be evaluated by giving 0 to No and 1 to

Yes.

Sample unit: McDonalds

Sample size: 102

Sample technique: Questionnaires

Sample area: IBS Hyderabad

OBSERVATION METHOD

We have also tried to identify the variables by the observation method. We had visited TheMcDonalds store in City Centre Mall, Hyderabad on 26th

of December, 2010 and we hadobserved the McDonalds outlet over there for around 2.30 hours during the evening.


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SURVEY METHOD: QUESTIONAIRES

We have also used the survey method: questionnaires. We distributed questionnaires to 102students of IBS, HYDERABAD to identify the variables affecting the consumption pattern of

consumers of burgers in Mc Donalds.

Sample size & Selection of sampling elementsWe have selected probability sampling as it strengthens the validity of evaluation results sinceeach element the population has equal chance of being selected so it has lesser chances of beingbiased. The sample size which we have selected is 102 which we think is adequate for thispurpose.

1.3QUESTIONNAIRE DEVELOPMENT

We designed one questionnaire for the survey. The questionnaire had 15 questions based on all

the 11 independent variables and 2 dependent variables which were identified from the focusedgroup discussion. We wanted to gather the response of the sample which was representative of

our population. These responses eventually helped us in evaluating the various factors whichaffected the consumption pattern of McDonalds.

The data collected has been analyzed using Factor analysis and the variables have been groupedinto factors based on the results. During the analysis of the data, Likert Scale (1: Lowest & 5:Highest) has been used for questions that have multiple selection options. The questions we as

follows :-

SAMPLE QUESTIONNAIRE

1. How often do you consume burgers?

1. Daily

2. Weekly

3. Monthly

4. Occasionally; once in ________ months.

5. Never

2. How do you rate the delivery time of Mc Donalds?

1. Very fast

2. Fast

3. Average

4. Slow

5. Very slow

3. The quality of the burgers served is -:

1. Very good

2. Good


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3. Average

4. Poor

5. Very poor

4. How far are you willing to go to have Mc Donalds burger?

1. Less than 1km

2. Less than 5 km

3. Less than 10 km

4. More than 10 km

5. How often do you think Mc Donalds diversifies its burger menu?

1. Very often

2. Often

3. Average no. of time

4. Rarely

5. Never

6. To what extent advertisement have an influenced your consumption (number of burgersbought at particular visit) of Mc-Donalds burger?

1. Highly influenced

2. Influenced

3. Rarely influenced

4. Never influenced

7. How reasonable do you think are the price of burgers at Mc-Donalds?

1. Very highly priced

2. Highly priced

3. Fairly priced

4. Low priced5. Very low priced

8. Are you satisfied are you with the current customer services of Mc-Donalds chains?

o Yes

o No

9. Is the ambience of current Mc-Donalds stores apt?

o Yes

o No

10.Are the opening hours of Mc Donalds apt (11 am. To 11 pm.)?

o Yes

o No

11.Do you feel that current seating capacity of Mc Donalds store sufficient?

o Yes

o No

12.Do you think Mc Donalds is hygienic enough?

o Yes


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o No

13.Each time you visit a Mc-Donalds chain what is the average number of burgers do you

purchase _______.

14. Rank these factor affecting the consumption pattern for Mc Donalds chain in ascending

order (most essential to least essential) :-

o ____ Timely delivery

o ____ Quality

o ____ Location

o ____ Customer service

o ____ Menu diversification

o ____ Promotion

o ____ Price

o ____ Ambience

o ____ Hygiene

o

____ Seating Capacityo ____ Store Opening Hours

15.According to you are there any factors other than listed above which contribute to

consumption pattern of Mc Donalds burger?

o No

o Yes; Please mention:

__________________________________________________________________

____________________________________________________________


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frequency Count Col %

Daily 3 2.9

weekly 21 20.3

monthly 54 52.4occasionally 22 21.3

never 2 1.9

Analysis

From the data it can be inferred that more than

half of the sample population consumed Mc

Donalds burger monthly and other half

consumes weekly or occasionally. There are very

few who consume daily or never.

Delivery time Count

Percentage

%

Very fast 28 27.45

Fast 59 57.84

Average 14 13.73

Slow 1 0.98

very slow 0 0.00

AnalysisFrom the data we can tell that people consider

delivery time of Mc Donalds quit Fast there is

almost non who consider its delivery time slow,as it is a fast food center they have to serve the

food in shortest possible time, Mc Donalds has

ever since tried to cut down its delivery time asmuch as possible.

AnalysisPeople consider quality of Mc Donalds Burgerquite good in a restraint one can not compromise

with the quality of food it serves.

Quality Count Percentage %

Very Good 29 28.43

Good 63 61.76

Average 10 9.80Poor 0 0

Very Poor 0 0

Daily

3%

weekly

20%

monthl

y

53%

occasio

nally

22%

never

2%

frequency of burger

consumption

Very

fast

27%

Fast

58%

Averag

e

14%

Slow

1%

very

slow

0%

Delivery time

Very

Good

28%

Good

62%

Average

10%

Poor

0% Very

Poor

0%

Quality

DATA REPRESENTATION & ANALYSIS


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AnalysisPeople like to travel least distance possible to get a burger which has urged Mc Donalds to open as many

as possible distance at minimum distance in between.

AnalysisThere is a mixed opinion as to how often Mc Donalds diversifies its menu 32% of the sample

population beliefs that they often diversify their menu at the same time 30% believe average noof time and 33% believe rarely. Mc Donalds to retain its customer tries to bring out new food

item and add in their menu.

Advertiesment

Effect

Count Percentage %

Highlt Influenced 12 11.76

Influenced 42 41.18

Rarely Influenced 27 26.47

Never Influenced 21 20.59

AnalysisPromotion plays a vital role in sales of any consumer product it influences the buying pattern of

a consumer in a great deal and Mc Donalds burger is no exception. 12% people believe they gethighly influenced and 42% agree they get influenced by the advertisements.

less than 1

km

22%

less than 5

km

40%

less than

10 km

27%

more than

10 km

11%

DistanceDistance Count Percentage %

less than 1 km 22 21.57



more than 10 km 11 10.78

MenuDiversifications

Count Percentage%

Very Often 3 2.94

Often 32 31.37

Average no ottimes

30 29.41

Rarely 33 32.35

Never 4 3.92


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Opening hours Count Perceentage

%

Yes 19 18.63

No 83 81.37

Analysis

81% people that opening hours of 11 a.m. to 11 p.m. is

not apt they could be extended which would eventually

help them in increasing their Sale.

Seating Capacity Count Percentage %

Yes 44 43.14

No 58 56.86

Analysis

As per the review about seating capacity the opinion is

quit divided 43% people believe that the seating

capacity there is sufficient seating capacity at Mc

Donalds outlets wherein 57% believed it not sufficient.

Hygiene Count Percentage %

Yes 11 10.78

No 91 89.22

Analysis

89% people that Mc Donalds is not hygienic enough ,

Mc Donalds should take measures to improve hygiene

of its restaurant.

Yes

19%

No

81%

Opening Hours

Yes

43%No

57%

Seating Capacity

Yes

11%

No

89%

Hygiene


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FACTOR ANALYSIS

To continue towards the main analysis, factor analysis has been performed to identify the main

factors influencing the consumption pattern ofMc Donalds burgers. The objective of thisanalysis is to club the factors which show a high degree of correlation into a single factor.

. The respondent ratings were subject to principal axis factoringwith varimax rotation to reduce potential multicollinearity among the items and to improve

reliability on the data. Varimax rotation (with Kaiser Normalization was converged in twentyfive iterations.). Eleven variables were reduced to five factors which explained

63.318 % of the overall variance indicating that the variance of original values was wellcapturedby these five factors.

RELIABILITY OF DATA & SAMPLE ADEQUACY(KMO AND BARTLETT`S

TEST)

Analysis was done with the help of the statistical software SPSS. This table shows two testswhich indicate the suitability of data for factor analysis.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of SamplingAdequacy. .565

Bartlett's Test ofSphericity

Approx. Chi-Square 100.432

df 55

Sig. .000

Kaiser-Meyer-Olkin Measure of Sampling AdequacyThe Kaiser-Meyer-Olkin Measure of Sampling Adequacy is a statistic which indicates the

proportion of variance in your variables which is common variance, i.e. which might be caused

by underlying factors. [It is the Index for comparing the magnitudes of the observed co-relationcoefficient to the magnitude of the partial correlation coefficients]

High values (close to 1.0) generally indicate that a factor analysis may be useful withyour data.

If the value is less than .50, the results of the factor analysis probably won't be very

useful.

The KMO Measure of Sampling Adequacy for our case is above .5 (.565 actually ) which

indicates that our sample size of 103 is adequate .

Bartletts Test of Sphericity Bartlett's test of sphericity indicates whether your correlation matrix is an identity matrix,which would indicate that your variables are unrelated.

The significance level gives the result of the test. Very small values (less than .05)indicate that there are probably significant relationships among your variables.

A value higher than about .10 or so may indicate that your data are not suitable for factoranalysis.


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Ho: There is significant indifference in all the factors affecting the consumption of Mc Donaldsburgers.

H1: There is significant difference in all the factors affecting the consumption of Mc Donaldsburgers.

The observed significance level is 0.000 (Refer Table 1) which is less than .05, which issmall enough toreject the hypothesis.

It means there is a significant difference between the factors affecting the consumption of Mc

Donalds burgers.

It presents a good idea to proceed to factor

analysis for the data.

COMMUNALITY COMMON FACTOR VARIANCE

Principal component analysis works on the initial assumption that all variance is

common; therefore, before extraction all the communalities are 1. The communalities in the column labeledExtraction reflect the common variance in thedata structure.

So, for example we can say that 75.1% of variance associated with the first factor is

shared or common, variance.

Eigen Value: Indicates the amount of variance in the original variables accounted forby each component. The total initial variance in the new components will be 8.

Communalities

Initial Extraction

Delivery_Time 1.000 .486

Quality 1.000 .747

Distance 1.000 .655

Menu_Diversification 1.000 .606

Adv_Effect 1.000 .647

Price 1.000 .606

Satisfaction_level 1.000 .690

Ambience 1.000 .618

Opening_Hrs 1.000 .677

Seating_Capacity 1.000 .579

Hygine 1.000 .655

Extraction Method: Principal Component Analysis.

Another way to look at these communalities is in terms of the proportion of variance explained

by the underlying factors.

After extraction, some of the factors are discarded and some information is lost.

The amount of variance in each variable that can be explained by the retained factors isrepresented by the communalities after extraction.


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TOTAL VARIANCE EXPLAINED

.

This table gives Eigen values, variance explained, and cumulative variance explained for the

factor solution. It lists the Eigen values associated with each linear component (factor) beforeextraction, after extraction and after rotation. For the initial Eigen values solution, there are as

many components or factors as there are variables. The Extraction Sums of Squared Loadings

group gives information regarding the extracted factors or components. We can see from theabove table that 5 components have been extracted from the initial 11. We have also rotated the

factors to see the difference more clearly. The variance accounted for by rotated factors or

components may be different from those reported for the extraction but the Cumulative % for the

set of factors or components is the same. The results of the Extraction Sums of Squared Loadingsobtained are explained below.

SCREE PLOT ANALYSIS

The scree plot is an indication of the number of factors that we finally get from the initial

variables considered. The inflection on the curve gives the number of factors. This curve is

difficult to interpret because it usually tails off after 5 factors. For this reason, the indications ofthe scree plot are not very reliable. But if we look carefully; there is a break at the 5 th component

as well indicating 5 factors.

We can interpret that 11 variables are now reduced to 5 components contributing 63.318% of thetotal variance. With the help of, Scree plot, we can just visualize that 5 factors are taken withEigen value greater than 1.0000.


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COMPONENT MATRIXThis table reports the factor loadings for each variable on the unrotated components or factors.

Each number represents the correlation between the item and the unrotated factor. This

correlation helps to formulate an interpretation of the factors or components. This is done bylooking for a common thread among the variables that have large loadings for a particular factor

or component.

We can see from the table below that in component 1, many variables are highly loaded. Similar

is the case for other components. This makes interpretation difficult. Thus we conducted a

rotation to obtain a clearer picture of the factor loadings.Component Matrix(a)

Component

1 2 3 4 5

Delivery_Time -.127 .475 .459 .053 .173

Quality -.293 .429 .055 .687 .045

Distance -.350 -.347 .026 -.023 .641

Menu_Diversification .670 -.224 .309 .045 .098

Adv_Effect -.593 -.261 .447 .072 -.146

Price .560 .245 .176 .449 -.028

Satisfaction_level .027 .469 .033 -.463 .503Ambience .647 -.371 -.232 .075 .036

Opening_Hrs .091 .370 -.662 .176 .250

Seating_Capacity -.542 -.135 -.470 .098 -.189

Hygine -.086 -.500 .021 .431 .459

Extraction Method: Principal Component Analysis.a 5 components extracted.

1110987654321

Component Number

2.1

1.8

1.5

1.2

0.9

0.6

0.3

Eigenvalue

Scree Plot


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ROTATED COMPONENT MATRIXAfter applying rotation to the data, the loadings were observed. Rotation Method was Varimax

with Kaiser Normalization. After the rotation, the factor loadings were clearly observed. The

variables under each factor have been shown.

Each variable has been categorized into different factors depending upon the factor loadings.

We see the highest value for the variable irrespective of whether it is positive or negative and putthat highest value into the component under which it falls.

Thus , our 11 variables get clubbed into five components or factors.

Rotated Component Matrix(a)

Component

1 2 3 4 5

Delivery_Time .103 -.212 .425 .495 -.072

Quality-.127 .072 .849 -.035 .057

Distance-.174 -.080 -.099 .199 .754

Menu_Diversification.753 -.030 -.174 -.074 .052

Adv_Effect-.294 -.706 .153 -.073 .182

Price.618 .194 .386 -.107 -.162

Satisfaction_level

-.003 .226 -.105 .792 .015

Ambience.493 .337 -.340 -.370 .093

Opening_Hrs-.183 .781 .175 .050 .023

Seating_Capacity-.680 .085 .030 -.320 .075

Hygine.114 -.024 .110 -.252 .752

Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization.Rotation converged in 25iterations.


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RESULT OF FACTOR ANALYSIS :

S. N. Factor AttributesVarience

Explained

1 Price

Menu Diversification

18.803

Price

Ambience

Seating Capacity

2 Advertisement

Advertising

13.388Opening Hours

3 Location

Outlet location

11.413

Hygiene

4. Quality Quality 10.276

5. Customer ServiceSatisfaction level

Delivery Time9.438


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REGRESSION ANALYSIS

After running the factor analysis on the data we were able to get the value of reduced no. of

factors(five).These factor were thenused to run regression analysis. Following were the findingsof the data:

Model 1:

Dependent Variable = Frequency (Annual) * Average Number of burgers consumed on eachvisit.

Independent Variables:Factor1 (Price): Menu Diversification, Price, Ambience, Seating CapacityFactor2 (Advertizing): Advertizing Effect, Opening Hours

Factor3 (Location): Distance, LocationFactor4 (Quality): Quality

Factor5 (Customer Satisfaction): Customer Satisfaction.

Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Errorof the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .272(a) .074 .026 146.061 .074 1.538 5 96 .185

This clearly shows that the model is insignificant as the value of Sig. F Change is 0.185 which is

above the acceptable value of 0.1.

On closer observation of the data we found following output:

Coefficients

Model Unstandardized CoefficientsStandardizedCoefficients t Sig.

B

Std.

Error Beta

(Constant

) 112.176 14.462 7.757 .000Price -2.399 14.534 -.016 -.165 .869

Adv 32.540 14.534 .220 2.239 .027

Location -21.584 14.534 -.146 -1.485 .141Quality -1.948 14.534 -.013 -.134 .894

cust_serv

ice-9.504 14.534 -.064 -.654 .515


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This leads us to the conclusion that only factor that was having a significant impact on

consumption pattern of Mc Donalds is Advertizing. Since Advertizing comprises of twovariables:

Opening Hours

Advertizing Effect.

So only these variables are responsible for affecting the consumption pattern at Mc Donalds.

Now we ran a Regression analysis using the dependent variable and the two independent

variables: Opening Hours & Advertizing Effect.

Model 2:

Dependent Variable = Frequency (Annually) * Average Number of burgers consumed on each

visit.

Independent Variables:Opening Hours

Advertizing Effect

The output of these variables is discussed hereunder:

Model Summary

Mode

l R R Square

Adjusted

R Square

Std. Errorof the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .241(a) .058 .039 145.086 .058 3.048 2 99 .052

Now this model is clearly significant as its significance is below the acceptable limit of 0.1.

Coefficients

Model Unstandardized Coefficients

Standardized

Coefficients t Sig.

BStd.

Error Beta

(Constant

)214.206 58.338 3.672 .000

Adv_Effect

-38.042 15.695 -.244 -2.424 .017

Opening_

Hrs-5.767 38.108 -.015 -.151 .880


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So we can find that the Regression Equation is:

Y = -38.042X1 -5.767X2 +214.206

Where:Y Consumption Pattern (number of units consumed annually)

X1 Effect of Advertizing

X2 Opening Hours

In this model the significant factor is Effect of Advertizing as value of significance is 0.017which is less than 0.1 .

While that ofOpening Hours is 0.88 which is well above 0.1.

So clearly the only factor that can improve the consumption of burgers at Mc Donalds is

Advertizing.


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LIMITATIONS:

Extraneous factors i.e. factors which have not been taken into account may also affect the

results.

The results obtained for a specific city Hyderabad which is a metropolitan city might be

difficult to generalize for the whole of country.

As most of the data has been collected from the students of IBS Hyderabad some biases

may have unintensionally cropped up.

Since the significance level of the model is high we cant identify many factors . Only one factor

advertising was found to have a considerable impact.


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RECOMMENDATIONS & CONCLUSION:

Though we included 11 variables influencing the consumption pattern of the consumers namely

delivery time, quality, distance, menu diversification, advertisement effect, price, customerservice, ambience, opening hours, seating capacity and hygiene. After factor analysis we got five

main factors which were put through regression analysis . We found that out of all the factorsadvertising was the only significant factor . We further found that amongst two variables under

the factor advertisement which are advertisement effect and opening hours, advertisement

effect was more significant. So we could clearly infer from the analysis that advertisementeffect is the only main factor affecting the consumption pattern of the consumers.

So ,McDonalds should concentrate on the advertisements and marketing of its products. The

promotion factor has to be looked amongst the all factors of marketing strategies. If McDonalds

wants to increase their customer base then it should spend more on its advertisement activities. It

should come up with more number of advertisements so that frequent come-across ofadvertisement leaves a impression in mind of consumers and they turn up only to McDonalds.

Advertisement is going to help McDonalds in clearly conveying the consumers about their newproducts and diversification in menus.

Advertisement should be attractive enough and McDonalds should concentrate on their

competency while advertising, they should convey about their best quality in affordable prices.They can tap every form of media for advertisement, they are already into basic television,

newspaper, magazines, billboards forms of media . They can move into new mediums like

internet and mobile advertisements.

Further suggestions for Mc Donalds to improve on their advertisement are:

They should go for cross- promotions. Which may be with sports related goods or

products, so that youth could start associating themselves with McDonalds. McDonalds can have celebrity spokesperson to increase their publicity. They can have

famous film and cricket stars as their spokesperson. As they have done in abroad , theyhad basketball player Michael Jordan and superstar Justin Timberlake as their

spokesperson.

They can have diversification in burgers in accordance to different regions and states andconvey them through advertisements to consumers.

Their competitors KFC have been giving them competition in non-vegetarian food items,so McDonalds should improve their non-vegetarian products by launching some new

product which can create hype amongst consumers and hence improve the sales in non-

vegetarian items as well.

They can come up with more attractive tag lines so that consumers can relate them wellwith products. They have been doing the same since long.One of their oldest is :

McDonalds is Your Kind of Place which they came up with in year 1967. Then their

latest one is i'm lovin' it in the year 2003.

Also as innovation is the key to success in todays competitive atmosphere McDonaldswill have to innovate its offerings , procedures and services to fight the competitors.
http://en.wikipedia.org/wiki/Michael_Jordanhttp://en.wikipedia.org/wiki/Justin_Timberlakehttp://en.wikipedia.org/wiki/Justin_Timberlakehttp://en.wikipedia.org/wiki/Michael_Jordan


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