“consumer involvement level of fast food industry in lahore, pakistan"

A Research Report on

“Consumer Involvement level

of fast food industry”

[Business Research Methods]

Business research Methods Final Project Proposal on

Executive summary

This project had been assigned by Mr. Manqoosh-ur-Rehman lecturer of Business

research methods on 6th Jan, 2010. The topic was to analyze the “Consumer Involvement”

in fast food industry and we focused on the customers of Fri-chicks, a very well-known

and emerging fast food restaurant in Lahore.

Although, there is a growing volume of research on consumers especially for fast food

restaurants but there are many variables which are still confusing or may be changing

according to the customer changing taste and buying or decision pattern. That’s why in

this project we considered product attributes, such as Price, Ingredients, Quantity and

Hygiene factors. We collected information with the help of questionnaire from the

customers who ate fast food, specifically from Fri- Chicks.

Then we have analyzed the collected data through SPSS and made a decision by

analyzing and interpreting the data.

We took 7 days for the research work till the analysis and findings of the assigned project

i.e. “consumer involvement level of fast food industry”.

We also have clarified out time schedule and task management through Gantt chart as

well and in the end we have also determined the total and segmented cost of the whole

project.

Problem Statement

How many customers are involved in fast food industry?

Research question/Problem:

1. What factors are influencing the consumer involvement level of fast food industry

in Lahore?

2. Does consumers concern with price of the fast food?

3. Does consumers concern with Quantity of the fast food?

4. Do customers want hygienic products?

1 | P a g e


5. Is the price they are offering affordable to number of customers?

6. Are customers looking for ingredients in fast food?

7. Does a customer go for fast food daily or they have different routine?

Research objectives & Variables

1. To know: about the demographics of fast food users

Variables:

Age

Gender

Income level

Area

2. To know about how product attributes put affect on fast food industry.

Variables:

Price

Quantity

Ingredient

Hygiene

3. To know about the importance of price, Quantity, Ingredients and Hygiene factors

in the eyes of customer

Variables:

Valuable

Significant

Appealing

Essential

Relevant

2 | P a g e


Research Methodology

a) Data and Data Collection

1. Primary Data

In order to collect our primary data we have done the following methods:

Survey:

Questionnaire

2. Secondary Data

We are also going to take information from:

Internet

Articles

Brochures

Magazines

b) Measurement methods

The two methods which we will be using for the analysis of our data to get the output are:

Manually

SPSS

c) Sampling Plan

A sampling plan is a detailed outline of which measurements will be taken at what times,

on which material, in what manner, and by whom. The criteria of our sampling plan will

be as follows:

1. Population

People who likes and visit fast food restaurants.

2. Sampling Unit

Individuals who take fast food and are being surveyed.

3 | P a g e


3. Sample Size

Our sampling size is 25

4. Sampling Method

Our sampling method is convenience sampling

Time schedule:

Total time estimated for the project completion will be two weeks. i.e. 14 days.

Sr. No. Activities Time period

1 Primary Data collection 1 Day

2 Secondary Data Collection 1 Days

3 Developing Instrument 2 Days

4 Data Entry in SPSS 1Days

5 Analysis, results and Interpretation 1 Day

6 Compilation of Project 1days

Gantt chart:

Activities1st Week

Days

Primary Data

Collection

1Days

Secondary Data

Collection

1Days

Developing

instrument

1Days

Data entry in

SPSS

1Days

Analysis 1Day

Compilation 1Days

4 | P a g e


Cost Schedule

Cost schedule Amount

Printing Expenses 50

Stationary Expenses 40

Telephonic expenses 500

Refreshment 1,000

Transportation & fuelling Expenses 1,500

Total 3,090

5 | P a g e


Chapter 2:

Introduction to industry

Fast food is the term given to food that can be prepared and served very quickly. While

any meal with low preparation time can be considered to be fast food, typically the term

refers to food sold in a restaurant or store with low quality preparation and served to the

customer in a packaged form for take-out/take-away. The term "fast food" was

recognized in a dictionary by Merriam–Webster in 1951.

Franchise operations which are part of restaurant chains have standardized foodstuffs

shipped to each restaurant from central locations for example like KFC, McDonald, Pizza

Hut, and Burger King and so on. The capital requirements involved in opening up a fast

food restaurant are relatively low.

Smaller, individually-owned fast food restaurants are becoming much more common

throughout the world. Even fast food have become a phenomena in Malaysia even

through out the world, this have come up some issue such as globalization, jobs and labor

issues and health issue. Fast food has become one of the fastest-growing segments of the

hotel and catering industry. This growth has not only been fuelled by consumer demand,

but also through the expansion of the supply base.

Fast-food menus have been limited in breadth and depth of product mix, as the market

has matured. Numbers of chains are able to offer a new experience to their existing

customers and possibly appeal to a new customer base. In the United States, product

diversity has taken a branded route, with companies supplying complementary products

in order to create branded stores.

The capital requirements involved in opening up a fast food restaurant are relatively low.

Restaurants with much higher sit-in ratios, where customers tend to sit and have their

orders brought to them in a seemingly more upscale atmosphere may be known in some

areas as fast casual restaurants.

6 | P a g e


Chapter 3:

Introduction of Fri-Chiks

Fri-Chicks is basically a foreign fast food restaurant and it started its services from

Kentish town, London. Now they are working in Lahore from 2003 and they are running

their business through six branches in Lahore in the following areas:

1. Iqbal Town

2. Sabzazar

3. Faisal Town (Akbar Chowk)

4. Johar Town (Near G1 Market)

5. Sadar (Cantt)

6. Fortress Stadium

Fri-chicks is offering take away facility, dine in and home delivery service. They have

several deals with the normal price rate.

The current deals which they are offering are mainly with the price range from Rs 25 to

1195. The names of the Deals are mentioned below in which sub deals are also available.

Mazedar deals

Special deals

Family meal

Super family meal

Some of the major product of the fri-chicks are

Chicken finger also known as chicken tenders or chicken strips, this is one of the

most common forms of fried chicken, generally pieces of chicken breast

(sometimes with rib meat) cut into long strips, breaded or battered dipped, and

deep fried.

Chicken nuggets

Hot chicken - a pan-fried variant of fried chicken coated with lard and cayenne

pepper paste

Popcorn chicken — occasionally known as chicken balls

Chicken fries chicken nuggets in the shape of French fries

7 | P a g e


Burgers

Pizza

Major Competitors

The major competitors for Fri-Chicks are:

1. AFC

2. KFC

3. Mc Donalds

4. Pizza Hut

AFC:

The time was mid 90's. Fast food companies were booming in Pakistan. Quality fast food

in Pakistan was outrageously expensive and on a handful of families could afford to go

there. No middle class family could think of taking their children to such big food chains.

This was the time when AFC (Al-Najam Fried Chicken) opened its first restaurant at

Saman Abad, Main Market in Lahore. AFC’s goal and aim was very simple. To make the

quality fast food available to all those people who liked the fast food but couldn't dare to

afford.

They did so without compromising the highest standards of food industry. AFC, not only

use the best raw materials available but they also provide the best of food at a very

reasonable and competitive price. All their foods are processed and prepared using of the

art machines and equipments. AFC became the fastest growing fast food chain in

Pakistan.

At present time, AFC has more then twenty branches Nationwide including Mall Road,

Railway Station, Allama Iqbal Town, Twonship, Mughal Pura, Defence, Thokar Niaz

Baig, G.T Road, Wapda Town. It has also opened in Faisalabad, SGD, Abbotabad,

Karachi, Gujranwala, Rawalpindi, Gujrat whereas Sahiwal Branch is ready to start

business. At least three more branches including Murree and Multan are in the wings.

8 | P a g e


KFC ( Kentucky fried chicken):

KFC has come a long way, perfecting its herbs and spices; they opened their first

franchise in Lahore in 1997 in Gulshan-e-Iqbal and wore the market leaders title in fast

food industry. Delicious food in a relaxing environment had made KFc everyone’s

favorite. Presently KFC is branched out in eighteen major cities of Pakistan (Karachi,

Lahore, Gujranwala, Sukkur & Muree) with more than 60 outlets nation-wide.

KFC has also contributed a lot in the economic development of Pakistan as well as

providing entertainment to its customers in a friendly environment.

Presently KFC has provided to over 1200 Pakistanis, which adds up to 6000

individuals directly dependent in KFC Pakistan.

The Government of Pakistan receives over Rs.10 million per month from KFC

Pakistan as direct taxes.

95% of all food and packing material used in KFC Pakistan is procured locally,

which sums up to a purchase of over Rs.35 million per month.

Each new outlet developed by KFC Pakistan costs approximately Rs.40 million,

which is a huge amount for our construction industry.

Mc-Donald’s:

McDonald's Corporation is the world's largest chain of fast food restaurants. In 1940, the

first McDonald's was built by the McDonald brothers (Dick and Mac). In 1953, it became

the standard for the fast food franchises across the country. Later in 1955, the

McDonald's Corporation was created which is the ninth most valuable brand in the world

in USA.

In Pakistan, McDonald started its business in September 1998 at Lahore. The Lakson

Group Companies has taken over McDonalds Corporation, USA and a local partner

making it a 100% owned and operated Pakistani company. Presently, it is operating in

seven major cities with a network of 20 restaurants. The cities in with McDonald is

operating are Lahore, Karachi, Islamabad, Sialkot, Rawalpindi, Hyderabad and

Faisalabad.

9 | P a g e


Pizza Hut:

Pizza hut came into being by two brothers named Frank and Dan Carney who lived in

Wichita, Kansas. They wanted to open a pizza parlor which they started of by the name

of Pizza Hut in 1959 by borrowing $600 from their mother initially in Topeka, Kansas.

After just 10 years they were catering one million customers a week in 310 locations and

it was put into New York stock exchange in 1970.

Over the years Pizza Hut captured the market world wide and its sales increased

gradually globally. They introduced Pizza Hut delivery service in 1986. Their market

share was 46.6% in 1996, when they launched their campaign “The Best Pizzas under

One Roof” which battered slowly over the years due to tough market competitors.

10 | P a g e


Literature Review

Consumer involvement in product choice

Consumer involvement is a source to explain the differences in the degree of both mental

and physical effort of a consumer and his decision making.

The objective of this article is to examine the relationships between consumer

involvement and demographic in a different temporal and cultural context. This article

talks about how consumer involvement varies with different product and also with

demographics of the people.

Involvement comes from split half theory which describes that there are types of

involvement, high and low involvement. So, the people who have high involvement they

require more information for a decision making purpose.

The constructs of consumer involvement like interest and importance create a conflict

that is consumer involvement perceived personal relevance or motivational state.

Research shows that consumer involvement relates with consumers psycho-social wants

and needs.

This is also analyzed that the product which has high price, complexity and high

perceived risk, consumers are more inclined towards them rather than the products which

have low risk and price.

Consumer involvement is also linked with demographic of the consumers. Consumers

made different purchases in their lives according to their current stages like a married

person and unmarried person will purchase different products and they have different

involvement level with different products.

Research shows that due to differences in age, sex, occupation and family income

consumers have different involvement with products

Two products were taken which shows high involvement (television) and low

involvement (toothpaste) so that consumer’s exact response could be achieved.

Cronbach alpha value for high involvement (television) and low involvement (toothpaste)

are 0.6993 and .6773 respectively which shows that consumers are much inclined toward

high involvement products rather than low involvement products.

Received November 11, 2006; Revised February 13, 2007

1. Fellow (Doctoral) Student, Institute of Rural Management, Anand,

e-mail : [email protected], [email protected], XIMB Journal of Management ;

March, 2007

11 | P a g e


Data Analysis

Hypothesis:

Overall Involvement Level of customer in fast food:

Statistics

IL

NValid 25

Missing 0

Mean 41.9833

Percentiles

25 34.0000

50 41.7500

75 49.0000

We have calculated Quartiles in order to define the ranges of involvement levels i.e. High

Involvement, Medium Involvement and Low Involvement. The values of the quartiles are

as follows:

1. 1st Quartile = 34 & Below 34

2. 2nd Quartile = 34-49

3. 3rd Quartile = above 49

We have computed the mean in order to find the involvement level of the overall data and

the mean in 41.9833 which falls in the middle quartile range i.e. 34-49 this shows that our

mean lies in the 2nd Quartile, but we are not sure that the overall involvement level of the

data is in second Quartile. We are not sure about the decision only based on mean so we

have done hypothesis testing below in order to be sure about the significance of the

whole data.

12 | P a g e


Significance (T-test):

One-Sample Test

Test Value = 1

t df Sig. (2-tailed)Mean

Difference

95% Confidence Interval of the

Difference

Lower Upper

IL 19.319 24 .000 40.98333 36.6050 45.3617

We have done hypothesis of Involvement Level only here, One sample T-test is

performed in order to reject or do not reject the null hypothesis. Here we will reject Ho

because our p value is less than alpha (0.05) and our involvement level is highly

significant.

Significance T-test of Gender and IL:

One-Sample Test

Gender

Test Value = 1


Difference

95% Confidence Interval of

the Difference

Lower Upper

Male IL 16.455 17 .000 41.86111 36.4938 47.2285

Female IL 9.694 6 .000 38.72619 28.9511 48.5013

In order to find that either male are significant or females are significant in the fast food

industry we have done one sample t-test on both the genders along with the involvement

level, the results we obtained are displayed in the table and interpreted as follows.

We have found that both male and female are significant here and we reject Ho because

our P-value is less then Alpha (0.05).

13 | P a g e


One-Sample Test

Household Income

Test Value = 1


Difference

95% Confidence Interval of the

Difference

Lower Upper

upto 10000 IL 11.051 4 .000 37.75000 28.2658 47.2342

10001-20000 IL 14.533 3 .001 43.75000 34.1696 53.3304

20001-30000 IL 4.564 2 .045 42.33333 2.4209 82.2458

30001-40000 IL 8.217 4 .001 36.20000 23.9683 48.4317

above 50000 IL 8.319 6 .000 43.33333 30.5871 56.0796

a. No statistics are computed for one or more split files

Significance T-test of Household Income and IL:

In order to find that which Household factor is significant in the fast food industry we

have done one sample T-test on all the household income along with the involvement

level, the results we obtained are displayed in the table and interpreted as follows.

We have found that all the ranges of household incomes are less significant among each

other but income range upto Rs10, 000 and above Rs50, 000 are highly significant among

each other but the income range of Rs20, 000 – Rs30, 000 are least significant among all

because its p-value is 0.45, the ranges but if we compare them with alpha (0.05) they are

all significant. So we will reject Ho as all the p-values are less than alpha (0.05).

Significance T-test of Age and IL:

One-Sample Test

Age

Test Value = 1


Difference


the Difference

Lower Upper

Upto 20years IL 14.903 6 .000 44.47619 37.1738 51.7786

21-25years IL 12.048 13 .000 39.41071 32.3439 46.4776

a. No statistics are computed for one or more split files

14 | P a g e


In order to find the significance of involvement level in age of the people we performed

the t-test of age and Involvement level and found out the results that both the age levels

which we attained are highly significant and the significance of the remaining four age

classes are not calculated by SPSS as they don’t have any Standard Deviation among

them. So we can say that by analyzing that we will reject Ho as the p values are less than

that of alpha (0.05) which shows that our decision is obvious and we are not committing

error by rejecting Ho.

Significance T-test of frequency of taking fast food and IL:

One-Sample Test

Frequency of Taking

Fast Food

Test Value = 1


Difference


the Difference

Lower Upper

Daily IL 11.231 1 .057 36.50000 -4.7952 77.7952

Once a Week IL 9.179 4 .001 44.15000 30.7956 57.5044

Twice a Week IL 7.226 6 .000 40.46429 26.7626 54.1660

Once a Month IL 5.749 2 .029 37.16667 9.3492 64.9841

Twice a Month IL 12.633 3 .001 41.68750 31.1858 52.1892

Occasionally IL 7.595 3 .005 42.33333 24.5954 60.0713

To find the significant level of frequency of taking fast food with the involvement level

of customers, we analyzed that only out of six variables only one variable i.e. “Daily” is

insignificant, while the others are less significant and varies from 0.00 – 0.029.

We concluded that we have rejected Ho in all the five cases which are significant

whereas only one of the variable which is ‘Daily’ is not rejected as the p value is greater

than alpha (0.05).

15 | P a g e


Factor Analysis

Total Variance Explained

Compo

nent

Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 10.735 53.676 53.676 10.735 53.676 53.676

2 3.094 15.468 69.144 3.094 15.468 69.144

3 1.205 6.027 75.171 1.205 6.027 75.171

4 .862 4.311 79.482

5 .849 4.246 83.728

6 .715 3.575 87.303

7 .581 2.907 90.210

8 .386 1.930 92.139

9 .364 1.821 93.960

10 .274 1.369 95.329

11 .241 1.206 96.535

12 .171 .855 97.390

13 .131 .657 98.048

14 .123 .613 98.660

15 .090 .450 99.111

16 .077 .383 99.493

17 .048 .238 99.731

18 .030 .148 99.879

19 .014 .071 99.949

20 .010 .051 100.000

Extraction Method: Principal Component Analysis.

We have done factor analysis of all the 20 Variables of each factor that are price,

Quantity, Ingredients, and Hygiene and we found out, that only three variables are

16 | P a g e


affecting the most, to them which are mentioned in the table above, but we are not sure

that which are the most affecting three Variables are, so it is explained below with the

help of the component matrix.

Component Matrix

Component Matrix

Component

1 2 3

IMPO .500 .566 -.414

OCTM .728 -.383 -.405

IRVN .822 -.380 -.042

MALM .824 .158 -.310

USLS .810 -.345 .308

VLUE .649 .503 .227

SECN .611 -.285 .076

BENI .680 .567 .318

MATM .789 .491 .027

INTR .803 -.294 .109

SIGN .913 -.010 .157

CRIT .722 .209 -.345

BORN .710 -.251 .418

UNEX .841 -.156 -.045

APPL .523 .711 -.031

ROMA -.220 .570 .295

ESSE .886 .089 .157

UNDE .775 -.389 .099

WANT .753 .279 -.184

NOND .762 -.393 -.166

Extraction Method: Principal Component Analysis.

a. 3 components extracted.

17 | P a g e


In order to find that which three variables are most significant among the 20 variables, we

have analyzed through this table and found that Essential, Appealing and boring are the

most significant variables among 20 variables respectively.

Reliability Analysis

Case Processing Summary

N %

Cases

Valid 25 100.0

Excludeda 0 .0

Total 25 100.0

a. Listwise deletion based on all variables in the procedure.

We had a sample size of 25 and out of which 25 are valid so we got 100 percent result of

the reliability analysis.

Reliability Statistics

Cronbach's Alpha N of Items

.942 20

We have done reliability analysis to find out that how much our analysis is reliable.

The value of Cronbach’s Alpha when comes approximately to 0.5 or 0.6 it is normal but

is very good if it is 1 or near to 1. Here our Cronbach’s value is 0.94 i.e. 94% which

depicts that our analysis is near 1 that is a excellent score.

18 | P a g e


Findings

The purpose of this investigative study was to measure the involvement level of the

consumers of fast food. Four variables has been tested that were price, quantity, hygiene

and ingredients and each variable got twenty factors. We calculated the quartiles in order

to set the scale to prioritize the data. There are many findings which are listed below:

The consumer involvement level in fast food regarding our survey is medium by

calculating mean

Involvement level of all the factors varies.

Involvement is highly significant of customers in fast food.

Frequency of taking fast food daily is not significant among other variables.

Household Income range up to 10,000 and above 50,000 is significant as

compared to other variables.

When we found the involvement level in age of the people. The results we found

are that; age levels up to 25 years which we attained are highly significant and the

significance of the remaining four age classes are not calculated due to no SD.

Among the four factors that are price, Quantity, Ingredients, and Hygiene, The

most significant variables are: Essential, Appealing and boring which are

considered the most by the consumer in buying a product.

Analyzing the reliability of our analysis the cronbach’s Alpha shows that our

analysis is 94.2% appropriate in order to make decisions.

Recommendation:

This study could assist and help in understanding consumer involvement behavior

regarding fast food restaurants because we mainly focused on relevant and important

factors from both consumer and service provider side as well.

After analyzing all the findings we suggest that Fast food industry should focus on the

three main factors which are mainly focused by the customers.

Industry should make their deals more exciting as compared to the current deals which

are being offered now as deals and the four factors appeal the most to the customers but

they found them boring.

19 | P a g e


They should reduce their prices and improve the quantity and quality as the customers are

feeling bored and are not happy to pay the prices for the regarding deals.

This could be of benefit for fast food restaurants in making wise decision while

recommending price, quantity of fast food because now customer have more options and

now they are more price conscious and sharp. Also, this could help them in providing

good atmosphere and healthier fast food because now people are more heath conscious.

References:

Muhammad Mansoor

Operation manager (Sabzazar Branch –fri Chiks)

Mr. Imran Ali

Operation manager (Iqbal Town Branch- fri Chiks)

XIMB Journal of Management ; March, 2007

1. Fellow (Doctoral) Student, Institute of Rural Management, Anand,

[email protected],

20 | P a g e

“consumer involvement level of fast food industry in lahore, pakistan"

Documents