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Quick Service Restaurant Analysis

Marketing Analytics Project Report

Submitted By: (Group-8) Abhinandan Narayan (M003/12) Hemlata Meena (M018/12) Pallavi Srivastava (M023/12) Vineet Rai (M051/12) Nakul Bindlish (M093/12) Nikita Johari (M095/12)

Table of Contents

1.INTRODUCTION11.1.Quick Service Restaurants1Mc Donalds1KFC1PIZZA HUT2SUB WAY22.ABOUT THE PROJECT23.LITERATURE REVIEW44.RESEARCH METHODOLOGY54.1.ABOUT THE SAMPLE:54.2.CHOICE OF SCALE:54.3.Measurement Tool54.4.Reliability Tests6Reliability for Ambience6Reliability for Food Quality7Reliability for Service Quality7Reliability Analysis for Menu_Offerings8Reliability analysis for Prices9Reliability Analysis for Value Added Services105.ANALYSIS115.1.GAP Analysis11Determining the Customer Preference parameters11KFC12Mc Donalds12SUBWAY13PIZZA HUT14COMPARATIVE ANALYSIS14FINAL RESULT145.2.Perceptual Mapping using Multi-Dimensional Scaling165.3.Binary Logistic Regression175.4.Structural Equation Modeling196.CONCLUSION226.1.CONCLUSION GAP ANALYSIS226.2.CONCLUSION PERCEPTUAL MAPPING226.3.CONCLUSION BINARY LOGISTIC REGRESSION226.4.CONCLUSION Structural Equation Modeling237.Bibliography24Appendix A Questionnaire Designed for ProjectA-1Appendix B Tabulated Responses from the publicB-1Appendix C Results SheetC-1

List of Figures

Figure 1: 5 Point Likert Scale Employed5Figure 2: Reliability Analysis for Ambience6Figure 3: Reliability Analysis for Food Quality7Figure 4: Reliability Analysis for Service Quality7Figure 5: Reliability Analysis for Menu Offerings8Figure 6: Reliability Analysis for Prices9Figure 7: Reliability Analysis for Value Added Services10Figure 8: T-values for individual attributes11Figure 9: Gap analysis for KFC12Figure 10: Gap analysis for Mc Donalds13Figure 11: Gap analysis for Subway13Figure 12: Gap analysis for Pizza Hut14Figure 13: Comparative analysis14Figure 14: Weights of each QSR15Figure 15: Customer Mind Map for various QSR15Figure 16: Perceptual Mapping of various QSR16Figure 17: Perceptual Mapping (contd.)17Figure 18: Generating Binary Logistic Regression response18Figure 19: Binary Logistic Regression (contd.)18Figure 20: Initial proposed SEM Model19Figure 21: Improved SEM Model20Figure 22: Final derived SEM Model23

Running Head: FINAL PROJECT REPORTiM. ANALYTICS REPORT GROUP 8A-3

INTRODUCTION

Quick Service Restaurants

A Quick Service Restaurant is synonymously known as a fast food restaurant. It is a specific type of restaurant characterized by the following Fast food cuisine Minimal table service Offered from a limited menu Cooked in bulk in advance and kept hot Usually available ready to take away Seating may be providedModern commercial Quick Service Restaurants are highly optimized by standardizing their processes. Quick Service Restaurants are known for fast, efficient, take-out-ready foods at affordable prices. For our project, we have considered the following Quick Service Restaurants Mc Donalds

The McDonald's Corporation is the world's largest chain of fast food restaurants, serving around 68 million customers daily in 119 countries. It is headquartered in the United States. The company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles.A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants.

KFC

KFC (Kentucky Fried Chicken) is a fast food restaurant chain which specializes in fried chicken and is headquartered in Louisville, Kentucky. It is the world's second largest restaurant chain overall (as measured by sales) after McDonald's, with over 18,000 outlets in 120 countries. The company is a subsidiary of Yum! Brands.KFC was founded by Harland Sanders, a colorful figure who began selling fried chicken from his roadside restaurant in Corbin, Kentucky, during the Great Depression. Sanders identified the potential of the restaurant franchising concept, and the first "Kentucky Fried Chicken" franchise opened in Utah in 1952. KFC popularized chicken in the fast food industry, diversifying the market by challenging the established dominance of the hamburger.

PIZZA HUT

Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including salad, pasta, breadsticks, and garlic bread. Pizza Hut was founded on June 15, 1958 by brothers Dan and Frank Carney in their hometown of Wichita, Kansas.Corporately known as Pizza Hut, Inc., it is a subsidiary of Yum! Brands, Inc., the world's largest restaurant company.As of 2012, there were more than 6,000 Pizza Hut restaurants in the United States, and more than 5,139 store locations in 94 other countries and territories around the world.

SUB WAY

Subway is an American fast food restaurant franchise that primarily sells submarine sandwiches (subs) and salads. It was founded in August 28, 1965 by Peter Buck and Fred Deluca.It is owned and operated by Doctor's Associates, Inc. Subway is one of the fastest growing franchises in the world with 40,043 restaurants in 102 countries and territories as of 27 August 2013. It is the largest single-brand restaurant chain and the largest restaurant operator globally.

ABOUT THE PROJECT

In this project, we attempted to analyze the Quick Service Restaurants using marketing analytics tools and techniques. Broadly, we intend to do the following analysis Gap Analysis Perceptual Mapping Logistic Regression Structural Equation ModelingFor the analysis, we collected a sizeable amount of representable responses.

For the survey, a questionnaire was designed (Please refer to Appendix A for the questionnaire). The questionnaire had the following sections 1. Personal Information2. Following constructs and related attributesI. AMBIENCE : The environment inside the restaurant in terms of the following - Interior Furniture Lighting Music Odor Cleanliness TemperatureII. FOOD QUALITY : The quality of food in terms of the following attributes - Taste Freshness Aroma PresentationIII. SERVICE QUALITY : The quality of service gauged in terms of the following attributes- Lead Time Behavior of Staff Service offered by StaffIV. MENU OFFERINGS: The range of offerings/ menu offered Veg Options Non Veg Options Customization Revision of Menu Addition of new items / yearV. PRICE : The price factor involved Affordability Discounts Combos Payment OptionsVI. VALUE ADDED SERVICES : Additional offerings apart from the core product Home Delivery Delivery Time Commitment Special Offers Discount CouponsVII. CUSTOMER SATISFACTION INDEX : How satisfied are the consumers Satisfaction Level Value for money Consider Revisiting

LITERATURE REVIEW

Quick Service Restaurant (QSR) has become one of the major segments in the food service industry. With more and more customers, in particular, the younger generations are being pulled towards this segment and they are becoming more and more demanding in terms of higher quality food preparation and taste, good hygienic conditions, superior customer service, healthier food choices, value for money etc. There is a lot of literature, which studies the impact of organizations image on customer behavior and customer loyalty. According to Kisang Ryu, Heesup Han and Tae-Hee Kim (Kisang Ryu) quick casual restaurant image and perceived value has a significant role in influencing customer satisfaction. Quick service restaurants image, consumer satisfaction and perceived values are significant predictors of consumers behavior intentions i.e. to revisit or not to visit the restaurant again. This also has an impact on customer loyalty. The Image (Baloglu and Brinberg, 1997) is defined as the sum of beliefs, ideas, and impressions that people have of a place or destination . Quick service restaurant image is directly dependent on consumers perception of attributes like ambience, food quality, service quality, price, menu offerings, value added service and customer satisfaction.Customer satisfaction is very important factor in the success of restaurants especially QSR. Customer satisfaction is a perception based on the overall eating experience (pleasurable experience) of the customer and this pleasurable experience will depend on the Quality of the restaurant. Food quality that consists of presentation, freshness, taste, temperature and healthy option is an important attribute leading to customer satisfaction. It alone has the potential to lure consumers to revisit the restaurant (Sulek & Hensely, 200 4) and is a contributing factor in QSRs success. The level of service Quality i.e. the quality of service received by the consumer greatly enhances the overall customer experience and satisfaction. Studies have shown that simple gestures like smiling; speaking softly has a positive impact on customer satisfaction and gives a competitive edge over its rivals. This also increases the level of customer retention and frequency of visits.There is a relationship between consumer value of eating out and importance of fast food restaurant attributes. Consumer values of eating out are divided into hedonic and utilitarian factors (Park) .The hedonic values of eating out relates to quick service, taste of food, cleanliness, employee kindness and various facilities and which are positively correlated, whereas utilitarian value consists of reasonable price, promotional incent