marketing strategies for fast‐food restaurants: a customer view

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British Food Journal99/9 [1997] 318–324

© MCB University Press [ISSN 0007-070X]

Marketing strategies for fast-food restaurants: a customer view

Ali KaraAssistant Professor of Business Administration at the College of BusinessAdministration, Pennsylvania State University at York, Pennsylvania, USAErdener KaynakProfessor of Marketing at the School of Business Administration, PennsylvaniaState University at Harrisburg, Pennsylvania, USAOrsay KucukemirogluAssociate Professor of Business Administration at the College of BusinessAdministration, Pennsylvania State University at York, Pennsylvania, USA

Posits that, in recent years, amajor food consumptiontrend in the USA and Canadais that more people are eatingmore meals outside theirhomes. It is predicted thatthis trend will accelerate inthe future. As a result, fast-food markets will offergreater growth opportunitiesfor marketers. Presentsconsumers’ perceptions ofand preferences for fast-foodrestaurants in the USA andCanada. The results of thisstudy may have very impor-tant implications for develop-ing successful marketingstrategies for fast-foodrestaurants. Findings of thestudy offer need-orientedmarketing strategies for bothfranchisers and franchiseesin the US and Canadian fast-food sectors to enable themto be more competitive in thisfast-changing business envi-ronment.

Introduction

The fast-food sector is now more global thanever and international fast-food consumptioncontinues to increase in popularity.Customers usually form perceptions of fast-food outlets. These perceptions may beformed by word-of-mouth communication,exposure to promotion from fast-food restau-rants, past personal experience and othersources. Some perceptions may even be incorrect; they may differ from country tocountry.

It is accepted that fast-food marketingstrategies should have a sound understand-ing of consumers’ perceptions of and prefer-ences for fast-food outlets and how they differacross cultures/countries. This understand-ing can be helpful in targeting countries/cultures to promote fast food and improvingor amending their restaurants’ perceptionsso that customer demand can be increased.If countries/cultures differ widely in theirperceptions of and preferences for a fast-foodrestaurant, promotional campaigns tailoredto individual countries/cultures may becalled for.

In summary, international fast-foodresearch requires the researcher to investigate customer perceptions and prefer-ences and relevant multi-attribute criteriaused for their decision. Therefore, in thisstudy, the focus of attention is placed on thetwo relatively important international fast-food markets, the USA and Canada. In partic-ular, how the perceptions of fast-food con-sumers differ across the two countries isexamined. The overall goal of the study is todetermine whether the same fast-food restaurants are perceived similarly/differently across the two countries, andwhether their positioning can beimproved/changed through careful and selective promotion.

The US and Canadian fast-food markets

A major trend in the USA and Canada and inmost of the industrial world is that morepeople are eating meals outside their homes.Recent studies suggest that one out of everytwo-and-a-half meals today is eaten away fromhome[1]. According to the Bureau of LaborStatistics, the share of total fast-food spend-ing away from home rose from 33 per cent in1975 to 39 per cent in 1980 and to 46 per cent in1990. Even in the recessionary times, sales offast-food franchises grew by 11 per cent. Ifthis current trend continues, Americans andCanadians will consume more than half theirmeals outside their home by the end of thecentury, which will also account for nearly50 per cent of their household food expen-ditures[2]. Of course, this trend is also signifi-cantly dependent on a number of demographicand lifestyle changes that account for thesignificant growth in meals consumed outsidethe home. However, currently, many types offast-food outlets are benefiting from thisapparent trend. Owing to the relatively inex-pensive costs and quick convenient service,fast-food outlets have become a “home awayfrom home” for breakfast, lunch and dinner.

In recent years, changing lifestyle anddemographics of North American consumersare the mechanisms affecting change in thefood industry. As a result, today’s menusreflect a marketing-oriented approach thatlooks at wholesomeness and a variety offoods. In most cases, menu redesign is thecritical issue in meeting customer demandsfor nutrition and variety[3].

Since 1970, consumers have been spendingless of their food budget at the grocery storewhile more and more of their food money isending up in cash registers at restaurantsand fast-food outlets. On the other hand,North Americans have developed a growinginterest in the nutritional quality of the foodthey consume (e.g. low-calorie or fat-free

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Ali Kara, Erdener Kaynak andOrsay KucukemirogluMarketing strategies for fast-food restaurants: a customerview


foods), becoming more health conscious thanever. The trend is low calorie, light and lowfat, and the health items will supplement, notreplace, the traditional menu. Burke Market-ing Research’s extensive study of consumerattitudes indicates that Americans are eatingbetter food only if it is easy and it tastes good.In general, consumers express concern abouttheir health, salt intake and cholesterol, butthose factors such as easy preparation, tasteand appeal to children dominate their buyingbehaviour[4].

Increased customer service is also becom-ing an important factor in fast-food restau-rants’ offerings. For instance, McDonald’sCorporation makes service its primary focus.Domino’s Pizza is testing a customer satisfac-tion guarantee as a replacement for its 30-minute delivery guarantee. Burger KingCorporation, with a lower media budget, hasadded modified table service and advertises atoll-free number for consumer complaintsand suggestions[1].

The internationalization of fast-food outletsis proceeding in many different ways, includ-ing cross-border transfers of techniques,ideas and practices, in addition to directinvestment activity and the development ofcross-border alliances between leading fast-food retail outlets and their local counter-parts. That is why we are seeing the openingof more fast-food outlets outside the USA thanin the domestic market and the increasingnumbers of host country fast-food outletsoperated by major franchisers such asMcDonald’s recognizable international trad-ing formats[5].

The objective of this article is to understandconsumer perceptions of and preferences forfast-food outlets in the USA and Canada.Specifically, the objective of the study is toanswer the following questions.• What are consumers’ perceptions of differ-

ent fast-food outlets in the USA and Canadawith respect to certain multi-attribute crite-ria?

• Are there any differences between US andCanadian consumers’ perceptions of andpreferences for different fast-food outletsand meals?

• What are the managerial implications ofthese differences (if there are any)?

The findings are expected to have relevanceto both fast-food franchisers and franchiseesby helping them to prepare consumer-ori-ented marketing strategies.

Literature on fast-food research

There has been little work done in the past onconsumer perceptions of and preferences for

fast-food outlets. To the best of our knowl-edge, previous studies of fast-food outletshave been limited to the description of thecharacteristics of the fast-food consumers interms of some demographic and socio-eco-nomic factors and very few have been relatedto the behavioural and attitudinal orientationof fast-food consumers. Research conductedby Good Housekeeping evaluated the mealsserved by the popular fast-food outlets interms of nutritional value, such as proteinand calorie content. A study by McNeal etal.[2], on the other hand, attempted to explorenutritional perceptions of the selected fast-food meals held by consumers from differentsocio-economic backgrounds and with differ-ent nutritional knowledge.

Another study by Miller and Ginter[6]argued that situational variation can be usedto explain consumer choice and attitudes.Thus, they attempted to find out the impor-tance of attributes of fast-food choice on dif-ferent consumption occasions. However, theiranalysis was very limited. In other words,they simply plotted the importance of pre-specified attributes and compared the attri-butes for different fast-food outlets usingmean rating values.

Louviere[7] used fast-food outlets to fore-cast consumer choices. This study is useful inthe context of the present study in terms ofthe identification of the attributes used tounderstand consumer perceptions of andpreferences for fast-food outlets/meals. Nopreviously reported research has investi-gated the perceptions of and preferences forfast-food consumers at cross-national/cul-tural level. This study focuses on the manage-rial relevance of consumers’ self-reportedpreferences and perceptions.

Study methodology

Fast-food restaurants and serviceattributesProducts and services geared to consumerinterests in health, safety and environmenthave been playing an increasingly importantrole in the franchising industry of the 1990s.Studies indicate that Mexican dishes are thefastest-growing market segment among allquick-food service segments. From 1986 to1990, traffic at quick-service Mexican fast-food outlets advanced by 42 per cent. In thepast five years, the number of Mexican fast-food entrées on menus has swelled by 180 percent[8]. In this study, fast-food product cate-gory was narrowed to include only those fast-food restaurants oriented towards hamburg-ers, sandwiches, pizzas, fried chicken, Chinese food, Greek food and Mexican food

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(hamburgers or cheeseburgers still rank asthe most popular items among US fast-foodoutlets[9,10]. Nine fast-food restaurants wereused in the study:1 McDonald’s;2 Burger King;3 Taco Bell;4 Pizza Hut;4 Subway;4 Kentucky Fried Chicken;7 Fuddrucker’s;8 Wendy’s;9 Little Caesar’s;

10 others.

Four of the nine restaurants specialize inhamburgers, two in pizzas, one in submarinesandwiches, one in Mexican food and one infried chicken. According to the pre-testresults, these brands were known orfrequently consumed by 82 per cent of theconsumers in the two samples.

The next step was to identify the attributesthat could be used to reveal consumers’ per-ceptions of the fast-food restaurants. Previousstudies[2,6,7] helped to determine the multi-attribute criteria on which consumers differ-entiate fast-food restaurants. Eleven attrib-utes were elicited from the literature andthey are also consistent with those suggestedby Belk[11]:1 price;2 friendliness of personnel;3 variety of menu;4 service speed;5 calorie content;6 cleanliness;7 convenience;8 business hours;9 delivery service;

10 novelties for children;11 seating facilities.

Data collectionThe data for this study were collectedthrough self-administered questionnaires inthe three neighbouring cities of Bedford,Dartmouth and Halifax, Nova-Scotia, Canadaand the three-county region of York-Lancaster-Harrisburg, Pennsylvania, USA. Inboth regions of North America there arecapital cities of the respective regions andthey contain a sizeable percentage of urbanpopulation who are a major target market forfast-food outlets. In both major cities, a size-able percentage of population makes a livingfrom service, light manufacturing andresource-based industries.

These apparent structural similaritiesbetween the two selected regions of NorthAmerica lend credence to the study and help to ensure that the study results are

comparable for marketing purposes. The twostudy areas have distinct characteristics withdiverse socio-economic and cultural back-grounds. Survey questionnaires were handdistributed at home to 200 households in theUSA and in Canada in the three predeter-mined cities where there are distinct demo-graphic and socio-economic groups of house-holds. After a one-week waiting period, thequestionnaires were personally retrievedfrom the respondents with the aid of under-graduate university students.

The questionnaire used in the study wasadopted from Green et al.[12]. The question-naire contained attribute by brand questions,pairwise comparisons of fast-food outlets,frequency of purchase, dollar amount of pur-chase, products purchased, and a comprehen-sive demographics and socio-economic fac-tors section. The same research instrumentwas used in both regions.

Analysis and results

A total of 179 usable questionnaires wasobtained from the US sample yielding an 89.5per cent response rate; and 141 usable ques-tionnaires were retrieved from the Canadiansample yielding a 70.5 per cent response rate –and these response rates are acceptable bysocial science standards. Demographic andsocio-economic characteristics of the samplefrom the two regions are presented in Table I.

Table II shows consumers’ preferences forfast food in the two regions studied. There is asignificant difference between the USA andCanadian consumers as to the fast food theyprefer (p < 0.05). While the US consumersplace hamburgers at the top of their prefer-ence list, Canadian consumers prefer seafood.Pizza ranks second among US consumerswhile Canadians place hamburgers second.The US and Canadian consumers do not dif-fer in terms of preferred fast-food consump-tion time. Most US and Canadian consumersprefer to eat in a fast-food restaurant between11.00 a.m. and 3.00 p.m. The second most pop-ular eating time for both US and Canadianconsumers is between 3.00 p.m. and 8.00 p.m.Although there is a significant differencebetween US and Canadian consumers interms of the eating place, the most preferredfast-food restaurant for both US and Cana-dian consumers is close to their home. Thisconfirms the importance of convenience inthe selection of a fast-food outfit.

Table II also shows that there is a differencebetween US and Canadian consumers interms of the price that they are willing to payfor fast foods. While most US consumers arewilling to pay between US $3.00 and US $4.00,

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most Canadian consumers are willing to paybetween US $2.00 and US $3.00 for fast food.

In determining the perceptions of fast-foodrestaurants for US and Canadian consumers,correspondence analysis was used in thisstudy. Correspondence analysis (CA), hasbeen described as “a special case of canonicalcorrelation analysis between sets of indicatorvariables”[13]. Although it has been a populardata analysis technique in France for manyyears[14], it has only gained attention in theUS during the last ten years[15,16]. CA is anexploratory multivariate technique that con-verts frequency tables into graphical displaysin which rows and columns are depicted aspoints. It provides a method for comparingrow and column proportions in a two-way ormultivariate table. Mathematically, CAdecomposes the χ2 measure of association ofthe table into components in a manner simi-lar to that of principal component analysisfor continuous data[17,18]. CA portrays sets ofdata points in a joint space, usually definedby two or three dimensions[15,17]. The axes ofthe joint space are principal componentsidentified in the analysis. The name “corres-pondence analysis” refers to the fact that therow and column scores are reported in

corresponding units, which permits the por-trayal of the points in joint space and facili-tates interpretation. The graphical output ofCA is rich in information and it requirescategorical data as input. If continuous vari-ables need to be used as input, they must beconverted to discrete form. In this study CA isapplied to data on consumers’ perceptions ofvarious fast-food restaurants in North Amer-ica.

The data on the multi-attribute criteria thatinfluence fast-food restaurant preferenceswere collected by using the 11 items listedearlier. An interval scale was used rangingfrom 1 (no influence) to 5 (very strong influ-ence). To understand the influence of a factoron respondents’ choices, only “indicates a lotof influence” and “indicates very strong influ-ence” responses are used. Then the data werediscretized by using the top and bottom twocategories of the scale.

Table IDemographic and socio-economic characteris-tics of fast-food consumers

PercentageUSA Canada

Characteristics (n = 179) (n = 141)

SexMale 57.2 61.1Female 42.8 38.9Total 100.0 100.0

Age (years)Less than 25 23.4 24.725-45 44.7 48.1Above 46 31.9 27.2Total 100.0 100.0

Income ($)Under 10,000 13.5 14.210,001-20,000 18.3 21.520,001-30,000 29.9 32.130,001-40,000 23.6 22.7Above 40,000 14.7 9.5Total 100.0 100.0

OccupationStudent 16.1 13.9Housewife 38.7 39.7Employed 43.6 45.4Other 1.6 1.2Total 100.0 100.0

Table IIComparison of US and Canadian consumers

PercentageUSA Canada

Characteristics (n = 179) (n = 141)

Favourite fast food*, **Hamburgers 40.22 27.73Seafood 3.91 36.24Pizza 29.05 7.09Chicken 12.85 12.77Chinese food 4.47 2.84Greek food 1.12 4.96Others 8.38 8.37Total 100.00 100.00

Eating time7.00 a.m.-11.00 a.m. 6.70 6.9311.00 a.m.-3.00 p.m. 50.84 45.653.00 p.m.-8.00 p.m. 34.08 37.328.00 p.m.-midnight 7.82 10.52Later 0.56 1.58Total 100.00 100.00

Eating place**Home 65.92 42.06Place of employment 27.93 36.91Place of recreation 1.68 12.80Other 4.47 8.23Total 100.00 100.00

Price willing to pay** (US$)Under 2.00 3.35 6.382.00-3.00 19.55 36.883.01-4.00 60.34 35.46Above 4.00 16.76 21.28Total 100.00 100.00

Notes:* Comparison based on χ2 test** Significant at p < 0.05

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There are differences between the US andCanadian consumers in terms of the relation-ship between frequency of purchase andattributes considered important. Figure 1illustrates the relationship between the fre-quency of fast-food purchases and factorsconsidered important in fast-food restaurantpreferences for US consumers. Figure 1 alsoillustrates that the frequent fast-food buyersin the US perceive that delivery service, vari-ety, speed of service, quality, cleanliness andfriendly staff are the most important influ-encing factors of their fast-food restaurantpreference.

However, less frequent US buyers indicatethat novelties for children, price and nutri-tional value are the most important factorsinfluencing their fast-food restaurant prefer-ences. Hence, it seems that less frequent fast-food buyers are seeking price deals and pro-motions before visiting a fast-food restaurantas well as responding to their children’srequests. This finding offers importantmanagerial implications in terms of fast-foodmarketers’ targeting strategies to frequentand/or non-frequent buyers.

On the other hand, different factors werefound to be influencing Canadian consumers’fast-food restaurant choices. Figure 2 illus-trates the relationship between the frequencyof fast-food purchases and the factors consid-ered important in fast-food restaurant prefer-ence for Canadian consumers.

It is interesting that price, location andnovelties for children are considered to be the

most important factors in fast-food restau-rant preference by the less frequent Canadianbuyers. This is, in fact, not much differentfrom the attributes that less frequent USconsumers consider important. On the otherhand, statistically significant differenceswere found between the frequent US andCanadian fast-food buyers in terms of theattributes perceived as important. Frequentfast-food buyers in Canada consider seatingcapacity, cleanliness, nutritional value,friendly personnel and variety as the mostimportant factors which offer from the fac-tors considered important by the US con-sumers.

To understand the factors influencing fast-food restaurant choice for different agegroups, χ2 analysis was performed separatelyon the two data sets. Cleanliness, nutritionalvalue and quality of taste are closely associ-ated with the last two age categories (46-55and above 55) which are labelled older con-sumers. On the other hand, variety, price,delivery service and location are closely asso-ciated with the first two age groups (12-17 and18-24), which are described as youngconsumers. Speed and friendly personnel areclosely associated with the age groups 25-35and 36-45, which are labelled middle-agedconsumers. These relationships, however,were different for the Canadian consumers.The older consumers in Canada considernutritional value and seating capacity to bethe most important factors influencing theirfast-food restaurant choice. On the otherhand, price and novelties were consideredimportant by the young Canadian customers.Middle-aged Canadian customers considerspeed, quality, variety and service to be themost important factors influencing theirchoice of fast-food restaurants.

The differences observed in the Canadiansample also need to be evaluated in the con-text of possible differences in the definition of“fast food” and “fast-food restaurant” byconsumers in the two countries. While ham-burgers and pizza were the two favourite fastfoods for American consumers, Canadianconsumers indicated that seafood, ham-burgers and chicken were the favourite fast-food items for them.

Discussions and implications

A key objective of marketing is to define mar-ket segments so that the product can be differ-entiated from rival products to serve theneeds of a given segment in the best way pos-sible. In this comparative cross-nationalstudy, US and Canadian consumers’ prefer-ences for and perceptions of fast-food

Figure 1Frequency of fast-food purchases and important factors for US consumers

Novelties0.20

0.15

0.10

0.05

0.00

–0.05

–0.10

–0.15

–0.18 –0.09 0.00 0.09 0.18 0.27 0.36 0.45 0.54

Three-times-a-week

Twice-a-weekVariety

Price

Once-a-month

Axis 1

Axi

s 2

Delivery service

Seating capacity

Once-a-weekQuality of food

Cleanliness

Twice-a-month

Nutritional

SpeedFriendly staff

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restaurants using correspondence analysisand multidimensional scaling were explored.These analytical techniques are particularlyappropriate for analysing positioning of fast-food restaurants across different countries.

The results indicate that there are signifi-cant differences between the frequent fast-food buyers in the USA and in Canada interms of the factors perceived important byfast-food consumers. Frequent buyers in theUSA considered variety, speed and friendlystaff as the most important factors of theirfast-food restaurant choice while less fre-quent buyers indicated that price and promo-tional deals were the most important factors.On the other hand, frequent Canadian fast-food buyers considered seating capacity andnutritional value as the most important fac-tors while less frequent buyers indicated, liketheir US counterparts, that price, noveltiesand location were the most important attrib-utes. However, no differences were foundbetween the US and Canadian consumers’perceptions of the similarity of the fast-foodrestaurants studied. This is an importantfinding because fast-food restaurants per-ceived as similar can be viewed as directcompetitors.

The results of the study offer several man-agerial implications. First, they emphasizethe differences between the perceptions andpreferences of consumers in two culturallyvery similar nations (USA and Canada) forso-called commodity-type product/service,that is, fast food.

Second, the study illustrates that there areseveral product/service factors thatconsumers consider to make their decisionon selection of a fast-food restaurant. It isincorrect to assume that the fast-food markethas become a commodity market. The mar-keters who understand the factors that fast-food customers consider most important fortheir choice will emphasize those factors intheir marketing strategies and can then dif-ferentiate (actual or perceived) their prod-ucts/service. For instance, the customizationthat Fuddrucker’s offers increases the abilityof consumers to control the number of calo-ries in their meal and this is thought to be animportant contributory factor to their suc-cess in the fast-food market.

Finally, the results indicate differencesbetween consumers’ preferences for fast-foodrestaurants in relation to age groups and interms of frequency of buying within, as wellas between, nations. This emphasizes theimportance of target marketing for fast-foodrestaurants.

Limitations and future researchavenues

The study has certain limitations which canbe viewed as future research items. Althougha sufficiently large sample from the two coun-tries was used in the study, samples were notconsidered to be representative of the overallUS and Canadian consumer. They representurban consumers’ perceptions in the tworegions only. A more representative samplemight consider the differences within the twonations more carefully. Despite this caveat,however, samples used in the study are drawnfrom the general public and, therefore, lendthemselves to generalization.

The results of this particular study need tobe replicated by collecting data at the con-sumption point. In other words, data might becollected in the fast-food restaurants duringthe actual consumption, therefore yieldingmore realistic information. Furthermore, acomparison of on-the-premises versus off-the-premises fast-food consumption behaviourmight shed more light on this under-researched topic also.

Another interesting future research agendawould involve the comparison of USA,Canada and Mexican consumers’ perceptionsand preferences. The North American FreeTrade Agreement (NAFTA) increases theimportance of such a cross-cultural approach.Further research should examine fast-foodconsumption preferences at cross-cultural aswell as cross-national levels. For instance,one may expect differences at a cross-national

Figure 2Frequency of fast-food purchases and important factors for Canadian consumers

Service

0.10

0.05

0.00

–0.05

–0.10

–0.15

–0.20

–0.3 –0.2 –0.1 0.0 0.1 0.2 0.3 0.4 0.5

Axis 1

Axi

s 2

0.6 0.7

Novelties

Quality foodSpeedOnce-a-weekFriendly staff

PriceOnce-a-month

Three-times-a-weekCleanliness

Nutritional

Seating capacity

Twice-a-month

Location

Twice-a-week

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level among the three countries, there mayalso be certain differences at cross-culturaland regional levels within each country. Eth-nic and regional food consumption differ-ences between French and English Canadi-ans may help to pinpoint important consump-tion trends. If there are similarities in certainareas, one could develop pan-regional or evencentralized marketing strategies for fast-foodchains.

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marketing strategies for fast‐food restaurants: a customer view

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