Mc-Donald Vs Domino’s - Comparative Analysis

Determinant Of Choosing Fast Food Restaurant And Their Service Quality

BY:- ANUJ CHAUHAN (FINANCE + MARKETING)

ITM UNIVERSITY, SITHOLI, GWALIOR

ABSTRACT

SERVICE QUALITY

Parasuraman et al. (1988) introduced a 22-item scale, called SERVQUAL, for measuring service quality, the model has been widely adopted across industries. The scale was tested in 4 service settings different from those of the original test: a dental school patient clinic, a business school placement center, a tire store, and an acute care hospital. In service industries, customer satisfaction is always influenced by the quality of interactions between customers and the personnel involved in the contact services (1994). In the last decade, the movement towards quality had started to spread from the manufacturing sector to the service sector. The shift of focus to quality is basic for the service business to survive the competition, get acceptance from society, and be able to achieve its missions.

In principle, the two main things closely related to services are expected quality and experienced or perceived quality. The first is the customers' expectations of service quality and the latter is the customers' perceptions of service quality. The customers will always assess the services they experienced by comparing them with whatever they expected or wished to receive.Services are behavioral rather than physical entities and have been described as deeds, performances or effort (1966); deeds, acts or performances, (1980); activities or processes (1991). (1988) defined services as "that broad class of products characterized by intangibility, inseparability of production and consumption, difficulty of standardization and perishability".

As (1986) notes, there is fairly widespread agreement in the literature concerning the characteristics which tend to differentiate services from goods. These are intangibility, perishability, inseparability of production and consumption, and heterogeneity.

TABLE OF CONTENT

Synopsis

1. Industry Profile2. Literature review3. Need for study4. Research methodology5. Analysis of study6. Finding and suggestions7. Conclusion8. Appendices9. Bibliography

Summary:-

In this comparative analysis of two fast food restaurants regarding their service quality.

In this, there are pair of determinant factors of Domino’s pizza and Mc-Donald which identifies the service quality regarding their customers and how they affect customer satisfaction.

Both are famous for their services as it explained in the abstract, it includes the service delivered to their customers and what they perceived before getting these services in terms of their service quality. There are two stages are forms, one of them related to their perception and another are totally related to expectations, which is observed by these fast food restaurants after service delivered to their customers, and related too their satisfaction level of customers.

INDUSTRY PROFILE:- FAST FOOD RESTAURANT

A fast food restaurant, also known as a quick service restaurant (QSR) within the industry itself, is a specific type of restaurant characterized both by its fast food cuisine and by minimal table service. Food served in fast food restaurants typically caters to a "meat-sweet diet" and is offered from a limited menu; is cooked in bulk in advance and kept hot; is finished and packaged to order; and is usually available ready to take away, though seating may be provided. Fast food restaurants are usually part of a restaurant chain or franchise operation, which provisions standardized ingredients and/or partially prepared foods and supplies to each restaurant through controlled supply channels. The term "fast food" was recognized in a dictionary by Merriam–Webster in 1951.

Arguably the first fast food restaurants originated in the United States with A&W in 1916 and White Castle in 1921.Today, American-founded fast food chains such as McDonald's and KFC are multinational corporations with outlets across the globe.

Innovation Timeline:-

1872 Walter Scott of Providence, RI outfitted a horse-drawn lunch wagon with a simple kitchen, bringing hot dinners to workers

1902 First Horn & Hardart Automat opened in Philadelphia

1912 Horn & Hardart opens a second Automat in Manhattan

1916 Walter Anderson built the first White Castle in Wichita, KS in 1916, introducing the limited menu, high volume, low cost, high speed hamburger restaurant

1919 A&W Root Beer took its product out of the soda fountain and into a roadside stand

1921 A&W Root Beer began franchising its syrup

1921 White Castle opens its first restaurant

1926 Maid-Rite opened its first restaurant in Muscatine, Iowa.

1930s  Howard Johnson's pioneered the concept of franchising restaurants, formally standardizing menus, signage, and advertising

1948 In-N-Out Burger begins drive-through service utilizing call-box technology

1967 McDonald's opens its first restaurants outside the U.S.

1971 McDonald's begins serving breakfast, test-marketing the Egg McMuffin in the U.S.

1971 The first Starbucks store opens in Seattle, Washington in Pike Place Market to sell high-quality coffee beans and equipment

1980  7-Eleven introduces the 32-US-fluid-ounce (950 ml) Big Gulp

1981 Arby's offers nutritional7-Eleven introduces the 32-US-fluid-ounce information

1987 Howard Schultz leads purchase of the Starbucks brand from its founders (who adopted the name Peet's) and begins offering coffee drinks modeled after those sold in Italian coffee bars

1994 McDonald's begins "supersizing" Extra Value Meals

1994 Arctic Circle becomes the first fast food restaurant to sell Angus beef exclusively.

1994 Arby's is first fast food restaurant to implement a no-smoking policy

2002 McDonald's cuts back on the amount of trans fat by 48 percent on French fries

2006 Arby's begins elimination of trans fat oils in French fries

Indian Fast food Industry

With rapidly growing middle class population and changing lifestyle, India is blessed with one of the fastest growing fast food markets of the world. The Indian fast food market is growing at the rate of 30-35% per annum. Almost all big fast food brands of the world have succeeded in making their presence felt in the country and most of them are posting appreciable growth.

Consequently, all the popular fast food chains have chalked out massive plans for expanding their business and presence throughout the country. Moreover, foreign fast food chains are aggressively increasing their presence in the country. For instance, Domino’s has planned to open 60-65 outlets every year for the next three years (2010-2012) while Yum Brands Inc is also preparing for massive expansion across the country with plans to open 1000 fast food outlets by 2015.

According to “Indian Fast Food Market Analysis”, although the market has witnessed a robust growth in the past couple of years, it remains largely underpenetrated and concentrated into metropolitan cities. However, there is large room for growth in tier-II cities and tier-III cities, which are mostly untapped. Therefore, the future of Indian fast food industry lies in masses that live in tier-II and tier-III cities.

The report provides extensive research and objective analysis on the fast expanding Indian fast food market. The report analyzes all the vital industry trends and possible growth areas for future expansion. It also analyzes important driving forces in detail, which will help clients to understand the market better.

Moreover, we have also identified the important players operating in the sector and have made a separate chapter which talks about their business expansion plans in detail. Most importantly, the report also features forecast on fast food sales in the country. The forecast is based on the correlation between past market growth and growth in base drivers such as growth in middle class, urbanization, cultural shift and lifestyle changes.

McDonald's India ProfileA Locally Owned Company:

McDonald's is the world's leading food service retailer with more than 33,000 restaurants in 118 countries serving more than 67 million customers each day. In India, McDonald's has two Indian entrepreneurs: Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd, which has been awarded a Development Licensee status by McDonald's Corporation, U.S.A, spearheads McDonald's operations in West & South India, while McDonald's restaurants in North & East India is managed by Vikram Bakshi's Connaught Plaza Restaurants Private Limited, which is still a Joint Venture with McDonald's Corporation.For Hardcastle Restaurants Pvt. Ltd ('HRPL'), the transition to a Development Licensee implies a higher level of commitment by McDonald's Corporation as it enhances its trust in theLocal partner. McDonald's ensures that the evolution to a Development Licensee takes place only after the financial strength, viability, profitability and long - term sustainability of the business is assured.Celebrating over 15 years of leadership in food service retailing in India, McDonald's Indianow has a network of over 250 restaurants across the country. McDonald's India is a leader in

the food retail space, with a presence of more than 250 restaurants serving more than 6.5 lakh customers daily in India.McDonald's India and HRPL in particular has an aggressive expansion plan - including marketexpansion, new customer outreach formats and menu expansion. With HRPL becoming a Development Licensee in the year 2010, there are strong and robust commitments to investments, expansion and growth. By 2014, HRPL plans to double the number of restaurants it currently has. HRPL is expanding its reach by expanding the portfolio and access points with formats like from kiosks, drive thrus, web-delivery and petrol pumps in addition to the restaurants. In 2012, HRPL plans to open another 35-40 McDonald's restaurants in West and South India.An Employer of Opportunity:

McDonald's India is an employer of opportunity, providing quality employment and long-term careers to professionals across the country. The average McDonald's restaurant employs 40-60 people from crew to restaurant manager. McDonald's invests in its employees, leveraging world class-training inputs to create ambassadors of the brand and creating food service professionals with global outlook. The brand currently has over 10,000 employees in India.Respect for Indian Customs and Culture:McDonald's worldwide is well known for the high degree of respect for the local culture of each market it operates in. In line with this respect for local culture, India is the first country in the world where McDonald's does not offer any beef or pork items. McDonald's has developed a menu especially for India with vegetarian selections to suit the Indian palate, and has also re-engineered its operations to address the special requirements of vegetarians. Special care is taken to ensure that all 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 soft serves are also 100% vegetarian, and McDonald's uses only vegetable oil as a cooking medium in India.

Quality, Service, Cleanliness & Value (QSC & V):McDonald's is driven by the philosophy of Quality, Service, and Cleanliness & Value for Money. This translates into a commitment to provide customers high quality products, served quickly with a smile, in a clean and pleasant environment at an affordable price. This effectively means that the McDonald's menu is priced at a value that the largest segment of the Indian consumers can afford, while at the

same time ensuring that quality is not sacrificed for value - rather, McDonald's leverages economies to minimize costs while maximizing value to customers.

McDonald's a Global Phenomenon

Formed in 1954, McDonald's brand is the leading global foodservice retailer with more than 30,000 local restaurants serving nearly 50 million people in more than 120 countries each day. Our rich history began with the founder Ray Kroc's vision and his commitment, transformed in our talented executives, and will keep the shine on McDonald's arches for years to come.

McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. 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. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.

A McDonald's restaurant is operated by either 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. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion.

McDonald's primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruit.

Quick Facts About McDonald’s

1. McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in California, US in the year 1937.

2. By mid-1950s, the restaurant's revenues had reached $350,000.

3. Ray Kroc, distributor for milkshake machines, expressed interest in the business, and he finalized a deal for franchising with the McDonald brothers in 1954.

4. He established a franchising company, the McDonald System Inc. and appointed franchisees.

5. In 1961, he bought out the McDonald brothers' share for $2.7 million and changed the name of the company to McDonald's Corporation. In 1965, McDonald's went public.

McDonald’s is a global foodservice retailer with more than 32,000 local restaurants in 117 countries, serving more than 58 million customers each day. In simpler terms, we’re a global brand of local restaurants. At the heart of McDonald’s operations is a unique business model comprised of the Company, our suppliers and franchisees (also called owner/operators). Often referred to as a three-legged stool, all three parts of this business model are essential to McDonald’s success around the world.

Domino's Pizza is an international pizza delivery corporation headquartered in Ann Arbor Township, Michigan,

United States, near Ann Arbor.[ Founded in 1960, Domino's is the second-largest pizza chain in the United States (after Pizza Hut) and has more than 10,000 corporate and franchised stores in 70 countries and all 50 U.S. states. Domino's Pizza was sold to Bain Capital in 1998 and went public in 2004.Domino's serves Coca-Cola products, and as of January 2012 is the only "Big Four" pizza chain to do so. Rivals Papa John's Pizza and Little Caesars sold Coca-Cola in the past (Pizza Hut, due to its previous ownership by PepsiCo, has a lifetime contract to sell Pepsi products.), but both switched to Pepsi in 2012 and 2007, respectively. Domino's Pizza in Mexico switched to Pepsi in November 2012.

The Beginning

The Domino's franchise started out as just one tiny store. It was purchased and started by brothers Tom and James Monaghan in 1960. At that time, the restaurant was known, not as "Domino's," but as "Dominick's Pizza" and was located in Ypsilanti, MI. The two brothers only worked as a team until 1961, when James traded his half of the business to his brother for the price of a Volkswagen Beetle. In 1965, the name "Dominick's" was traded for "Domino's."

Growth

The second Domino's pizza store was opened in Ypsilanti in 1967, officially starting the Domino's franchise. Since that time, the chain has experienced record-breaking growth: By 1978, 200 Domino's restaurants had been opened, and by 1983, the chain boasted 1,000 openings as well as restaurants in Australia and Canada. By 1985, Domino's was the fastest-growing chain in the United States, with additional locations in England and Japan.

Obstacles

As hugely successful as the Domino's pizza franchise has been, the chain's history has been riddled with obstacles and troubles. In 1968, the company's headquarters were destroyed in

a fire. In 1975, Domino's entered, and eventually won, a 5-year legal battle over trademark infringement claims posed by Domino Sugar. In 1989, a man named Kenneth Noid created a hostage situation at an Atlanta restaurant, angrily believing that the company's "Avoid the Noid" ad campaign (featuring a pizza-stealing, stop-motion animation character known as "The Noid") to be a personal insult. Luckily, Noid surrendered to police without harming his hostages, though he did force them to make pizza for him.

Delivery

From the early days of the company, Domino's has had a delivery-focused business model. This approach helped the business gain a serious leg up during the late 1960s when the store's East Lansing location gained massive popularity with Michigan State University students wanting convenient food options without having to have their own cars. The delivery-heavy model prompted the restaurant's famous "30 minutes or it's free" guarantee. However, this guarantee was rescinded in 1993 as a result of complaints about reckless driving and accidents caused by delivery drivers in a rush to meet the requirements.

Today

Nowadays, Domino's pizza continues to grow, with over 8,000 store locations worldwide. The company has continued to develop its business model by featuring many non-pizza menu items and incorporating new customer service options such as online order. Domino's has also been listed in Entrepreneur magazine's list of the top 10 best franchise opportunities.

IN INDIA

Domino’s pizza opened its first store in India in January 1996, at New Delhi. Today Domino’s pizza India has grown into a country wide network of more than 300 stores with a team of 9000

people. According to India retail report 2009, domino’s is the largest Pizza chain in India.

LITERATURE REVIEW:-

According to (1982), service quality is generally viewed as the output of the service delivery system, especially in the case of pure service systems. Moreover, service quality is linked to consumer satisfaction. Although there is no consensus in the research community about the direction of causality relating quality and satisfaction, the common assumption is that service quality leads to satisfied customers (1994; 1990, 1989).

For example, customers leaving a restaurant or hotel are asked if they were satisfied with the service they received. If they answer "no," we tend to assume service was poor. Direct service providers, such as waitresses, also note that at times the best service efforts are criticized because the customer's perceptions of the service are clouded by being in a bad mood or having a disagreement with someone just before arriving at the restaurant. These service providers recognize that in practice the influence of service quality on customer satisfaction is affected by other factors, one of which is the customers themselves.

In addition, (1989) and (1983) defined both service quality and customer satisfaction as matching the expectation of the service with that which is actually experienced by the customer. Therefore, when customers' experiences meet or exceed their expectations, the service is viewed as a quality service and the recipients are typically satisfied customers. On the other hand, when the service experienced by consumers is less than their expectations, the perception of service quality is diminished and customers are generally not satisfied.

Almost half of our food expenditure today is on food prepared away from home. And we all know that food prepared away from home is far too often high in calories, unhealthy fat, and sodium. So why are we eating out so much? The top three reasons for choosing fast foods are:

1. Rapid service2. Convenient location3. Good-tasting food

Researchers from Texas A&M University recently investigated whether additional explanations for eating away from home exist. In particular, they looked at factors like: parental work (whether one or both parents were working), family meal rituals (like who eats dinner together

and whether family members believe it is important to eat together), parenting style, and mothers' worries and concerns regarding their children's weight3. Researchers spoke with 312 families (parents and children ages 9-11 or 13-15), asking them about the factors above as well as all of the foods they ate over a two-day period.Some interesting findings included:

When both parents have a standard work schedule (8-5), father has a flexible schedule or he feels that he has control at work, children use full service restaurants more.

Children whose mothers rank their job role as more important than their other roles, including that of a parent, reported spending more time in fast food restaurants.

Time spent by children traveling in the car was directly related to use of fast food restaurants and time spent in both fast food and full service restaurants.

Fathers who reported that the family dinner was a family ritual had children who frequented fast food restaurants less.

Children with authoritative mothers (parenting style that consists of caring, clear behavioral expectations and punishment by privilege withdrawal) used fast food restaurants less.

Children with neglectful parents (parenting style with lack of caring, lack of control, and few punishments) spent more time in fast food restaurants.

Researchers concluded that eating away from home and the healthfulness of children's diets are linked with the manner in which parents interact with their children (parenting style), time available for family meals, and the role restaurants play in their lives. 

Physical evidence

Services are different from physical goods on some key dimensions or characteristics such asintangibility, heterogeneity, inseparability and perishability (Lovelock and Wirtz, 2004). Thedelivery and measurement of the high-quality service are difficult tasks for a service providerbecause of the intangible nature of the services. Research has revealed that the consumers mayrespond to more than just the tangible part of the product or service rendered when making apurchase decision (Kotler, 1973; Milliman, 1986). A proper combination of tangible and intangible aspects should result in a customer’s perception of high service quality (Ryu, 2005).Physical evidence is one such instrument, which is widely used to visualize the intangible aspects of the service delivery. It relates to the style and appearance of the physical surroundingsand other experiential elements encountered by customers at service delivery sites (Lovelock andWirtz, 2004). It is one of the additional Ps of services marketing mix and considered as a powerful tool for those services in which customers and service providers have high degree ofinvolvement (high-contact) while delivering and receiving the service.

LITERATURE REVIEWConsiderable research has been conducted in the area of physical evidence as it is one of the

determinants of service quality. Most of the previous studies related to physical evidence tried torelate it with the perceived performances of the services and expectations of the service customers, which in turn produces service quality perceptions. Such studies on the effect ofphysical evidence on the perceived service quality and on store or outlet selection covered widerange of service categories. Baker (1987) classified three fundamental factors that affect the tangible portion of service quality dimensions: design, social, and ambient factors. Ambienceincludes background factors such as lighting, aroma, and temperature. Design factor representsthe components of the environment that are more visual and tangible in nature. It includes color,furnishings, and spatial layout. The design elements contain both the aesthetic aspects (e.g.,beauty, décor) and the functional aspects (e.g., layout, ease of transaction, and waiting roomdesign) that facilitate high quality service. The social factors relate to an organization’s concernfor the people in the environment, including customers and employees.

Berman and Evans (1995) classified tangible quality clues into four categories: external, general interior, layout, and point of purchase factors. External variables or factors include exterior, signs, building size and color, location, and parking. General interior variables include music, scent, lighting, temperature, and color scheme. The layout and design factors pertain to the workstation placement, waiting facilities, and traffic flow. Finally, the point of purchase anddecoration variables relate to the displays, pictures, artwork, and product displays at point ofpurchase. Environmental dimensions of the servicescape shapes the way customers and serviceproviders interact and behave (Zeithaml, et.al., 2006). Such environmental dimensions are thebasic constituents of the framework for understanding environment-user relationships in serviceorganizations. Ambient conditions (temperature, air quality, noise, music, odor), space (layout,equipment, furnishings), signs, symbols and artifacts are included in these environmental dimensions.

A multiple item scale has been developed by Raajpoot to determine tangible quality of foodservice industry. The scale captures factors such as music and temperature; design factors such as location and seating arrangement and service factors such as food presentation and foodvariety (Raajpoot, 2002). In another study among the elderly citizens, Knutson and Patton (1993)found that about one fourth of older diners named service quality as a strong motivator for choosing a restaurant. According to this research, seniors want to eat in a welcoming, pleasant,comfortable atmosphere.

Determinant factors are:-Accessibility:- according to Litman, 2003a Accessibility refers to the ability to

reach desired goods, services, activities and destinations (together called opportunities). Accessibility depends on mobility, mobility substitutes and opportunities as follows:

• Mobility - provided by walking, cycling, public transport, car sharing, taxi, cars, and other modes. All else being equal, an increase in the speed, service quality or affordability of a mode will improve access by that mode.

• Mobility substitutes - telecommunications and delivery services. These can provide access to some types of goods and activities, particularly those involving information.

• Land uses - the geographic distribution of activities and destinations. The dispersion of common destinations increases the amount of mobility needed to access goods, services and activities, reducing accessibility. When real estate experts say “location, location, location” they mean “accessibility, accessibility, accessibility”.

• Other factors - information availability, affordability, convenience and comfort, security and prestige.

Key responsibility for accessibility:-

“ All else being equal” – Responses to mobility changes can mean that things are usually not “equal” and often complex behavioural responses need to be considered. The need to consider information, availability, comfort, security, prestige, speed, modes available, telecommunications, land uses and all potential activities emphasises that it is important not to confuse detailed components of accessibility with the definition “the ability to reach goods services, activities and destinations”.

Accessibility is a term often used in transport and land-use studies and the main aim of this report is to survey the range of measures of accessibility that have been proposed. Accessibility is seen as being concerned with the opportunity available to an individual or type of person at a given location to take part in a particular activity or set of activities. However various other interpretations of the term accessibility have been made and in order to survey the range of indices to which the term accessibility measure has been applied it is necessary to consider also the range of definitions that have been given to the term accessibility. The advantages and disadvantages of the various measures are discussed. No single "best" measure is identified; rather the choice depends on the type of problem being studied and the resources available. Some consideration is given also to the areas of study in which accessibility may be a useful concept.

1. Price:- Pricing actually plays a vital role in the branding and image of your product. Determining your price can be difficult, especially if you product is in a widely-variable industry. You must determine pricing strategy, retail and wholesale pricing, possible bundling, and any type of discounts.

2. Ambiance:- Eating takes place in a context of environmental stimuli known as ambience. Various external factors such as social and physical surroundings, including the presence of other people and sound, temperature, smell, color, time, and distraction affect food intake and food choice. Food variables such as the temperature, smell, and color of the food also influence food intake and choice differently. However, the influence of ambience on nutritional health is not fully understood. This review summarizes the research on ambient influences on food intake and food choice. The literature suggests that there are major influences of ambience on eating behavior and that the magnitude of

the effect of ambience may be underestimated. Changes in intake can be detected with different levels of the number of people present, food accessibility, eating locations, food color, ambient temperatures and lighting, and temperature of foods, smell of food, time of consumption, and ambient sounds. It is suggested that the manipulation of these ambient factors as a whole or individually may be used therapeutically to alter food intake and that more attention needs to be paid to ambience in nutrition-related research.

LITERATURE REVIEW:-  Researchers have recently addressed the links between customer satisfaction (CS) and restaurant performance, emphasizing the way that satisfaction affects a customer’s repeat purchase practices (Sulek and Hensley 2004; Söderlund  and Öhman 2005; Cheng 2005). Several studies have identified some of the factors that influence customer’s satisfaction of dining experience, including wait time, quality of service, responsiveness of front-line employees, menu variety, food prices, food quality, food consistency, ambience of the facilities, and convenience (Sulek  and Hensley 2004; Iglesias and  Yague 2004; Andaleeb  and Conway 2006). 

        In reality, the success of restaurant managers/owners depends on understanding their customers’ needs and expectations, and then meeting these needs better than the competition. While estimates vary, a National Restaurant Association report indicated that 60% of all new restaurants fail within the first three years in business, and roughly half of those fail in the first year (Parsa, Self, King, and Njite 2005). This high percentage of failure shows the importance of ensuring customer satisfaction by providing excellent service, listening to customers’ needs and complaints, and caring about the customer. 

        An additional benefit of customer satisfaction is the increased likelihood that diners will repatronize the establishment. The majority of previous research has addressed the nonlinear effects of antecedents on CS (Anderson and Mittal 2000; Mittal, Ross, and Baldasare 1998; Oliver 1995). For example, Mittal et al. examined the nonlinear effects of attribute performance on CS, and found support for an S-shaped function (which is steep in the middle and flat at the extremes). These results question the commonly held belief of linear (positive and direct) relationships between product attributes and consumer satisfaction. Only a few studies have presented empirical evidence for nonlinear effects in the satisfaction-outcome link (with dependent variables such as customer loyalty and complaining behavior), and no examination of the functional structure for specific relationships have yet been undertaken.

3. C hoice: - Currently healthy food choices are difficult. The food environment around us is not conducive to healthy eating. In restaurants, people are offered large portion sizes, value meals include French fries and soda, and there are limited healthy choices on menus. That is, the default options are primarily unhealthy.

Studies consistently show that the default exerts a powerful influence on choice, and the default option is more likely to be chosen. Behavioral economic interventions that make default options healthy make the healthy choice the easy choice and mean that individuals must actively work to engage in less desirable behaviors. The use of healthy default items as part of restaurant meals is

supported by studies in retail food chains and cafeterias, as well as from studies in the areas of health insurance, 401(k) savings plans, and organ donation. Providing healthier default items on menus could lead to healthier food choices and positive health benefits.

Customer loyality:-

The fast food industry is on in an upward trend. The demand for fast food product is nowgrowing as it is convenience which suits the lifestyle of customers. With the changing lifestyle of Malaysian consumers, more educated people and affluent, people tend to eating-out especially in fast food restaurants. Along with the heavily promote through media and information technology exposure, customers has variety choice of fast food pattern and restaurants. Therefore, local fast foods restaurants have to be sensitive to these changing trends and to be innovative and get prepare to change accordingly to avoid from losing their existing and future potential customers. The aim of this study is to examine how the respondent’s perception will be influenced by factors of customer loyalty towards preferred fast food restaurants. Malaysia is a multiracial and multicultural country that made up by several dominant groups such as Malay, Chinese and Indians. Malaysia is a rapidly developing country in Asia and economic growth is projected to moderate to 5.2% in 2011. According to the World Bank Group, Malaysia GDP per capita is US dollars 14, 215, which adjusted by purchasing power parity. This shows that the purchasing power and standard of living of the population in Malaysia is growing adequately. Consequently, Malaysians allocated largest amount of household expenditures to their food budgets. Owing to the changing lifestyle of Malaysian households, the trend towards greater consumption of take-away food outside the home is increasing. This gave birth to fast food sector. According to Bender and Bender (2001), fast food is a general term used for a limited menu of foods that lend themselves to production line techniques and that are typically hamburgers, pizzas, chicken or sandwiches. According to ACNielsen (2005), there is 59% of adult population that eats at take-away restaurants at least once a week. This is due to convenience concept of fast food restaurant match the busy lifestyles and ease of access to a wide variety of fast food restaurants in the Markets.

Analysis of the global fast-food industry is enhanced by segmenting it into Quick Service Restaurants (QSR, 65.5%), Takeaways (17.7%), Leisure Locations (13%), and Mobile and Street Vendors (3.9%) (Datamonitor, 2005a). Global consumers generally perceive fast food as characteristically similar to McDonald’s, Burger King, or Taco Bell. As noted earlier, the present study was designed to examine consumer perceptions of fast food in the United States, Japan, and China due to the continued growth rates of fast-food consumption in each of these three areas.

The average American dines out four times weekly, with nearly half of adults consuming at least one meal outside the home daily (Rubin, 2004). In 1970, away-from-home foods accounted for 25 percent of total food spending. That amount increased to 47 percent by 1999 (Clauson, 2000). Fast-food accounts for 32 percent of America’s away from- home meals (Economist, 2002).

Fast-food consumption among Chinese children appears to be increasing (Cheng, 2003). Consistent with this, Chinese generally perceive McDonald’s as representing youth, perhaps due to the brand’s self-promotion as a children’s birthday party venue and “Uncle Ronald” as an icon for Chinese children (Eckhardt and Houston, 2002). Elder Chinese are commonly observed acquiescing to their children and grandchildren’s requests to be escorted to McDonald’s, although they generally find the food’s taste and affordability to be lacking (Yan, 1997).

Waiting time:-People are willing to queue and pay to get food. Knowing peoples’ opinions on queuing

is of interest to restaurant stakeholders since it and related actions have a direct effect on revenue. While most previous studies focused on dine-in restaurants, we observed queuing for

fast food restaurants. Specifically, we observed the actual waiting time of customers for a number of fast food restaurants, and compared the metrics with waiting times that customers expected. During lunch time peak hours, customers spent on average 5.4 minutes waiting before they could get their orders. The 5.4 minutes consisted of 2.42 minutes of queuing time and 2.98 minutes of service time. This total waiting time is only slightly below the actual expected waiting time of 5.42 minutes. How the fast food restaurants try to manage the perceived waiting time of customers was also discussed.

Literature ReviewIn general, restaurants can be divided into five categories; quick service, family dining, casual dining, dinner house and fine dining (Walker, 2011, p. 34-40). Quick service restaurants are restaurants where the food and drink are paid for before being served. The critical points for this type of restaurant are to have staff and food ready to serve the maximum number of customers in the least amount of time. The menus offered are usually limited and include burgers, sandwiches, hot dogs, tacos, burritos, fried chicken and so on. Family restaurants developed from coffee shop-style restaurants, offering simple menus and providing service for the family market segment. Due to their market type, most family restaurants do not serve alcoholic drinks. Casual restaurants or casual dining offers a relaxing lifestyle, signature food items, wine service, bar and comfortable décor. Fine dining is a type of restaurant that offers expensive cuisine and beverages such as wine, elegant service and luxurious ambiance. The table turnover is usually only once an evening.

Other sources (Jackson, 2011; Walker, 2011; Knutson, 2000) mention that the fast food restaurant is often categorized under quick-service restaurant, even though not all quick-service restaurants serve fast food. The main characteristics of quick-service restaurants are speedy service, inexpensive food items, simple décor, limited menu normally displayed on a wall, and convenience. This type of restaurant may also provide drive-thru, delivery, and take-out services.Simplicity and limitation in a menu are important in a quick-service operation due to speed of service and high turnover rates to achieve high sales volumes. To realize speed, several factors are required: minimum food handling by food production staff, minimum handling by the service staff, and the ability to withstand a holding temperature since most of the food items are precooked (Drysdale and Galipeau, 2009, p. 207-208).

Restaurants fall into the category of a service industry. As such, researchers analyze the efficiency of restaurant services. Hummel and Murphy (2011) mapped out an entire service system to depict the impact of efficiency management on a restaurant and its industry. This technique was termed service blueprinting. One of their findings was that optimizing the time to serve the customers paying their bills would earn the restaurant three additional dining tables in a peak hour. Hummel and Murphy highlighted that the difficulties in producing a conclusion weredue to service blueprinting requiring extensive research that observes larger samples than had previously been utilized.

Restaurants balance efficiency-for-profitability with customer satisfaction. As defined by Carbone and Haeckel (2002), customer satisfaction includes functional, mechanical, and humanic clues. Kimes (2004) discussed that efficiency and profitability could be represented in numbers, whereas customer satisfaction measurement was subjective. Sulek and Hensley (2004) showed that choice of foods, restaurant atmosphere and the fairness of the seating contributed a large part to a customer satisfaction model. Wall and Berry (2007) added performance, appearance, and behavior of the employees to the above dimensions.

External Environment:-Literature shows that the entry decision to any market is significantly affected by the

Political (P), Economical (E) and Social (S) conditions (Whitelock & Jobber, 2004). The growth rate of fast food industry is directly proportional to employment and consumer income. The consumer spending at fast food outlets reflects the better life patterns of people according to economics (Deane, 1987). According to Deane, these factors affect the growth of fast food industry and with a better understanding of these factors managers can increase the profits and remain up to date with time. A positive correlation was found between income of consumers and visit of customers to some types of restaurants. Consumers with higher income visit restaurants more frequently as compared to lower income consumers. Fast food has the negative effect on the social habits of the people, as the gain in the mass (weight) is found to be directly proportional to the fast food especially in Women (Jeffery & French, 1998). It is supposed that both the technical and the legislative parties should sit together and find some solution to the problems that are being faced in the environment to improve the quality of the fast food so that the technical issues may be made the part of the policy (Tester, Stephanie A. Stevens et al., 2010). Hazard analysis and critical control point (HACCP) is found to be the very good technology to improve the speed of the safety implementation and the quality of the food in the industry especially fast food industry (Sweet, Balakrishnan et al. 2010). The use of the technology has increased the growth of the fast food industry, as the Burger King and the Macdonald’ s has increased their budget for the TV advertisements, and as a result led to increase in the sale (Harris, Schwartz et al. 2010). Poultry meat (One of the key ingredientsused in the fast food industry) quality insurance is the very key and primary issue for the fast food industry, so for that purpose the PRP are introduced to manage the meat requirement andsupply efficiently (Manning & Chadd, 2006).

NEED FOR STUDY:-

Determinant of Service quality in response to fast food restaurants.

RESEARCH METHODOLOGY:-

Research Methodology deals with, the procedure adopted to carry out the study. According to GREEN AND TULL:“A research design is the specification of methods and procedures acquiring the information needed. It is the overall operational pattern or framework of  the p ro jec t tha t s t ipu la t e s which in fo rmat ion i s to be co l l ec ted f rom which sources by what procedures’’. For conducting the study, as a researcher I adopted both primary as well as secondary method of data collection.

Objectives:-T h e p u r p o s e o f r e s e a r c h i s t o d i s c o v e r a n s w e r t o

q u e s t i o n s t h r o u g h t h e application of scientific procedures. The main aim of research is to find out how much people an individual get aware and go for those advertisement and collect more information about it. Though each research study has its own specific purpose. The objective of study “To know the impact of determinant factors on service quality and satisfaction of customer”.

1. To know an individual awareness about fast food industry.2. To know how these determinant factors can affect one’s fast food industry.

Hypothesis:-

1. There is null hypothesis of different determinant on service quality and satisfaction level of customer.

2. There is positive hypothesis of different determinant on service quality and satisfaction level of customer.

TYPES OF RESEARCH:-

Research refers to the search for knowledge. It can be defined as scientific and systematic search for pertinent information on a specific topic. It is careful investigation or enquiry especially through search for new facts of any branch of knowledge. In this study I used Exploratory research, which provides insights into and comprehension of an issue or situation. It helped me to draw some definitive conclusions. Exploratory research is a type of research Conducted when the problem has not been clearly defined. It helps in determine the best research design, data collection method and selection of subjects. Given its fundamental nature, exploratory research often concludes that a perceived problem does not actually exist.

RESEARCH DESIGN

A research design or a structure is the process done before data collection or  analysis can commence. A research design is not just a work plan. A work plan details what has to be done to complete the project but the function of a research design is to ensure that the evidence obtained enables us to answer t h e i n i t i a l q u e s t i o n a s u n a m b i g u o u s l y a s p o s s i b l e .

Primary data:The primary data was collected with the help of questionnaire filled using

Interview method. As per the need of the study I formulated the questionnaire with the help of the mentor’s guidance. This helped me to frame the required level of questionnaire needed for the study of the service quality.

Secondary data:The secondary data was collected from the database, publications

and the websites of the company through Internet.

DATA ANALYSIS