PREFACE

I, ANKUR ARORA, being a student of MBA GGSIPU University as a part of

partial fulfillment of my course.

The project title A Study on Consumer Satisfaction in “Fast-Food Service”

with special reference to McDonalds in Delhi & NCR is the analysis of the
Consumer Satisfaction level of fast food industry. This project involves the
service level provided by McDonalds and other fast-food to its customers. The
survey was conducted so as to analyze the service quality prevailing in the
current industry and the improvement that can be made upon it.

Market research study has been conducted in order to bring out the picture of
customer satisfaction and service quality that exists in this industry. The
differences in customer satisfaction and service quality that exists in the market.
What the customer’s preferences are about the hospitality provided by the fast
Food industry?

After this a comprehensive and comparative analysis has been made. And
conclusion has been made keeping in mind the detailed analysis of the findings,
which has been collected through the market research.

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 RESEARCH OBJECTIVE

OBJECTIVE
 The Customer Satisfaction in fast-food service industry prevailing in
McDonalds:
To find out the Customer Satisfaction of McDonalds in the various areas and
finding out the deficiencies.
 Customer Satisfaction in fast-food service industry of other players
vis-à-vis McDonalds:
Comparing the service quality of McDonald along with that of Nirula’s’, Pizza Hut
and others.
 Area of improvement:
To find out the ways by which McDonald’s can improve upon its customer
satisfaction in fast-food service industry and bring more satisfaction to
customers and thus add value to its bottom-line.

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 RESEARCH METHODOLOGY
The research process is carried out according to a designated series of steps,
which are required to be taken in a chronological order.

Fundamental to the success of any research project is sound research design. It

is the framework or plan for a study that guides the collection and analysis of
data.

The research design used for this project is exploratory in nature. The major
emphasis is on the discovery of ideas. The exploratory study is also used to
increase the analyst familiarity with the problem under investigation.

Sample Design
Target population
Those who have regularly visited in the fast-food.

Sampling unit
Delhi market is treated as sampling unit.

Sample size: 40.

Data Collection
Primary Data
Primary data has been collected through surveyed to the consumer.
Secondary data
Secondary data has been collected from the company’s information brochure
s,various magazines and articles in news papers and through internet.

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 EXECUTIVE SUMMARY
In today’s world of cutthroat fierce competition, it is very essential to not only
exist but also to excel in the market. Today’s market is enormously more
complex. Henceforth, to survive in the market, the company not only needs to
maximize its profit but also needs to satisfy its customers and should try to build
upon from there.

The project is the analysis of the customer satisfaction in fast-food and service
quality level provided by the fast food joint Mc Donald’s, Nirula’s and Pizza Hut.
The survey was conducted so as to analyze the service level prevailing in the
fast food center and the improvement that can be made upon it.

The meaning of service and service quality has been discussed elaborately.
Market research study has been conducted in order to know about the
customers’ preferences and hospitality that they want from the fast food joints.

After this a comparative analysis along with diagrams and charts has been made
to bring forward the overall picture of the market research.

Conclusions have been drawn keeping the detailed analysis of the findings in
mind.

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 REVIEW OF LITERATURE
An Overview –Fast food market in India
Up to the year 1995 Indian food market was predominantly dominated by the
traditional dhabas, potential restaurants in the customer’s colony and some
restaurants in a five star hotel. Having fast food i.e., burgers, pizzas etc., was
considered to be an option for eating out. It was not at all synonymous with the
American concept of fast food as a quick takeaway bite or a substitute for lunch.

Apart from fast food being available at the local colony restaurants and at some
five star restaurants, Nirula’s was the only fast food chain existing in the country
with its restaurants expanding with every passing year since its inception. It has
been almost more than 50 years now since its set up and there is hardly any one
who doesn’t know that Nirula’s exists. Nirula’s was the first one to bring fast food
to India back in the 50’s since then it has evolved into an eating place with
tremendous brand equity and brand recognition. It proved to be a perfect eating
place for an average middle class who wants to eat out at an affordable price that
can’t afford the five-star restaurants and would not want to go to the local
dhabas.

Nirula’s almost had a monopoly for decades due to the way it has been placed. It
is a place where a person from an average middle class group to upper class
group can go to eat out. Its popularity has increased over the decades. With the
trends changing and the incomes rising almost anybody who can afford to eat out
could go for a snack at Nirula’s.

However the year 1995-96 witnessed a drastic change. 1996 is considered to be

the year of India’s entry into the world food market. International giants such as
McDonalds, Dominos, and Pizza Hut all bombarded the Indian food market.

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Before these, UK-based joint called Wimpy’s had established its chain in the
country in 1990. By year 1996 it had about three to four joints established in
Delhi. However it did not pose much of a threat to Nirula’s reason being lack of
variety and that Wimpy’s was looked at more of a hangout place rather than
eating out with the family.

However, restaurant business is such that it is surrounded by competitors from

all sides, be it Indian joints or foreign joints.

Each of the foreign food joints that have come into the country have their own
strategy lined up to differ from the rest. Each of these studied the Indian tastes
and style and thereby targeted the Indian customer. An average Indian
restaurant goes is no convenience eater, unlike the Americans.

If he is paying, he is paying for food that tastes good (Spicy, soft, savory etc.),
not for how pleasantly the stuff is served or how spotless the windows are. He
wants food for that can make him come back to the restaurant. An Indian food
joint owner would definitely understand this but an American company which
comes and places itself directly without knowing the customer is definitely in for
trouble. Customer loyalty in a restaurant business is essentially low. A customer
when he comes to a restaurant usually looks at the quality of food, variety,
ambience, speed of delivery and the location. The variety would influence the
frequency of visits since taste is a dominating factor to the Indian customers.

Almost all the fast food chains both Indian i.e., Nirula’s and foreign i.e.,
McDonalds etc., are targeting the families. This serves to be an advantage
because the turnaround time is short and family has higher propensity to spend
because different members order larger variety of dishes.

Each of these restaurants delivers quality, value and services in its own way
through its line of strategies. The emphasis is on the value that the restaurant is
delivering to the customers.

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 COMPANY PROFILE

Rstaurant Industry

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 PRESENT POSITION OF THIS INDUSTRY IN
RESPECT TO SERVICE GAP

Gap between consumer expectation a management perception:-

While the management of pizza hut perceives that the consumers need better
quality food, but the consumers may a clinically want better ambience, (Like,
light, music) or work floor area.

Gap between management perceptions Service-quality

specification.
The “fast” service provided by McDonald goes very well with its customer
perceptions. Here the negotiation has perceived well what the customer wants
but, the main area where at lacks is that it has not specified its customer “how to
serve “or” what quality to be served”.

Gap Between service quality specifications & service delivery

The delivery personnel in McDonald are mainly fresh graduates without a
personal degree in “hotel management”.

If the other person visit except the recognize restaurant like and what is in some
what difference. They find what have shown in media and what shown here in
name some what difference.

Gap between perceived service and expected service.

The customer of McDonald and Nirula’s are wanted free home delivery but
presently they are providing it only selected areas.
After this analysis we come to no that there is some service gap is there inside
this industry which needed to improve.

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1. Product
McDonald's menu internationally is based on five main ingredients: beef, chicken,
bread, potatoes and milk. Their main products are hamburgers, chicken
sandwiches, French fries and beverages. In addition it serves a variety of
breakfast items and desserts.

The original McDonald's menu was simplicity itself -hamburgers, cheeseburgers,

fries, soft drinks, coffee and shakes. This limited menu concept triggered the "fast
food" concept, because focusing on just a few items that were prepared with
standardized procedures made food service a model of efficiency. And buying
food supplies in quantity as the restaurant chain grew larger enabled it to keep
prices low. Finally, because the menu was limited, it was able to deliver a
consistent product, no matter which restaurant a customer visited. And this
consistency has remained a hallmark of McDonald's even as its menu has
expanded over the years. Customers know they can count on being served the
same Big Mac whether they're at a McDonald's in Moscow, Idaho, or Mumbai,
India…the same world famous fries whether they're in Dallas or Delhi.

Mc Donald's India representative says, "We take the hamburger business more
seriously than anyone else." Surprisingly, in India McDonald's has been
particularly successful at catering to local tastes. The global giant is often
criticized for standardizing tastes by serving the same burger the same way
everywhere in the world. But that's far from the truth. Though the core menu--
hamburgers, Big Macs, fries, etc.--is available in all McDonald's restaurants, it's
complimented with an array of localized choices. Usually in Asia, about a third of
the menu is made up of dishes you won't find anywhere else, like Pizza McPuffs
in India..
India has been the biggest inspiration for McDonald's fusion chefs. With a
population that is mostly Hindu, the restaurant chain can't serve its mainstay--
beef. So most of the standard menu had to be thrown out, down to the "special
sauce" that goes into Big Macs elsewhere. Many Hindus, who are strict

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vegetarians, eschew mayonnaise, the sauce's main ingredient. McDonald's India
developed a special egg less mayonnaise for the burgers; instead of eggs it used
a large amount of mint. In place of the Big Mac, McDonald's India developed the
Maharaja Mac--a mutton burger. All these extra steps have been taken to assure
Indian customers of the wholesomeness of both products and their correct
preparation. So intense is the idea of Indianization that McDonald's opened an
all- vegetarian outlet in Ahmedabad, which is predominantly a vegetarian city.

2. Place
McDonalds is ever expanding and due to this its presence is felt by more than
3.5 million customers in India alone and more than a billion people worldwide
every day. It has excellent networking capabilities with its suppliers and ensures
quality from them. McDonalds India's outlets are generally located near
community centers (some also have small parks adjacent to them),metro
station,malls ,to provide the complete family experience).

3. Price:
Aimed at luring the Indian middle class, the ice cream cone was started with zero
margins to pull in crowds. McDonald's has always strive to offer quality products
at an affordable price. Its bulk purchasing capabilities have given it the cost
advantage. It thus strives to be an optimum-cost producer -not the lowest cost -
since quality comes first for this restaurant chain. The products are priced
keeping in mind the target group. Since the people targeted belong to the Socio
Economic Classification Grid A & B, the company refrained from excessive or
premium pricing. In fact, as already stated earlier, certain items on the menu are
actually loss leaders, which facilitate building traffic into the restaurant. An
interesting piece is that the company claims to have a margin of 40 percent on its
soft cone, which is a big hit among the people. Most of the meal combinations i.e.
including burger, French fries and a coke, price are nominal. This could,
according to us be an attempt to use psychological pricing. McDonald’s has also

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introduced McHappy Hours, to increase attendance during the lean time. This is
also in tune with the school and college kids, who come would like to go out with
their friends after school or college. This has yielded returns and the turnout
during this time has increased sharply.

4. Promotion
The emphasis is on projecting McDonald's as a global brand relevant to the local
community. The positioning of McDonald's as a family restaurant is being
carefully put across to the consumers.

A) Advertising: McDonalds advertising in India is being handled by Mudra

Communications. Amit Jatia, MD, McDonald's India (Hardcastle Restaurants) has
to say the following for Mudra: "They're completely involved in the brand. They
take an active role and we see them as a partner." McDonald's spends over
5.5crores each year on advertising: the Golden Arches are now more recognized
by kids in metros than their favorite super hero. McDonald's is recognized as one
of the best marketers of the world, investing some hundreds of millions of dollars
every year for advertising and promotion of its image. “Get them in. Trade them
up. Get them back.” These are the three basic steps of McDonald's marketing
strategy, as defined internally at Mudra Communications, the agency handling
the account. Shorn of jargon, this simply means objective number one is to make
consumers' step into McDonald's outlets. The second objective is to shift the
consumer to McDonald's core products (the Vegetarian Burger with cheese, the
McChicken Burger with cheese and Fillet-o- Fish) by increasing sampling and
showcasing the value aspect of McDonald's. Third, increase the frequency of
visits by making the McDonald's brand experience unique and memorable. The
Indianised items like McAloo tikki burger and pizza McPuff are instrumental in
bringing in the traffic into the store.

McDonald's has always shown bits of real life in their commercials that seems to
have become a standard for them. Their marketing efforts go far beyond

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advertising, including special food promotions, games, videos, cassettes, tapes,
videos, CDs that customers couldn't get anywhere else for the value. Because of
the diversity of customers that go to McDonald's, they have developed
segmented marketing programs as various key audiences.

B) Public Relations: McDonald's public relations in India are being handled

by Corporate Voice Shandwick, a subsidiary of Weber Shandwick Worldwide.
This begins with franchisee involvement in their communities and extends to
other national passions like cricket (McDonalds invites young and successful
cricketers like Yuvraj Singh to inaugurate their restaurants). This means a well
organized psychological bombing aimed at all kind of people, from every race
and social class where the golden arches result to be the overall winner.

Recently, McDonalds was charged by some fundamentalist organizations with

using beef talon in its French fries. This was picked up by the media and resulted
in a big controversy. The consultancy immediately got into action by sending
press releases, calling press conferences and opting for an independent test of
its French fries to show that they did not contain beef talon. This paid off as
McDonalds sailed through the crisis smoothly and the consultancy got the award
for the "Best handled Crisis PR campaign" from the Indian Public Relations
Association. The consultancy also gets a lot of media coverage for the brand.

C) Promotions: Using collectable toys, television adverts, promotional

schemes in schools and figures such as Ronald McDonald the company
bombards their main target group: children. Happy meal combine wholesome
food with a toy; Ronald McDonald is a special friend; play places (like in
McDonalds, Priya Complex) provide safe and fun recreation and the alliance with
Walt Disney Company let the children's shout even more.

D) Market Research: McDonald's strategy for communication relies heavily

on research to fine tune its significance and effectiveness. An ear closer to the

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ground because that's where the action is! An organization has to be on the look
out for any slight signals in the market that, suggest some kind of change. This is
where the role of market research comes in. it can help an organization identify
underlying needs and make changes to capitalize on them accordingly. This is
precisely what McDonald's did. From being classified by consumers as being
'bland' in 1997 to being sought after in 2000 for its 'unique' taste, McDonald's
India has been the 'biggest experiment' for the worldwide chain, what with the
Indian outfit having to consistently launch products to tickle Indian taste buds.
Even though the Indian outfit stuck to its core taste that grew on consumers from
'bland' to 'unique' in three years, with no change factored in by the fast-food
chain, McDonald's India's menu is about 75 per cent different from its global
menu. All this can be attributed to the menu development team set up my
McDonald's to explore and exploit the Indian taste buds.

Country Fast Food Soft Drink

Australia McDonald's Coca-Cola
China McDonald's Pepsi
Hong Kong McDonald's Coca-Cola
India Local chains Pepsi

McDonald's was the most popular fast food for children across the Asia Pacific
region. Children from 8 of the 14 countries claimed that McDonald's is their
favorite fast food. Coca-Cola was seen as the most popular soft drink preferred
by children from 10 of the 14 countries. But taste is not the only thing that can
draw people to McDonald's. There is the snob appeal of foreign food, which
confers status on middle-class Indians flush with cash. And there is the
irresistible attraction of junk food for children the world over, who are drawn to
the high-octane marketing pitch of the fabled Ronald McDonald character.

5. People

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McDonald's relies upon a blend of US human resource practices and host
country norms. The firm has over a million employees, a figure that is estimated
to double in the next few years. The organization has a strong commitment to
staffing locally and promoting from within. McDonald's India employs around
1,500 people in Delhi and Bombay. In Bombay alone, its team comprises a 100-
member management and 800-strong crew. McDonalds India invites applicants
having a minimum qualification of higher secondary, very good communication
skills, ability to work in teams and a friendly nature. To survive in the communal
market McDonald's delivers Quality, Service, Cleanliness and Value (QSCV).
This chain is also well known because of its consistency in delivering a customer
experience that has value far beyond good food at a great price. But probably the
most attractive side of McDonald's' activity is the training that stands as
background in every single employee. McDonald's corporation started its fortune
trailing people on how to be kind, fast, precise and effective: it has been an
absolute pioneer in this field.

6. Physical Evidence
A standard and differentiating aspect of McDonald’s menu is that it displays two
different menu boards in each restaurant -green for vegetarian products and
purple for non-vegetarian, making it easier for customers to see their options and
make their choices. Behind the counter, restaurant kitchens have separate,
dedicated preparation areas for the meat and non-meat products -and even crew
assigned to the products' cooking have different uniforms to distinguish their
roles. The company struck a better chord with the consumers when after the
consumers felt that the counters at the outlets were "too high", making the
McDonald's staff "unapproachable" it immediately swung into action and reduced
the height of the counters. To reinforce its positioning as a family restaurant with
the prime focus on kids, it designed a counter specifically for kids keeping the
height in mind. Again, keeping kids in mind, McDonald's has done away with
somber colors in favor of rich, vibrant ones. Even the paintings that once tended
to be abstract have been replaced with things children could relate to. It has high

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stools to make the tables more accessible for small kids. Although the medium
through which it is broadcast may vary depending upon the company,
McDonald's offer the same message in every franchise throughout the world.
"McDonald's Mein Hai Kuch Baat" is an attempt to adopt a more personal
approach towards its customers, talking "to" them and not "at" them. This is yet
another example of adding to their image as a global brand.

7. Process
A precise way of considering McDonald's' role of operations is through Porter's
value chain analysis. The Value chain breaks down the firm into its strategically
relevant activities, in order to understand the behavior of costs and the existing or
potential sources of differentiation. A firm gains competitive advantage by
perfoffi1ing these strategically important activities more cheaply or better than its
rivals. For a company which feeds some 38 millions clients every day, finding a
reliable quality supplies is a major factor for success. McDonald's has solved the
problem by making food supplies part of their success.

McDonald's distributors are strategically to be accessible to the each restaurant

and carry practically everything, from meat and potatoes to light bulbs. Coca-
Cola, the well-known beverage, has been with McDonald's from the beginning
supplying beverages. McDonald's is increasingly using its leverage to capitalize
upon global purchasing practices.

The most important part of McDonalds India's operations was developing a cold
chain which is the process of procurement, warehousing, transportation and
retailing of food products under controlled temperatures. Although McDonalds
sources most of it's raw materials locally, several products such as French fries,
specialty cheeses, some meats and fishery products, flavors, condiments and
ingredients are often imported.

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McDonald's India is banking on quality and hygiene as its unique selling
proposition to capture a sizeable portion of the fast- food market in India. This
explains the company's attempts to select its chain of local food suppliers. For
three years, before it opened its first restaurant in India, McDonald's and its
international supplier partners worked together with local Indian companies to
develop products that met McDonald's quality standards. These standards are
also in keeping with Indian Government regulations on food, health and hygiene.

8. Segmentation, Targeting & Positioning

Segmentation
McDonald’s has decided on certain criteria to divide the market into relatively
homogenous clusters which it can target for commercial gain. These criteria are
as follows:
Based on stage in Family Life Cycle
 People buy different goods and services over a lifetime due to the different
needs associated with the distinct stages in life. Thus the consumption pattern
is shaped by the stage in the family life-cycle.
SEC based
 The education along with occupation is an accepted way to segment a new
market. McDonald’s also segmented the Indian consumers on such a basis.
Only urban segments were considered even within this criterion as the
demand for a fast-food restaurant was felt in the urban markets only.

Lifestyle

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 Lifestyle of a customer dictates his/her spending habits, i.e. where he spends
his disposable income. This was relevant for McDonald’s as they wanted to
integrate their product-service hybrid offer with the customer’s lifestyle.

Targeting
SEC target- A look at the new products that have been launched by McDonald’s
recently shows that their focus is on the middle class. This is because they
believe that is where the profitability is going to come from. McDonald’s plan to
continue to focus on this category as of now.

Family Life Cycle target- McDonald’s target the following segments in this
category:
Full nest I: People in this stage of family life cycle have their youngest child less
than 6 years, their home purchasing is at peak, and they are interested in new
and advertised products. Children influence their buying decisions.

Full nest II: People in this segment have their youngest child 6 years or over,
their financial position is a little better than those in full nests I and they are less
influenced by advertised products. They are interested in special offers, as taken
out by McDonald’s from time to time and their decisions too are influenced by
children.

Positioning
McDonald’s position them selves as a welcoming and affordable family
restaurant committed to values of quality, fun and excitement. It is also
positioned as a restaurant which makes the customer feel special and makes him
smile. So it has a clear positioning as a family restaurant to which the customer
goes for a quick bite. Such customer convenience is integrated into their seven
Ps and through QSCV.

9. Customer Relationship Management:

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McDonalds is probably one of the most famous examples of the philosophy and
practice of Customer Relationship Management. Each employee who has
contact with a customer must conduct himself or herself in a certain prescribed
way. So, no matter where one buys a McDonalds hamburger from, it will always
be the same hamburger, for the same price, served within the same time line,
with the same smile. Always.

Through careful analysis, McDonalds knows exactly what expectations their

client-to-be have of them and how to fulfill them or, exceed those expectations.
Infact, they are not overly concerned with exceeding people's expectations: just
meeting them, time after time.

CRM is the business of managing people during the buying cycle. We define
CRM as, "The profitable integration of People, Processes and Technology."
McDonald’s conducts regular satisfaction surveys of the customer experience,
manages high value information in an organized customer database, makes it
easy for the customers to buy from McDonald’s, and constantly anticipates
customer’s need and their expectations.

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Suggested Marketing Strategies:
1) New Year and festival strategies through SMS (Cellular Phones)
competitions. On any order above Rs. 50 the customer gets a key against
which he gets a question on his mobile after giving his number. A right entry
fetches the customer entry to the daily lucky draw of bumper prizes.
2) McDonald’s could also have two auto connecting, customized, and dedicated
phone lines under all the potential business giving corporate offices which
automatically connect to the nearest McDonald’s.
3) Reintroduce the Chilly sauce as another differentiated yet standard
(McDonald’s) product.
4) Seeing that the choice and selection of the children by and large dominate
buying behavior of the family, therefore we suggest that McDonalds should try
and capture more of this section. From the past few years McDonald’s is
doing the same by introducing meal combos, toys, and special children day
program, but as we see at present fast food in all Asian countries except India
is a synonym for McDonalds, McDonald India has to do the same, make it
presence felt, for long time as giving a Scholarship program for students. A
lasting impression in the student community would help a long way in the
Brand Recognition.
5) Combo Options with various movie halls like PVR, Priya etc.
6) Order placing compatibility on the internet for home delivery. Verification done
through a phone call from McDonald’s to the customer.

 Call Pickup Standard: Max time of 5 seconds before the customer attended to
with standard greeting.
 Customer Identification for the customer database.
 Order Details along with order time and promised order delivery time range.
Verification with customer for the same imperative.
 Identification of nearest McDonald’s outlet.
 Check for traffic and cost of delivery vis-à-vis the identified outlet.

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 Evaluate the optimal option and a go ahead with order processing.
 On delivery conformation received against the order number and the outlet
identification number.

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LIMITATION OF STUDY

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 CONCLUSION
McDonald takes the share on this attribute by providing the customer with fast
and friendly services.

At McDonald you get your order usually within 60-90 seconds from the time it is
placed. Providing the customer fast and friendly services is the philosophy of
McDonald. This is the big advantage McDonald having over the other restaurant.
The customer satisfaction levels in better that the other competitor McDonald is
having. If we compare the space management Nirula’s is having batter than
McDonald and Pizza Huts Nirula.

The advantage McDonald having over the other restaurant is I) Ambiance ii)
employ behavior iii) cleanness. There is the factor the today customer is looking
for. It is give an edge to McDonald over Nirula and Pizza Hut.

BIBLIOGRAPHY

 Kotler Philip, Marketing Management, Tenth Edition, New Delhi, Prentice-

Hall of India Private Ltd.
 Saxena Rajan, Marketing Management, New Delhi, Tata McGraw, Hill.
 Aggarwal Sangeeta, Marketing Research, Third Reprint, Delhi, Global
Business Press.

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 Christopher lovelock marketing of Services 2nd Edition.
 Zenithal Marketing of Services.
 Market Research by D.D. Sharma.
 Consumer Behaviour by Sechiffman, Leon G.
 Marketing Creative value for Customers , Churachil Gilberta.

Search Engine and Web Sites

 www.altavist.com
 www.google.com
 www.infind.com
 www.mcdonaldsindia.com
 www.pizzahut.co.in
 en.wikipedia.org

And official sites of McDonald, Pizza hut, and Nirula’s.

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 APPEDIX

CUSTOMER QUESTIONNAIRE
Dear Sir/Madam,

I am pursuing MBA from NIEC Business School under its curriculum there is a
requirement of a Project, under fulfillment for the Award of the Degree. Here I
am for the same concern approaching to you with my Questionnaire, I would be
highly obliged if
you could spare some of your prestigious time to answer properly. Whatever the

data provided by you; would be kept confidential and will be used only for the

academic purposes.

Thanking you.

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