MARKET ANALYSIS
OF
QUICK SERVICE RESTAURANTS Submitted By:

Submitted to:
Prof Joyeeta Chatterjee

Approvals: Distribution List:
Prof Joyeeta Chatterjee Prof Joyeeta Chatterjee
Prof. Praveen Gupta Library

Copyright is retained by the authors of this report, as stipulated by Indian copyright act 1957. Individual researchers are responsible for using these materials in conformance with copyright law as well as any donor restrictions accompanying the materials.

CERTIFICATE

This is to certify that the project report entitled Analysis of Quick Service Restaurants (Context Subordinate) is a bonafide work carried out by Group 6, Section C - 2013-15, under the guidance of Prof Joyeeta Chatterjee, as a part of the final project for 1st trimester, 2013-15.

Prof Joyeeta Chatterjee
Faculty, Lal Bahadur Shastri Institute of Management
New Delhi

ACKNOWLEDGMENT

Every piece of hard work requires the combined efforts and talents of many people. An Ambitious work of this kind, providing review to the subject would have remained a concept rather than the finished product without co-operation of those who respondent to our request to contribute.

We are very much graceful to our respected Director Dr. P.K. Biswas of L.B.S.I.M., New Delhi who has enriched our knowledge and gave us a moral support to do this report. We are also highly thankful to Prof Joyeeta Chatterjee for showing us the right path and encouraging us for the preparation of this report. We are extremely thankful for her involvement and interest and providing necessary guidance regarding concept clarity of the project and support during all the stages of this project. We are very much thankful to all those people who gave us their valuable time and related information about the project.

CONTENTS CH. NO. | TITLE | PAGE NO. | 1. Chapter 1 1 2. Chapter 2 5 3. Chapter 3 24 4. Chapter 4 28

List of References
Bibliography

Chapter-1

Introduction Indian preference towards food is still traditional. Indians like to have home-cooked meals – a concept supported religiously as well as individually. However, with times due to increasing awareness and influence of western culture, there is a slight shift in food consumption patterns among urban Indian families have started with eating outside and moved on to accepting a wide variety of delicacies from world-over. With the liberalization of the Indian economy in the early 1990s and the subsequent entry of new players had set a significant change in lifestyles and the food tastes of Indians. Indians started to have an open mindset towards fast food. In spite of initial resistance in form of campaigns about the nutritional value of the food, fast food gained acceptance of Indian palate after the multinational fast food players adapted the basic Indian food requirements viz. vegetarian meals and selected non-vegetarian options excluding beef and pork totally from their menu. Due to their fast paced life, affordability of fast food and easy availability people, with time began to prefer fast food. It all began with the entry of Mc Donald’s, the famous American burger chain. The success of this chain acted as a catalyst in the development of Indian fast food industry. This was followed by many new entrants like the following entering into the market. Namely : 1. KFC 2. Subway 3. Domino’s 4. Pizza Hut and many others.

Market
Segmentation
7
•Accounting Transparency
•Organized Supply Chain
•Quality Control
•Sourcing Norms
•Multiple Outlets
•Dominated by Global Players
•Road-side location
•No technical standards
•No accounting standardization Highest growth segment.
Maximum Footfall due to increasing traffic at airports, railway stations, malls, multiplexes and supermarkets

Eat-in
Home
Delivery
Casual
Dining

Take-away

Fine Dining

Kiosks/Carts
Bars and
Lounges

QSRs
Full-Service
Restaurants

Organized

Unorganized

Restaurant
Industry

The Restaurant Industry is divided into 2 segments. i.e. ,
1.Unorganised
Under this comes the road side stalls and thelaas and sometimes roadside mini shops. The main factor of concern with this segment is that it lacks technical standards ,no systematic working ,no accounting standardization and the most important is hygiene factor.
2.Organized
These are the one with proper sitting arrangements, organized supply chain, they have control over the quality, accounting transparency, multiple outlets and these types of restaurants are generally dominated by global players like Dominos, McDonalds, Pizza Hut, etc.
Now this segment is further classified in 4 parts: * Full Service Restaurants under which options include:
A.Fine Dining
B.Casual Dining * Quick Service Restaurants under which options include:
A.Take Away
B.Online order
C.Eat in * Bar and Lounges * Kiosks/Carts

Growth
Drivers
8
25% of population eats out at least twice a month and spends Rs.150-Rs.500 / meal
A younger and richer India is fuelling rapid growth in the eating-out segment
Household Distribution By Annual Income
1%
Total population of Gen
Next living in urban areas
2%
29.5 % or 88.5 million
2%
11%
Affuent
29%
Spending Power
Rs.3000-40000 per month er Middle Class
Lower Middle Class and malls om of the pyramid right places
2010
2020

• Socially active
• Hangs out at coffee shops
Urban youth behaviour • Prefers to be seen at the • Expresses one‟s identity through choice of brands consumed

Key consumption areas Clothing & accessories, Food, Entertainment and durables

1

5%

Af
Upp
L
Bott

86%

64%
Total population of Gen 300 million
Next (13-24 Age Group)

Expanding
Middle Class

Urbanization

Youth
Spending

Nuclear families

Better logistics

Mall and
Multiplex
boom

As there is an increment in annual income of people of all classes there is a big growth in this sector.
Around 2020 the distribution of people under the bottom of the pyramid is expected to decline by 22% and that of Lower Middle class is expected to incline by 18 %. Due to these 2 reasons people are expected to spend more on fast food and quick served food.

Now the main drivers for growth in fast food industry includes: * Expanding Middle Class * Urbanization * Youth Spending * Nuclear Families * Better Logistics * Mall and Multiplex boom * Also the total population of gen next living in urban areas is around 88.5 million which is also an important factor for growth in this sector

Chapter – 2

ANALYSIS

Research Methodology:
Sample unit: * In this research report we have considered people residing in different parts of Delhi.
Sampling size: * The sample size of our research is 105 respondents.
Sampling procedure: * We have used Convenience Sampling to select the sample in study.

We have analysed these variables using: * Graphical analysis * Descriptive statistics * Correlation * Independent t-test * Anova

* The tools used for the same are: * Spss * Microsoft excel

Graphical Analysis
Demographic Factors
Age (in years)

Gender

In our survey we found that around 43 of 105 sample population were of age group 20-25 so the analysis part is highly as per responses of this particular age group and 66 of our respondents were male and 39 were female.

Demographic Factors
Marital status

Education Qualification In our survey 80 repondents were singe and 25 were married and postgraduates & graduated students dominated the education qualification part.

Demographic Factors
Occupation

Work Experience

Monthly Family Income

Most of our respondents are students and around 69 of respondents have work experience of range 0-3 years. 84 respondents dominated the monthly income part who have more than 20000 per month family income.

Money Spent on Fast Food 47.6% of respondents spent more than Rs 1000 per month on Fast Food.
Frequency of visits to fast food restaurants

Main reasons for visit to fast food restaurants
Here in this graph we can see that food taste and convenience are the main reasons

Factors on the likert scale
Quality of the food
Taste
Freshness
Nutritional value
The most important factors on likert scale of our survey includes Quality of food, Taste, Freshness and Nutritional Value.

Awareness about QSR
Do you prefer QSR?

YES-84%
NO-16%

Have you Heard about QSR ?
YES-90%
NO-10%

Questions were asked from respondents regarding Quick Service Restaurants like: * Have you heard about QSRs?
90% of the respondents said yes. * Do you prefer QSRs?
Around 84% of the respondents replied that they do prefer these QSRs.

Descriptive Statistics

| [Quality of food] | [Taste] | [Price] | [Ambience of the QSR] | [Effect of advertisements] | [Cleanliness] | [Online order] | [Brand visibility] | | | | | | | | | | Mean | 1.31428571 | 1.41904762 | 2.02857143 | 1.74285714 | 2.12380952 | 1.53333333 | 2.16190476 | 2.114285714 | Standard Error | 0.04938131 | 0.06169307 | 0.12289036 | 0.08668558 | 0.11538694 | 0.0635729 | 0.09863891 | 0.101557726 | Median | 1 | 1 | 2 | 2 | 2 | 1 | 2 | 2 | Mode | 1 | 1 | 1 | 1 | 2 | 1 | 2 | 1 | Standard Deviation | 0.50600786 | 0.63216588 | 1.25925148 | 0.88826291 | 1.1823643 | 0.65142841 | 1.0107481 | 1.04065702 | Sample Variance | 0.25604396 | 0.3996337 | 1.58571429 | 0.78901099 | 1.39798535 | 0.42435897 | 1.02161172 | 1.082967033 | Skewness | 1.25843209 | 2.1737124 | 1.2412663 | 1.20400797 | 1.17890284 | 1.0445245 | 0.74943369 | 0.549925227 | Range | 2 | 4 | 4 | 4 | 4 | 3 | 4 | 4 | Minimum | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | Maximum | 3 | 5 | 5 | 5 | 5 | 4 | 5 | 5 | Sum | 138 | 149 | 213 | 183 | 223 | 161 | 227 | 222 | Count | 105 | 105 | 105 | 105 | 105 | 105 | 105 | 105 | Confidence Level(95.0%) | 0.09792499 | 0.12233968 | 0.24369619 | 0.17190076 | 0.22881663 | 0.12606745 | 0.19560466 | 0.201392776 |

Observations * Sum is maximum for “Online order” and “Advertisements”, hence we can say that these are the least important factors. * Whereas, sum is minimum for “Quality” and “Taste”, hence they are the most important factors.

Correlation

Obsevations * Here we can see that for “Quality” and “Nutritional Value” we have the highest correlation which signifies that both these factors are most highly related. * Also, “Nutritional Value” and “Advertisements” are least related as they have the minimum values for correlation.

DESCRIPTIVE STATISTICS 1. For various factors like price, ambience, taste, advertisements, quality and others analysed using the likert scale. | Quality of food | Nutritional value | Taste | Price | Ambience of the QSR | Effect of advertisements | [Cleanliness] | [Online order] | [Brand visibility] | | | | | | | | | | | Mean | 1.31428571 | 1.8 | 1.41904762 | 2.02857143 | 1.74285714 | 2.12380952 | 1.53333333 | 2.16190476 | 2.114285714 | Standard Error | 0.04938131 | 0.07821263 | 0.06169307 | 0.12289036 | 0.08668558 | 0.11538694 | 0.0635729 | 0.09863891 | 0.101557726 | Median | 1 | 2 | 1 | 2 | 2 | 2 | 1 | 2 | 2 | Mode | 1 | 1 | 1 | 1 | 1 | 2 | 1 | 2 | 1 | Standard Deviation | 0.50600786 | 0.80144101 | 0.63216588 | 1.25925148 | 0.88826291 | 1.1823643 | 0.65142841 | 1.0107481 | 1.04065702 | Sample Variance | 0.25604396 | 0.64230769 | 0.3996337 | 1.58571429 | 0.78901099 | 1.39798535 | 0.42435897 | 1.02161172 | 1.082967033 | Skewness | 1.25843209 | 0.83630825 | 2.1737124 | 1.2412663 | 1.20400797 | 1.17890284 | 1.0445245 | 0.74943369 | 0.549925227 | Range | 2 | 4 | 4 | 4 | 4 | 4 | 3 | 4 | 4 | Minimum | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | Maximum | 3 | 5 | 5 | 5 | 5 | 5 | 4 | 5 | 5 | Sum | 138 | 189 | 149 | 213 | 183 | 223 | 161 | 227 | 222 | Count | 105 | 105 | 105 | 105 | 105 | 105 | 105 | 105 | 105 | Confidence Level(95.0%) | 0.09792499 | 0.15509858 | 0.12233968 | 0.24369619 | 0.17190076 | 0.22881663 | 0.12606745 | 0.19560466 | 0.201392776 |

In the above descriptive statistics table, we can see that sum is maximum for effect of advertisements and online order thus we can say that these are the least important factors in determination of the customers preference of quick service restaurants Whereas, sum is the minimum for taste and quality and hence they are the most important factors.

CORRELATION

| [Quality of food] | [Nutritional value] | [Taste] | [Price] | [Effect of advertisements] | [Cleanliness] | [Quality of food] | 1 | | | | | | [Nutritional value] | 0.441012 | 1 | | | | | [Taste] | 0.335805 | 0.204969 | 1 | | | | [Price] | 0.151765 | 0.14863 | 0.214312 | 1 | | | [Effect of advertisements] | 0.159338 | 0.10756 | 0.148613 | 0.255924 | 1 | | [Cleanliness] | 0.361713 | 0.390449 | 0.339339 | 0.15707 | 0.163122 | 1 |

Here we can see that for quality and nutritional value we have the highest correlation which signifies that both these factors are related. Also, nutritional value and advertisements are least related as they have the minimum values for correlation.

INDEPENDENT T-TEST
1.Gender v/s effect of advertisements

Assumptions: Null hypothesis H0 : mean of both genders are equal.
Alternate hypothesis H1 : mean of genders are not equal.

1.

Here we see sig (2-tailed) value for equal variances is 0.515 which is more than 0.05 and hence we reject the alternate hypothesis and we can see there is no significant difference between the male and female’s view on the advertisement factor of the various fast food items.

ANOVA
1.Age v/s quality of food

Assumptions: Null hypothesis H0 : mean of all age groups are equal.
Alternate hypothesis H1 : mean of all age groups are not equal.

ANOVA | quality_of_food | | | | | | | Sum of Squares | df | Mean Square | F | Sig. | Between Groups | 4.852 | 5 | .970 | 4.412 | .001 | Within Groups | 21.776 | 99 | .220 | | | Total | 26.629 | 104 | | | |

Here, p value < α
0.001<0.05

Thus we reject null hypothesis and we see there is a significant difference between the age groups on the quality of the food. Using the means plot we can see, that for while a consumer of age group <20 years do not consider quality an important factor and can eat at road side stalls or kiosks, the people with higher age consider hygiene and quality more important and thus prefer fine dining restaurants.

2. Annual Income v/s price

Assumptions: Null hypothesis H0 : mean of all income groups are equal.
Alternate hypothesis H1 : mean of all income groups are not equal.

ANOVA | price | | | | | | | Sum of Squares | df | Mean Square | F | Sig. | Between Groups | 3.462 | 3 | 1.154 | .722 | .541 | Within Groups | 161.452 | 101 | 1.599 | | | Total | 164.914 | 104 | | | |

Here, p value ≥α
.541≥.05
Thus we reject alternate hypothesis and we see there is no significant difference between the various income groups on the price of the product i.e. all the income groups consider price an equally important factor. Thus we can say that QSR’s should design the menu taking in view of all the income groups ranging from low priced food items to higher range also.

But here we see huge difference in mean of price value for people with monthly income of 10,000-15,000 and those with income >20,000. So we can assume that people with higher income might not take the price factor as importantly as the people with lower income.

3. Age v/s taste

Assumptions: Null hypothesis H0 : mean of all age groups are equal.
Alternate hypothesis H1 : mean of all age groups are not equal.

ANOVA | taste | | | | | | | Sum of Squares | df | Mean Square | F | Sig. | Between Groups | 1.337 | 5 | .267 | .658 | .656 | Within Groups | 40.225 | 99 | .406 | | | Total | 41.562 | 104 | | | |

Here p value ≥α
0.656≥0.05
Thus ,we see there is no significant difference between the age groups on the taste and for all the sample it is equally important feature. So innovation in food along with taste is a must for increasing the footfall in quick service restaurants. 4. Age v/s nutritional value

Assumptions: Null hypothesis H0 : mean of all age groups are equal.
Alternate hypothesis H1 : mean of all age groups are not equal.

ANOVA | nutritional_value | | | | | | | Sum of Squares | df | Mean Square | F | Sig. | Between Groups | 24.493 | 5 | 4.899 | 11.463 | .000 | Within Groups | 42.307 | 99 | .427 | | | Total | 66.800 | 104 | | | |

Here p value < α
0.001 <0.05
Thus we do not reject alternate hypothesis and we see that for all the age groups nutritional value of the food is of equal importance. This is similar to quality of food because people assume that nutritional value is somewhat related to the quality of food. Subway has taken a step towards this factor by including salads and other nutritional food items in their menu.

CHAPTER 3

SWOT ANALYSIS

SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500 companies. The degree to which the internal environment of the firm matches with the external environment is expressed by the concept of strategic fit.

Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization. * Strengths: characteristics of the business or project that give it an advantage over others * Weaknesses: are characteristics that place the team at a disadvantage relative to others * Opportunities: elements that the project could exploit to its advantage * Threats: elements in the environment that could cause trouble for the business or project
Identification of SWOTs is important because they can inform later steps in planning to achieve the objective.
First, the decision makers should consider whether the objective is attainable, given the SWOTs. If the objective is not attainable a different objective must be selected and the process repeated.
SWOT ANALYSIS OF QSR INDUSTRY IN INDIA
The Indian Food Service Industry is thriving. Higher levels of disposable income among consumers have led to more adventurous tastes and a greater appetite for eating out in many areas of India. The fastest growing segment in the organized segment of the industry is the Quick Service Restaurants segment (QSR’s). Presently, QSR business is growing at a fast pace in India. The industry which makes up 42% of the organized food services market is outpacing most modern food service formats.

With growing disposable income and changing dietary habits, the demand for fast foods and organized food chains is rising in India. International brands have enhanced their presence as have existing domestic ones and newer start ups seeding every day. Indian QSR industry currently pegged at USD 1.36 billion in 2011 is stated to grow at a CAGR of 35% to reach USD 4.5 Billion by 2015. With growing urbanization, rise in income levels and a young population, the QSR industry in India is in a sweet spot.

INTERNAL FACTORS 1. STRENGTHS

* Risk Sharing in a franchise based model: The QSR have chains of restraints given as franchises across the country, so that the risk for the industry as a whole is considerably reduced. * Abundance of cheap labor in India: India is very well known for cheap labor that too in abundance. The QSRs mainly look for educated people who can work at average salaries and operate in shifts depending upon the nature of the job.

2. OPPORTUNITIES

* Burgeoning middle class: Over the years the purchasing power of the middle class (constituting of the majority of population) has been rising. This can increase the business for QSRs in India. * Increase in malls and multiplexes: With increasing number of malls and multiplexes, the opportunity to setup new outlets and also increasing the number of footfall at these outlets increases to a great extent. * Increasing youth spending: The youth form a significant percentage of the customers that come to QSRs; increase in their spending style would be very beneficial to the industry. * Urbanization: The people of India are getting more urbanized with time, which encourages them to visit QSRs more often and hence prosper the business more.

EXTERNAL FACTORS 1. WEAKNESS

* Sourcing Talent: Employing the right people so that more customer satisfaction and hence customer retention is ensured. This is a very precise and difficult task. * Monitoring franchisees: Managing and maintaining the widespread outlets is a tedious task, which needs to be done very meticulously. * Maintaining quality standards across outlets: The quality standards should be very high, and maintaining these standards is very important. QSRs lack in competition if they lack in this point. * Understanding Indian tastes: People like to eat what tastes them good, and to cook according to someone’s taste is something that can’t be mastered in one day. So researching and understanding the Indian tastes is an important task.

2. THREATS

* Food Inflation: The QSRs serve at rates which are very economic. Inflation is possible threat which would lead to drop in profits as well as the number of customers. * Product Imitation: The well established QSRs face a potential threat from some of the local vendors in smaller areas. For example, KFC’s fried chicken concept had been imitated by MOC, a local vendor. These local vendors can pose as a probable competition in near future. * Price Competition: There is war of price in this industry. Any firm can alter the market by lowering the prices. Hence, a constant check of prices needs to be kept to hold the market position. * Dependency on third parties: The suppliers who supply these QSRs with raw materials have an upper hand, and hence can impose as a threat anytime. * Local Competition: The QSRs are established in urban parts of the city, and hence not reachable to people leaving in smaller areas. Therefore, the local vendors can easily target this part of the customers and pose a s potential threat to QSRs.

Chapter 4

Porter’s Five Forces Analysis

Porter’s five forces model helps in accessing where the power lies in a business situation. Porter’s Model is actually a business strategy tool that helps in analyzing the attractiveness in an industry structure. It let you access current strength of your competitive position and the strength of the position that you are planning to attain.
Porters Model is considered an important part of planning tool set. When you’re clear about where the power lies, you can take advantage of your strengths and can improve the weaknesses and can compete efficiently and effectively.
Porters model of competitive forces assumes that there are five competitive forces that identifies the competitive power in a business situation. These five competitive forces identified by the Michael Porter are:

1. Threat of substitute products 2. Threat of new entrants 3. Intense rivalry among existing players 4. Bargaining power of suppliers 5. Bargaining power of Buyers

1. Threat of substitute products
Threat of substitute products means how easily customers can switch to your competitors product. Threat of substitute is high when: * There are many substitute products available * Customer can easily find the product or service that one is offering at the same or less price * Quality of the competitors’ product is better * Substitute product is by a company earning high profits so can reduce prices to the lowest level.

Threat from Substitutes for QSR
(Moderate)
Substitutes are readily available: Food can be purchased almost anywhere, through foodservice or retail. However, convenience is the value-adding component of the service which reduces the threat of substitutes. Consumers can cook at home cheaply, but this lacks the convenience element which people require nowadays.
Ready-meals are therefore a more substantial threat, competing with fast-food on price as well as convenience. If you are ‘on-the-go’ however, without access to a microwave, QSRs are almost uncontested if you want a hot meal in a short timeframe. With many differentiated players and varying service offerings, customers can select the best value option
2.Threat of new entrants
A new entry of a competitor into your market also weakens one’s power. Threat of new entry depends upon entry and exit barriers. Threat of new entry is high when: * Capital requirements to start the business are less * Few economies of scale are in place * Customers can easily switch (low switching cost) * Your key technology is not hard to acquire or isn’t protected well * Your product is not differentiated
There is variation in attractiveness of segment depending upon entry and exit barriers. That segment is more attractive which has high entry barriers and low exit barriers.
Some new firms enter into industry and low performing companies leave the market easily. When both entry and exit barriers are high then profit margin is also high but companies face more risk because poor performance companies stay in and fight it out. When these barriers are low then firms easily enter and exit the industry, profit is low. The worst condition is when entry barriers are low and exit barriers are high then in good times firms enter and it become very difficult to exit in bad times.
Threat of New Entrants for QSR(Moderate) * QSR Industry is dominated by global chains with very high brand values * New players struggle to compete with incumbent firms, as their brands are unknown and advertising campaigns are expensive . Established chains have the resources to retaliate aggressively through pricing promotions * New entrants lack economies of scale, which existing chains have developed over time, and utilise to remain competitive in this low-margin, high-turnover industry.
However, social media websites have evened the playing field in terms of marketing communications; they allow firms to efficiently communicate their message inexpensively
Hence this threat is a moderate threat to QSR industry.
3. Competition among rivals
Competition among rivals mean the intensity of competition among the existing competitors in the market. Intensity of rivalry depends on the number of competitors and their capabilities. Industry rivalry is high when: * There are number of small or equal competitors and less when there’s a clear market leader. * Customers have low switching costs * Industry is growing * Exit barriers are high and rivals stay and compete * Fixed cost are high resulting huge production and reduction in prices
These situations make the reasons for advertising wars, price wars, modifications, ultimately costs increase and it is difficult to compete.
Competition among Rivals for QSR
(Strong)
* The market as a whole is fragmented with many global chains and independent operators. Competition is primarily cost-based with firms continuously investing in their production and service processes to undercut competitors. * Branding is the most prevalent weapon for competing

4.Bargaining power of suppliers
Bargaining Power of supplier means how strong is the position of a seller. How much your supplier have control over increasing the Price of supplies. Suppliers are more powerful when * Suppliers are concentrated and well organized * a few substitutes available to supplies * Their product is most effective or unique * Switching cost, from one suppliers to another, is high * You are not an important customer to Supplier
When suppliers have more control over supplies and its prices that segment is less attractive. It is best way to make win-win relation with suppliers. It’s good idea to have multi-sources of supply.
Suppliers Bargaining Power for QSR industry
(Moderate)
* With a competitive global supply chain, supplier power is limited. Due to the number of suppliers in the industry, it is difficult for them to leverage significant power over fast-food firms. * The supply of soft-drink is dominated by Coca-Cola and Pepsi due to their global distribution channels. Additionally, Coca-Cola and Pepsi provide fast-food chains with equipment such as refrigerators and drink dispensers. This markets their brand and aligns it with fast-food brands, reducing costs for customers, which would otherwise be passed onto them.
5.Bargaining power of Buyers
Bargaining Power of Buyers means, How much control the buyers have to drive down your products price, Can they work together in ordering large volumes. Buyers have more bargaining power when: * Few buyers chasing too many goods * Buyer purchases in bulk quantities * Product is not differentiated * Buyer’s cost of switching to a competitors’ product is low * Shopping cost is low * Buyers are price sensitive * Credible Threat of integration
Buyer’s bargaining power may be lowered down by offering differentiated product. If you’re serving a few but huge quantity ordering buyers, then they have the power to dictate one.

Buyer’s Bargaining Power for QSR Industry
(Moderate)

The market’s competitiveness increases buyer power and customers are price sensitive with no switching cost between providers. * However, key players attempt to reduce buyer power, offering a product range which caters for the entire demographic, rather than one specific segment. For example, McDonald’s target children with ‘Happy Meals’. * Firms are increasingly promoting differentiated products. * High brand value and customer loyalty has reduced buyers’ bargaining power.

Conclusion As per our research we conclude that of the considered factors the most important factors in our analysis that impact the fast food industry are: 1. Taste of food 2. Quality of food Where as the least important factors were: 1. Price 2. Advertisment

However with respect to the demographic factors, we can say that age groups have a significant difference in their opinions about the quality of food and the nutritional value i.e the people with the higher age group(>40 years of age) are concerned more about the nutritional value of food in comparison to those of lower age group(esp. 15-25 year of age). Whereas we see from our research that regards less of the gender of the respondent is indifferent towards the effects of advertisements.

Recommendation 1) New menu for Health conscious people should be introduced eg :- usage of brown bread instead of normal bread in few items 2) Should focus on the presentation of the food items . 3) Should try to expand to rural areas also and make items specific to their taste. 4) New schemes and offers should be introduced for different age groups.

LIST OF REFERENCES

1. http://web.ebscohost.com/ehost/selectdb?sid=9431f723-00bd-41fb-8d56-a68edf205f17%40sessionmgr15&vid=1&hid=13

2. www.inc.com/articles/1999/12/15964.html

3. http://www.businessballs.com/pestanalysisfreetemplate.htm

BIBLIOGRAPHY * Marketing research by Naresh K Malhotra * Marketing Management by Philip Kotler