Fast food impact

8/14/2019 Fast food impact

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India made a dramatic transition frombeing a supply-constrained to ademand-driven economy.

The most important change in theretailing pattern that led to the boomin consumer spending has been the

rise of organised retailing At present the organised retail activityis concentrated mainly in the apparel,food & beverages and entertainmentsegments.


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Eating out in India will continue to be significant dueto reasons like, increased average working hours;increase in the number of working women anddecline in number of large family units.

Therefore, there is a tremendous market potential inthe Indian fast Food market.

There is an annual compounded growth rate of over20% much better than the 7-8% growth that theindustry has been witnessing in the last few years,which makes it more lucrative for the multinationalplayers to enter the Indian market.

The traditional Indian chains have also woken up tothe challenge and are aggressively on an expansiondrive and have altered their business strategies aswell.


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Coffee house chains The forerunners in the business,

Barista and Caf Coffee Day, todayhave a total of around 400 retailoutlets across the country.


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Fast food chains Dominos and Pizza Hut McDonald's, KFC, Sub Way etc Nirulas, Kamats According to industry data, of the total

branded quick service restaurantmarket of over Rs 1,200 crore, thepizza chains contribute around 50% of the sales. In fact, the two pizza chainsthat currently dominate the brandedpizza quick service restaurant market Dominos and Pizza Hut togetheraccount for over 75% market share .


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Fast food and its differentcategories:

Indian fast food/finger food-local Family diners-udupi joints,thalis

Sandwich & salad parlours-Subway Multi-cuisine food courts-

Hangouts Ice-cream and juice/beverage

parlours-BaskinsRobins,Mamamia

Indian "desserts" and "snack


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Redefining Service Value enabling to go beyond the core

product enhance the value offered to the

customer through supplementaryofferings

customer experience critical to theoverall customer satisfaction

Delivery within 30 min


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Redefining Product Value Ghar ka khana health promoting side-dish such as a salad

or juice There is an interesting observation at some

of the traditional south Indian restaurantchain like Kamats- go past the time limitand you don't get any

upgraded themselves in terms of ambience

and service in lieu with the increasedcompetition while still maintaining thetraditional feel and essence

The clothes worn by the waiters makes one feel as they have

reached the actual Gandhian era, where


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Growth and Expansion plans of various players in Fast food sector

in India Nirulas

- its 21 range of ice cream cafes toattract the younger lot.

- The advantage for the Indian chains isthat they know the Indian taste buds whichare a challenge for the foreign players.

-Nirulas has started putting in play

corner for kids with vibrant colors. Themenu is a mix of continental, Indian, SouthIndian and Chinese with desserts andbakery products. The menu has a quite arange and as compared to McDonalds isquite affordable.


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Dominos The reason for dominos success in

India is customization, consistentquality, companys strength insupply chain and logisticsmanagement which have createdunique brand equity

unique selling proposition in terms of delivery and take away therbyproviding more value to the

customer.


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The multinationals have changed thedynamics of the industry byinvesting in product development,

sourcing practices, qualitystandards, service levels andstandardizing operating procedureswhich they have developed out of years of experience.

IT has become an integral part of thecompanys business vision


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KAMAT The differentiating strategy always

was a prime objective and so thefocus was on customer experiencewith quality food items with latestcrockery, furniture and equipments


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positioning strategy McDonald is primarily seen as

Children and a family fun place Nirulas as college going crowd Caf coffee day as hang out for

young and professional crowd


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Barista It has positioned as an experiential lifestyle

brand and is a part of the $9 million TataGroup

The outlets offer coffee, beverages, cookies,cake and desserts

The merchandise basically reflects theItalian spirit through Indian origin

It focuses on consumer experiences andemphasis was by greeting regularcustomers by name, knowing theirpreferences, creating right ambience, buya safe place for women to visit, lean


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Factors that impact successof a Restaurant

Quality Location-Parking Convineince Food Service Menu Price Atmosphere-Ambience, furniture Management


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Basic Consumer Service Since the evolution of mankind, the

consumption of food has progressedfrom a simple physiological need toone that satisfies higher needs of self esteem, social acceptance etc

The need to be understood:establishing a rapport and showingempathy

The need to feel welcome The need for comfort; Physiological and

Psychological The need to feel important; catering to

the human ego


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The 5 dimensions of restaurants

Tangibles: Appearance of physical facilities,equipments, personnel and informationmaterial.

Reliability: Ability to perform the serviceaccurately and dependably

Responsiveness : Willingness to helpcustomers and promptness

Assurance : a combination of Competence,

Courtesy, Credibility and Security Empathy : a combination of Accessibility,Communication, Understanding customerneeds.

Above factors put together are known asSERVQUAL dimensions.


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Gaps between Serviceexpectancy and perception

Gap 1: Difference betweenmanagement perceptions of whatcustomers expect and what

Consumers realy do expect- It exist because of notknowing what customers expect.

Gap 2: Difference betweenmanagement perceptions and servicequality specifications the standardgap.

-It exists because of thewrong service quality standards.


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Findings The traditional players were initially focusing on the expansion plans but the

entry of new players forced them to come up with differentiating strategiesin terms of menu, price, quality and service

The Indian players definitely have an edge over multinational players as theyare well aware with the eating habits and tastes of people in differentregions, so experimenting with menu is not a great task for them

he study also finds that as a part of growth strategy there are tie-ups and

alliances happening, to merge the existing synergies of various companiesto achieve collective profitability. In this study, the concept of SERVQUAL is interpreted to understand the various

gaps in consumer expectations and management perception Several factors which were highlighted as grey areas are Accessibility,

Ambience and Service efficiency. These are the areas where Indian playersare not able to meet the consumer expectations

They have improved in terms of variety, hygiene and entertainment but certainissues as mentioned need to be addressed.

It is found that majority of customers are not fully satisfied with the friendlinessof staff. So it is suggest that the stores should conduct soft skill training andmake them give more customer service .Regular monitoring of the staff behavior towards customers is also suggest here.


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The main reason behind the success of the multinational chains is theirexpertise in product development,

sourcing practices, quality standards,service levels and standardizedoperating procedures in theirrestaurants, a strength that they have

developed over years of experiencearound the world. The home grownchains have in the past few years of competition with the MNCs, learnt a

few things but there is still a lot ofsco e for im rovement

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Fast food impact