Term Paper FAST FOOD IN RURAL MARKET A STUDY OF MOTIVES & CHANGING CONSUMPTION PATTERNS [pic] Submitted by: Sunil Asija University Registration No. 2020070066 MBA-(310) D Submitted to Mr. Harpreet Singh DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA (2008) TABLE OF CONTENT CONTENTS Page No. – TITLE PAGE1 CHAPTER -1 1. Introduction To The Topic3-4 1. Fast Food 2. Fast Food Industry in India 1. 2 Review of Literature5-6 1. 3 Objectives7 1. 4 Research methodology7 1. 5 Interpretation & analysis8-13 1. 6 Findings14 1. 7 Conclusion14 1. 8 Bibliography15 1. 9 Annexure16 1. 1 Introduction to Topic

With the increase in purchasing power and demand for a wide variety of products by the rural consumers, the rural markets offer new and greater opportunities to manufacturers of several FMCG products in India. To tap the vast and expanding market, companies are developing effective marketing and strategies based on their study and understanding of rural consumer behaviour. There are certainly significant differences in the buying behaviour of the rural consumers from the stand point of product development, pricing policies, distribution and after sales services, which create differences in requirements for marketing strategies in rural India. Sarangapani & Mamtha, 2008) Consumer Behaviour The study of consumers helps firms and organizations improve their marketing strategies by understanding issues such as how • The psychology of how consumers think, feel, reason, and select between different alternatives (e. g. , brands, products); • The psychology of how the consumer is influenced by his or her environment (e. g. , culture, family, signs, media); • The behaviour of consumers while shopping or making other marketing decisions; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and • How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. One “official” definition of consumer behaviour is “The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. (Lars Perner, 1999) Fast food Fast food is one of the world’s fastest growing food types. Fast foods are quick, reasonably priced, and readily available alternatives to home cooked food. While convenient and economical for a busy lifestyle, fast foods are typically high in calories, fat, saturated fat, sugar, and salt. (Singh & Goyal, 2007) Fast food industry in India India’s fast-food industry is growing by 40 percent a year and before the entry of multinational fast food outlets, Nirula’s was a popular domestic fast food provider for eating-out.

Nirula’s started with ice-cream parlours and later moved on the range of fast food including burgers, pizzas, sandwiches etc. Wimpy was another fast food provider besides Nirula’s in Indian market. Wimpy was the only multinational fast food outlet in India before 1990s with one outlet in New Delhi. After the liberalization policy that came in force in 1991, fast food industry grown in India as multinational fast food providers have set up their business either jointly with Indian partners or independently. McDonald’s, Domino’s, Pizza Hut and Nirula’s are the most popular and frequently visited fast food outlets.

KFC has limited outlets and has faced number of problems since entry in India. Besides these, there is Pizza Express and Pizza Corner of which are not so popular. With changing life style and aggressive marketing by fast food outlets, fast food is also becoming popular in small towns; therefore, success of existing fast food outlets and entry of more is inevitable. (Singh & Goyal, 2007) India being at the seventh place is among the top ten markets for weekly fast food consumption among the countries of Asia-Pacific region. Over 70 per cent of urban & rural Indians consume food from take-away restaurants once a month or more frequently.

Survey indicates that Pizza Hut is the most preferred fast food outlet in India. Identifying the drivers for preference of one-brand over another, the survey results indicate that Indians (66 per cent) are amongst the consumers who consider hygiene and cleanliness their most important criterion for selection. A total of 24 per cent of Indians use the quality of service as a decision making criterion to purchase a fast food brand’s offering and 22 per cent rely on their perception of whether a take-away brand offers them healthy food options. (Singh & Goyal, 2007)

Review of Literature 1. Goyal, Singh & N. P (2007) analyzed the importance of various factors affecting the choice of fast food outlets by Indian young consumers and the consumption patterns, impact of hygiene and nutritional values of fast food. However the results indicates that the young Indian consumer has passion for visiting fast food outlets for fun and change but home food is their first choice. They feel homemade food is much better than food served at fast food outlets. They have the highest value for taste and quality followed by ambience and hygiene.

The two fast food outlets’ rating differs significantly on the seven attributes. McDonald’s scores are higher on all attributes except “variety”. Further, consumers feel that fast food outlets must provide additional information on nutritional values and hygiene conditions inside kitchen. 2. Rajeev & sinha (2004), conducted a study on the purchasing pattern of the consumers and their brand preferences for fast food among 150 consumers based in rural area. The study revealed that the education level of the consumer of fast food significantly influences the formation of brand loyalty.

Less educated people from their brand loyalty on the basis of price, attractive packaging and easy availability in the market, whereas highly educated consumers from their brand loyalty on the basis of quality of the food. 3. Ravichandran (1998), in his study on consumer satisfaction determinants and measurement observed that in addition to the purchase behaviour, consumers also engage in the evolution of purchase decision. Satisfaction is an important element at the evolution stage. Satisfaction is the result of matching actual post purchase and consumption experience with the expected reward from the brand.

These evolutions are in the terms of products potential to satisfy the consumer motives. Thus consumer from certain expectations, prior to purchases about the cost and efforts to be expanded and social benefits accruing. The interaction between expectation and actual performance produces either satisfaction or dissatisfaction. 4. Lokhande in his research work attempted to probe into the buying habits and behavioural changes of rural consumers. The study observed that the income is one of the major influencing factor on the consumption pattern of consumers.

In addition, caste, religion, education and gender are the influencing factors in rural areas. Further to was suggested that the distribution channel should be made effective and efficient in rural areas so that none is deficient of the necessary goods, consumers awareness must be created by the way of imparting consumer education. 5. Surrender (2004), undertook a research to evaluate the impact of advertising on both the rural and urban consumers, in term of improving the sales of products, to analyze the differences between rural and urban consumers.

The study examined different media habits of the rural and urban consumers with regard to the purchase of the selected fast food items and also effectiveness and usefulness of advertising to the society in general and in rural consumers. Objectives 1. To investigate the motives of rural consumer with regard to select fast food. 2. To analyze the consumption pattern of rural consumer with regard to fast food Research Methodology SOURCES OF DATA The study undertaken there to be mainly based on the primary data i. e. structured questionnaire is designed. The study also contains secondary data i. e. ata from authenticated websites and journals for the latest updates just to gain an insight for the views of various experts. METHODOLOGY & PRESENTATION OF DATA The data collected is then coded in the tables to make the things presentable and more effective. The results are shown by tables which help me out in easy and effective presentation and hence results are being obtained. TOOLS AND TECHNIQUES USED FOR ANALYSIS In this study the technique used for interpreting the results is chi square test. It is used as because sample size 50. Research Design The design for this pilot study is exploratory and snowfall sampling

Data Collection The data is collected randomly irrespective of the category of the people in the form of questionnaire and the sample size is 50 respondents. Because it is a pilot study and due to time constraint the sample size is small. Attraction of fast food Frequently go for fast food |Particular |No. of Respondents | |Yes |18 | |No |32 |

Interpretation: from the above table we can easily judge that most of the rural people do not go for fast food frequently, out of 50, 18 respondents go for fast food frequently and 32 people go for fast food not so frequently. We can say that a less number of people go for a fast food twice or thrice in a week. Preference of food |Particular |No. f respondents | |Home made |19 | |Branded |31 | Interpretation: from the above table we can easily judge that most of the rural people prefer branded fast food, out of 50, 31 respondents’ preferred branded fast food because rural people want to change and they have more tendency towards urbanisation and only 19 people prefer a homemade fast food.

Eat fast food in a week |Particular |Observed values |Expected values | |Once |32 |12. 5 | |Twice |11 |12. 5 | |Thrice |5 |12. 5 | |More than thrice |2 |12. 5 | Ho: Rural people do not eat fast food once in a week

H1: Rural people eat fast food once in a week Level of confidence is 95% |chi square value |43. 92 | Result: – As the 95% level of confidence the table value is 0. 352 which is less than the chi square value 43. 92 so that, null hypothesis is rejected. It means most of the rural people eat fast food once in a week. Interpretation: from the above table we can say that most of the rural people eat fast food only once in a week, out of 50, 32 respondents go for fast food once in week and only 2 people go for fast food more than thrice in a week.

Factors affecting while purchasing fast food |Factors |Observed values |Expected values | |Quality |15 |12. 5 | |Price |28 |12. 5 | |Quantity |7 |12. 5 | Ho: Rural people do not preferred price H1: Rural people preferred price |chi square value |22. 4 | Result: – As the 95% level of confidence the table value is 0. 352 which is less than the chi square value 22. 14 so that, null hypothesis is rejected. It means price factor more affected while purchasing fast food by rural people. Interpretation: from the above table we can say that the price is considered the first preference factor while purchasing the fast food item by a rural consumer, because out of 50 respondents 28 respondents preferred price while purchasing fast food items and only 7 people consider quantity.

Time to mostly take fast food |Particular |Observed values |Expected values | |At the time of breakfast |6 |12. 5 | |At the time of lunch |22 |12. 5 | |At the time of dinner |8 |12. | |Any other time (evening) |14 |12. 5 | Ho: Rural people do not take fast food at the time of lunch H1: Rural people take fast food at the time of lunch Level of confidence is 95% |chi square value |12. 4 | Result: – As the 95% level of confidence the table value is 0. 352 which is less than the chi square value 12. 4 so that, null hypothesis is rejected.

Interpretation: from the above table we can say that most of the rural people eat fast food at the time of lunch, out of 50, 22 respondents take their fast food at the time of lunch and only 6 people take at the time of breakfast. Motive for go or consume fast food |Motives |Observed values |Expected values | |For change |27 |16. 66 | |For having spicy food |8 |16. 6 | |For taste |15 |16. 66 | Ho: Change is not the motive behind fast food for rural people H1: Change is the motive behind fast food for rural people Level of confidence is 95% |chi square value |11. 0844 | Result: – As the 95% level of confidence the table value is 0. 103 which is less than the chi square value 11. 0844 so that, null hypothesis is rejected.

Interpretation: from the above table we can easily judge that most of the rural people go for fast food for change as a substitute of a regular meal, out of 50, 27 respondents go for fast food for change as a substitute of a regular meal and only 8 people go for having spicy food. Adoption of fast food as a habit |Particular |Observed values |Expected values | |Friends company’s |31 |12. | |Travelling job/ nature |16 |12. 5 | |Influence by company through their marketing information |3 |12. 5 | Ho: Friends company’s do not influence to adopt fast food by rural people H1: Friends company’s do not influence to adopt fast food by rural people Level of confidence is 95% |chi square value |35. 58 | Result: – As the 95% level of confidence the table value is 0. 52 which is less than the chi square value 35. 58 so that, null hypothesis is rejected. Interpretation: from the above table we can say that the friends company is considered the first influencing factor for adopting the fast food item by a rural consumer, because out of 50 respondents 31 respondents influenced by Friends Company for adopting fast food and only 3 people Influenced by company through their marketing information. Findings Most of the rural people eat fast food once in a week as the substitute to their regular meal because they are most influenced by theirs friends company’s.

Rural people mostly consider price factor while purchasing any fast food item because they are more price conscious. Now in days most of the people of rural area prefer branded fast food rather than home made because they want to change their life as an urban people. Most of the rural people take fast food as their lunch, because young Indian consumer has passion for visiting fast food outlets for fun and change Majority of the rural people go for fast food for change and taste. They want to change their life as an urban people Friends companies influenced more to rural consumers to adopt fast food as their habits. Conclusion

From the above we can conclude that there are different people having different perception about fast food. As per the findings, most of the rural people preferred price factor more while purchasing any fast food item and in urban area the people preferred quality while purchasing fast food. So, we can say that rural people want to change their life and became like as an urban people, for this they mostly preferred branded food rather than homemade food. BIBLIOGRAPHY REFERANCES 1. Singh, N. P. & Goyal, Anita,” Consumer perception about fast food in India: an exploratory study”, British Food Journal, Volume 109, pp. 82-195, 2007 2. kaushal, Rajeev & sinha, B. K, ” purchasing behaviour pattern of consumers and their brand preferences for fast food “,Indian journal of marketing, vol. 8, pp9-14,2004 3. Ravichandran, M, “determinants and measurements”, NMIMS,Mumbai, pp. 42-45, 1998 4. Lokhande, “rural marketing management in India”, anmol publications pvt ltd, new Delhi, 1999 5. Surender P, “impact of advertisement on rural and urban consumers- a comparative study”, published research thesis, 2004 Journal • Sarangapani, A & Mamtha, T, “Rural consumer behaviour with regard to select FMCGs consumption pattern and brand usage: A study”,2008 “Consumer perception about fast food in India: an exploratory study”, British Food Journal, Volume 109, pp. 182-195, 2007 • Regmi, Anita & Dyck, John, “Changing Structure of Global Food Consumption and Trade”, Economic Research Service/USDA,2005 Books Consumer Behaviour (Laslie Lazar) Consumer Behaviour, The Psychology of Marketing by Lars Perner. Questionnaire Impact of fast food in Rural market Name………………….. Age……………………. City……………………. Sex: – MaleFemale 1. Do you go for fast food frequently? YesNo 2. How many times in week you eat fast food? OnceTwice ThriceMore than thrice . What factors you consider most while purchasing fast food? QualityPrice QuantityPackaging 4. Which fast food you prefer more? Home MadeBranded 5. At what time you mostly take fast food? At the time of BreakfastAs a substitute to your At the time of Lunchregular meal At the time of Dinner Any other Time If yes, when 6. By which motive you go or consume fast food? For change For having spicy food For taste 7. What made you to adopt fast food as a habit? Friends CompanyTravelling job / nature Non availability of food Influence by company through their marketing information