Chapter 1: Introduction and Background to the Research Problem

1.1

Background of Research Fast food is the hot food, such as French fries and hamburgers, which can be

quickly served, can be taken away and eats it while youre on the go. The leading fast food franchises such as McDonalds, Kentucky Fried Chicken (KFC), Burger King and many other fast food restaurants serve various kinds of fast food every day. McDonalds has about twenty-eight thousand restaurants worldwide and it opens almost two thousand new restaurants each year. Started from selling hamburgers and fries at the end of 1960s, McDonalds quickly grow into a multinational company and it is responsible for 90% of the United States (US) new jobs. Same goes to KFC, in year 2005, KFC had dominated McDonalds in China by owning restaurants at 1200 locations in that country. In 2011, Yum! Brands Inc., the world largest restaurant company which owns KFC, Pizza Hut, Taco Bell (Mexican-style food) and Long John Silvers (quick-service seafood) have reported that fourth-quarter of their net income in 2010 came from the rapid growth of their businesses from overseas. The fast food giant in United Kingdom (UK), McDonalds has also reported a 9% rise in its worldwide profit during 2010. People love to consume fast food. According to the study, men visit to fast food restaurants more frequently compared to women. In US, fast food has been an inseparable part of Americans life. The black men visit to the restaurants on an average frequency of 2.3 visits per week in year 2000 to 2001. "If you are an average American, you probably consume three hamburgers and four orders of fries each week or an average of 159 fast food meals each year." (Kathleen Aicardi, M.Ed., 2001) In Malaysia, McDonalds has 204 restaurants located nationwide and is currently expanding at about 10 to 15 restaurants annually. Now people can even drive-through to purchase the food and do not need to queue inside the restaurant to wait for their turn. Parents who are busy to cook will bring their children to fast food restaurants for meal. Children also love to visit to fast food restaurant as some fast food restaurants do have 1|Page

playground for children to have fun. Furthermore, fast food restaurants also offer special package of meals for children whereby the toys are given out free with every purchase of the meal. This strategy has helped fast food restaurants to penetrate the childrens market. Today, many fast food restaurants open for 24 hours in 7 days a week. Free Wi-Fi service and football screening service have been introduced into most of the fast food restaurants. Results has proven that the introduction of drivethru facilities, offerings of free Wi-Fi service and in-house development of new Electronic Point of Sales (EPOS) system helped to increase their profits. On November 2008, with the introduction of the services and facilities, McDonalds global sales rose by 7.7 %, and the European sales rose by 7.8%. McDonalds Malaysia also expects to achieve a 15 to 20 percent increase in sales this year, by driving the 7 innovative ways to boost the sales.

1.2

Definitions of Key Concepts and Terms Fast food, based on Oxford Advanced Learners Dictionary, means hot food, such

as hamburgers and chips/fries, that is served very quickly and can be taken away to be eaten in the street; in Cambridge Dictionary, it is defined as hot food that is quick to cook or is already cooked and is therefore served very quickly in a restaurant. Together with all the definitions above, we can understand that fast food is to be prepared and served in a short amount of time. Fast food restaurant is the place that serves fast food. The first fast food restaurant opened in a shopping mall in Atlanta back in 1967. For over 40 years, this industry has shown a rapid growth due to increasing demand for fast food. The number of fast food restaurants also increased from hundreds to thousands worldwide. In Western countries, fast food is part of their life. They eat pizzas, fries, chips and burgers every week. Fast food however, is offered differently in different countries. The differences exist due to culture and traditional food of a country. For example, hamburgers and fries are foods from Western countries, but in Eastern countries, especially in China and Japan, the traditional food is rice. Since burgers and fries can be prepared within short period of time, 2|Page

rice can also be prepared in such a way. Cultures and beliefs are different in Malaysia which has 3 different main ethnics. The menus in fast food restaurants are modified to suit the customers preference and culture in different countries. When talk about of fast food restaurants, many of us will quickly think of those well known fast food restaurant franchises. Compared to local fast food restaurants, the franchises have a more systematic management, high uniformity, large network, high appearance in our life and huge financial support. As a result, the franchises are able to generate large amount of profits every year and offer many job opportunities to the people. In order to compete with other franchises, many marketing tools have been used such as upgrading their services and facilities to fulfill customers need and attract more business. Wi-Fi service, drive-through facilities, 24 hours restaurant-to-home delivery, advertise through internet, interact with customers using social networks, remodeling their restaurants, implement suitable marketing strategies for different markets, training programs for the employees and offer good customer service are among the competitive advantages which fast food companies want to gain. Fast food restaurants business depends very much on the factors which influence consumption of fast food. They must understand the reason behind peoples consumption of fast food and make suitable changes to attract more customers. 3 decades ago, there are no fast food franchises like what we can easily find today. Therefore, before we get back home, how about a drive-through to the fast food restaurant nearby?

1.3 Rationale of Research The rationale of this research is to find out the reason behind the growing sales of fast food in the food and beverage market through the identification of factors affecting/influencing people to consume fast food. Fast foods were not easily available as today until McDonalds successfully transformed the trend of franchising across countries which led to the increasing numbers of fast food chain restaurants around the world. Many fast food restaurants followed 3|Page

McDonalds concept of expending their business worldwide which created a picture of intense competition among fast food restaurants today. Fast food restaurants are easily available in many countries nowadays which are operated under the standard and requirements of their parent company. However, there are certain changes made to their products served in different countries to suit the taste and culture of local markets. For the past 40 years, fast food restaurants have been improving in terms of food quality, speed of serving and its availability to consumers globally. People used to dine in fast food restaurants in a less frequent basis, where the choices of foods were limited with only a few restaurants available. However, the trend today have changed rapidly, fast food are something very common to the society today where consumers demand for fast food has been increasing and contributes to the growing sales of fast food in the food and beverage market. Consumers of the younger age group are the ones of greater demand for fast foods. This research will help us in identifying the factors which lures consumers to consume fast food which led to the growth of fast foods sales in the market.

1.4 Research Objectives To determine if convenience is a factor to consume fast food. To determine whether price is a factor affecting consumer to consume fast food. To determine if taste is related to ones choice to consume fast food. To determine if product of better nutrition is a factor that influences consumer to consume fast food. To determine whether service quality is an aspect that encourages consumption of fast food.

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To determine whether brand popularity is a factor influencing people to consume fast food.

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1.5 Research Questions Will the convenience factor affect the consumer to consume fast food? Is price a contributing factor to the consumption of fast food? Is taste related to ones choice to consume fast food? Will product of a better nutrition influence consumer to consume fast food? Is service quality an aspect that encourages consumption of fast food? Will brand popularity be a factor that influences consumption of fast food?

1.6 Significance of the Study The study is important as it allows us to identify and understand better the factors influencing people to consume fast food which contributes to growing sales of fast food in the market. The data collected will be useful to fast food companies as they will be able to identify the major factors which stimulate consumers purchase on fast food. Each factor studied in the research will provide important information to fast food companies toward the right path. Companies will get a clearer picture on the direction that they can achieve successful result through the data. On the other hand, fast food companies can also have a better understanding on their products and companys position in the food and beverage market with the identified consumers buying behavior on fast food. With such sources of information, fast food companies will get to improve their product and services for an increased competitive advantage. Strategies of fast food companies can be revised to suit the markets demand for a greater expansion opportunity with the data of this research. Menus can be upgraded base on the behavior of consumers in consuming fast food for example if healthier food provided is one of the major factors which influence consumers to purchase fast food, companies can come out with healthier products to profit from the market. The study on factors influencing consumers to consume fast food is important and beneficial to 6|Page

fast food companies by providing useful data and information that serve as a guidance to companies toward further improvements to achieve greater heights in their business.

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