Loyola Institute of Business Administration

CONSUMER BEHAVIOUR

What factors are currently influencing the consumer decision-making process in the fast
food restaurant industry in India, and how is McDonalds responding to changing
environment and consumer behaviour?

Ajoy Infant Raj A (F14004)

Joseph Sathyan M (F14028)
Sindhura Reddy (F14030)
Praveen Kumar R (F14038)

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Consumer behaviour
Consumer behaviour is the study of the processes involved when individuals or groups select,
purchase, use or dispose of products, services, idea or experiences. Consumer behaviour
focuses on how individuals make decisions to spend their available resources on consumption
related items. That includes what they buy, why they buy, when they buy, where they buy it,
how often they buy it how often they use it, how they evaluate it after they purchase and the
impact of such evaluations on future purchases, and how they dispose it.

Consumer attitudes
Attitudes are the first determinant of behaviour intention. In consumer behaviour context
attitude is a learned predisposition to behave in a consistently favourable or unfavourable way
with respect of a given object. There is a general agreement that attitudes are learned. This
means that attitudes relevant to purchase behaviour are formed as a result of direct experience
with the product, word-of-mouth information acquired from others, or exposure to mass
media advertising. Internet etc. As learned predispositions, attitudes may propel consumer
towards particular behaviour or repel the consumer away from particular behaviour. .

Fast food VS Junk Food

Fast food is regarded as “food, as hamburgers, pizza, or fried chicken, that is prepared in
quantity by a standardized method and can be dispensed quickly at inexpensive restaurants for
eating there or elsewhere”.
Junk food is regarded as “food such as potato chips, sweets and doughnuts, which is mass-
produced and is of low nutritional value”.
Often the term junk food is used to describe fast food. Just recently, the debate has been going
on whether the term junk food (to describe fast food) is in fact justified. The "junk food" tag
seem to be applied selectively, and often to food outlets in urban and suburban areas but not to
those in leafier parts. Hence, the term "junk" has become a way of disapproving of certain
foods.

1.3 Obesity in India

The most recent research has shown that being overweight or obese is now the norm in India,
with figures released by the government showing that two- thirds of men and almost 60% of

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women are unhealthily heavy. Furthermore India has the highest level of obesity in Asia.
Within four years, predictions say that a third of all adults in India will be obese.

Fast food industry in India

Definition of the fast food industry:
The fast food industry is defined as the sale of food and drinks for immediate consumption
either on the premises or in designated eating areas shared with other foodservice operators,
or for consumption elsewhere.
Fast food outlets are specialised in burgers, bakery products, chicken, ice cream, fish and
pizza.
In spite of consumer concerns of fast food being linked with problems such as obesity,
diabetes, heart conditions, food poisoning and scares and unethical advertising, the fast food
industry has enjoyed remarkable growth in recent years.

McDonald's Corporation background

McDonald's Corporation was the leading fast food outlet in India since 1996, with an 19%
value share and a clear lead over its nearest rivals KFC (owned by Yum Brands) and Burger
King.

Figure 1.1: Market share in India (2004)

Name of the company Market share (%)
McDonald's Corp 18.3
Yum! Brands Inc 8.4
Marrybrown 8.3
5 Star chicken 1.4
Compass Group Plc 1.2
Nando's Group Holdings Ltd 0.8

McDonald's is a pioneer in the fast food industry and today world leader in the sector. The
company has over 31,000 fast food restaurants in over 120 countries.
In 2003 the company was loosing money for the fist time in its five-decade history, as it was
serving mainly greasy food and therefore fuelling obesity epidemic. Moreover the company
was loosing important consumers trust due to release of the documentary ‘Super size me’ and
critical book ‘Fast food nation’. However, McDonalds introduced healthier menus and just

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recently and it has announced that its sales had rocketed, sending its shares soaring to a six
year high.
Consumer attitude formation and change
Understanding the factors that determine consumer perception/attitudes of a product’s value
or cost is of crucial importance to an industry’s product innovation, choice of marketing and
communication strategy and maintenance of competitive advantage.
The attitudes are the first determinant of behaviour intention. In consumer behaviour context
attitude is a learned predisposition to behave in a consistently favourable or unfavourable way
with respect of a given object. Most researchers agree that attitudes consist of three
components: Affect (consumers’ emotions and feelings about the attitude object), Behaviour
(intention to do something with regard to an attitude object) and Cognition (believes a
consumer has with an attitude object).
Examining the influences on consumer decision-making process towards fresh meat, the
hierarchy of effects indicates the different mental stages that consumer must go through when
making buying decision and responding to marketing or non-commercial messages. In our
instance, where the attitude object is fast food, plus taking into account that fast food is
considered to be low involvement product, the low involvement hierarchy of effects would
occur.
Knowledge and perceptions (cognitive component) of an attitude that consumer has with an
attitude object plays important/initial role by the attitude itself. The nature of fast food
production and processing is becoming more important to consumer. Also the ethical
production in terms of animal and human welfare and environmental protection are of greatest
importance. Recognizing information regarding firm’s ethical behaviour is thought to
influence product sales and consumers’ overall image of a company. Along with increasing
importance of quality, organoleptic and sensory properties of the food, issues relating to food
safety and human health have gained considerable attention and importance. All above links
well to attitudes that consumers will have with fast food products and companies.
Attitude can form in several different ways, depending on particular hierarchy of effects in
operation. The formation of consumer attitudes is strongly influenced by personal experience,
the influence of family and friends, direct marketing and mass media. The impact of social
values on food related attitudes, recognize that marketers, consumer psychologists and public
policy makers have an interest in the personal and social values of consumers as these deeply

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held feelings of what is important in life influence both consumer attitudes and behaviour.
Reflecting desired end states or ways of living, values might in part represent some of the
fundamental motives that drive and direct the consumer behaviour. The influence of values
may not be limited just to high- involvement areas, but may also be relevant to less involving
product fields such as food.
Besides the values, which influence both consumer attitudes and behaviour, the formation of
consumer attitudes is strongly influenced by personal experience, the influence of family and
friends, direct marketing and mass media.
Finally, the importance of risk perception needs to be explained. Attitudes towards GM food
are determined by perception of risk and benefits. When perceived risk is high, that influence
negatively on consumer’s purchase intention. That might be linked to fast food as well, as
eating fatty food may be risky of suffering obese related diseases.

Tri-component Attitude Model

According to tri-component attitude model, attitudes consist of three major components:
 Cognitive component- knowledge, perceptions and beliefs that are acquired by a
combination of direct experience with an attitude object and related information from
various sources.
 Affective component- emotions and feelings that consumer have towards an attitude
object
 Conative component- is concerned with the likehood or tendency that consumer will
undertake a specific action or behave in a specific way with regard to the attitude
object

This model emphasizes the interrelationships between knowing, feeling and doing.

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The tri-component attitude model will assist author to structure questions for focus group and
questionnaire, as it helps to explore and gauge consumers’ attitudes towards attitude object-
fast food. When such model applied to the questions, the outcome might give author greater
insight regarding knowledge and perceptions (about the fast food), emotions or feelings
(toward the fast food) and finally likelihood or tendency (of certain behaviour).

Key factors influencing the consumer decision-making process

Questionnaire (analysis of findings)
In total 71 participants responded on the survey. The gender split was 49% men and 51%
women. The global target market for fast food companies is between 17-25 years. The
respondent profile to the questionnaire, matched this target market with 88% aged between
17-25 years.
30 out of 71 respondents (42.3%) eat fast food once every month. (Figure 5.5)

How often do you eat fast food (i.e. McDonalds)?

 QUALITY OF FAST FOOD & CONSUMER’S TRUST IN MCDONALDS

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We have used a ‘selected evaluative scale’ to gauge respondents’ attitudes towards quality of
fast food. The majority of respondents classified all types of food with exception of salads and
fruit, as the worst quality. 34% of respondents have seen a list of nutrition facts in McDonalds
restaurants. Nevertheless, those who had seen it they do not trust what is written on it.
83% of respondents believe that McDonalds use chemicals in their products.
When respondents were given the 5 point Likert-scale, 31 out of 71 (44%) considered what
McDonalds claims on their website, “…committed to providing high quality food, using the
best raw ingredients” as untrue.

Do you believe McDonalds put chemicals in their food? (To improve the taste and/or

improve the texture of vegetables)

McDonalds claims on their website that they use “the best raw ingredients in their

highly quality food”! Do you believe that? Please mark on a scale from 1 to 5 (1 as least

believable)!

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When respondents were given the fact that if McDonalds would have used 100% beef along
with fresh vegetables, apples in their apples pies, etc., 34% said they would go eat there more
often.
30% of respondents have visited www.mcdonalds.co.india and 50% of those who have visited
claimed that they haven’t found it really appealing or useful. Furthermore, 61% of those who
haven’t visit the website they don’t intend to visit it in the future.

If yes, do you find it appealing and/or useful?

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Reason for going to McDonalds as “dying of hunger and nothing else is available” was firstly
picked up during the focus group discussion. It was, however, claimed by larger population as
the strongest reason why eating there as well, where 27 out of 71 participants (38%) selected
that option over the convenient one (28%).

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Figure 5.9: What makes you go to McDonalds?

When participants were asked to write three adjectives they would link to McDonalds
products; unhealthy, cheap, tasty and fatty were the ones that were noted most frequently

 ETHICAL ISSUES
Merely 31% of respondents did not have any knowledge what ethical issue (animal welfare
concerning chicken) in relation to McDonalds is. While great majority of respondents were
familiar with the ethical aspects, 25% of those claimed that this is the reason they don’t eat
chicken in McDonalds.

When you eat chicken sandwich at McDonalds, does the ethical issue regarding chicken

bothers you?

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When respondents were given the fact that if McDonalds would have used 100% naturally
raised chicken meet, 39% said they would go eat there more often.

 IMPACT OF GOVERNMENT AND MEDIA

The great majority (76%) claimed that were familiar with the current obesity issues in India.
15% of those who were familiar with that issue claimed they have now different perception of
fast food and hence they don’t eat it any more. Moreover 28% of those who were familiar
with that issue it affected them in such way that they now eat less fast food as they used to.

Do these high public obesity debates from the government and media have any impact
on you (in terms of what makes you change your attitudes towards fast food products)?

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The infamous documentary ‘Super size me’, which 84% of all participants claimed they were
familiar with, had a strong negative influence (on those who had seen the movie). 35%
claimed that ever since they saw the documentary, they don’t eat in McDonalds anymore.
Indians are known to be obese. What do you think is the reason for that? Please apply

everything that you consider as a reason!

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In conclusion, author found out that the key issues/themes from the focus group discussion
appeared to be of greatest importance with the larger group of India’s fast food target market.
However, one topic from focus group did not match with answers given in questionnaires.
Respondents associated McDonalds and its products with adjectives such as unhealthy, cheap,
tasty and fatty. They ‘ranked’ their food (with exception of salads and fruit) as of the worst
quality. Ethical issue concerning McDonalds, current high public obesity debates in India
along with the documentary Super Size Me, appears to contribute towards negative attitudes
that consumers have with McDonalds.

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 QUESTIONNAIRE
Hi! I’m doing this for my dissertation and I would really appreciate if you could answer
following questions. The topic is FAST FOOD & MCDONALDS.
I’m looking for your attitudes and perceptions regarding fast food products and restaurants,
particularly McDonalds. Moreover I’m trying to find out the impact of current high pubic
anti-obesity debate in India that it has (if it has) on your behaviour.

1. Please choose your sex

o Male
o Female

2. Please choose your age bracket:

o Under 15
o 16-25
o 26-35
o 36-45
o over 46

3. How often do you eat fast food (i.e. McDonalds)?

o Every day
o 3 times a week
o Once a week
o 3 times a month
o Once every month
o I don’t eat fast food

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4. On a scale from 1 to 7 (1 being the worst quality and 7 as the best quality) how nutritious
are McDonalds’ products?
o Beef Burgers 1 2 3 4 5 6 7
o Vegetables in burgers 1 2 3 4 5 6 7
o Salads 1 2 3 4 5 6 7
o Fruit 1 2 3 4 5 6 7
o Apple pies 1 2 3 4 5 6 7
o Chicken sandwiches 1 2 3 4 5 6 7
o McDonalds McNuggets 1 2 3 4 5 6 7
o French fries 1 2 3 4 5 6 7

5. Have you ever seen a list of nutrition facts at the McDonalds restaurants?
o Yes
o No

6. If you have seen it, do you trust it?

o Yes
o No

7. Do you believe McDonalds put chemicals in their food? (to improve the taste and/or
improve the texture of vegetables)
o Yes
o No

8. McDonalds claims on their website that they use “the best raw ingredients in their highly
quality food”! Do you believe that? Please mark on a scale from 1 to 5 (1 as least believable)!
1 2 3 4 5

9. If you were given the fact that McDonalds uses 100% lean beef along with fresh
vegetables, apples in their apples pies, etc. would that make you go eat there more often?
o Yes

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 o No

10. Have you ever checked McDonalds Web page?

o Yes
o No

11. If yes, do you find it appealing and/or useful?

o Yes
o No

12. If you haven’t visit it yet, do you intend to visit their website in the future?
o Yes
o No

13. What makes you go to McDonalds?

o Dying of hunger and nothing else is available
o It’s the most convenient option (as you are either in a hurry and you want something
quick or you often pass it by as you feel hungry, etc.)
o Because it offers great value for money (good food for good price)
o Because I love the taste of it
o I never go to McDonalds because it’s not healthy to eat such food

14. How well are you aware of the ethical issues (animal welfare- for example feeding
chicken with steroids, etc.) regarding McDonalds chicken farming?
o Very familiar
o Quite familiar
o Don’t know what that is

15. When you eat chicken sandwich at McDonalds, does the ethical issue regarding chicken
bothers you?
o Yes it bothers me, and that’s the reason I don’t eat chicken in McDonalds

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 o Yes it bothers me, but I eat it anyways
o It doesn’t bother me at all
o I don’t eat chicken

16. If you were given the fact that McDonalds uses 100% naturally raised chicken meat in
their sandwiches, would that make you go eat there more often?
o Yes
o No
17. Please write 3 adjectives you would link them to McDonalds products they offer!
________________________________________________________

18. Are you familiar with the current obesity in India?

o Yes
o No

19. Do these high public obesity debates from the government and media have any impact on
you (in terms of what makes you change your attitudes towards fast food products)?
o Yes, I now have different perception of fast food and I don’t eat it any more
o Yes, but I still go and it in fast food restaurants, just not as often as I used to
o No, it didn’t affect me in any way and I still eat in fast food restaurants
o I never eat in such restaurants

20. Are you familiar of the documentary about McDonalds “Super Size Me”?
o Yes
o No

21. Did that make you go less in McDonalds?

o Yes, I don’t eat there anymore
o Yes, at the beginning, but now I go as often as I used to
o No, I still eat there

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22. India is known as an obese nation. What do you think is the reason for that? Please apply
everything that you consider as a reason!
o Busier lifestyle
o Sedentary lifestyle (lack of exercise)
o Lack of education
o Eating too much “junk food”

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