Factors that influences consumer buying behaviour for fast food of mcdonalds

Introduction:

In the recent period of time, there has been a hasty change in the food habits among UK residents. Fast food is in United Kingdom since medieval age, it wasn’t exactly 21th century fast food but somehow similar to today’s fast food. Fast food has become a popular trend of British culture as it is been carried a long way since Roman Empire. The basic roots of fast food are coming over from America but fast food was in different form in every country. It started getting into more of a worldwide business when globalisation started its role. It is now one of the multi-million pound industries which boost the UK economy. Fast food was revolutionised in 1902 with the introduction of the automat in America, where customers started to line up for readymade foods from the display counters or vending machines, paid and either left or ate the food on the premises. The restaurant which made its first move into UK was KFC in 1965 following the step, pizza hut came into the market in the year 1973 and then the global fast food leader McDonald’s jumped in the year 1974. (Fast food nation, 2009)

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In 1940s, McDonald brother’s introduced new concept of ‘Speedee Service System’ which revolutionized the restaurant business, the benefits of their system was advertised as ‘Imagine- No carhops-No waitresses-No Dishwashers-No bus boys-The McDonald’s system is Self-Service’ (Scholosser,E, 2002..P20) In the past few years fast food has industry has faced many criticism, people are getting more concern about healthy diet. Government interaction in to business by banning the advertisement in certain places as well as many campaigns and programs are raised following the health awareness among the people. People are getting against the salted chips, high fat meals and many other issues.

Why fast food is been considered and its expansion in United Kingdom

Every day many people are consuming fast food and for many people it is a regular evening dinner. Fast food is developing and expanding immensely. A recent survey carried out by BBC world, 2008 shows that 45% of people in UK are likely to agree that they liked the taste of fast food too much to give it up, as well it also reveals that people in the UK are Europe’s highest fast food consumers which is due to the popularity of fast food chains in their favourite’s list.

Consumers are having a growing desire for fast food and UK consumer’s trying to put McDonald’s on the safer side in the economic crisis with sales in 2008 beat last year’s. The per head spending of UK customers in 2007 was £82 in fast food restaurants which is predict to go higher and it will benefit chains like McDonalds and burger King. (Data Source: Caterersearch, 2008)

The United Kingdom national statistics in 2009 (Kent K, 2009) suggests that unique nature of working force has increased due to the rise in numbers of women working as the employment pattern and style of student including international students and many foreign workers has been increased. According to Schlosser E (2002) with increased mobility and the expansion of urban areas people spent more time in their workplace. This was also paired with an increasing number of working women in the workplace thus leading to less time allocated for food preparation at home, supporting the argument Glazer F (2009) provides evidence in the research that working moms are more concerned about lack of time to prepare meals in compared to moms who is not working. In such a way, some three quarters of the family food budget was initially spent on fast food meals. Kent K (2009)

This increase in the work force from migrant workers, foreign students as well the increase of women in work force has made a big contribution in fast food success, considering London as the location of this study it is clear that it is the most diverse city of UK with different cultures sharing their views and rituals in the city.

The fast food has also been driven by multi-cultural people in London, London is considered as one of the most diverse city in the world and where a marketer can expect a diverse buying behaviour too. Many cultural and communities are based in London and the city also expect the numbers of tourist every day, all these different cultures have their unique taste. The multicultural customer has base has forced the marketers to include diverse taste and they have to consider the demand of their multicultural customers.

McDonald has taken the initiative by promoting the different cultural promotional menu for example: Chinese food promotion and recently launched Indian chicken tikka wrap. The food giants are keeping the diverse customer base into consideration. Snackspot, (2009)

The big brands are regularly expanding their menu in order to cope with the demand of the fast food customers. The fast food market is getting really high due to the number of consumers getting towards it; the industry is growing really rapid and fast food companies making better profits on daily basis. The branded fast food outlets and classic British cafes are the main chains in the industry, the restaurants and take away shops are deeply rooted on the British high roads and at popular shopping centres as well as retail parks, motorway and at many other places.

Brandau M, (2009) a recent consumer research has found out that quick service restaurants have gained market through value of offering and premium menu which has helped them to go through post recession recovery, it is also been revealed that big fast food giants has gained a huge number of affluent customer base as well more typical fast food lovers in this economic downturn which is been named as ‘barbell strategy’. As the study show there has been a massive rise in the fast food consumption and every day it is more and more expanding.

McDonald’s is in the UK fast food market for long but recently there has been a fierce competition between

Technology has played its role in almost every business. Technology could be used from improving business to attracting customers into the restaurant. Smithers R (2007) the idea of launching the free internet service in the McDonald’s restaurants have helped the company in getting number of customers into the restaurant, Liddle A (2005) also they are teaming up with Nintendo to promote its portable Nintendo DS to attract the gamers, it is kind of great promotion which is building a brand image and it can attract many teens into the restaurant. The Wi-Fi concept has attracted many students which can help them in savings money on internet. The fast food giants have also started taking card payments few years back which proves to be a convenient method of payment ignoring the hassle of change, card payments has no minimum payment restrictions in many outlets and can be used also for 20p sweet chilli sauce in McDonalds. The card concept was upgraded by Barclaycard arrival of contactless technology which was successfully launched at McDonald’s. Chain Store Age (2007) mentions that according to a survey conducted by Visa, the use of card payments in the quick service restaurants has been rated a more convenient experience, around 82% consumers agreed with the fact and 77% agreed that it pursues them buy whatever they desired because they were not limited to the cash in their wallets.

Pietrykowski B (2004) mentions that fast food industry has faced many critics from many groups in the previous years and it’s still facing problems from the media and also from the government, in the year 1986 there was campaign started by an Italian which was named slow food movement, at present it comprises 77,000 individual members representing 48 countries, Slow food (1989) ‘We are enslaved by speed and have all succumbed to the same insidious virus: Fast life, which disrupts our habits, pervades the privacy of our homes and forces us to eat fast food, so slow food is now the only truly progressive answer’, Walsh B (2008) names this movement as the anti-fast food, anti-industrial and anti-agricultural movement. Whereas Pietrykowski B (2004:12) states slow food movement seeks the preservation of local foods and cuisines by creating and strengthening networks of social relations between consumers and makers. In return the fast food companies introduced healthy options in their menu adding fruits and nutritional information as well reduce salt to their food. Fast food giants are also keeping up the demand by expanding their menus and trying different promotional tactics. Fast food is considered as an easy key and recently with the added values to healthy food and also by adding organic ingredients and food to their menus; it is drawing attention to many new customers. Glazer F (2009) mentions that McDonald’s recently launched ‘the global mom’s panel’ to advice the company on issues such as balanced food and communications with the families as well as launched mom’s quality program insisting on the chain’s quality and safety standards, hence the food chain has taken a family step towards their products and launching such campaigns can create a better trust among their consumers. Sky News (2010), McDonald’s has achieved this success by following these steps in to their business as well as their performance was aided by its superior value at every level of the menu, helping it to push up sales increased by double digits and full year profits growing up to 6% to £2.83 billion.

Life style impacting the fast food industry and cultural influence on fast food advertisement and its consumption

London is been considered as one of the business capital of the world, similarly one of the most diverse city in the world too, hence the lifestyle of the city is much different comparing to other UK cities. Economist (2003) mentions that before when people needed fatty hot food, they had to cook it. So they had to spare time and energy, this has discouraged the consumption but now the mass preparation of fast food took away that concept, nobody has to make big effort and nobody has time. The lifestyle of Londoners is getting more and more hectic. The fast food trend has taken the effort of cooking out from the house to the giant fast food companies, people do not mind eating in trains, busses as long as it saves time. Londoners are getting into work more in comparison to previous years in London. Kent K (2009)

The image above shows the different cities of United Kingdom, which shows London having the highest employment rate in the recent years and again, Economist (2003) the proportion of women going out to work is probably the main force pushing the time-saving trend, Britain is considered as a topper in convenience food league as well as the working women league. Within an increase in employment there has also been a change in the working hours of British people, Summerskill (2000) mentions that it is one of the main reasons of time poverty and fast food consumption in Britain. People are working long working hours possibly with few breaks and many doing antisocial hours (typical night hours), or they take second and third jobs to meet their own needs. In UK, one in nine workers do more than 60 hours a week, antisocial working hours and working extra hours are very common, especially in retail industry as many are getting 24/7. (Dailymail, 2008) A research conducted by Oxford Economics consultancy suggests similarly there has been rise in the income which has made the living standards in Britain better, the living standards were been calculated taking GDP in to consideration. Another lifestyle based factor is individualism, which is much common in London because of many foreign workers and students. Arndt M (2007) In general, the heavy consumption of fast food is a single man in his mid-20s who has a professional job that pays above average wages. Hence the lifestyle is much responsible for the success of the fast food market.

Marketers need to consider many things when they start promoting a particular brand or product. As the world is not homogenous, there is a difference in choice even in the same culture. If we consider London, there are number of multi-cultural people living in the city. A company in order to get success cannot really rely on just one common culture. Rugman A (2001: 583) suggests that globalization ‘does not, and has never, existed in terms of a single world market with free trade, cultural differences has divide the world into the triad blocks. In United Kingdom, Schiffman L, Kanuk L (2007) there is many different societies and culture residing in other term subculture. Subculture is set of people with distinct belief and behaviour, it differs from mere social grouping, is awareness of style and differences in style, language or other phenomena and more complex society. The fast food companies focus on particular subcultures in order to gain the market and to make the advertisement work.

Types of subcultures followed by companies in segmentation

Schiffman L, Kanuk L (2007)

McDonald’s has used the concept of sub-culture by diversifying few of their London based restaurants into ‘Halal’ restaurant, which is certainly a part major muslim community in London. Similarly KFC has followed the same step and has turned 74 out of 700 of their restaurants into ‘Halal’ certified restaurants, their products are been approved by recognised Muslim association and certificate is been displayed at their restaurants (KFC, 2010).

United Kingdom is a very diverse country and considering the fact about the different ethnic backgrounds, fast food companies run different events and food promotions in order to attract the consumer towards the brand and towards their product such as oriental menu taking Chinese into consideration and chicken tikka wrap attracting Indians and Pakistani. Furthermore McDonalds acts according to the location.

McDonald’s restaurant

Ghauri, Cateora, (2005 P-22)

In this competitive period of business, the fast food companies cannot do business without taking international business dimensions into the business. It not only helps to gain the local market but it also helps to gain success in the cross border trade. The marketing polices may be needed to change according to different market culture.

Fast Food’s heavy investment on advertisement

‘Without a strong recognisable brand name a product is no more than a commodity, with – out advertising there is no recognisable brand name.’ (Wright R, 2000 P-89)

Consumer buying behaviour depends mainly on awareness and recognition which is achieved by advertisement. Advertisement can be consider as a way of communication, almost all advertisement contains a persuasive element of sales but it also creates brand and should also deliver a motive.

(Sargeant A, Asif S, 2000)

The above gives an idea how the advertisement is conducted and which factors are been consider when an advertisement is carried on.

In UK, McDonald’s identified the need of co-ordinated marketing and advertising policy, in order to gain the market, a company should find out what the customers want, develop products to satisfy them, charge them the right price and make the existence of the products through promotion. McDonald’s is now the biggest single brand advertiser on British television. Promotional activities and special suggestive selling within the restaurant have a tactical role to play in getting people to return to the restaurants regularly. All franchisees benefit from any national marketing and contribute to its cost, currently a fee of 4.5 percent of sales. (The times, 2009)

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Consumer buying behaviour and Marketing Mix

For a person to make a decision, a choice of alternatives must be available. When a person has a choice between making a purchase and not making a purchase, a choice between brand x and brand y, or a choice of spending time doing A or B, that person is in a position to make a decision. Consumer decision depends on many factors, human brain has two hemispheres one on left and another on the right. It is important for an advertisement to appeal to both sides. This means combining the rational dimension with the emotional component in your brand proposition. If they build a brand personality for a product that has both an emotional and rational appeal then they are appealing customer decision making. (Schiffman L and Kanuk L, 2004), a various index of repetitive purchase go after a similar buying decision which can be determined through brand, products and other factors. (Ehrenberg, 1988:28) Knowledge of consumer buying behaviour can help the companies to identify the needs of consumers better and that can lead towards market success.

McDonald’s is one of the world’s best familiar brands, and the consumer buying decision affects from many point of view. A repetitive purchase can only occur if the companies deliver consistently. A model of consumer buying behaviour is shown below which can be applicable to many companies and it helps to identify the consumer buying decision.

The model describes the customers perception towards different purchase factors, these factors run’s through consumers mind and after a while the consumer can come to conclusion of purchase or no purchase. The Times (2006) has conducted a study on McDonalds, The consumer takes number of external and internal factors before making the buying decision. Psychological factors are important, e.g. what image doest the product give or how the consumer feels when purchasing it (eg; pound saver menu for quick bitters). The advertisement of the product has to be linked with the realism of the consumer buying behaviour, if the advertisement matches with the consumer’s emotion then the result will be positive. It is called a ‘black box model’. (Kotler, 2004) Jill McDonald, Chief marketing officer of McDonalds UK reveals their idea behind the advertisement of McDonalds that they always try to be clear and confident about what they are and what they stand for and they convey in a simple language considering every single person to understand their message as McDonalds have always been customer oriented. Although (The times, 2006) it is essential that the messages which are being communicated by the company to their customers supports each other and there should be brief understanding keeping brand aspects in the communication and the target audience should be rolled out into action which may include purchase of a product or referring to their friends or family etc, the core concept in consumer buying process is to make customer feel positive about the product and (Achenbaum 1989, Lindsay 1990) it is quite fact that advertising is the best source in influencing the consumer buying decision and to build a brand image.

(O’Doneell C, 2005) Marketing mix supports companies marketing and business strategies whereas mix includes price, place, product and promotion, (Kotler P, Armstrong G, Wong V, Saunders J, 2008) mentions that the marketing strategy is linked with the marketing mix in order to achieve the company’s marketing aims and objectives, the marketing mix acts as a toolkit in order to establish a strong marketing hold in the target market. A company may use one marketing mix to reach one target market and can differentiate second one to achieve the target market. (Pride W, Hughes R, Kapoor J, 2009)

Schieffer R, Leininger E, (2008) McDonald’s has successfully marketed their product to their targeted customers and has developed well positioned offerings for a manageable group of target segments, which is an effective marketing mix, offers (Baker M, 2003) a right product that meets the customers demand, that is of effective cost to the customer and it effectively delivers the quality and usage of the product which can be purchased with the utmost convenience. McDonald’s customer profile is very diverse, family visits with their children for a treat, kid’s visits McDonald’s for fun and youngsters visits considering price and the business customers may visits for a quick service. The specific target can be simple to communicate and the company can convey their message in an effective and efficient way.

McDonalds have also tried to offer a product which is demanded by their customers, Jim Skinner, Vice president of McDonald’s limited mention (Schieffer R, Leininger E, 2008) that McDonald’s always focus on good customer service, quality product and hygienic & cleanliness in their restaurants, as well as they always giving tips on management Mr. Skinner mentioned ‘face the facts, listen to your customers because they will tell you what really matters’. The company should always keep in mind that they are not the only one offering the product or service, a customer have a choice unless there the company holds a monopoly of particular product. McDonald’s has to consider the competitors and taking them into consideration they have to revitalise their menu. The product life cycle is much important for a business to float regularly in profit and with good brand image. (Marketing, 2009) McDonald’s has successfully launched new chicken legend burger & chicken selects in competing with KFC for their spicy chicken strips, in their menu in the past year as well introducing fish fingers in their happy meal selection. The company also launched a range of healthy products including the organic milk and they introduce ethical standards for their coffee suppliers. McDonald’s brand has gone to the basic of marketing communications; the new product launched is typically marketed through television and newspaper advertisement. (Justin M, 2009) following this mantra McDonald’s always improve their products and services. In order to sustain in the market McDonald’s has always been innovative in their products and it will continue to do so. In the below mention diagram the chicken legend and chicken selects product of McDonalds are the recently launched new product or innovation of McDonald’s, where as one can say that their popular burger Big Mac is at the maturity stage. (Strategic Management, 2005)

Similarly (Haines S, 2008) the price of the McDonald’s product reflects the targeted customer’s decision to purchase the benefit; it represents a link between the pricing rationale to value, revenue & volume of the product, McDonald’s has always maintained their product when there is reduction in the price in order to compete in the market, usually many companies face the quality issue when they reduce the price of a particular product or services, as the customers mentally thinks that the reduced price products are not really same compared to original product quality. Kurtz D (2008) explains that the pricing objective varies from company to company, the main areas to consider in price objectives are probability objectives, volume objectives, meeting competition objectives and prestige objectives and McDonald’s follows a mixture of this objectives into their business.

References

http://books.google.co.uk/books?id=P_ovoY2ZcbkC&pg=PA255&dq=marketing+mix+model&cd=1#v=onepage&q=marketing%20mix%20model&f=false