PIZZA WARS: Understanding Consumer Behavior

Presented by: DIXIT KAUSHAL DIVYA VERMA SHOBHIT BHATNAGAR

INTRODUCTION
BACKGROUND | PROBLEM DISCUSSION

BACKGROUND
Quick service restaurants also known as fast food restaurants, are defined as food establishments that have limited service and menu items.
Such restaurants rely on a narrow menu, catering to extremely price sensitive consumers. QSR falls under organized sector category and are characterized as having consumer demands for foods served quickly and at the right temperature, accurate orders and clean locations.

INTRODUCTION

BACKGROUND (contd)
Indian QSR Industry is emerging very rapidly and it is a reflection of the change in the lifestyle, food habits and consumption pattern of the population. According to Crisil, Indias quick-service restaurant business will double in just three years, from Rs. 34 billion (US$550m) in the 2012-13 to around Rs. 70 billion in 201516.

INTRODUCTION

PROBLEM DISCUSSION

There are several factors which affect an individual consumers decision making process. The problem however is that due to the changing demographics and entry of new entrants there is no clear set of factors that direct a consumers decision in regard to pizza related decisions.

INTRODUCTION

REVIEW OF LITERATURE
INDUSTRY OVERVIEW | PIZZA SEGMENT | INFLUENCING FACTORS

INDUSTRY OVERVIEW
The industry can be broadly segregated into two segments viz. organized and unorganized.

The country has about 1.5 million eating outlets and only 3,000 of them form the organized segment.
The organized segment due to the huge investments in the industry is expected to reach about Rs. 22,000 Crores by 2017.

REVIEW OF LITERATURE

INDUSTRY OVERVIEW (contd)

The Indian restaurant industry can be broadly categorized into five major segments:
Segment Quick Service Restaurants Casual Dining Restaurants Cafs Fine Dining Restaurants Brand Dominos, KFC, Pizza Hut Yo! China, Sagar Ratna, Haldirams Caf Coffee Day, Costa Coffee, Starbucks Mainland China, Sahib Sindh Sultan

Pubs, Bars, Clubs & Lounges Hard Rock Caf, TGIF, Underdoggs

REVIEW OF LITERATURE

INDUSTRY OVERVIEW (contd)

Each of the segment is projected to grow rapidly over the coming years.
5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 25.00%

21.50%

20.00%
15.00%

4675

11.90% 2365

12.30%

12.00%

11.00%

10.00% 5.00%

1265 Quick Service Restaurants Casual Dining Restaurants Cafes

1045 Fine Dining Restaurants

963 0.00% Pubs, Bars, Clubs & Lounges

Market share (in Rs. Crore)

Expected Growth Rate

REVIEW OF LITERATURE

PIZZA SEGMENT
Out of all the QSR brands in the Indian industry 63 percent are foreign brands and rest are Indian brands. The Indian quick-service market has experienced robust growth throughout the past few years, mostly in metropolitan and tier-I cities. The Indian organized pizza market is estimated to surge at a CAGR of more than 27 percent during 2012-2015. Factors which affect the popularity of pizza and the quick-service segment in general in India include
increasing disposable incomes faster lifestyles greater exposure to various global cuisines a favorable response from younger generations.
REVIEW OF LITERATURE 10

INFLUENCING FACTORS
Hygiene Conditions
Location of the Restaurant Interior / Ambience of the Restaurant

Value for Money

Variety of the Menu Speed of Service Politeness of Staff Offers and Schemes
REVIEW OF LITERATURE 11

METHODOLOGY
OBJECTIVES | PURPOSE | APPROACH | DATA COLLECTION METHODS | SAMPLING | ANALYSIS

12

OBJECTIVES
To identify the factors affecting the choice of consumers (Indian youth) for specific fast food category viz. Pizza.
The research seeks to estimate importance of various factors affecting the choice of pizza outlets by young Indian consumer.

To study the consumption pattern towards fast foods particularly with respect to the frequency of visits and choice of pizza outlets.
To identify the impact of several factors regarding eating out on consumer purchase decision. To study consumer perception about two popular pizza outlets in National Capital Region (NCR), New Delhi.

METHODOLOGY

13

PURPOSE
Exploratory research, aims to formulate and define a problem. In this study, the purpose was exploratory as it aims to collect as much as information as possible about a specific problem. The study was conducted to get a better insight into the quick service restaurant industry.

METHODOLOGY

14

APPROACH
A quantitative approach is formalized and structured and the results are measurable and presentable in figures. A qualitative approach draws conclusion from nonquantifiable data. In this study, the approach was quantitative as quantifiable data was used for exploratory analysis with an aim to gain better understanding into consumer preferences.

METHODOLOGY

15

DATA COLLECTION METHODS

Data were collected from three sources:
Students of ITM University, Gurgaon (email) Customers/shoppers at Ansal Plaza mall, Gurgaon (on the spot)

Friends & family (email and on the spot)

The questionnaire had the following dimensions:

Demographics of the respondent such as age, qualification and status;

Factors affecting selection of pizza outlets;

Comparisons between fast food outlets on various parameters such as service, speed, price, hygiene, variety, and ambience etc.
METHODOLOGY 16

SAMPLE SELECTION
Sample of the study consisted of youth segment in the age group of 18 to 29 years. Convenience samples were drawn from Gurgaon & NCR region. Due to limited resources and time a total of 108 responses could be collected. Out of 108 respondents 98 were valid. Sample Size = 98
METHODOLOGY 17

ANALYSIS
The data were subject to statistical analysis such as descriptive statistical analysis and frequency distribution.

For scaled data, analysis was conducted by testing mean difference using t-test, and carrying out factor analysis.
To make comparisons of ratings, t-test was applied to mean scores of two major pizza outlets that are Dominos and Pizza Hut.

METHODOLOGY

18

DATA PRESENTATION
OVERVIEW | PREFERENCES

19

OVERVIEW
Gender of respondents

40.82%

59.18%

Female
DATA PRESENTATION

Male
20

OVERVIEW (contd)
Age of respondents
18 16 14 13

Frequency

11

6 4 2 2 1 27 28 29 4

18

19

20

21

22

23 24 25 Age of Respondents

26

DATA PRESENTATION

21

OVERVIEW (contd)
Living status of respondents
1.02% 5.10%

33.67% 60.20%

Living in Joint Family Married / Living with Partner Single & Living Alone / Sharing with Friends Single & Living at Home with Parents
DATA PRESENTATION 22

OVERVIEW (contd)
Education level
Undergraduate 39

School

31

Post-Graduate

27

PhD

DATA PRESENTATION

23

OVERVIEW
Occupation
Student 81

Private Service

Professional

Self Employed

Other

Business

DATA PRESENTATION

24

OVERVIEW
Monthly household income
8.16% 6.12% 3.06% 5.10% 8.16%

10.20%

59.18%

Less Than Rs. 10,000 Rs. 30,001 Rs. 40,000 Rather Not Say
DATA PRESENTATION

Rs. 10,001 Rs. 20,000 Rs. 40,001 Rs. 50,000

Rs. 20,001 Rs. 30,000 More Than Rs. 50,000

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OVERVIEW
Leisure activities
Watching movies Spending time with friends Eating out Spending time with family/relatives Watching TV Playing outdoor sports Going for long drive Playing indoor sports Visting historical places Other
DATA PRESENTATION

18 17 15 13 11 8 8 4 3 1
26

PREFERENCES
Favorite pizza outlet
5.10%

40.82%

54.08%

Dominos
DATA PRESENTATION

Pizza Hut

Others
27

PREFERENCES
Preferred mode of buying a pizza
3.06% 8.16% 1.02%

54.08% 33.67%

Home delivery

Dine - in

No preference

Pick up / Take out

Can't say
28

DATA PRESENTATION

PREFERENCES
Importance of factors regarding eating out
0.00% 20.41% 30.61% 37.76% 60.20% 31.63% 43.88% 47.96% 1.02% 2.04% 1.02%

7.14%

6.12%

5.10%

8.16%

66.33%

79.59% 68.37% 57.14% 66.33% 55.10% 43.88%

32.65%

27.55%

Hygiene Location of the Interior / Conditions Restaurant Ambience of the Restaurant

Value for Money

Variety of the Menu

Speed of Service

Politeness of Staff

Offers and Schemes

Most Important
DATA PRESENTATION

Important

Least Important
29

PREFERENCES
Reasons for eating pizza
To eat something different (than usual) 42

For a get-together / party

28

As a snack

17

As a complete meal

11

0
DATA PRESENTATION

10

15

20

25

30

35

40

45
30

PREFERENCES
Rating for pizza outlets
44.90% 41.84% 44.90% 42.86% 34.69% 27.55% 24.49% 33.67% 45.92%

11.22% 0.00% 0.00% 2.04% Dominos Excellent

DATA PRESENTATION

9.18% 1.02% 1.02% 1.02% Pizza Hut Good Ok

9.18% 4.08% 0.00% Papa John's Bad Poor

9.18% 6.12% 4.08% 1.02% Pizza Vito Can't say

31

ANALYSIS
FACTOR ANALYSIS | COMPARATIVE ANALYSIS

32

ANALYSIS
Reason for having a pizza To eat As a For a getsomething complete As a snack together / different meal party (than usual) Frequency % Frequency 4-6 % Frequency 7-9 % More than Frequency 10 % 1-3 No. of times (in one month)
ANALYSIS

Total

7 7.10% 2 2.00% 1 1.00% 1 1.00%

11 11.20% 5 5.10% 1 1.00% 0 0.00%

22 22.40% 4 4.10% 1 1.00% 1 1.00%

30 30.60% 9 9.20% 3 3.10% 0 0.00%

70 71.40% 20 20.40% 6 6.10% 2 2.00%

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ANALYSIS (contd)
It was observed from the data that about 60% of the respondents considered promotional offers
About 60% people also indicated that they regularly eat pizza at outlets others than their favorite outlet On the promotional front, about 70% of the respondent were able to recall an advertisement about their favorite outlet

30% indicated that they do not eat any other type of fast food expect for pizza, suggesting that about 1/3rd of the sample has high affinity towards pizza
METHODOLOGY 34

FACTOR ANALYSIS
Major attributes for choosing pizza outlets, data were collected on seven key attributes of pizza outlets. These are:
Quality Promotions

Price (or Affordability) Hygiene

Service

Variety Combos

Data were collected using 5 point Likert type scale regarding each outlet.
ANALYSIS 35

FACTOR ANALYSIS
Attribute Rating Scores (Mean Standard Error) Mode Quality 3.96 0.032 4 Variety 3.88 0.033 4 Price 3.55 0.068 4 Service 3.52 0.068 4 Promotions 3.54 0.071 4 Combos 3.59 0.058 4 Hygiene 3.86 0.038 4

ANALYSIS

36

FACTOR ANALYSIS (contd)

Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.628 Approx. Chi-Square 126.7 Bartlett's Test of Sphericity df 21 Sig. 0.000
KMO measure whether the size of the sample is adequate for factor analysis (KMO should be above 0.50) Bartletts test is used to test if k samples are from population with equal variances. It tests that the correlation matrix is an identity matrix. The sig. value of 0.000 (< 0.050) signifies that correlations in the dataset are appropriate for factor analysis.
ANALYSIS 37

FACTOR ANALYSIS (contd)

Quality Variety Price Service Promotions Combos Hygiene Total Variance Explained (%) Cumulative Variance Explained (%) Component 1 2 3 0.441 0.728 -0.118 0.219 -0.139 0.927 0.631 -0.355 -0.06 0.705 0.295 0.249 0.655 -0.539 -0.132 0.683 -0.342 -0.248 0.538 0.578 -0.062 33.188 21.493 14.58 33.188 54.681 69.261

ANALYSIS

38

COMPARATIVE ANALYSIS
Quality Variety Price Service Promotions Combos Hygiene Dominos Pizza Hut t-values Sig. (2-tailed) 3.94 0.057 (4) 3.98 0.025 (4) 116.753 0.000 3.89 0.044 (4) 3.88 0.053 (4) 115.292 0.000 3.75 0.060 (4) 3.33 0.131 (4) 51.699 0.000 3.45 0.106 (4) 3.60 0.086 (4) 49.468 0.000 3.66 0.089 (4) 3.50 0.107 (4) 52.217 0.000 3.72 0.062 (4) 3.53 0.088 (4) 69.245 0.000 3.77 0.064 (4) 3.95 0.035 (4) 95.531 0.000

ANALYSIS

39

FINDINGS & CONCLUSION

FINDINGS | CONCLUSIONS | IMPLICATIONS | LIMITATIONS

FINDINGS & CONCLUSION

40

FINDINGS

Dominos is preferred by more number of people

as compared to Pizza Hut.

However more people consider Pizza Hut to be

excellent overall in comparison to Dominos.

Hygiene
factor.

conditions are the most important

FINDINGS & CONCLUSION

41

FINDINGS
Most people prefer to consume pizza by home delivery On the basis of factor analysis:

Product dimension Quality dimension Service delivery dimension

Using comparative analysis:

Pizza Hut is rated higher on quality and hygiene Dominos is rated higher than Pizza Hut on affordability and the schemes and combos offered.

FINDINGS & CONCLUSION

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CONCLUSIONS

Consumer acceptance of food served by pizza outlets is critically important for the future growth of fast food outlets in any economy. Though the rating of pizza outlets attributes under study based on mean score is very high but still consumers eat pizza from outlets to eat something different than usual so as to experience a change. Comparison of Dominos and Pizza Hut indicates a clear difference in their mean score of their attributes and each outlet has its own strong footing on different attributes. Based on the analysis and results, we can say that with more and more acceptability of pizza outlets, changes in life style and competition among the outlets with respect to product (or food) quality, price and service are most essential.
FINDINGS & CONCLUSION 43

LIMITATIONS
The responses were collected on the basis of convenience
sampling however the sample used aptly represents the key demographic for pizza outlets viz. 18 29 years.

Due to time constraint further statistically models could

not be build and only limited analysis could be performed.

FINDINGS & CONCLUSION

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ANY
QUESTIONS?

45

THANK YOU