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Market Research
Title:
Factors that Affect the Sales of Selected Fast Food Chains
In Morayta, Manila
Alagao, Welben Chad P.
Uddin, Nortujah
Raposas, Andre B.
Casakit, Flori May C.
Dr. Joselito P. Tem
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Factors that affect the sales of selected fast food chains in Morayta,
Manila
Food is one of the basic necessities in our everyday lives. The industry
which deals with preparing food items/products refers to the food service industry
includes restaurants, cafeterias, canteens, fast food, food carts and trucks and
catering. Restaurants and fast food mainly contributes to its industry. They
provide services to people away from home that is now developing wider, making
it not only a food service industry but gives importance now to hospitality
industry. However, it is the complexity of mans life nowadays that makes fast
food restaurant rise; the shifting consumers preferences towards leisure and
convenience, and urbanization have heighted consumer demand for food
services.
Fast food restaurants are enhanced traditional catering. It is the type of
restaurant that sells quick made and served inexpensive and handy food. They
have provided flexibility and comfort with reasonable prices. Their services are in
the level that can satisfy customer. Like every other country, the food industry
has grown very well in the Philippines. Filipinos love to eat thats the reason why
you will see a lot of restaurant and fast food chains restaurant everywhere.
These restaurants and fast foods can be local or international food chains.
Fast food restaurants have their own benefits. These perceived benefits
are the primary reason why they are patronized. Markets consist of various
buyers, and buyers differ from each other. They may differ in their wants,
resources, geographical locations, buying attitudes, lifestyle, and buying
practices. Therefore, the management needs to describe of his customers how
his store differs from current and potential competitors. Using their attributes, he
can make an image that directly influences the consumer patronage. It is the
purpose of this study to determine the forces that are responsible for students
consumptions of food and the areas of improvement in fast food restaurant in
University-belt.
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On the other hand, Fast food retains its position as the largest and the fastestgrowing category in the Philippine consumer food service industry. During 2012, this
category reported total food service revenue of Ps121.9 billion, taking 30% of total value
sales in consumer food service. Growth in terms of outlets, transactions and value sales
remains vibrant. Outlet openings have been supported by the increasing number of
shopping centers and small community supermarkets in Metro Manila and key cities
nationwide. Outlet growth was estimated to be at 8% in 2012 while transactions and
value sales ballooned by 9% and 11% respectively.
Including revenue from its various franchisees and other brands under the whole
company, Jollibee Foods Corp dominates the local fast food category. The business
organization has grown its portfolio to include Jollibee, Greenwich, Chow king, Burger
King, Mang Inasal and Red Ribbon, most of which are sub-category leaders. The
company takes advantage of its deeper knowledge on the local palate, aggressive
advertising campaigns, and commitment to product innovation and brand acquisition in
order to cement its category leadership in the Philippines. Other important players in
fast food include Golden Arches Dev Corp (McDonalds), RamcarInc (KFC and Mister
Donut) and Philippine Seven Corp (7-Eleven).
Fast food will continue to enjoy moderate in growth in the forecast. Amid more
market saturation and maturity, fast food constant value CAGR is set at 3% which is the
same rate recorded in the review period. In order to grow sales, operators will continue
to grow their outlets via franchising. The opening up of shopping centers and community
supermarkets both in Metro Manila and in key provincial cities will provide lucrative
venues for fast food. This category is expected to remain the biggest in the Philippine
consumer foodservice industry by the end of 2017.
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Abstract
This study examines the effects of the five Ps of marketing on the sales of
different fast food chain in Morayta. Respondents of the study includes the
4thyear IABF Marketing Management students of Far Eastern University tested
and ask for their point of view of towards the Fast food chains in Morayta by
answering the questions in the survey form that is related to the topic. Products
taste and preferences considered being the high factor of the respondents to
avail products and services of the specific fast food chain based on results given
by the respondents. This research also supported by different related literature to
signifies the topic and its essence. However, this study will provide valuable
information of the factors that can affect the sales of fast food chain industry to
project sales.
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Objectives:
To examine the buying behavior of the consumers in a fast food chain.
Identify problems that mostly affect fast food chain industry.
Provide possible solutions on how will fast food chains gain profit and
maximize it.
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Jollibee
McDonalds
KFC
Chow king
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Mang Inasal
Conceptual framework
Promotion
PROCESS
Steps to be done:
INPUT
People
Provide a program
that provide better
service and build
customer loyalty.
Problems usually
encounter:
People
- Slow service
performance
- Safety and security
Product
- Availability of
product (supplier)
- Taste
Place
- Ambiance
- Cleanliness of fast
food chain
Price
- Price cost
Promotion
-using of advertising
Provide safety
measures such as
CCTV, security
guard and
alarming systems.
Product
Agreement between
the suppliers.
Place
-Attractive
OUTPUT
Provide better service
by developing
some personnel
orientations, team
buildings and
other seminars
that can train and
enhance the skills
of their
employees.
Implicate good
ambiance in the
store clean
surroundings and
organized exterior
and interior
designs to
encourage
customers and to
attract sales
tools
Price
Offer affordable prices
Promotion
-used activities and
printed materials
for announcements
Usage of advertising
materials to
provide customer
information
Ensuring product
availability that
meets customer
demand
Figure 1.1 indicates the factors that affect the sale of the fast food chains including
the 5 Ps of marketing mix.
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This conceptual framework is focusing in the 5ps that is mainly affecting sales of a
fast
food chainindustry.
(A.)inputsome problems occurs in marketing mix that the fast food chain
are always facing they somehow become less focusing in their personnels ability
and services that can cause a customer dissatisfaction and lose sales. It is also the
product that sometimes becomes unavailable due to its high demand less supply
that can discourage sales. Place and ambiance is also a main factor because
customer is always looking for good servicestogether with the good ambiance
environment where the customer can move and eat without having dissatisfied
feeling. Price is also a main factor in affecting the sales of the fast food chain
because it is too risky in setting price in whether high or low because it greatly
affects the sales of the firms. Lastly, promotions are sometimes a problem because
firms are not maximizing the use of it, they are locking of support in advertising
sectors that can cause a low brand recall and can cause low customer retention and
can lead to lower sales.
On the other hand, (B.) Process is the things to be done. To increase the
sales of the firms they are needed to engage their personnel in some activities to
enhance their skills and ability. They are also needed to deal more in a fast flow of
logistic and build a good relationship in their suppliers to meet the demand of the
customers. The fast food firms are also needed to provide good ambiance together
with a high level of security to avoid unexpected incidents and lastly is the better
pricing and maximize use of promotional tools.
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The possible output (C.) stated in figure 1.1 states that the fast food firms
will need to develop their personnel and implicate an organized physical store to
create an increase of sales.
As we all know, the fast food industry in the Philippines gets bigger and
larger in the years to pass. Its mainly because a lot of business men are investing in
this industry; they are allowing healthy competitions to provide choices and
satisfaction for the consumers.
For the researchers, this paper can enlighten their thinking with regards to
the reality of life especially as we walk towards concerning one of the basic needs of
individual which is the food. It tackles topics that can help fast food institutions on
how they can provide better service and products offering in their consumers as well
as developing a store ambiance to encourage more customers to eat. It also
includes the establishments of good business team in order to meet the satisfaction
of the customer and on how to maximize the use of advertising tools in order to
provide information for the customer need, because we believe that these can build
a customer loyalty that can cause high sales prospective and results. Also aside
from being informative this research will encourage the readers to stay abreast to
the various developments in the fast food industry and be aware in possible results
of their decision making in choosing the fast food chains they will choose to eat.
Hypothesis
There is no significant difference on the factors that affects the sales of fast food
chains in Morayta.
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Review of Literature
I.
Sales promotions are action-focused marketing events whose purpose is to have a direct
impact on the behavior of the firms customers. There are three major types of sales
promotions: consumer promotions, retailer promotions, and trade promotions. Consumer
promotions are promotions offered by manufacturers directly to consumers. Retailer promotions
are promotions offered by retailers to consumers. Trade promotions are promotions offered by
manufacturers to retailers or other trade entities (Blattberg andNeslin 1990). This thesis is
focused on promotions offered to the consumer, therefore a combination of consumer and
retailer promotions. Throughout the world, sales promotions offered to consumers are an
integral part of the marketing mix for many consumer products. Marketing managers use priceoriented promotions, such as coupons, rebates, and price discounts to increase sales and
market share, entice consumers to trial, and encourage them to switch brands or stores. Nonprice promotions such as sweepstakes, 7frequent user clubs, and premiums add excitement
and value to brands and may increase 6brand attractiveness.
Stimulus-Organism-Response Model
General form of the stimulus-organism response system where the organism stands for
a constellation of internal processes and structures intervening between stimuli external to the
person and the final actions, reactions, or responses emitted (Bagozzi
1986).
Marketing Mix
Variables
Product
Place
Promotion
Price
Environmental
Factors
Economic
Conditions
Social Forces
Cultural Inputs
Perceptual
Physiological
Feeling
Thinking
Process
And
Structure
Psychological Reactions
Purchase Activities
Consumption Patter
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display) or internal (e.g., deprivation) stimulus has caught our attention, and the product is easy
to acquire. Not many thoughts occur. Rather, emotional or motivational processes are primarily
at work. These, however, may occur below the level of self-awareness.
II.
randomly depending on the stimulus that they are confronted with. The
stronger the effect or influence of
randomness
that
is exhibited
by
the
the
stimulus
the
greater
buyers
and
vice
the
versa.
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I.
A sale is the main factor why business men are doing business their goals
is to get high sales. Fast food chain industry gets a high percent in market share
in the Philippines. According to EUROMONITOR INTERNATIONALE Fast food
retains its position as the largest and the fastest-growing category in the Philippine
consumer foodservice industry. During 2012, this category reported total foodservice
revenue of Ps121.9 billion, taking 30% of total value sales in consumer foodservice.
Growth in terms of outlets, transactions and value sales remains vibrant. Outlet
openings have been supported by the increasing number of shopping centres and small
community supermarkets in Metro Manila and key cities nationwide. Outlet growth was
estimated to be at 8% in 2012 while transactions and value sales ballooned by 9% and
11% respectively.
Including revenue from its various franchisees and other brands under the whole
company, Jollibee Foods Corp dominates the local fast food category. The business
organisation has grown its portfolio to include Jollibee, Greenwich, Chowking, Burger
King, Mang Inasal and Red Ribbon, most of which are sub-category leaders. The
company takes advantage of its deeper knowledge on the local palate, aggressive
advertising campaigns, and commitment to product innovation and brand acquisition in
order to cement its category leadership in the Philippines. Other important players in
fast food include Golden Arches Dev Corp (McDonalds), RamcarInc (KFC and Mister
Donut) and Philippine Seven Corp (7-Eleven).
Fast food will continue to enjoy moderate in growth in the forecast. Amid more
market saturation and maturity, fast food constant value CAGR is set at 3% which is the
same rate recorded in the review period. In order to grow sales, operators will continue
to grow their outlets via franchising. The opening up of shopping centres and community
supermarkets both in Metro Manila and in key provincial cities will provide lucrative
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venues for fast food. This category is expected to remain the biggest in the Philippine
consumer foodservice industry by the end of 2017.
II.
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*Some advertising campaign used by leading fast food chains in the Philippines
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III.
Total Customers Experience
Customers total experience can be defined as a totally positive,
engaging, enduring, and socially fulfilling physical and emotional customer
experience across all major levels of ones consumption chain and one that is
brought about by a distinct market offering that calls for active interaction
between consumers and providers. Delivering customers total experience (CTE)
goes beyond mere customer satisfaction and is a relatively new concept since
satisfied customers could still defect (Jones and Sasser, 1995). The ability to
satisfy customers is energetic for a number of reasons and avoids dissatisfied
customers (Syed and Conway, 2006). In the past, companies have primarily
focused on the physical aspects of the product, while totally neglecting the
emotional and value aspects and hence, losing many customers in the long run
( Nunes and Cespedes, 2003). According to Bojanic (2007), most of the
research concerning selection of a restaurant usually is based on
identification of determinant attributes. The attributes are taste of food,
competitive price, service response time, cleanliness of the fast-food
restaurant, fast-food restaurant location, amenity, safety, employee
courtesy, restaurant operating hours, and the availability of healthy menus.
Food Quality
Food quality is one of the most critical components of a dining experience
(Namkung and Jang, 2007; Sulek and Hensley, 2004). Clark and Wood (1999)
confirmed that food quality is a primary factor influencing customer loyalty in
restaurant choice. While, Susskind and Chan (2000) persisted that from the
customers perspective, food quality is a key determinant forvisiting a restaurant.
Mattila (2001) considered food quality as a key predictor of customer loyalty in
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casual-dining restaurants and Sulek and Hensley (2004) found that when
compared with other aspects of the restaurant, such as environmental
components and service quality, food quality is the most important element of
customer satisfaction. Namkung and Jang (2007) tested the impact of food
quality on customer satisfaction and behavioural intentions and found a
positive relation between food quality and satisfaction or behavioural
intentions. Kivela et al. (2000) considered several aspects of food quality such
as tastiness of food, menu variety, and nutrition to examine the effect of excellent
food on customer satisfaction and return patronage. Darian and Tucci (2011)
added that nutrition food making consumers more health over time. For Raajpoot
(2002), he used food presentation, serving size, menu design, and variety of food
to measure product quality (food quality) in the food service industry.
Service Quality
Recently, customers have been progressively aware about quality of
service (Soriano, 2002).Service quality is often viewed from two perspectives that
are from the customers cognitive evaluation of the service provided (Taylor and
Baker, 1994) and a multidimensional construct created by an evaluation of
attribute performance (Parasuraman et al., 1988). Service quality is usually
defined as the customers judgment of the overall excellence or superiority of the
service (Zeithaml, 1988). Thus, it is the customers subjective evaluation formed
by comparing expectations and perceived performance (Bolton and Drew, 1991;
1985, 1988). Based on this gap theory, Parasuraman et al. (1988) developed
SERVQUAL as a mechanism to measure service quality. SERVQUAL consists of
five dimensions that are reliability, responsiveness, empathy, assurance, and
tangibles. In addition, since perceived levels of service in restaurants are based
on the relationship between customers and service providers (Nikolich and
Sparks, 1995), customers perceptions and evaluation of service quality may be
highly dependent upon the service providers performance during service
delivery.
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Atmospheric Quality
Previous studies have identified atmospherics as another important
element of the dining experience and reported that atmospherics influence
customers emotions and expectations regarding service and food quality
(Baker et al., 1994; Reimer and Kuehn, 2005; Wall and Berry, 2007). Usually, a
customer first perceives the atmospherics when he or she enters a restaurant,
which occurs before any actual services or foods are delivered. Thus, the
emotions created by the perception of the atmospherics may affect the
customers reaction to the actual services and foods in restaurants (Bitner, 1990;
Zeithaml et al., 1993). In addition, Ryu et al, (2012) point out that consumers
perception of a restaurants image will return customers cumulative consumption
such as food, atmospherics, and service. That is, if a customer has a high
perception of the atmospherics, then customers expectations for service and
food quality could also be higher.
Perceived Value
The first definition indicates that perceived value is derived from a
comparison between the expected benefits of a product and the sacrifices that a
consumer would have to make in order to guarantee those benefits (Monroe and
Krishnan, 1985). The results of this comparison should affect the level of
customer satisfaction. However, even though individuals in both cases make a
comparison between rewards and costs, the concepts of perceived value and
satisfaction are not synonyms. Previous studies also have concluded that brand
perception can provide understanding for food firm to enhance perceived value
(Wang, 2013). Moreover, perceived value is classified into quality and price
(Dodds and Monroe, 1985). In addition, Zeithaml et al. (1998) indicate
perceived value plays an important role in consumers purchase decision
making, suggesting that behavioral intentions are consequences of
perceived value. From the various dimension of value, the most frequently
apply in recent marketing literature are hedonic and utilitarian values (Babin et
al., 1994; Jones et al., 2006; Park, 2004; Voss et al., 2003). According to
Donovan and Rossiter (1982), hedonic value is related with the revisit intention
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questionnaires
and
some
library
techniques.
The
use
of
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of marketing. The participants are required to fill out each space after the
question choosing form strongly agree to the strongly disagree by putting
check. The researchers tally the results on how quantify each check in
different columns of questions in order to support the research data.
Results
Analyzes focus in the participants answers in the questions given in the survey form
In where they are obliged to answer each questions pertaining to the 5ps of marketing
that is consider the factors of this study. Each participant has their own perception in
different factors that affects the sale of the fast food chains, they have different result
provided on what factors seems to be the list and the most needed in the fast food chain
industry to make their sales high.
Figure 1 and 2 defines the graph of the demographic state of the 47
respondents. it shows the gender and the age of respondents who became the target
market of the study. Figure 1 shows the gender side, it shows that the dominant
respondents are the male (19) with having 3 number points greater than the female
(16).on the other hand, the age dominantly get form ages 16 to 20 years old (graduating
FEU IABF BSBA Marketing Management student)3/4 high than the 21 to25 years old
respondents. Respondents with the dominant demographic results are the ones who
are often go and avail service of the fast food chains in Morayta area.
Figure 1.
GENDER
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Most of our respondents are male students, this show that male
students are more into eating at fast food chains.
AGE
As you can see, 16-20 years old are majority who answered the
questionnaires
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The next figures represent the results of the survey based on the factors that
affects the sales of selected fast food chains in Morayta. The factors include the
Product, Place, Price, People and promotion that greatly affects the buying behavior
of the consumers. It focuses on what factors is the most concern of the consumers
in choosing the fast food chains to eat that project and decrease the sales of the
fast food chains. The respondents chosen were located in Morayta area where they
are all spend time in study and eat their breakfast and lunch in the leading fast food
chain in Morayta area they are chosen because if their capacity theyve experience
in eating in different fast food chains in the area. The results show the different
data coming from the respondents that meets their satisfactions in terms of service
and preference based on the given factor.
Majority of the respondents considers the taste and products that are
being offered by the fast food chains.
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Budget and Allowance has a big impact for students to eat in fast food
chains which is why most of them strongly agree to the statement
about budget and allowance.
The respondents are very particular in the clean surroundings and are
of the fast food chain.
S a l e s
The
respondents
agree
o f
s e l e c t e d
that
f a s t
f o o d
promotional
c h a i n
Medias
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TV
commercials, radio ad, and prints ad help them choose the fast food
chain to eat
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A. Computation Chi-square
Strongly
PRODUCT
Agree
Strongly
Agree
Disagree
Row Total
disagre
e
Brand Name
Variety
of
18
23
24
24
0
0
5
0
47
47
products
Taste of the
33
14
47
product
Column
74
62
141
(Grand
Total:
Total)
B.
PRICE
Strongly Agree
Agree
Strongly
Disagree
disagree
Affordabilit
19 (22.00) [0.41]
25 (20.33) [1.07]
0 (1.00) [1.00]
3 (3.67) [0.12]
y
Price list
Budget and
24 (22.00) [0.18]
23 (22.00) [0.05]
20 (20.33) [0.01]
16 (20.33) [0.92]
0 (1.00) [1.00]
3 (1.00) [4.00]
3 (3.67) [0.12]
5 (3.67) [0.48]
66
61
11
allowanc
e
Column
Total:
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C.
The chi-square statistic is 9.3636. The P-Value is 0.154136. The result is not
significant at p < 0.05.
PLACE
Strongly
Agree
Strongly
Disagree
Row Total
Agree
disa
gree
Ambiance
Location
Cleanliness
Column
30
25
35
90
14
18
12
44
0
0
0
0
47
47
47
141
3
4
0
7
(Grand
Total:
Total)
D.
Strongly
PROMOTION
Agree
Strongly
Agree
Advertisements
11 (11.00) [0
9 (11.00) [0.
endorsers
Special promo.
26 (20.00) [1
discount
gree
5 (10.00
.80]
13 (20.00) [2
36]
13 (11.00) [0
Row
disa
.00]
Celebrity
Disagree
.36]
tal
5 (6.00)
) [2.
50]
17 (10.0
.45]
21 (20.00) [0
To
[0.17]
8 (6.00)
0) [
4.90]
8 (10.00
.05]
47
47
[0.67]
5 (6.00)
) [0.
47
[0.17]
40]
Column Total:
33
60
30
18
141
(G
ra
nd
To
tal
)
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PEOPLE
Agree
Agree
Strongly
disagree
Disa
Row
To
tal
e
Accommodating
staffs
15 (26.33) [4
.88]
20 (15.67) [1
.20]
10 (4.33) [7
.41]
e
2 (0.
47
6
7
)
[
2
.
6
7
Security
30 (26.33) [0
measures
.51]
17 (15.67) [0
.11]
0 (4.33) [4.
33]
]
0 (0.
47
6
7
)
[
0
.
6
7
Good
quality
and services
34 (26.33) [2
.23]
10 (15.67) [2
.05]
3 (4.33) [0.
41]
]
0 (0.
6
7
)
47
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[
0
.
6
7
]
Column Total:
79
47
13
141
(G
ra
nd
To
tal
)
The chi-square statistic is 27.1358. The P-Value is 0.000137. The result is significant
at p < 0.05.
C. Conclusion
As per the study it is analysed that consumers in the todays market are more
aware in the changes and factors which is the five ps of fast food chains industry
having the frequency of visiting the fast food outlets relates with the ages of the
consumers as well as the income affects the spending habits of an individual.
Therefore the factors of five ps of marketing giving great effect to the sales of the
fast food chain industry.
D. RECOMMENDATION
The researchers recommends that the fast food industry will need to focus on their
product offering to and develop product lines to meet the satisfaction of the
consumers and to lead in increase of sales.
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References
Bemmel Van J.H. (2002). Analysis of Sales Promotion on house hold purchase Behavior
Erasmus universities Rotterdam.
Erasmus Research Institute of Management
Borbon, R (2010). Analysis on the effectiveness of inventory methods used by selected
fast food chain in Metro Manila
Crisostomo, M.C. (2010) Effects on premium in sale of fast food along U-belt
Far Eastern University thesis 2010
Euromonitor. (November 2013)Fast food in the Philippines report
Report for consumer behavior 2013
Emmanuel, S.A, Miloslava, C. (1997) the behavior that consumers display in searching
for purchasing-
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