How Do Fast Food Consumption Trends Impact Consumer Behaviour - Dominos Pizza - Case Study Example

W DО FАST FООD СОNSUMРTIОN ТRЕNDS АND РАTTЕRNS IMРАСTS СОNSUMЕR BЕHАVIОUR. А STUDY ОF DОMINО’S РIZZА UK Name Course Tutor University Department Introduction Research Background P Patterns and trends of spending give a good picture of consumption behaviors by showing social and economic trends at household levels. Over the past ten years, the fast food market is tremendously grown, as well as home away foods (Jekanowski 1999). These strategies tend to influence food preferences of the consumers. More importantly, parent tends to influence their children eating habits through the application of both explicit and implicit modeling behavior with regards to food consumption. Food consumption patterns knowledge is crucial because it affects consumer buying behaviors increasing the overall sales revenue, as well as the profitability of the firm. The food consumption patterns and trends are a significant consideration for businesses operating in the food industry. Company Profile of Domino (UK) Dominos Pizza was established in the USA in 1960 and it was the pioneer of the fast food. Currently, it is one of the largest pizza delivery companies in the world due to its unique model of operation. The name Domino is the primary company brand as the market leader in the industry. Today, it operates about 9350 stores in more than 70 countries worldwide. Domino's operation in the UK uses the franchise model, as well as its operation in other countries with its headquarters in Michigan, USA. Currently, Domino UK has numerous stores in various towns throughout England Ireland, Scotland and Wales. In its half year of 2010, the company gross profit increased to 237 million Euros. This paper aim is to assess the impacts of fast food consumption trends and patterns on consumer behavior concerning Domino Pizza UK. The objectives of the paper are to: i. To assess the impacts of organizational products and consumer buying behavior on fast food. ii. To find out whether the influence of reference group affects consumer buying behavior of fast food. iii. To determine if client loyalty affects consumer buying behavior of fast food. iv. To determine how business environment affect consumer buying behaviors on fast foods. Literature Review Factors Affecting Consumer Buying Behavior on fast food Many scholars have provided various definitions of consumer behavior. It may be defined as the conduct portrayed by consumers in their search for buying, suing, assessing or disposing of a product or service (Schiffman & Kanuk 2000). They also added that consumer behavior is a study of how people make decisions to spend resources. People have very dynamic concerning their tastes and preferences of food; therefore, food companies should endeavor to understand their target market behavior to implement strategies to meet these needs. There are numerous factors in the market that influence consumer behaviors (Hoch and Loewenstein 1991). A firm should thus strive to understand the consumers' process involved to reach purchasing decisions to assess the performance of their product in the market. According to consumer behavior theory, people are rational and have perfect information about the market; thus, they know how to meet their needs (Belch and Belch 2004). In the fast food industry, such information is crucial as consumer behavior has a huge impact on the firms cost, profit, and revenue. When a firm understands characteristics of consumer buying behaviors, it can effectively come up with ways of predicting future trends in their buying behaviors. The critical determinants of consumer behaviors in the literature are reference groups; organizational products, clients loyalty, and changing business environments. Organizational Products and Consumer Buying Behaviour on fast food Individuals have numerous perceptions of products that affect their buying decision processes. Belch & Belch (2010) suggested that people recognize various tangible and intangible products in fast food industry. However, in the food industry, the perception is determined by the quality of food. Hoch and Loewenstein (1991) argued that factors that affect customer buying behaviors in the fast food industry are new food, quality of services and promotion. Lately, most of the fast food products have a convenient package, size, and shape. Also, promotional strategies in fast food emphasize on taste, low cost, and convenience (Jekanowski 1999). Influence of Reference Group A reference group acts as a point of reference for people through which they form their behaviors. These groups are plays a significant role since they display similar values, and interact regularly. Consumers try to keep their buying behaviors in line with what they believe to be values of their reference group. Of all groups, family enacts the most significant influence on buyer behaviors. Gardyn (2002) study showed that approximately 33% of parents frequently take fast food, despite studies showing that fast foods contribute more than 12% of our calories intake (Guthrie, Lin & Frazão 2002). Another study also indicated that about 24% of parents in most cases eat fast food as a family (Barbour 2004). Furthermore, they are very common to young or parents with busy working schedule, and if a parent consumes fast foods, it can influence children preferences. Even though parent, are not the only influencers of consumption of children, their eating habits tend to influence habits of their children (Moore, Wilkie & Lutz 2002). Young children are also important marketers of fast food, fast food companies marketing strategies are targeted to children and adolescents (Nestle 2002). In another study, approximately 36% advertisements that are brought during children programs were snacks or fast food (Outley & Taddese 2006). With reference groups, there is a strong motivation to conform. Domino's Pizza UK Product Life Cycle Introduction - Dominos pizza started from the USA and then to the UK, which was controlled by the USA headquarters. Growth – Dominos pizza took a hold of the market, and the local franchise took over the existing stores in the UK which saw the introduction of online and interactive TV ordering. This period witnesses high growth in sales. Maturity – There were changes in consumer tastes and sales began to decline. The menu was changed and other products introduced, delivery doctrine became stressed. Decline – The Company is in this stage; however it is addressing the decline and re-designing its core products. Consumer Buying Behavior and Client Loyalty (dominos pizza) Many fast food chains are operating in UK market and offering a wide range of products to the customers. Therefore, to maintain a large market share, fast food customers need to increase customer loyalty (Belch & Belch 2004). Firms should focus on identifying strategies that can influence customer loyalty and influence their buying behavior (Schiffman & Kanuk 2000). According to (Richards & Padilla 2009), service quality can enhance customer loyalty because it ensures satisfaction of the customers. Domino's Pizza has also utilized technology to help its brand known to consumers. They have excellent delivery service; customer just dials Pizza hotline, and their favorite pizza is delivered in less than 25 minutes at their doorstep. Customers can also make orders via the website, and interactive TV. Maintaining customer loyalty is crucial to ensure repeat visits (Zeithaml and Bitner 2003). Domino's Pizza has been able to serve millions of customers in the UK by taking great care of its customers. The company put much value on customer feedback. Domino's Pizza has established great customer loyalty through quality service and feedback which has been greatly beneficial to their company's success. Food Consumption Trends in the UK Several factors have influenced today's consumption trends such home away food, marketing, and food prices. Over the past few years, major food consumption in the UK is majority people find it more convenient to eat away from their homes (Park 2004). This trend is likely to continue in future, fast food markets are expected to grow and offer numerous opportunities for expansion. Furthermore, the majority of people in the UK have a positive perception of fast-food restaurants. Richards and Padilla (2009) found that once in three times out foods are eaten outside the home; reveal significant growth on home away food. Consumer Buying Behavior and Changing Business Environments Business environment refers to both external and internal factors that influence business. These environments are always changing. In the fast food industry, the store location has a huge impact on customers' decisions to buy. Most fast food outlets are located near schools, fuel stations and zoo making them easily accessible (Gallo 1999).Customer-facing technologies, such as company websites, payment options affect customers buying behaviors, particularly in the food industries. Dominos pizza has implemented technology allowing customers to get automatic notifications of every pizza stage. Health is also a key determinant consumer buying behavior in fast food; however other factors such as taste and convenience are stronger determinants buying decisions, especially for children (Belch & Belch 2004). Research Methodology Research approach A researcher must make a decision on which research methodologies to use, that is, qualitative and quantitative methodologies. This is a crucial step because it reflects on varying research philosophies. However, the most significant element does not rely on superiority of the research method, but rather identifying a method that is most appropriate for the study. In this case, our study focuses on deepening an understanding of food consumption trends and patterns that underlie consumer behaviors in the fast food industry, thus choosing an appropriate method would be crucial. Therefore, this study will employ both qualitative and quantitative methods. Taking a mixed approach by combining the two methods can produce insightful information, particularly for business looking to learn more about customer reaction (Denscombe 2008). Quantitative research methods are perceived to be objective; it uses numerical data to gather the necessary information systematically. The data is interpreted with the help of the figures. The quantitative method helps to explain variables and assess their relationship to determine cause-and-effect interactions between them. It allows the results to be administered in diagrams (Saunders et al. 2009). However, qualitative research entails collecting date based on meanings, and the results need classification. It helps to do a comprehensive research on both the background and context of decision making. The data are complex and unstandardized, thus, must be summarized (Hague 2006). Qualitative research is used to analyze people values, beliefs, behaviors, reaction to concepts such as advertisings, buying, as well products and services (Hague 2006). It is considered interpretive compared to quantitative research due to its inductive and constructionism (Denscombe 2010). The quantitative method provides statistical predictions and description while qualitative methods seek understanding of social realities. In this study, both qualitative research method and quantitative methods were used to collect data and analysis of information. The use of a combined method increased the efficacy of data allowing the researcher and examined from different circumstances. A qualitative method was used to analyze managers' perception regarding the sales of Dominos Pizza in the UK. Quantitative research is used to quantify the preferences for fast foods products on organizational products, inference groups, client loyalty and changing business environment factors. Data Collection In this study, primary data collection method will be used. This type of data can be generated from survey, in this case, both interviews and questionnaire survey. Our study depends mostly on primary data. It will help us collect data on fast food consumption trends to show how they affect buying decisions of fast food brands. We collected primary data using both methods. The questionnaire was used to sample attitudes that consumers consider important when buying Dominos pizza. On the other hand, the interviews were used to collect information from the managers of various Dominos pizza stores responsible for marketing. Interviews 10 Dominos pizza managers were selected from the best performing stores in the UK. The managers' contacts were acquired from the store websites where appointments for the interview were made. The researcher used open-ended, as well as close-ended questions. The interview was conducted online because it was not feasible to visit different stores in the UK. This allowed managers from various stores to participate. The interview questions were to understand factors that their influence in the purchase decision of Dominos Pizza. The interview took approximately 15- 30 minutes and the answers wee filled and printed. To ensure that all the information is used, we recorded the interview sessions. Survey Questionnaires Similarly, ten respondents who have a tendency to consume fast food at three Dominos store regularly were selected. A stratified sample was used to select the ten consumers by sampling the respondents from various Dominos pizzas stores including near schools, colleges, business, and others surrounding the city. Structured questionnaires were used to collect data from the survey to eliminate biases. The questionnaires were sent to the selected customers that were involved in the study. Various variables were considered such as changing business environment, client loyalty, organizational products, and inferences groups were measured through five scale questionnaires as strongly agree, agree, somewhat agree, disagree, strongly disagree. Questionnaires allow a quick and efficient method of collecting information. Blaxter, Hughes, & Tight (2006) noted that questionnaires are the most extensively used methods in social researchers. This method is cost-effective and provides standardized answers; thus, it is easy to gather and analyze (Denscombe 2010). The researcher ensured validity and reliability of the data by ensuring confidentiality of the data. This was done by assuring the respondents that the data will only be used for research purpose, and thus, will not face consequences for giving information. The questionnaires were short and thus reducing the probability of respondent answering superficially. Furthermore, the respondent was selected randomly as personal questions have honest answers. Analysis of Data Limitations of the Study Like any other research, we have several limitations. Our sample size was small, consisted of 20 participants due to constrained budget and time we could not choose a bigger sample size. Considering that our study employed quantitative research method, it may be difficult to find a significant correlation from the data as this method requires a large sample size to ensure that all the representative groups are well presented to allow generalization of the results. A larger sample would probably enhance the effectiveness of the research. Also, this study will rely on self-reported data from our respondents. Therefore, this type of data is limited since it is not easy to independently verify it. In other words, we will just take what the respondents reveal at face values both on questionnaires or interviews. However, these types of data may contain several sources of bias; for instance, the managers may exaggerate some of the company's information. Our study is restricted to Dominos Pizza, and thus it cannot be assumed to give a valid representation of fast food industry in the UK. Further research should consider other companies in the fast food industries to get a clearer picture of consumer buying behaviors. Ethical Considerations According to Bryman and Bell (2007), ethical consideration is one of the most important parts of the study. Ethical Considerations are essential parts of the research. The current study on how fast food consumption trends and patterns affect consumer behavior was subject to certain ethical issues. The participants in this study were informed that taking part in the study was voluntary, and they were free to leave the research at will. This was aimed at reassuring the participants they are under no obligation to do so, and there are no consequences if they are not willing to participate in the research. The respondents were also guaranteed that what they will reveal would only be used for academic purposes and only for the particular research. The participants will be given all the information regarding the study objectives, and assured confidentiality of the information they give. The researcher also ensured that there was no use of offensive, discriminatory, or unacceptable language during the formulation of both questionnaires and Interview. Furthermore, the participants were assured that they would not be harmed either physically or psychologically during the duration of the research. On the contrary, the researcher will try to ensure that a climate of comfort is maintained. The anonymity of the research was achieved through conducting a random online survey, particularly when getting information from the customers. References Barbour, J. (2004). Children’s Eating Habits in the U.S.: Trends and Implications for Marketers. New York: Packaged Facts. Belch, G. E., & Belch, M. A. (2004). Advertising and Promotion: An Integrated Marketing Communications Perspective. New York: McGraw Hill. Blaxter, L., Hughes, C., & Tight, M. (2006). How to Research. McGraw-Hill Open University Press. Bryman, A. & Bell, E. (2007). Business Research Methods (2nd ed). Oxford University Press. Denscombe, M. (2010). The Good Research Guide for small-scale social research projects. Open University Press Holch, S. J., & Loewenstein, G. F. (1991). 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