COMPARATIVE STUDY ON CUSTOMER SATISFACTION TOWARDS KFC AND MCDONALDS, CHENNAI

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1 COMPARATIVE STUDY ON CUSTOMER SATISFACTION TOWARDS KFC AND MCDONALDS, CHENNAI M.MONDURAILINGAM*, V.JEYASEELAN ** AND A.K.SUBRAMANI*** * I YEAR M.B.A, VEL TECH BUSINESS SCHOOL, VEL TECH UNIVERSITY, AVADI, CHENNAI TAMILNADU, INDIA. ** I YEAR M.B.A, VEL TECH BUSINESS SCHOOL, VEL TECH UNIVERSITY, AVADI, CHENNAI TAMILNADU, INDIA. *** ASSISTANT PROFESSOR, VEL TECH BUSINESS SCHOOL, VEL TECH UNIVERSITY, AVADI, CHENNAI , TAMILNADU, INDIA. ABSTRACT The international market is flooded with various sectors and industries that involve products of daily as well as occasional use for the consumers.in today s competitive world, Service Quality has become one of the most strategic tools for measuring customer satisfaction. The main objective of the study is to compare customer satisfaction level towards KFC and McDonalds, Chennai. Descriptive research is followed in this research. The universe of the population includes the respondents who are the customers of KFC and McDonalds, located at Mogappair, Chennai. The samples (i.e. sample size 50) were selected among the customers of KFC and McDonalds, located at Chennai for this research. The major findings of the study are 22% of KFC customers and 18% of McDonalds customers are not opined either positively or negatively with respect to the quality of food. 18% of KFC customers and 12% of McDonald s customers are not satisfied with price of the food. 24% of KFC customers and 18% of McDonalds customers are satisfied with taste of the food.both the food giants have given each other immense competition in terms of customer satisfaction, service quality and promotional strategies. KEY WORDS: Customer satisfaction, Fast food industry, Food and beverage services, Food retail chain, KFC, McDonald. I. INTRODUCTION Indian consumers lifestyle has immensely helped the fast food industry to mature and expand over the last few years. Other reasons like rising number of nuclear families, exposure to western cuisine and global media, growing number of working women - have had a substantial 50

2 impact on the eating out trends and growth of the fast food industry. The industry experts consider that the middle class young population, with high disposable income, will spend more on eating out at chained fast food outlets. The demand for ready-to-eat packaged food is also expected to record strong growth in the country. In today s competitive world, Service Quality has become one of the most strategic tools for measuring customer satisfaction. Customer satisfaction is actually how customer evaluates the ongoing performance (Gustafsson, Johnson and Roos, 2005). Customer satisfaction is very important in today s business world as the ability of a service provider to create high degree of satisfaction is crucial for product differentiation and developing a strong relationship with customers (Deng et al., 2009). Because of the above reasons the companies consider customer satisfaction as very important element while devising their core strategies. Moreover, the concept of customer satisfaction gained so much importance that American Customer Satisfaction Index (ACSI) was developed. II. COMPANY PROFILE a) About McDonalds The McDonalds restaurant concept was introduced in California by two brothers named Dick and Mac McDonalds of Manchester. The business was founded in 1940 by these 2 brothers. It is the world's largest fast food chain, selling primarily hamburgers, chicken, French fries and carbonated drinks. It was later modified and expanded by their business partner, Ray Kroc who later bought out the business of the McDonalds brothers and went on and found McDonald's Corporation. Advertising has always played a key role in the development of the McDonald's Corporation. Indeed, McDonald's ads have been some of the most identifiable over the years. In 1962, McDonald's introduced its now world-famous Golden Arches logo. A year later, the company sold its billionth hamburger and introduced Ronald McDonald, a red-haired clown designed to appeal to children. McDonald's restaurants are found in 120 countries and serve nearly 54 million customers each day. Most of the McDonaldsrestaurants offers both counter services and home deliveries up to certain distances. At the end of 2003 there were over 6oo McCafes worldwide. b) About KFC KFC (the name was originally aninitialsfor Kentucky Fried Chicken) is a fast food restaurant chain that specializes in fried chicken and is headquartered in Louisville, Kentucky, in the United States. It is the world's second largest restaurant chain (as measured by sales) after McDonald's, with 18,875 outlets in 118 countries and territories as of December The company is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut and Taco Bell chains. KFC was one of the first fast food chains to expand internationally, opening outlets in Canada, the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout the 1970s and 1980s, KFC experienced mixed fortunes domestically, as it went through a series of changes in corporate ownership with little or no experience in the restaurant business. In the early The chain has since expanded rapidly in China, which is now the company's single largest market. PepsiCo spun off its restaurants division as Tricon Global Restaurants, which later 51

3 changed its name to Yum! Brands. KFC's original product is pressure fried chicken pieces, seasoned with Sanders' recipe of 11 herbs and spices. The constituents of the recipe represent a notable trade secret. Larger portions of fried chicken are served in a cardboard "bucket," which has become a well-known feature of the chain since it was first introduced by franchisee Pete Harman In Since the early 1990s, KFC has expanded its menu to offer other chicken products such as chicken fillet burgers and wraps, as well as salads and side dishes, such as French fries and coleslaw, desserts, and soft drinks, the latter often supplied by PepsiCo. KFC is known for the slogan "finger licking' good," which has since been replaced by "Nobody does chicken like KFC" and "So good." III. REVIEW OF LITERARTURE Schlosser E. (2001) pointed out the most frequently reported reasons for eating at fast-food restaurants were fast food is quickly served. Laroche and Parsa (2000) found that that people decide to choose fast food restaurant because they like the taste and prefer instant satisfaction of their taste buds. Fast food restaurant include a wide range of quick and fast service, brands and take only short period to serve it. Consumer make their choice of brands in multi brand situation is one of least understood yet important phenomenon in the marketing of Quick Service Restaurant - Fast Food Restaurant. French SA et al, (2001) pointed out that visiting fast food restaurant is to spent time with family and friends. Drewnowski and Spectre, (2000) contends that one of the factor that influences consumption of fast food is by socio-economic status. There is a difference between people who have high income with people who is have low income. Usually people with low economic status prefer roadside stalls which are inexpensive; hygiene is not a criterion for them. Agnes K.Y. Law, Y.V. Hui, Xiande Zhao, (2004) have studied on Modeling repurchase frequency and customer satisfaction for fast food outlets. In this study, the relationships between customer satisfactions; repurchase frequency, waiting time and other service quality factors in fast food outlets are modeled. Results shows that waiting time, staff attitude, food quality and food variety all significantly affect customer satisfaction. Ronald Gilbert, Cleopatra Veloutsou, Mark M.H. Goode, Luiz Moutinho, (2004) have studied on Measuring customer satisfaction in the fast food industry: a cross-national approach. This study provides a cross-cultural comparison of service satisfaction of fast food establishments in four English-speaking countries. It is based on data collected from customers of five globallyfranchised fast-food chains, using a previously developed service satisfaction instrument. The study reveals two empirically derived, cross-cultural fast-food customer satisfaction dimensions: satisfaction with the personal service and satisfaction with the service setting. Monika J.A. Schröder and Morven G. McEachern, (2005) have studied on Fast foods and ethical consumer value: a focus on McDonald s and KFC. This paper aims to investigate the effect of communicating corporate social responsibility (CSR) initiatives to young consumers in the UK on their fast-food purchasing with reference to McDonald s and Kentucky Fried Chicken (KFC). 52

4 Most respondents (82 per cent) regularly purchased fast food from one of the companies; purchases were mostly impulsive (57 per cent) or routine (26 per cent), suggesting relatively low-level involvement in each case. Four factors were isolated, together explaining 52 per cent of the variance in fast food purchasing behaviour. They were brand value, nutritional value, ethical value and food quality. Sandeep Singh Chib (2012),in his paper analyzed the customer satisfaction level related to KFC and McDonald. It aims at knowing which of the companies (KFC or McDonald) is doing better in terms of service quality and also to know which of the companies (KFC or McDonald) is having more overall customer satisfaction. The researchers have used self-administered questionnaire which is having two sections. First section comprises of statements related to customer satisfaction, derived from Customer Satisfaction Questionnaire (CSQ-8, C. Clifford Attkisson 1979) and American Satisfaction Customer Index (ASCI, University of Michigan 1944). The second section comprises of statements related to service quality, derived from SERVQUAL statements to collect primary data. The investigator has used ANOVA (Univariate), Descriptive Statistics, correlation and regression, KMO and Bartlett Test and Factor Analysis in order to achieve the research objective. The study reveals that KFC was having better service quality and overall customer satisfaction as compared to McDonald. This paper offers suggestions for adoption of customer satisfaction techniques pertaining to Fast food Industry. Finally, the scope for further research also spelt out concisely. Vanishree, M, and Shanthi, L (2013), in their paper discussed about customer awareness and satisfaction towards KFC in Coimbatore. The demand for ready-to-eat packaged food is also expected to record strong growth in the country. After the liberalization policy that came in force in 1991, fast food industry has grown in India as multinational fast food providers have set up their business either jointly with Indian partners or independently. In 1995, Kentucky Fried Chicken (KFC) also entered the Indian market and opened its outlet in Delhi. With changing life style and aggressive marketing by fast food outlets, fast food is also becoming popular in small towns; therefore, success of existing fast food outlets and entry of more is inevitable. Hence, the researcher has chosen this area for the study. Tools like descriptive analysis, chi square analysis and average rank analysis are tested to identify the awareness and satisfaction level of KFC customers. Kinnarry Thakkar and Mrunmayee R.Thatte (2014), in their study attempted to study the consumer perception about two important food franchise, McDonalds and KFC. The study is an explorative study based on primary data collected from 150 respondents in Thane city through a structured questionnaire. Various factors like variety of food items, quality, taste, ingredients etc. are analyzed to study consumer perception about food franchise. The study revealed that price of the food items affect the frequency of visits to food outlets. IV. OBJECTIVES OF THE STUDY Primary Objective: To compare customer satisfaction level towards KFC and McDonalds, Chennai. 53

5 Secondary Objectives: To identify the relationship between demographic variables and factors of customer satisfaction towards KFC and McDonalds. To compare the satisfaction level of KFC and McDonalds customers. To access the user satisfaction towards service, Hygienic, Advertisement, delivery of the products. VRESEARCH METHODOLOGY Descriptive research is followed in this research. The universe of the population includes the respondents who are the customers of KFC and McDonalds, located at Mogappair, Chennai. The samples (i.e. sample size 50) were selected among the customers of KFC and McDonalds, located at Chennai for this research. The samples were chosen from the population, by using Convenience sampling technique (i.e. Non-probability sampling technique), because the exact population size is unknown and the accessibility of the customer is difficult. Survey method of data collection was used in this research. The primary data were collected using structured questionnaire. VIDATA ANALYSIS AND INTERPRETATION 1. FREQUENCY ANALYSIS: Descriptive statistics is used to describe the nature of the population. In this part of analysis, descriptive statistics tools such as frequency table, cross tabulation, mean and standard deviation were used to analyze the data. Table 1 Frequency table Classification of the respondents based on demographic variables S.No Particulars Frequency Percent Gender Group 1 Male Female Qualification Group 1 S.S.L.C/H.S.E U.G P.G Others Occupation Group 1 Student Employee Self Employed/ Business Others (Source: Primary Data) 54

6 From the above table 1, it is inferred majority(56%) of respondents are male and the remaining (44%) are female. 30% of the respondents are PG Qualified. 46% of respondents are employed. Table 2. Frequency table- Personal details S.No Particulars Frequency Percent Type of Food consumption 1 Vegetarian Non vegetarian Accompanied person to the restaurant 1 Family Friend Alone Others (Source: Primary Data) Table 2 presents that, most (96%) of the respondents are non-vegetarian. Majority (72%) of respondents are accompanying friends to visit KFC or McDonalds. 2. CROSS TABULATION Table 3. Cross tabulation for Overall satisfaction towards KFC and McDonalds* Type of food consumption Type of food consumption Type of food consumption Total KFC McDonalds Total Overall satisfaction towards KFC Overall satisfaction towards McDonalds Overall satisfaction Vegetarian Non vegetarian Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Total Dissatisfied Neutral Satisfied Highly satisfied Total Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Total (Source: Primary Data) 55

7 Table 3 presents that, only 4% respondents are vegetarians, and that too they are the customers of McDonalds, these two customers are satisfied with McDonalds. In Non-vegetarians category, out of 96% of respondents, 48% are the customers of KFC and another 48% of are McDonalds.Out of Non-vegetarians. 16% of respondents from KFC are satisfied and 22% of respondents are satisfied in overall manner. Table 4.Cross tabulation - Customer Satisfaction towards the KFC and McDonalds Fast food Restaurant Total in S.No Particulars KFC in % McDonalds in % % Once a week Frequency of Once in 2 Weeks Visit Once in a month Once in 6 months Accompanying person Average expenses in a visit Family Friend Alone Below Rs Rs. 100 to Rs Above Rs Price of food 5 Quality of food 6 Taste of food Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied

8 Freshness of the food Preparation Time of KFC Variety of foods Hospitality of the staff Environment of KFC Advertisement attractiveness Attractive advertisement of KFC Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied Highly dissatisfied Dissatisfied Neutral Satisfied

9 Highly satisfied Home delivery of food Favourite restaurant Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied KFC McDonalds Both Overall satisfaction towards restaurant Highly dissatisfied Dissatisfied Neutral Satisfied Highly satisfied (Source: Primary Data) inference: From the above table 4, it is inferred that the 48% of respondents visit KFC or McDonalds once in two weeks. Majority (72%) of respondents visit KFC or McDonalds with their friends. 40% of customers spends between Rs.100 and Rs.500 in KFC or McDonalds restaurants. 22% of KFC customers and 18% of McDonalds customers are not opined either positively or negatively with respect to the quality of food. 18% of KFC customers and 12% of McDonalds customers are not satisfied with price of the food. 24% of KFC customers and 18% of McDonalds customers are satisfied with taste of the food. 3. INDEPENDENT SAMPLE T-TEST: HYPOTHESIS 1 Null Hypothesis: There is no significant difference between Vegetarian and Non-vegetarian respondents with respect to the factors of customer satisfaction towards KFC and McDonalds. 58

10 Highly Dissatisfied Dissatisfied Neutral Satisfied Highly Satisfied ZENITH International Journal of Multidisciplinary Research ISSN Table 5. Independent sample t test for significant difference between vegetarian and nonvegetarian with respect to preference towards food items of KFC and McDonalds. Overall satisfaction tvalue p value Type of food preferred Vegetarian Non vegetarian Total (Source: Primary Data) Inference: Table 5 depicts that, p value is 0.472, which is greater than 0.05, so null hypothesis is accepted and alternative hypothesis is rejected at 5% level of significance. Hence it is concluded that there is no significant difference between vegetarian and non-vegetarian respondents with respect to preference towards food items of KFC and McDonalds. ONE-WAY ANOVA TEST HYPOTHESIS 2 Null Hypothesis: There is nosignificant difference between qualification of the respondents and the customer perception towards price, quality and tasteof the food with regard to McDonalds and KFC products.\ Table 6. One-way ANOVA for significant difference between qualification of the respondents and the customer perception towards price, quality and taste of the food with regard to McDonalds and KFC products Particulars F value p value Price Between Groups Within Groups Total Quality Between Groups Within Groups Total Taste Between Groups Within Groups Total (Source: Primary Data)

11 Inference: The table 6 shows that, the p value is greater than 0.05 for all the factors of customer satisfaction, so the null hypothesis is accepted and alternative hypothesis is rejected at 5% level of significance. Hence it is concluded that there is no significant difference between qualification of the respondents and the customer perception towards price, quality and taste of the food with regard to McDonalds and KFC products. VII. DISCUSSIONS: The customers are mostly satisfied towards the price, quality and taste of KFC products. According to Hygiene, Preparation time, Nature of product and hospitality McDonalds was prepared much. There is no significant relation between vegetarian and non-vegetarian respondents to prefer the product of KFC and McDonalds. There is no relation between qualification of the respondents and the price, quality and taste of McDonalds and KFC products. 48% of respondents visit KFC or McDonalds once in two weeks. Majority (72%) of respondents visit KFC or McDonalds with their friends. 40% of customers spends between Rs.100 and Rs.500 in KFC or McDonalds restaurants. 22% of KFC customers and 18% of McDonalds customers are not opined either positively or negatively with respect to the quality of food. 18% of KFC customers and 12% of McDonalds customers are not satisfied with price of the food. 24% of KFC customers and 18% of McDonalds customers are satisfied with taste of the food. VIII. IMPLICATIONS: From the survey we come to know that the number of customers were fond of non-veg products of both KFC and McDonalds. So, importance of products were given only to non-veg customers. From the above point we come to know that only non-veg products are mostly sold so by introducing new varieties in veg will attract the veg customer and it will increase the number of customers Though KFC is an international product, the price of their products were nominal to the people according to the region. But McDonalds have common for all region so if the price level is modified McDonalds also can reach level of KFC If the method of delivering products of McDonalds should be revised to increase the number of customer. The fast food giants may open exclusive vegetarian food restaurant to attract vegetarian customers with more variety on vegetarian foods. IX. CONCLUSION: In India fast food market is strongly dominated by these 2 brands. But when it comes to comparing these two brands the following study brings us to a conclusion that as far as market presence and 60

12 brand value is concerned McDonalds has definitely provide a point for themselves. But KFC who re-entered in 2003 has shown a rapid progress and no wonder if in the coming year KFC overtakes McDonalds in the Indian market share. Both the food giants have given each other immense competition in terms of customer satisfaction, service quality and promotional strategies. X. REFERENCES: BOOKS: 1. Kenneth E Clow & Donald Back, Integrated Advertising, Promotion & Marketing Communications, Pearson, 2012 Edition. 2. George Belch & Michael Belch, An Integrated Marketing Communications Perspective, McGraw Hill Education, 2010 Edition. 3. Consumer Behaviour: Perspectives, Findings and Explanations (Paperback) by John O'Shaughnessy Publisher: Palgrave MacMillan Released: 2013 MacMillan 4. Consumer Behavior by Leon G Schiffman, Leslie Lazar Kanuk, ISBN , Consumer Behaviour : Text and Cases 1st Edition (Paperback) by Ramneek Kapoor, Nnamdi O. Madichie Publisher: Tata-Mcgraw Hill Publisher Edition: Consumer Behaviour Building Marketing Strategy with CD by Del l. Hawkins ISBN Publication, 2011 Eleventh Edition. JOURNALS: 1. Sandeep Singh Chib, Relationship matrix between customer satisfaction and service quality in fast food industry - A comparative study of KFC and McDonalds, International Journal of Retailing & Rural Business Perspectives, Volume 1, Number 1, July -September Kinnarry Thakkar and Mrunmayee R.Thatte, Consumer Perceptions of Food Franchise: A Study of McDonald s and KFC, International Journal of Scientific and Research Publications, Volume 4, Issue 3, March 2014, Pp Vanishree, M and Shanthi, L, A Study on Customer Awareness and Satisfaction Towards Kentucky Fried Chicken (KFC) in Coimbatore, Global Research analysis, Volume 2, issue 1, Jan 2013, Pp WEB REFERENCES: Hu%20_Wei.pdf 61

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