Firstly, I would like to thank to thank God for giving me the mental and physical strength and health to complete this project. I would like to thank my family for their constant support and guidance which helped me to stay motivated, confident and calm during times of distress.
I would like to express my sincere gratitude to my faculty mentor Dr. Shubhangi Salokhe, Professor- Agribusiness department, for her constant guidance and inputs. I would further like to thank my faculty members and my friends who took out time to share their valuable feedback.
Lastly, I would like to thank each and everyone who have played a role in helping me complete this project.
Food diversity in India is an implicit characteristic of India’s diversified culture
consisting of different regions and states within. Traditionally, Indians like to have
home-cooked meals – a concept supported religiously as well as individually.
However, with times due to increasing awareness and influence of western culture, there is a slight shift in food consumption patterns among urban Indian families. It started with eating outside and moved on to accepting a wide variety of delicacies from world-over. Liberalization of the Indian economy in the early 1990s and the subsequent entry of new players set a significant change in lifestyles and the food tastes of Indians. Fast food is one which gained acceptance of Indian palate after the multinational fast food players adapted the basic Indian food requirements viz. vegetarian meals and selected non-vegetarian options excluding beef and pork totally from their menu.
Multinational fast food outlets initially faced protests and non-acceptance from
Indian consumers. This was due to primary perception that these fast food players
serve only chicken and do not serve vegetarian meals. In addition, fast food is perceived expensive besides being out-of-way meals in Indian culture. Today, fast food industry is getting adapted to Indian food requirements and is growing in India. It is gaining acceptance primarily from Indian youth and younger generations and is becoming part of life. Keeping in view the Indian habits and changing preferences towards food consumption, this study has its focus to understand the factors affecting the perception of Indian youth, in the age group of 20-30 years, towards consumption of fast food as well as towards making choice of fast food outlets.
Fast food is a very fast growing industry in world as well as in India especially in
urban areas (small and large cities). However, not much research literature is available on fast food preferences of consumers’ especially young consumers in India.
Fast food industry in India
According to worldwatch.org, India’s fast-food industry is growing by 40 percent a year and supposed to generate over a billion dollars in sales in 2005 as per their estimates. Before the entry of multinational fast food outlets, Nirula’s was a popular domestic fast food provider for eating-out. Nirula’s started with ice-cream parlours and later moved on the range of fast food including burgers, pizzas, sandwiches etc.
Established in 1934, Nirula’s today is a diversified group having a chain of Elegant
Business Hotels, Waiter Service Restaurants, Family Style Restaurants, Ice Cream
Parlours, Pastry Shops and Food Processing Plants in India. The chain with over 60
outlets operating in five states successfully caters to the Indian palate of over 50,000 guest everyday for over 70 years.
Wimpy was another fast food provider besides Nirula’s in Indian market. Wimpy
was the only multinational fast food outlet in India before 1990s with one outlet in New Delhi. In the initial years of its operations, Wimpy used to be visited by foreigners in India. Indians were occasional visitors. Today Wimpy has 8 outlets in the capital city New Delhi and it is expanding its menu with Indian dishes with a view to attract Indian consumer.
After the liberalization policy that came in force in 1991, fast food industry grown in India as multinational fast food providers have set up their business either jointly with Indian partners or independently. McDonald’s signed two joint ventures – one with Amit Jatia and another one with Vikram Bakshi in April 1995. The first outlet was opened in New Delhi. It has 50 outlets in North India and 76 in total all over India. It aims for 100 outlets by the end of 2006. In 1995, Kentucky Fried Chicken (KFC) also entered the Indian market and opened its first outlet in Delhi. In 1996, Domino’s set up base in India by entering into a long-term franchisee agreement with the Bhartia Brothers who had businesses in chemicals and fertilizers. By 2000, Domino’s had presence in all the major cities and
towns in India. Domino’s had grown from one outlet in 1995 to 101 outlets in April 2001. Pizza Hut entered India in June 1996 with its first outlet in Bangalore. Initially, the company operated company-owned outlets and then moved on the franchisee owned restaurants. McDonald’s, Domino’s, Pizza Hut and Nirula’s are the most popular and frequently visited fast food outlets. KFC has limited outlets and has faced number of problems since entry in India. Besides these, there are Pizza Express and Pizza Corner of which are not so popular. 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 (Gupta, 2003).
Fast food and consumption patterns
According to the findings of the recent online survey from AC Nielson, India being at the seventh place, is among the top ten markets for weekly fast food consumption among the countries of Asia-Pacific region. Over 70 per cent of urban Indians consume food from take-away restaurants once a month or more frequently. Survey indicates that Pizza Hut is the most preferred fast food outlet in India. Identifying the drivers for preference of one-brand over another, the survey results indicate that Indians (66 per cent) are amongst the consumers who consider hygiene and cleanliness their most important criterion for selection. A total of 24 per cent of Indians use the quality of service as a decision making criterion to purchase a fast food brand’s offering and 22 per cent rely on their perception of whether a take-away brand offers them healthy food options.
In Indian context, there is high concern towards health in twenty-first century.
There are health related articles in daily newspapers, and health shows on television.
There are special health related magazines that are now very popular. Health related articles do mention to consume more fruits, vegetables, water and to consume less or nil of junk food including fast food being high on fat and calories. Recent news article by Barker (2006) indicates that Indians are facing the problem of obesity and among kinds of food – fast food is one of the reasons for the same. However, there is gap of a particular research in Indian context to have a link between the health problems and fast food consumption. In future, genetically modified food may take the place of fast food of today.
Marketing strategy is a big part of fast food success. Fast food chains have branches almost everywhere because, this is part of their marketing strategy. High Visibility along with global recognition is the most significant and prevalent theme of fast food chains. According to a New York Times article, there are about three new Mc Donald’s Opening every day. The main goal is to increase their outreach by not having any person more than four minutes away from a branch. Just as Mc Donald’s follows this marketing strategy, even other fast food chains does so. The competitor must be able to keep up to be able to complete with the biggest name in the industry, and hence, when new Mc Donald’s opens nearby, a competitor is also opening in the same area.
To understand the growth of fast food industry in India.
To take a look and study the fast food market store and market share in India
To understand the developing marketing strategies in fast food industry in India
The paper has been written by using secondary data collected from articles, books, journals, newspapers, reports, working papers and websites.
Also information has been referred from annual reports of various fast foods organizations.
Growth of the fast food Industry in India
India that is extremely conservative about its food is expressively fond of home cooked and fresh food. This trend is slowly shattering due to the globalization of India and increase of new markets. With number of people eating out increasing, the industry has major opportunities to offer to the players to capture a larger consumer base. In 1996 the international food players like McDonalds, Dominos, Pizza Hut and KFC entered Indian market and at the moment they are investing huge amount of money to seize a share of this extremely profitable market present in India. CRISIL reported that conventionally, the Indian consumers have preferred eating road side foods such as Dhabas and stalls which till date occupies a major share of the unorganized sector; where fast food has been eaten traditionally. However, domestic players like Jumboking, Kaati zone, Fasso’s are growing quickly with the changes in the economy and help of modern employment, in 2001. Jumboking is one of the fastest and biggest growing food chain in local fast food in India. The industry is currently having more than 75 stores across 12 regions in the country. The analysis predict that in 2020 their stores might increase to 200. Indian fast food market is growing at the rate of 40% per annually (CRISIL). India’s QSR business is expected to double in three years from Rs34billion in the 2012-13 to about Rs70billion in 2015-16. The analysists predict that in 2017 their QSR business will increased into Rs172billion in tier-1, tier-11 cities in India.
Present scenario in India
Market stores in India
The table-1 shows that in 2006 Dominos had 128 stores in India to market their produce. In 2010 it increased to 362 stores and in 2014 it increased further to772 stores. In contrast with previous year number of store of dominos has increased in ten years. Similarly McDonald’s market store has increased to 500 in 2015. Same is the case for KFC India’s market store which has increased significantly 372 in 2015. Therefore from the table it is quite evident that Dominos is the leading fast food market store in India.
Market Share of fast food in India
The above table -2 shows that in 2001 Dominos had market share of 4.5% in India. In 2005 it was 5.2%, 2009 it was 9.3% of market share. In 2013 contrast of market share of dominos has increased in twelve years. Even Mc Donald’s market share is quite constant from 2001 to 2013. Similarly KFC India’s market share has increased quite a lot to 12.2%. Therefore from the table it is clear that Dominos remains the leading fast food chain in India.
The above table-3 shows the Indian fast food market size has seen the constant growth from 2010 – 2014 that is 29.78% to 35.18%. It decreased to 26.02% in 2015. The year 2014 has shown the highest market growth rate in India. Furthermore fast food and food industry is highly competitive and conquered by large companies.