European Business School London

BABM DISSERTATION

CONSUMER BEHAVIOUR

What factors are currently influencing the consumer decision-

making process in the fast food restaurant industry in the UK, and

how is McDonalds responding to changing environment and

consumer behaviour?

Rok Zerjal

Tutor: Richard Mannix

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ACKNOWLEDGEMENTS

Writing and putting together this dissertation has been both exiting and challenging. Indeed, I

have been able to work on really interesting topic- consumer behaviour.

In twelve weeks time that we have been given to write this dissertation have been very

intensive, to some extend exhaustive as well, and have taught me how to deal with a great

amount of information and work within limited period of time.

I have now completed my dissertation of Business and Management degree program at the

European Business School London, and I would like to take this opportunity to thank a few

persons in for their direct or indirect contribution to my work.

Firstly, I would like to thank my tutor Mr. Richard Mannix, Subject Leader Marketing EBSL,

who has been indeed extremely supportive and understanding whilst I was progressing

through my work. Without him I believe that I would not be able to write my dissertation in

the way it has been written.

Finally, I would like to thank my family, my dad who has provided me with some ideas, and

my mom, who has contributed with her thoughts while deciding upon my dissertation topic,

as well as I am thankful for her support and patience during the past weeks.

Rok Zerjal

London 4th of December 2006

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION 1

1.1 Consumer behaviour 1

1.2. Fast food VS Junk Food 1

1.3 Obesity in the UK 2

1.4 Fast food industry in the UK 2

1.5 McDonald's Corporation background 3

1.6 Research question 4

1.7. Plan of the dissertation 5

CHAPTER 2: LITERATURE REVIEW 6

2.1 Consumer decision-making process 6

2.2 Consumer attitude formation and change 8

2.3 The marketing mix 9

CHAPTER 3: RESEARCH METHODOLOGY 12

3.1 Research philosophy 12

3.2 Research approach 12

3.3 The purpose of the research 12

3.4 The research strategy 13

3.5 Data collection techniques and analysis procedures 13

3.6 Sample selection 14

3.7 Data collection 15

3.7.1 Group interviews- focus groups 15

3.7.2 Questionnaire 16

3.8 Models employed in dissertation 17

3.8.1 Consumer decision-making process 17

3.8.2 Tri-component Attitude Model 18

3.8.3 Hierarchy of Effects Concept 19

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3.8.4 PEST Framework 20

3.8.5 Ansoff’s product/market matrix 21

CHAPTER 5: FINDINGS

5.1 External analysis 22

5.1.1 Fast food industry in the UK- overview 22

5.1.2 PEST Framework 24

5.1.2.1 Political / Legal conditions 24

5.1.2.2 Socio-cultural conditions 26

5.1.2.3 Key drivers of change: 27

5.2 Key factors influencing the consumer 29

decision-making process

5.2.1 Focus group (analysis of key points) 29

5.2.2 Questionnaire (analysis of findings) 29

CHAPTER 5: RECOMMENDATIONS 44

5.1 Option description and evaluation 45

5.1.1 Option 1: Increase awareness of the 45

quality of McDonalds’ products

5.1.2 Option 2: Introduction of new healthier 47

menus along with refurbishment of restaurants

5.2 Implementation plan 48

CHAPTER 6: CONCLUSION 50

BIBLIOGRAPHY 52

APPENDIX A 56

APPENDIX B 57

APPENDIX C 62

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LIST OF FIGURES

Figure 1.1: Market share in UK (2004) 3

Figure 3.1: Consumer-decision making process 17

Figure 3.2: Tricomponent Attitude model 18

Figure 3.3: The low-involvement hierarchy 19

Figure 3.4: PEST Framework 21

Figure 3.5: Ansoff’s product/market matrix 21

Figure 5.1: United Kingdom Fast Food Market Value 22

Figure 5.2: United Kingdom Fast Food Market Value 23

Figure 5.3: Expenditure on eating out by sector 23

Figure 5.4: Market share in UK (2004) 24

Figure 5.5: question 3 36

Figure 5.6: question 7 37

Figure 5.7: question 8 37

Figure 5.8 question 11 38

Figure 5.9: question 12 39

Figure 5.10 question 14 40

Figure 5.11 question 18 41

Figure 5.12 question 20 42

Figure 5.13: question 22 43

Figure 5.1 Options for McDonalds illustrated 44

in Ansoff’s matrix

Table 5.2: Gantt chart for 2007 49

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FORWARD

Having studied in United States (San Francisco) gave me the opportunity to experience the

eating habits of the “fast food nation” and the passion of the fast food myself. In those four

months of studying in San Francisco, I have gained 7 kilograms. At that point I began

questioning my self the importance of healthy diet and how nutritious in fact fast food is?

In the UK today, there is virtually no week that passes by without hearing any news regarding

obesity, health concerns and dietary issues, be it in newspapers or on TV news. That was my

primary motivation, along with studying in the US, that pushed me towards understanding the

process which impacts on us consumers, whether we will go and eat burgers or not.

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EXECUTIVE SUMMARY

The aim of this dissertation is to investigate the factors that are influencing consumer

decision-making process in relation to fast food restaurant industry in the UK. It further aims

to examine how is McDonalds responding to changing environment and consumer behaviour.

This is important and at the same time interesting to observe such topic, because of the high-

profile political and public debate on obesity and other health issues that is UK currently

facing.

A better understanding of the background and problems related to the fast food issue and

context of decision-making process is first obtained via literature review, where various

academic journals were examined. Afterwards the qualitative focus group was conducted with

an aim to explore and gauge consumer attitudes towards fast food and McDonalds. Key

themes from focus group formed questions for the questionnaire. This quantitative survey was

then used to gauge whether the views of the respondents from focus group were

representative of a larger group.

In order to examine the context in which McDonalds is evolving, with addition to identify the

key drivers of change that might influence fast food industry in the future, PEST framework

was applied. Changing consumer lifestyle and Government interference were highlighted as

two potential drivers of change.

Key themes from focus group were quality of fast food, ethical aspects (animal welfare), trust

towards McDonalds and impact of media and Government on consumer behaviour. These

themes were then tested to a larger group using questionnaires. Respondents associated

McDonalds and its products with adjectives such as unhealthy, cheap, tasty and fatty. They

‘ranked’ their food (with exception of salads and fruit) as of the worst quality. 25% of

respondents claimed that ethical issue regarding chicken bothers them and that is the reason

they don’t eat chicken in McDonalds. Moreover 28% of those who were familiar with current

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high public obesity debates in the UK issue it affected them in such way that they now eat less

fast food as they used to. 35% of respondents claimed that ever since they saw the

documentary “Super Size Me” they don’t eat in McDonalds anymore.

Most purchases of fast food occurred as a result of impulse decision-making.

Since consumer’s knowledge/information acquired regarding fast food are mostly negative, as

a result their attitudes are also negative. There are also external influences that have negative

impact on consumer decision-making process i.e. current high public obesity debates in the

UK. McDonalds is responding on changes in environment and consumer behaviour by

introducing healthier menus. Consumers do not trust McDonalds, which also negatively

impact on their decision-making process. All factors above contribute towards risk perception

that consumers have with McDonalds food. Marketers at McDonalds try to reduce perceived

risk by providing consumers with information regarding their food. That is also author’s

proposed recommendation- to increase awareness of the quality of McDonalds’ products and

hence reduce consumers perceived risk and increase their trust with McDonalds brand.

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CHAPTER 1: INTRODUCTION

This chapter will give the reader a clear statement of the research question and the problem

statement that will be addressed in this research. Moreover, the background information on

definitions of key terms and the chosen organisation will be presented. Finally, the ‘route

map’ will be illustrated in order to guide the reader to the rest of the report.

1.1 Consumer behaviour

Referring to Solomon (2006, p.27) consumer behaviour is the study of the processes involved

when individuals or groups select, purchase, use or dispose of products, services, idea or

experiences. Consumer behaviour focuses on how individuals make decisions to spend their

available resources on consumption related items. That includes what they buy, why they buy,

when they buy, where they buy it, how often they buy it how often they use it, how they

evaluate it after they purchase and the impact of such evaluations on future purchases, and

how they dispose it. Schiffman and Kanuk (2004, p.8)

1.1.2 Consumer attitudes

According to Ajzen (1998) the attitudes are the first determinant of behaviour intention. In

consumer behaviour context attitude is a learned predisposition to behave in a consistently

favourable or unfavourable way with respect of a given object. There is a general agreement

that attitudes are learned. This means that attitudes relevant to purchase behaviour are formed

as a result of direct experience with the product, word-of-mouth information acquired from

others, or exposure to mass media advertising. Internet etc. (Schiffman and Kanuk, 2004,

p.253) As learned predispositions, attitudes may propel consumer towards particular

behaviour or repel the consumer away from particular behaviour. . (Schiffman and Kanuk,

2004, p.253)

1.2. Fast food VS Junk Food

Fast food is regarded as “food, as hamburgers, pizza, or fried chicken, that is prepared in

quantity by a standardized method and can be dispensed quickly at inexpensive restaurants for

eating there or elsewhere”. (dictionary.com, 2006)

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Junk food is regarded as “food such as potato chips, sweets and doughnuts, which is mass-

produced and is of low nutritional value”. (dictionary.com, 2006)

Often the term junk food is used to describe fast food. Just recently, the debate has been going

on whether the term junk food (to describe fast food) is in fact justified. Author of article

argues that the "junk food" tag seem to be applied selectively, and often to food outlets in

urban and suburban areas but not to those in leafier parts. Hence, he points out that the term

"junk" has become a way of disapproving of certain foods. (O’Neill, 2006)

1.3 Obesity in the UK

The most recent research has shown that being overweight or obese is now the norm in the

UK, with figures released by the government showing that two- thirds of men and almost 60%

of women are unhealthily heavy. (Boseley, 2006) Furthermore UK has the highest level of

obesity in Europe. (Datamonitor, 2006) According to a report issued by the Department of

Health, the findings for ‘Forecasting obesity in 2010’ were grotesque. Within four years, it

predicts, a third of all adults in UK (13 million people) will be obese. So will 1million

children. (Marrin, 2006)

1.4 Fast food industry in the UK

Definition of the fast food industry:

The fast food industry is defined as the sale of food and drinks for immediate consumption

either on the premises or in designated eating areas shared with other foodservice operators,

or for consumption elsewhere.

Fast food outlets are specialised in burgers, bakery products, chicken, ice cream, fish and

pizza. (Datamonitor, 2006)

In spite of consumer concerns of fast food being linked with problems such as obesity,

diabetes, heart conditions, food poisoning and scares and unethical advertising, the UK fast

food industry has enjoyed remarkable growth in recent years.

In terms of per capita expenditure, between 2000 and 2005, the fast food outlets have been

growing at the fastest pace within the consumer food service sector. (Euromonitor, 2006b)

1.5 McDonald's Corporation background

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McDonald's Corporation was the leading fast food outlet in the UK in 2004, with an 18.3%

value share and a clear lead over its nearest rivals KFC (owned by Yum Brands) and Burger

King. (Euromonitor, 2006b)

Figure 1.1: Market share in UK (2004)

Name of the company Market share (%)

McDonald's Corp 18.3

Yum! Brands Inc 8.4

Burger King Corp 8.3

Pret a Manger Europe Ltd 1.4

Compass Group Plc 1.2

Nando's Group Holdings Ltd 0.8

Source: Euromonitor, 2006b

McDonald's is a pioneer in the fast food industry and today world leader in the sector. The

company has over 31,000 fast food restaurants in over 120 countries. (MarketLine, 2006)

The company operates primarily in the US and the UK. It is headquartered in Oak Brook,

Illinois and employs 447,000 people all over the world. (Datamonitor, 2006)

McDonalds currently operates in more than 1,316 restaurants throughout the UK. Its profits

grew by 55% in 2004. (Euromonitor , 2006b)

In 2003 the company was loosing money for the fist time in its five-decade history, as it was

serving mainly greasy food and therefore fuelling obesity epidemic. Moreover the company

was loosing important consumers trust due to release of the documentary ‘Super size me’ and

critical book ‘Fast food nation’. However, McDonalds introduced healthier menus and just

recently (October 13th 2006) it has announced that its sales had rocketed, sending its shares

soaring to a six year high. British restaurants were singled out among the biggest improvers in

performance. (Clark, 2006)

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1.6 Research question

What factors are currently influencing the consumer decision-making process in the fast

food restaurant industry in the UK, and how is McDonalds responding to changing

environment and consumer behaviour?

The research question can be further divided into three sub sections in order to clarify the

objectives of the research.

A. In order to present the context in which McDonalds is evolving

o The PEST Framework will be applied to identify the key drivers of change that

may have an impact on the industry in the future.

B. With the aim of identifying the factors that are influencing consumer purchasing

decisions in relation to fast food products:

o The Consumer Decision-Making Process will be examined, in particular the

psychological field- focusing specifically on consumers’ attitudes towards fast

food and McDonalds. In addition the socio-cultural environment, as external

factors that have impact on consumers’ decisions will be investigated.

C. Corporate responses on above changes:

o How is McDonalds responding on the changes with respect to its marketing

mix and communication strategy? The dissertation also seeks to propose a set

of recommendations for future actions by the company.

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1.7. Plan of the dissertation

INTRODUCTION

This chapter will give the reader a clear statement of the research question and the problem statement that will be addressed

in this research. Moreover, the background information on definitions of key terms and the chosen organisation will be

presented. Finally, the ‘route map’ will be illustrated in order to guide the reader to the rest of the report.

LITERATURE REVIEW

This chapter sets the study within its wider context and show the reader how this study supplements the work that has already

been done on chosen topic. Therefore it identifies, analyses, compares and contrasts views and theories of other writers in

relation to the research topic. It also provides the stepping-stone towards the methodology chapter of the dissertation.

METHODOLOGY

In this chapter the research design and the research methodology employed to answer the research question will be

explained and justified. In addition, it provides the reader with a clear description of models and concept used for the

analysis.

FINDINGS

This chapter will provide a reader with detailed presentation of facts and data obtained using tools described in research

methodology, leaving out discussion for the final chapter. In order to communicate findings clearly, author decided to brake

down this chapter into to parts. Firstly, the external analysis will be applied, in order to provide a reader with the context in

which McDonalds is evolving. And secondly, the key factors influencing the consumer decision-making process will be

analysed/explored.

RECOMMENDATIONS

In this chapter a set of proposed recommendations as well as supporting analysis of the options for McDonalds will be

depicted. In addition the implementation plan to support the key recommendation, including description of resources

required will be illustrated.

CONCLUSION

In this chapter author will conclude his research with how the research question has been solved. In addition a brief re-cap

of the whole dissertation will be provided.

CHAPTER 2: LITERATURE REVIEW

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This chapter sets the study within its wider context and show the reader how this study

supplements the work that has already been done on chosen topic. Therefore it identifies,

analyses, compares and contrasts views and theories of other writers in relation to the

research topic. It also provides the stepping-stone towards the methodology chapter of the

dissertation.

The following literature review will critically analyse the theories associated with the research

topic. Firstly, it looks at the issues of consumer behaviour; hence it highlights the factors,

which influence the consumer decision-making process, predominantly the consumer

attitudes. The author has found a variety of academic articles, some of which focus on food

industry and public trust in food safety. Other articles examine more generally models of

consumer attitude formation, which might be useful applied to the research question in this

dissertation.

While the first section focuses on the aspects of consumer behaviour, the second part of the

review, as already outlined in the introduction section of dissertation, observes the marketing

issues, particularly the marketing communication strategy within the marketing mix.

Furthermore this review will contribute towards creation of possible marketing strategies as

well as recommendations that McDonalds might pursue in order to respond on changing

environment and consumer behaviour.

Therefore the following theories from consumer behaviour and marketing have been outlined:

Consumer decision-making process

Consumer attitude formation and change

The marketing mix

2.1 Consumer decision-making process

The consumer decision to purchase or not to purchase the product is crucial for marketers. It

can signify whether the marketing strategy has been wise, insightful, and effective, or whether

was poorly planned and missed the mark. Hence marketers are particularly interested in such

process. (Schiffman and Kanuk, 2004, p.581)

Verbeke (2005) recognizes that at any point in time throughout the decision-making process,

judgements and choices are affected by a variety of stimuli from environment as well as by

internal process and characteristics form the consumers themselves. Based on earliest

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presented models of consumer behaviour towards food (Pilgrim, 1957, cited by Verbeke,

2005) and on a review of factors affecting food acceptance and behaviour (Shepherd, 1990,

Steenkamp, 1997, cited by Verbeke, 2005) proposed a classification with three types of

influencing factors: environmental factors, person-related factors and properties of the food.

Jobbers (1995) identifies the concept of influences on consumer purchasing behaviour among

which he points out the level of purchase involvement as one of the factors that influences the

consumer decision-making process. Referring to Kim (2005) who was investigating how

product involvement and values interact with consumers, more current research examines

consumer involvement under working assumptions that different types of product

involvement trigger different behaviour. In the research conducted by Schroeder and

McEachern (2005), who were analysing the impact of McDonald’s and KFC’s corporate

social responsibility (CSR) on consumers purchasing behaviour, authors propose that

purchases of fast food are mostly impulsive, hence suggesting relatively low-involvement in

each case.

Brown, McIlveen and Struggnel (2000) examined the nutritional awareness and food

preferences among young consumers. They suggest that young consumer decisions regarding

food preferences are influenced by nutritional awareness knowledge. This knowledge is

acquired within the home, school and social environments. They also put forward that

education plays important role regarding healthy eating.

Lye et al. (2005), in their study of consumer decision models, advocate that the complexity of

consumer decisions is increasing. “We have limited understanding of the decision process and

the models are inadequate at predicting decision outcomes”. Hence the current models, they

argue, are out of date and insufficient in providing the desired outcome.

Nevertheless, the decision-making process model will provide the author and the reader with

general overview and understanding of factors influencing on consumers purchasing

behaviour.

Author will attempt to identify and focus, along with the attitudes, on the socio-cultural part

of the consumer decision-making process, i.e. impact of communication and information from

mass media (bad publicity of fast food), as it appears that this is the most recent issue due to

health concerns in the UK.

2.2 Consumer attitude formation and change

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For Nielsen, Jongen and Meulenberg (1998, cited by Verbeke 2005) understanding of the

factors that determine consumer perception/attitudes of a product’s value or cost is of crucial

importance to an industry’s product innovation, choice of marketing and communication

strategy and maintenance of competitive advantage.

According to Ajzen (1998) the attitudes are the first determinant of behaviour intention. In

consumer behaviour context attitude is a learned predisposition to behave in a consistently

favourable or unfavourable way with respect of a given object. Most researchers agree that

attitudes consist of three components: Affect (consumers’ emotions and feelings about the

attitude object), Behaviour (intention to do something with regard to an attitude object) and

Cognition (believes a consumer has with an attitude object). (Solomon et al., 2006, p.140)

For Verbeke (2005), who examined the influences on consumer decision-making process

towards fresh meat, the hierarchy of effects indicates the different mental stages that

consumer must go through when making buying decision and responding to marketing or

non-commercial messages. In our instance, where the attitude object is fast food, plus taking

into account that fast food is considered to be low involvement product, the low involvement

hierarchy of effects would occur. This will be explained in more details in the next chapter-

methodology.

As mentioned on previous page, knowledge and perceptions (cognitive component) of an

attitude that consumer has with an attitude object plays important/initial role by the attitude

itself. Baltas (2001, cited by Schroeder and McEachern 2005) acknowledge that the nature of

fast food production and processing is becoming more important to consumer. Furthermore

Harper and Makatouni (2002, cited by Schroeder and McEachern 2005) note that ethical

production in terms of animal and human welfare and environmental protection are of greatest

importance. Similarly Mohr et al. (2001, cited by cited by Schroeder and McEachern 2005)

recognize that information regarding firm’s ethical behaviour is thought to influence product

sales and consumers’ overall image of a company. Additionally Verbeke (2005) recognizes

that along with increasing importance of quality, organoleptic and sensory properties of the

food, issues relating to food safety and human health have gained considerable attention and

importance. All above links well to attitudes that consumers will have with fast food products

and companies.

Attitude can form in several different ways, depending on particular hierarchy of effects in

operation. (Solomon et al., 2006 p.145) Referring to Schiffman and Kanuk (2004 p.256), the

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formation of consumer attitudes is strongly influenced by personal experience, the influence

of family and friends, direct marketing and mass media. Yet again author will attempt to link

the current health concerns/obesity issues to above factors that have direct impact on attitudes

formation. Goldsmith, Freiden and Henderson (1997) who investigated the impact of social

values on food related attitudes, recognize that marketers, consumer psychologists and public

policy makers have an interest in the personal and social values of consumers as these deeply

held feelings of what is important in life influence both consumer attitudes and behaviour.

Reflecting desired end states or ways of living, values might in part represent some of the

fundamental motives that drive and direct the consumer behaviour. Furthermore Homer and

Kahle 1988, cited by Goldsmith, Freiden and Henderson (1997) suggest that the influence of

values may not be limited just to high- involvement areas, but may also be relevant to less

involving product fields such as food.

Besides the values, which influence both consumer attitudes and behaviour, Schiffman and

Kanuk (2004 p.256) acknowledge that formation of consumer attitudes is strongly influenced

by personal experience, the influence of family and friends, direct marketing and mass media.

Author will try to connect the current health concerns/obesity issues to above factors that have

direct impact on attitudes formation.

Finally, the importance of risk perception needs to be explained. Verdume and Viaene (2003)

investigated consumers’ beliefs, attitudes and purchase intentions with regards to genetically

modified food. Attitudes towards GM food are determined by perception of risk and benefits.

(Grunet, 2001, cited by Verdume and Viaene, 2003). When perceived risk is high, that

influence negatively on consumer’s purchase intention. That might be linked to fast food as

well, as eating fatty food may be risky of suffering obese related diseases.

2.3 The marketing mix

The concept of the marketing mix as the combination of the major tools of marketing was first

developed by Borden in the 1950s. The idea of 4Ps (Product, Place, Price and Promotion) was

later formulated by McCarthy in 1975. The marketing mix creates an offering for the

customer. Marketers need to ensure that the marketing mix meets their customers’ needs and

wants in addition to that all of its components need to be consistent with each other. If not

costumers will turn away to its competitors. (Brassington, 2006 p.30)

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Vignali (2001) acknowledges that for many years 4Ps have been used as the principal

foundation on which a marketing plan is based. However, with particular attention being paid

to services marketing in recent years, theorists have identified additional variables, which

could be added to the 4Ps. Fifield and Gilligan (1996, cited by Vignali 2001) recognized the

following variables as an integral part of the marketing mix- process, physical and people.

Vignali (2001) applied 7Ps analysing the marketing mix of McDonald’s in the following way:

1. Product – features, quality, quantity.

2. Place – location, number of outlets.

3. Price – strategy, determinants, levels.

4. Promotion – advertising, sales promotion, public relations.

5. People – quantity, quality, training, promotion.

6. Process – blueprinting, automation, control procedures.

7. Physical – cleanliness, decor, ambience of the service.

In this dissertation, however, the author will not focus on all 7Ps; the emphasis will be on

product, promotion and physical as this links logically with the research question/objectives.

If we look further into the promotion part of the marketing mix, the promotional mix is a

direct way in which an organization attempts to communicate with various target audiences. It

consists of five main elements:

Advertising

Public relations

Sales promotion

Direct marketing

Personal selling

(Brassington, 2006 p.630)

As mentioned earlier fast food products are purchased mainly impulsively, hence they are

considered to be low involvement products. Laurent and Kapferer (1985 cited by Kim 2005)

recognize that the degree of consumer involvement in a product category has become a major

factor relevant to advertising and promoting strategies. Solomon et al. (2006) suggests that

this might be involvement paradox; the less important is the product to consumers, the more

important are many of the marketing stimuli (e.g. packages, jingles) that must be devised to

sell it.

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Taking above statements into account, McDonald’s might want to employ advertising and

sales promotions, in order to attempt to change consumer attitudes. Having said that author

will focus therefore primarily on advertising and promotion of the promotional mix.

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CHAPTER 3: RESEARCH METHODOLOGY

In this chapter the research design and the research methodology employed to answer the

research question will be explained and justified. In addition, it provides the reader with a

clear description of models and concept used for the analysis.

3.1 Research philosophy

Referring to Saunders et al., (2007, p.106) in order to underpin the research strategy and the

methods as part of that chosen strategy, it is important to understand the research philosophy

one adopts. Within research philosophy author chose interpretivism, as it advocates that is

necessary for the researcher to understand the differences between humans in our roles as

social actors. This emphasizes the difference between conducting the research among people

rather than objects. The role ‘social actors’ plays significant role here. Saunders et al., (2007,

p.106) Author believes that interpretivism is more appropriate that positivism philosophy as

consumer behaviour differs form country to country. Furthermore it interpretivism seeks to

explain why human beings react and behave in the way they do.

3.2 Research approach

In this dissertation author will start with collecting the data first and then the theory will be

developed, based on results of the data analysis. Moreover the research will be particularly

concerned with the context in which such events were taking place. Author is predominantly

interesting in understanding why something is happening, rather than being able to explain

what is happening. (Saunders et al., 2007, p.118) These are the reasons why this research will

be undertaken inductively and not deductively. Deductive approach is used for scientific

researches and it involves the development of a theory that is subject to a rigorous test.

(Saunders et al., 2007, p.118)

3.3 The purpose of the research

According to Saunders et al., (2007, p.133) exploratory study is a valuable means of finding

out what is happening, to seek new insights, to ask questions and to assess phenomena in new

light.

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The emphasis by explanatory study is on studying a situation or a problem in order to explain

the relationships between variables.

In the first part of this dissertation, the research purpose will be exploratory and explanatory

because the aim of the research is to explore consumer attitudes and factors that influence the

consumer decision-making process in the fast food industry. The purpose of the second part

of dissertation, however, is to elucidate McDonalds potential responses on changing

environment and consumer behaviour. From the analysis of the market and consumer

behaviour author will seek to apply established business models such as marketing mix in

order to generate a set of practical recommendations for McDonalds business.

3.4 The research strategy

Strategy used in this dissertation involves the empirical investigation of a particular

contemporary phenomenon within its real life context using multiple sources of evidence.

Moreover it is of author interest to gain a rich understanding of the context of the research and

the process being enacted. On account of these factors the chosen strategy will be the case

study. The case study has also considerable ability to generate answer to question “why”,

which appears to be appropriate for the research question (Saunders et al., 2007, p.139)

3.5 Data collection techniques and analysis procedures

To achieve the research aims, a mixed-methods data collection technique was adopted where

both qualitative and quantitative data collection techniques and analysis procedures are used.

(Saunders 2007, p.147)

Saunders (2007 p.147) justifies the adoption of a mixed-method to achieve an in-depth insight

in consumer behaviour. Another advantage of using such approach is that it enables

triangulation to take place. For instance focus groups may be a valuable way of triangulating

data collected by other means such as questioners. Baker and Goodyear (1998, cited by

Verdurme and Viaene 2003) recognise that interactive qualitative approach enables us to

explore and to see particular issues (in our instance fast food) through consumers’ eyes and to

understand the basis for their attitudes and behaviour. Qualitative results are sometimes

speculative and usually not generalisable to the larger population. Nancarrow et al., 2000,

cited by Verdurme and Viaene 2003) Author therefore intends to conduct a qualitative survey

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to attempt to gauge whether the views of the respondents in the focus group were

representative of a larger population.

Taking above facts into consideration author decided, firstly, to carry out the qualitative focus

group, and secondly use its outcome to formulate questions for the questionnaire.

3.6 Sample selection

In this research the probability of each case being selected form the population is not known

and it is impossible to answer research question or to address objectives require author to

make statistical inferences about the characteristics of population. For that reason, Saunders

(2007 p.207) suggests applying non-probability or judgemental sampling technique.

Nevertheless, author will still be able to generalize from such technique, though, not on

statistical grounds. For this reason non-probability sampling technique is more frequently

used when adopting the case study strategy. Moreover such technique provide author with

opportunity to select sample purposively. (Saunders, 2007 p.235)

The chosen sample for the focus group were undergraduate students form European Business

School London in the UK. Three out of seven participants were British citizens, remaining

four were international students, however, they have been living in the UK for 3-4 years.

Kraus (1995, cited by Schroeder and McEachern, 2005) support the use of students since they

are more homogeneous as a group than non-students, thus resulting in less “extraneous

variation”. As a key target market of the UK fast food sector is between 17-25 years, a

convenience sample of students is justified for this exploratory study. Author realizes that

socio-economic status of some EBS students for the focus group might not be the same as one

of typical fast food consumer. However, participants eat in such restaurants and are therefore

appropriate for this study.

Since there is nearly impossible to distribute over 100 questionnaires physically in such a

short time, author decided to distribute questionnaires to students via email. Author acquired

approximately 140 British email addresses that he got from a person who lives in London.

The questionnaires were sent then to people around the UK.

22

3.7 Data collection

In this study, both primary and secondary data sources were used. Firstly, for a better

understanding of the background and problems related to the context of the consumer

decision-making, the literature review was written based on secondary data collection. Then

the primary data was gathered using qualitative focus group, which were then quantitatively

validated through questionnaires.

Secondary data sources used in this dissertation include books, library databases, periodicals,

McDonalds web site and other Internet sources. For collecting primary data sources, author

used firstly focus group and secondly questionnaire.

3.7.1 Group interviews- focus groups

This qualitative data collection technique was employed in order to get better understanding

in consumer behaviour. Participants in the focus group tend to express views that might not

express in other settings, or if interviewed as individuals. (gwbweb.wustl.edu, 2006,

unattributed) With focus group individual group members’ interactions and responses are

both encouraged and more closely controlled to maintain the focus. (Saunders, 2007, p.339)

As explained earlier by the sample selection, participants (students) are selected because they

have certain characteristics in common that relate to the topic being discussed and they are

encouraged to discuss and share their points of view without any pressure to reach a

consensus. (Kruger and Casey, 2000, cited by Saunders, 2007, p.340) Furthermore the aim is

to crate conditions that promote both comfort and independence of thought, in order to

maximize discussion and self-disclosure. (gwbweb.wustl.edu, 2006, unattributed)

For questions discussed during focus group and other detailed information, please refer to

Appendix A.

When designing questions for focus group author focused primarily on two things; firstly on

exploring consumers’ attitudes towards fast food, and secondly identifying impacts from

external environment which might influence the consumer decision-making process regarding

fast food. Having said that knowledge and perception about fast food will be examined, and

what kind of experience and beliefs participants have with such restaurants and products.

Then their emotions and feelings towards fast food will be explored. Additionally the possible

23

impact of current anti-obesity campaigns and regulations on participant’s decision-making

process will be examined.

3.7.2 Questionnaire

Since the participants in focus group were not randomly selected from the population, the

author cannot freely generalize from the results. Hence qualitative data obtained by focus

group will inform the content of the questionnaire and will be tested to a larger group.

According to Saunders (2007, p.356) a questionnaire to discover consumers’ attitudes can be

complemented by focus groups to explore and understand these attitudes. Author decided to

use questionnaires that are completed by respondents, i.e. self-administrative questionnaires

(internet-mediated questionnaires). More specifically author selected special on-line surveys

(www.freeonlinesurveys.com) due to time restrictions and convenience reasons. In order to

ensure the high response rate, Saunders (2007 p.390) suggests use of covering email, which

explains the purpose of the study. The aim of my study was explained in the introduction part

of questionnaire, attached to actual questions.

The key issues/themes identified from focus group were used as a basis to construct closed-

end questions or forced-choice questions. These provide a number of alternative answers from

which respondent is instructed to choose. More specifically author used mainly category,

ranking and list type of closed questions. (Saunders, 2007 p.368) Moreover by designing

questions, for instance question number 4, the tricomponent attitude model was incorporated,

to gauge consumers’ attitudes toward fast food products. (Shiffman and Kanuk, 2004, p.258)

Answering categories given in the questionnaires were also based on the preliminary

qualitative research- focus group. Key themes from focus group (quality of fast food, ethical

aspects, trust towards McDonalds, impact of media and government on consumer behaviour),

formed questions for questionnaire and were further examined and tested to larger group.

Saunders (2007, p.386) encourages pilot test prior using the questionnaire to collect data.

Author sent questionnaire to few individuals before sending it to larger population, in order to

ensure that all questions are clear. For more information regarding actual questionnaire that

was sent to participant, please refer to appendix B.

24

3.8 Models employed in dissertation

3.8.1 Consumer decision-making process

Many consumer theories regarding the consumer behaviour were based on economic theory

on the notion that individuals at rationally to maximize their benefits/satisfaction in the

purchase of goods and services. Later research discovered that consumers are just as likely to

purchase impulsively and to be influenced not only by family, friends, and advertisers but also

by mood, situation and emotion. All of these factors combine to form a comprehensive model

of consumer behaviour that reflects both the cognitive and emotional aspects of consumer

decision-making. (Schiffman and Kanuk, 2004, p.19)

In this simplified model (Figure 3.1) of consumer decision-making process Schiffman and

Kanuk (2004) identified three distinct but linked stages from which the process of consumer

decision-making can be viewed. It ties together the psychological, social and cultural concept

into easily understood framework.

Figure 3.1: Consumer-decision making process

25

Source: Schiffman and Kanuk (2004)

This model will provide author and reader with a starting point and general picture of what

kind of factors have impact on consumer decision-making process.

Despite some critiques, which imply that these models are out of date and inadequate at

predicting decision outcomes, author decided to use it merely to clarify and illustrate rather

complex process of the decision-making.

3.8.2 Tri-component Attitude Model

According to tri-component attitude model, attitudes consist of three major components:

Cognitive component- knowledge, perceptions and beliefs that are acquired by a

combination of direct experience with an attitude object and related information from

various sources.

Affective component- emotions and feelings that consumer have towards an attitude

object

26

Conative component- is concerned with the likehood or tendency that consumer will

undertake a specific action or behave in a specific way with regard to the attitude

object

Schiffman and Kanuk (2004 p.256)

Figure 3.2: Tricomponent Attitude model

Source: Schiffman and Kanuk (2004)

This model emphasizes the interrelationships between knowing, feeling and doing.

The tri-component attitude model will assist author to structure questions for focus group and

questionnaire, as it helps to explore and gauge consumers’ attitudes towards attitude object-

fast food. When such model applied to the questions, the outcome might give author greater

insight regarding knowledge and perceptions (about the fast food), emotions or feelings

(toward the fast food) and finally likelihood or tendency (of certain behaviour).

3.8.3 Hierarchy of Effects Concept

While all three components of an attitude are important, their relative importance will vary

depending upon a consumer’s level of motivation with regard to the attitude object. Thus the

concept of hierarchy of effects was developed in order to explain the relative impact of the

three components. Attitude researchers traditionally assumed that attitudes were

predetermined sequence, consisting first of the formation of beliefs (cognitions) regarding an

attitude object, followed by an evaluation of that object (affect) and then some action

27

(behaviour). However, depending in the consumer’s level of involvement and the

circumstances, attitudes can result from other hierarchies of effects. (Solomon et al., 2006,

p.159)

Hence in our instance, where the attitude object is fast food, plus taking into account that fast

food is considered to be low involvement product, the low involvement hierarchy of effects

can be illustrated. (Figure 3.3)

Figure 3.3: The low-involvement hierarchy

Source: Solomon et al. (2006)

In this sequence, the consumer does not initially have a strong preference for one brand over

another, but instead acts on a basis of limited knowledge and then forms an evaluation only

after the product has been purchased or used. Under these conditions consumers are

influenced by principles of behavioural learning. (Solomon et al., 2006 p.142) Referring to

that, author assumes that consumers of fast food products will form attitudes via the concept

of low involvement hierarchy of effects. In turn, this concept will be taken into consideration

later in the dissertation by the final recommendations, when suggesting McDonald’s

communication strategy.

3.8.4 PEST Framework

The external environment will be analysed with the PEST framework, which categorized

environmental influences into four main types: political/legal, economic, socio-cultural and

technological (Johnson et al, 2005, p.65). This framework will help to analyse the macro

28

environmental influences that might affect the organization. In addition it will provide an

overview of the environment in which McDonalds is evolving.

The use of this framework is useful only when you apply the potential impact of factors, now

and in future affecting the industry, rather than just a long list of influences itself. Having said

that, we mean factors that have potential impact on customers and stakeholders. It is of vital

importance that one identifies the key drivers of change, as they will provide a better

understanding of the main issues that are currently facing the industry and how these might

affect the future of the business within the particular industry. Nevertheless, not all factors

will have the potential impact, thus combined effect of some of the factors is likely to be the

most important. (Johnson et al, 2005, p.65).

Economic and technological factors appear not to have any significant impact on the fast food

industry, and are hence irrelevant for such research. For that reason author decided to exclude

them from the PEST Framework. It is important, however, to identify the political and socio-

cultural factors, as they appear to be of crucial importance by influencing the fast food

industry in the future.

Figure 3.4: PEST Framework

29

3.8.5 Ansoff’s product/market matrix

In order to generate options for McDonalds, the author will use the Ansoff’s product/market

matrix, which is used for identifying directions for strategic development. (Ten Have et al., p.

9)

Figure 3.5: Ansoff’s product/market matrix

Source: Johnson et al, 2005, p.341

Once the options will have been generated the author will be able to evaluate them and choose

the one that could be the most beneficial.

30

CHAPTER 5: FINDINGS

This chapter will provide a reader with detailed presentation of facts and data obtained using

tools described in research methodology, leaving out discussion for the final chapter. In order

to communicate findings clearly, author decided to brake down this chapter into to parts.

Firstly, the external analysis will be applied, in order to provide a reader with the context in

which McDonalds is evolving. And secondly, the key factors influencing the consumer

decision-making process will be analysed/explored.

5.1 External analysis

In this section no other tools than PEST Framework will be applied, since the outcome of

PEST analysis will provide author with sufficient information for further research.

5.1.1 Fast food industry in the UK- overview

The UK fast food market generated total revenues of £2.8 billion in 2005. Comparing to 2004

revenues has increased by 4%. Furthermore sales of fast food to quick service restaurants

represented the markets most profitable segment, generating total revenues of £1.6 billion in

2005, equivalent to 59.7% of the market’s overall value.

(Datamonitor, 2006)

Figure 5.1: United Kingdom Fast Food Market Value: £ and $ billion, 2001-2005

Year £ Billion $ Billion % Growth

2001 2.4 4.4

2002 2.5 4.5 3.1

2003 2.6 4.6 3.4

2004 2.7 4.8 4.1

2005 2.8 5.0 4.0

Source: Datamonitor, 2006

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Figure 5.2: United Kingdom Fast Food Market Value: $ billion, 2001-2005

Source: Datamonitor, 2006

In spite of consumer concerns of fast food being linked with problems such as obesity,

diabetes, heart conditions, food poisoning and scares and unethical advertising, the UK fast

food industry has enjoyed remarkable growth in recent years.

In terms of per capita expenditure, between 2000 and 2005, the fast food outlets have been

growing at the fastest pace within the consumer food service sector. (Euromonitor, 2006b)

Figure 5.3: Expenditure on eating out by sector (growth): 2000- 2005

2000-2005 Nominal 2000-2005 Real

Cafés/bars  5.07 -3.14

Full-service restaurants  3.65 -4.56

Fast food  40.53 32.33

100% home delivery/take-away  10.76 2.55

Self-service cafeterias  20.84 12.63

Street stalls/kiosks  14.47 6.26

TOTAL  19.32 11.11

Source: Euromonitor, 2006b

32

McDonald's Corporation was the leading fast food outlet in the UK in 2004, with an 18.3%

value share and a clear lead over its nearest rivals KFC (owned by Yum Brands) and Burger

King. (Euromonitor, 2006b)

Figure 5.4: Market share in UK (2004)

Name of the company Market share (%)

McDonald's Corp 18.3

Yum! Brands Inc 8.4

Burger King Corp 8.3

Pret a Manger Europe Ltd 1.4

Compass Group Plc 1.2

Nando's Group Holdings Ltd 0.8

Source: Euromonitor, 2006b

McDonald's operates fast food restaurants all over the world. The company has over 31,000

fast food restaurants in over 120 countries. (MarketLine, 2006)

The company operates primarily in the US and the UK. It is headquartered in Oak Brook,

Illinois and employs 447,000 people all over the world. (Datamonitor, 2006)

McDonalds currently operates in more than 1,316 restaurants throughout the UK. Its profits

grew by 55% in 2004. (Euromonitor , 2006b)

5.1.2 PEST Framework

5.1.2.1 Political / Legal conditions

The most recent research has shown that being overweight or obese is now the norm in the

UK, with figures released by the government showing that two- thirds of men and almost 60%

of women are unhealthily heavy. (Boseley, 2006) Furthermore UK has the highest level of

obesity in Europe. (Datamonitor, 2006) According to a report issued by the Department of

Health, the findings for ‘Forecasting obesity in 2010’ were grotesque. Within four years, it

predicts, a third of all adults in UK (13 million people) will be obese. So will 1million

children. (Marrin, 2006)

Rising costs for NHS due to obesity

33

Currently 10% of National Health Association resources are spent on diabetes, and this could

easily be doubled within next four years to 20%. (Marrin, 2006)

More and more doctors’ surgeries require their patient to have an annual health check up.

Those who are overweight are set a program of physical activities and dietary advice.

National health service introduces top-up charges for those who are considered to be clinically

obese. (Blackman, 2005)

Obesity is a major risk factor linked to heart disease, cancer, and type 2 diabetes. It reduces

life expectancy by an average of nine years, and by more in smokers. Apart from the human

cost to the individual, there is a direct cost of obesity to the nation. The Government has

calculated that the overall cost of obesity to the National Health Service is around £1 billion

(2006), with a further £2.3 billion to £2.6 billion for the economy as a whole. It warns that if

obesity continues to increase, the cost to the economy alone could rise to £3.6 billion by 2010,

plus at least £1 billion on the NHS bill. (Euromonitor, 2006a)

Referring to the Department of Health, growing obese crisis is expected to cause thousands

more people to suffer obesity related diseases. (Oliver, 2006)

The White Paper

In 2004 the UK Department of Health released an extensive White Paper on “Choosing

health: Making healthy choices easier” that makes several recommendations for UK policy

on diet and health. (Blackman, 2005)

o Processed foods will be clearly labelled to indicate fat, sugar and salt content,

using a ‘traffic light’ system (e.g. red light for foods high in sugar, fat or salt).

o An independent task force will be set up to look at the best ways to prevent and

treat obesity.

o Emphasis will be placed on the role of schools, which will be tasked with

providing healthier meals, free fruit and sport both within and outside of school

hours.

o The way in which foods are advertised to children will be investigated, with a

view to voluntary restrictions, or possibly legislation, on “junk food” adverts.

(Blackman, 2005)

Regarding the last recommendation (advertising ban on junk food), several health charities

and campaigners put constant pressure on government concerning that issue. "We are

34

demanding the government place restrictions on advertising junk food to children before the

9pm watershed- a policy that can only have a positive impact on young people's attitudes to

foods high in fat, sugar and salt”, said Maura Gillespie, head of policy and public affairs at the

British Heart Foundation. (Oliver, 2006)

Fat tax

Another policy to tackle the rising incidence of heart disease and prevent obesity is to place so

called fat tax on junk food. The Prime Minister's Strategy Unit raised the prospect of extra

duty or VAT being imposed on some fatty foods after heart disease overtook cancer as

Britain's biggest killer, and more young people started developing diabetes. This would be a

warning sign to producers as well as consumers and serve more broadly as a signal to society

that nutritional content in food is important. (Telegraph, unattributed, 2006)

The British Medical Journal recently claimed a “fat tax” could help prevent 1,000 premature

deaths from heart disease every year in the UK. (News.bbc, unattributed, 2006a)

5.1.2.2 Socio-cultural conditions

According to the most recent Consumer Lifestyles in the UK research, the three main eating

occasions (breakfast, lunch and dinner) have become less structured / planned in recent years.

Instead, fast food and snacking have become everyday routine. (Euromonitor, 2006a)

Factors contributing to these changes in consumer eating habits are:

Increasing number of workingwomen

Longer working hours and shorter lunch breaks

Which have all resulted in a general speeding up of lifestyles and switching to fast food.

(Euromonitor, 2006a)

Moreover;

Average household size has declined

Number of single- person households is increasing

As a result, fewer family meals are taken, hence each family member take care of their own

meal. (Euromonitor, 2006a)

Above factors have led to a demand for food that is ready to eat, and which does not require

cooking or preparation at home. This includes fast food, snack food, confectionery and

biscuits, take-away food and home meal replacement products. (Euromonitor, 2006a)

35

Popularity of fast food

Referring to Wall Street Journal survey, 84% of people who are eating out spend £21 or less

on each meal- that is well bellow the level in Italy, Belgium and Netherlands. This low level

of expenditure correlates to the prevalence of fast food, which is cheaper than the traditional

restaurant meals. (Euromonitor, 2006a)

Attitudes towards healthy eating

Despite the increasing tendency of consuming junk food and rising obesity level, the health

concern of UK consumers, according to the survey undertaken in 2004, are very much high.

(Euromonitor, 2006a)

Influence of TV chefs

Another factor that has influenced the UK consumers is chef Jamie Oliver. His television

shows, books and recent TV series designed to improve the quality of school food and

highlight the danger of junk food in the UK have significantly increased consumer as well as

government awareness and interest in healthy eating. (Euromonitor, 2006a)

According to a survey, Jamie Oliver is named the biggest single force behind an improvement

in school dinners. The celebrity chef is perceived as having a bigger impact than the

government, local education authorities and the schools themselves. (Guardian, unattributed,

2006a)

Negative publicity of fast food

Despite the increasing popularity of fast food restaurants in the UK, they have been hit by

negative publicity in recent years. The reason behind that is their association with unhealthy

food and their perceived contribution to childhood obesity. Thus the growth in traditional fast

food sub sector (burgers, chip, kebab etc.) has been offset by continuous product innovation

in the bakery- sandwich sub sector (Pret-a-Manger, Subway, etc.) (Euromonitor, 2006a)

5.1.2.3 Key drivers of change:

Now that environmental factors have been identified, what is the future impact of these

factors? The key drivers of change, arising from external environment, that could have an

impact on fast food industry in the future, are manly:

Consumer demand (changing consumer lifestyle)

British lifestyle is becoming increasingly busy; decreasing free time and increasing disposable

income resulted in more consumers deciding on paying on food service rather than preparing

36

meals themselves. Plus changes in lifestyle have led to reduction in the number of structured

meals, as people choose more convenient options- fast food. (Euromonitor , 2006a)

While above changes in consumer lifestyle speak in favour of fast food industry, on the other

hand, the UK consumer is becoming more and more health conscious and is aware of the fast

food poor nutritious.

The next key driver of change that could affect the industry in the future is:

The Government interference

The high- profile political and public debate on obesity and other health issues will most

probably continue and this is likely to negatively affect burger, chicken and pizza fast food

sales. (Euromonitor, 2006b)

To make the above statement even more plausible, the government has failed to stop the rise

of obesity during its nine years in power. (Oliver, 2006)

Perhaps the seriousness of the situation has finally brought the government to take more

interventionist approach and ignore the accusations of running the “nanny state”. (Marrin,

2006) Probably is just the matter of time when it will start to employ the issues form the

White paper in addition to other proposals in order to tackle obesity.

These drivers will affect the fast food industry, however, it is hard to predict what impact will

predominate- the strong consumer demand and changes in lifestyles, which appears to be in

favour of fast food industry, or escalating trend of healthy living underpinned by possible new

government legislations, which negatively impact the industry.

In order to determine how McDonalds might effectively cope with the changes in

environment, it is crucial to examine the attitudes that consumers have toward fast food. Data

of this kind may give McDonalds greater insight into customer needs and wants.

Understanding this may then enable McDonalds to develop more effective marketing and

communications strategy.

37

5.2 Key factors influencing the consumer decision-making process

5.2.1 Focus group (analysis of key points)

As explained previously in methodology chapter focus group can be divided into two parts.

First three questions are designed in such way that they focus on exploring consumers’

attitudes towards fast food (and McDonlads). Whereas the last three questions are seeking any

impacts coming from external environment that might have an impact on consumer decision

making process in relation to fast food products. For focus group questions and other detailed

information please refer to appendix A.

Part one: Exploring consumers’ attitudes towards fast food

A lengthy debate took place regarding the quality of fast food. Respondents classified them

as extremely poor nutritious food. As one participant said: “There isn’t any fast food

restaurant that offers quality food.” The debate continued about what sort of things beef

burgers consist of. They all agreed that the quality of meet (beef) is very bad as they heard

they put all sort of parts of animals in there. “Vegetables they put in burgers are horrendous,

you open a burger and you see yellow lettuce, if not brown. How hard is it to keep vegetables

fresh”? Another issue regarding ingredients was noted when one participant said that: “I

heard that Apple pies in McDonalds aren’t really made of pure apples, but some cheap

artificial stuff. Then they would put apple flavour and cinnamon to make it taste like apple”.

This triggered a short discussion of how huge the chemical flavouring business is, followed

by ones statement: “I absolutely love the taste of the fast food, but I will never eat it because I

know what is in there.” Another participant said: “I’ve never seen nutritional facts in

McDonalds, and to be honest I wouldn’t trust it if I saw it.” The debate carried on discussing

the ethical issues regarding fast food restaurants. “What really bothers me about fast food is

the ethical aspect attached with food quality. Massive manufacturing of chicken- from

hatchling to full size takes three months; naturally it should take approximately 16 months.

They are fed with steroids.” Participants noted that companies are not fully respecting the

moral issues regarding the animal welfare. “We will never know how animas were raised,

under what conditions, and we will never know what’s in there (in burgers).” Another

participant said: “I never eat chicken in fast food restaurants on the principle of my

knowledge of what they do to chicken.”

38

Since some answers given by participants were considered to be bias, author verified the

content of McDonalds fast food products on their official website. Referring to McDonalds,

they are developing and maintaining the high standard of food quality, safety and traceability.

Raw ingredients have to meet strict specification and every detail of production, transport,

delivery and preparation is extensively monitored. They argue that they use 100% beef in

their burgers, bought from farms accredited by nationally recognized farm assurance schemes.

They only use cuts of forequarter and flank (parts of a cow), with nothing added. All beef

they use is audited by the European Food Safety Inspection Service. Chicken they use is in

their sandwiches comes form approved suppliers that have a fully integrated supply chain to

ensure full control over all aspects of chicken farming, including feed and animal welfare.

(mcdonalds.co.uk, 2006)

Despite what McDonalds claims they use in their products, participants clearly are either not

aware of or they don’t (want) to believe it. The truth is that their overall knowledge,

perception and beliefs regarding food quality and animal welfare are negative. However,

while nutritious value of fast food and ethical issue is important to them, it would not

determine them from going to eat in such restaurants.

During the debate author noticed several times that fast food has been referred as ‘junk food’-

i.e. food that is considered to be fatty and unhealthy. Referring to one article, the Food

Standards Agency ‘junk food’ is any food high in fat, salt or sugar. (O’Neill, 2006) O’Niell

argues, why are some fatty foods defined as ‘junk’, but others are not? Government ministers

and celebrity chefs discouraging people eating French fries (which in McDonald's contain

about 5g of fat), and at the same time say nothing of eating a dish like duck a l'orange (which

can contain 15 to 20g of fat in a single serving). Why does the ‘junk food’ tag seem to be

applied selectively? According to Peter Marsh of the Social Issues Research Centre in Oxford,

cited by O’Niell (2006), which studies food and obesity issues, the term ‘junk’ has become

“simply a matter of aesthetics”, a way of disapproving of certain foods. Koeslag, a professor

of medical physiology in South Africa, argues that French fries are seen as ‘junk food’, but

roast potatoes are not. Bread is a basic foodstuff, but biscuits are ‘junk’. The sugar in cake is

detrimental to health, but the sugar in honey and grapes is not. The adjective 'junk' is

unfortunate, if not outright misleading. (O’Neill, 2006) Above arguments indicates that

McDonalds food is not as fat and caloric comparing to other food (in some instances even less

39

caloric and fatty). However, participants still associated fast food with ‘junk food’ and

therefore simultaneously related it to fat, greasy and unhealthy food, which then have negative

impact on the perception of such food.

Group expressed mix feelings and emotions towards fast food (McDonalds). While some

participants absolutely loved it, others totally hated it. One participant put this reason for

going to McDonalds: “I’m dying of hunger and nothing else is available.”

Other participant said: “It comes once in a while, you know as it’s like something driving me

there, it’s when you have a crave, then I go and eat in McDonalds”.

This statement may suggest that eating such food comes as an eager desire. According to

Dictionary.com “to crave” means to want greatly, desire eagerly. This could imply that eating

fast food for some people is similar to eat sweets (as stated at Dictionary.com, to crave

sweets). Having said that author refers to some instances of females (or men) “addiction” to

chocolate. This perhaps could be linked to the infamous documentary about McDonalds and

fast food ‘Super size me’ which showed its maker Morgan Spurlock's gain 11 kilos, an

increase of 13% of his body mass and cholesterol levels soaring, as he ate only McDonald's

for a month. (Revill, 2004) In the documentary Morgan also suggests that such food is

addictive. To underpin that, according to research hamburgers and fries could be as addictive

as heroin, scientists have claimed. Researchers in the United States have found evidence to

suggest people can become overly dependent on the sugar and fat in fast food.

(news.bbc.co.uk, unattributed , 2003)

The majority of participants described eating in such restaurants as convenient: “It’s

convenient and cheap, you can go in McDonalds and eat for three pounds three burgers,

where else can you do that”? Despite the fact that group described fast food as unhealthy,

they still go and eat there, although not very often. Perhaps the frequency of eating in such

restaurants is also associated with risk perception. Participants are aware of poor nutritious of

fast food and links with obesity related diseases. Maybe they link such products with risk.

According to Schiffman and Kanuk (2004, p.198) the degree of risk that consumers perceive

and their own tolerance for risk taking are factors that influence their purchasing strategies.

Types of risks that might be perceived in case of eating in fast food restaurants are physical

and psychological risk. Physical risk could be associated with the risk of eating fatty food and

40

thus hazard of suffering obese related diseases (high cholesterol, high blood pressure, etc.).

Psychological risk could be linked to consumer’s ego, i.e. eating too often in McDonalds

could result in laugher of my colleagues, since they might perceive it as something cheap,

unhealthy and low-class. Referring to Schiffman and Kanuk (2004, p.198) more information

the customer has about the product and the product category, the more predictable the

probable consequences and, thus the lower the perceived risk. McDonalds tries to reduce

consumers’ perceived risk by providing information about their products. On their website

everyone can have a look what ingredients each product consists of. They strive to show

customers that their burgers are not as bad as majority might think. They also argue that

McDonald’s “highly quality food is made out of best raw ingredients”. (McDonalds.co.uk,

2006a) One can, for instance, calculate daily calories intakes and compare them to

McDonald's choices, using special tables. Basically their website is designed in such way to

inform consumers about the food and services they offer, providing information regarding

animal and environmental welfare. All that with attempt to reduce consumer perceived risk.

Moreover they have been promoting active lifestyle and importance of energy balance for

over a decade, via sponsoring various sport events- the most recent one, which are yet to

come- the Olympic Games!

One participant described his eating in fast food restaurants as: “You are tired, it’s late, you

are walking home and then you see McDonalds- at that point I decide to go and eat there…

sometimes I smell McDonalds”. Similarly one added: ”I often go there when I’m driving and

I see the golden arch…” These two statements (plus referring to other researchers, i.e.

Schroeder and McEachern) implicates that purchasing fast food is mostly impulsive- people in

general, when they decide to go in such restaurants, they do not plan that in advance,

suggesting that fast food is low involvement product. Under these conditions consumers are

influenced by principles of behavioural learning. (Solomon et al., 2006 p.142) Therefore

marketers at McDonalds pay more attention to the amount of information in their restaurants,

as well as to the way it is presented. Various points of purchase stimuli plays important role

when the consumer involvement is low and the purchase is impulsive. For instance,

McDonalds restaurants are currently advertising various attractive Sony prizes that can be

won. Also when one passes by the McDonalds restaurant the typical smell that is coming out

of the restaurant works as stimuli for going into the restaurant for a meal. Author assumes that

41

this could be done intentionally as one of the tactics McDonalds use to encourage more

customers to eat in their restaurants.

The Elaboration Likehood Model (ELM) suggests that a person’s level of involvement during

message processing is a critical factor in determining which route to persuasion is likely to be

effective. When involvement is low, consumers follow the peripheral route and rely more

heavily on other message elements (e.g. background music) to form attitudes or make product

choices. (Schiffman and Kanuk, 2004, p.238) That is one of the reasons why is McDonalds

using the famous jingle “I’m Lovin’ it” backed up by famous artist Justin Timberlake, as they

try to increase consumer involvement with the use of celebrity endorsement.

Part two: influences from external environment impacting (current obesity issues in the

UK, impact of media, etc.) on consumer decision making process with respect to fast

food

While all participants were familiar with the current obesity issue in UK, they claimed that

such issue is not affecting them in any way. “It is really the matter of ignorance, people don’t

really know how to eat. Its general change in lifestyle…people don’t exercise, they are lazy”.

Another one said: “Super size me movie make me not want to go to McDonalds ever again…”

It was interesting, however, to investigate the companies’ responses on that infamous

documentary. McDonalds surprisingly stated on their website that on the whole they agree

with the Super size me’s message- that is important to have a balanced diet and take exercise.

They argue that actor ate a one-dimensional diet with more than 5000 calories a day, that’s

twice the recommended intake for and adult male, while he goes from highly active individual

to purposely stopping all physical activities. That is not the reality, besides what the actor ate

in 30 days, an average British McDonalds customer eats in 6 years. It is hardly surprising then

that this had impact on his body. McDonalds also supports their customers by providing them

relevant nutritional facts so they can make informed decisions. (McDonalds.co.uk, 2006b) In

response to the documentary McDonalds launched a website www.supersizeme-

thedebate.co.uk which provides customers with information on a balanced diet and their

opinions on documentary. One can even take a test in order to separate the facts form the

fiction and at the same time learn the truth behind statements.

42

Debate carried on as one participant said: ”Its about changing lifestyles- couch potato

lifestyles and stuffing food in their mouth that taste good and they have no knowledge about

how this food does harm to them. Honestly I believe that is a question of education…people

aren’t aware of the consequences”. Referring to Alock (1995), cited by Brown, McIlveen and

Strugnell (2000), the power of education can be immensely helpful in the pursuit of better

understanding by consumers regarding healthy eating and may occur within home, school and

social environments. This implies that education might play crucial role by deciding what

people eat. Perhaps that is the reason why in general all participants, who are educated final

year university students, do not eat in McDonalds that often. Or perhaps this is the matter of

their social status/class. Furthermore one participant stated: ”If parents don’t encourage kids

to do something (sport) and if they don’t teach them how to eat properly, then they will end up

not doing so later in their life”. According to Warwick et al. 1997, cited by Brown, McIlveen

and Strugnell (2000), evidence has suggested that young consumers appear to be creatures of

habit, fuelled from birth by the guidance of parents, peers and from other societal factors and

once formed, such habits are difficult to change. This might indicate that the way children

were brought up; it is likely to affect its food behaviour. However, later research suggested

that the food preference habits of young consumers could change, depending upon the

environment within which they are present (home, school, social). (Brown, McIlveen and

Strugnell, 2000).

A lengthy debate took place whether should the government bring in laws to stop

companies promoting and producing unhealthy food or let the industry self-regulate and allow

customers make their own choices. Group supported the fact that the government intends to

interfere/has interfered by imposing regulation regarding advertising junk food to children.

However, they were sceptical by other regulations. Group advocated “personal liberty”- “I

believe strongly in the personal liberty and making your own choice. If you walked in the fast

food restaurant, you have made that decision…but then again we have came back to the

question of education- if that is really what you want to do (eat) as you have healthier

alternative option right next door. Everybody is given a choice to choose healthier alternative

over the fast food”.

43

Followed by another participant: “I agree- it’s a matter of education. If people know they

have alternatives, from that point on it’s their own choice. What the government should be

doing is promoting other lifestyles, and not stop companies from what they are doing”.

On the last question should fast food companies be held responsible for rising obesity levels

in the UK everyone said no, except one student who argue that: “They (fast food companies)

are aware of what they are serving, they know what kind of impacts such food has on people,

but they are in the business of making money. But somewhere you have to draw a line of

what’s right and what’s wrong…maybe that’s an ethical issue, I don’t know. So in a sense yes

they should be held responsible”.

There could be a possibility that fast food chains will be fought in a similar way tobacco

companies were fought. There were some cases in which individuals blamed McDonalds for

causing obesity, however, the lawsuits were dismissed. (Wazir, 2003)

To conclude, while ethical issue and nutritional value of fast food is important to them it will

not determine them from going to eat in such restaurants. The desire for fast food comes

impulsively. The convenience-healthfulness dichotomy, describing fast food as convenient

but unhealthy was underlined. High public anti-obesity debates in the UK appear to have no

significant negative impact on consumer attitudes towards fast food. Fast food companies are

not to be blamed for rising obesity levels in the UK, though people themselves.

5.2.2 Questionnaire (analysis of findings)

In order to present it in a coherent way, author decided to structure following analysis on five

parts. As mentioned in methodology chapter, following key themes from focus group (quality

of fast food, ethical aspects, trust towards McDonalds, impact of media and Government on

consumer behaviour) will be tested to larger group of people in the UK.

Author has found following results:

In total 71 participants responded on the survey. The gender split was 49% men and 51%

women. According to Schroeder and McEachern (2005), the global target market for fast food

companies is between 17-25 years. The respondent profile to the questionnaire, matched this

target market with 88% aged between 17-25 years.

30 out of 71 respondents (42.3%) eat fast food once every month. (Figure 5.5)

44

Figure 5.5: How often do you eat fast food (i.e. McDonalds)?

QUALITY OF FAST FOOD & CONSUMER’S TRUST IN MCDONALDS

Author used ‘selected evaluative scale’ to gauge respondents’ attitudes towards quality of fast

food. The majority of respondents classified all types of food with exception of salads and

fruit, as the worst quality. For detailed information regarding that question please refer to

Appendix C. Answers given by that question justified a lengthy debate from focus group, that

nutritional value of such food is indeed regarded as extremely poor.

34% of respondents have seen a list of nutrition facts in McDonalds restaurants. Nevertheless,

those who had seen it they do not trust what is written on it. (Appendix C)

83% of respondents believe that McDonalds use chemicals in their products. (Figure 5.6)

When respondents were given the 5 point Likert-scale, 31 out of 71 (44%) considered what

McDonalds claims on their website, “…committed to providing high quality food, using the

best raw ingredients” as untrue. (Figure 5.7)

Figure 5.6: Do you believe McDonalds put chemicals in their food? (To improve the

taste and/or improve the texture of vegetables)

45

Figure 5.7: McDonalds claims on their website that they use “the best raw ingredients in

their highly quality food”! Do you believe that? Please mark on a scale from 1 to 5 (1 as

least believable)!

46

When respondents were given the fact that if McDonalds would have used 100% beef along

with fresh vegetables, apples in their apples pies, etc., 34% said they would go eat there more

often.

30% of respondents have visited www.mcdonalds.co.uk and 50% of those who have visited

claimed that they haven’t found it really appealing or useful. (Figure 5.8) Furthermore, 61%

of those who haven’t visit the website they don’t intend to visit it in the future.

Figure 5.8: If yes, do you find it appealing and/or useful?

Reason for going to McDonalds as “dying of hunger and nothing else is available” was firstly

picked up during the focus group discussion. It was, however, claimed by larger population as

the strongest reason why eating there as well, where 27 out of 71 participants (38%) selected

that option over the convenient one (28%). (Figure 5.9)

47

Figure 5.9: What makes you go to McDonalds?

When participants were asked to write three adjectives they would link to McDonalds

products; unhealthy, cheap, tasty and fatty were the ones that were noted most frequently. For

adjectives given by all 71 participants please refer to Appendix C.

ETHICAL ISSUES

Merely 31% of respondents did not have any knowledge what ethical issue (animal welfare

concerning chicken) in relation to McDonalds is. While great majority of respondents were

familiar with the ethical aspects, 25% of those claimed that this is the reason they don’t eat

chicken in McDonalds. (Figure 5.10)

48

Figure 5.10: When you eat chicken sandwich at McDonalds, does the ethical issue

regarding chicken bothers you?

When respondents were given the fact that if McDonalds would have used 100% naturally

raised chicken meet, 39% said they would go eat there more often.

IMPACT OF GOVERNMENT AND MEDIA

The great majority (76%) claimed that were familiar with the current obesity issues (the

government anti-obesity policies, Jamie Oliver campaigns, etc.) in the UK. 15% of those who

were familiar with that issue claimed they have now different perception of fast food and

hence they don’t eat it any more. Moreover 28% of those who were familiar with that issue it

affected them in such way that they now eat less fast food as they used to. (Figure 5.2.2g)

49

Figure 5.11: Do these high public obesity debates from the government and media have

any impact on you (in terms of what makes you change your attitudes towards fast food

products)?

The infamous documentary ‘Super size me’, which 84% of all participants claimed they were

familiar with, had a strong negative influence (on those who had seen the movie). 35%

claimed that ever since they saw the documentary, they don’t eat in McDonalds anymore.

(Figure 5.12)

50

Figure 5.12: Did Super size me documentary made you go less in McDonalds?

On the last question participants blamed ‘junk food’ as the strongest reason for UK being

selected as the fattest country in Europe. (Figure 5.13)

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Figure 5.13: UK has been recently chosen as the fattest country in Europe. What do you

think is the reason for that? Please apply everything that you consider as a reason!

In conclusion, author found out that the key issues/themes from the focus group discussion

appeared to be of greatest importance with the larger group of UK’s fast food target market.

However, one topic from focus group did not match with answers given in questionnaires.

While participants in the focus group claim that current public anti-obesity debates in the UK

have no significant negative impact on their attitudes towards fast food, respondents by

questionnaires claimed opposite. Respondents associated McDonalds and its products with

adjectives such as unhealthy, cheap, tasty and fatty. They ‘ranked’ their food (with exception

of salads and fruit) as of the worst quality. Ethical issue concerning McDonalds, current high

public obesity debates in the UK along with the documentary Super Size Me, appears to

contribute towards negative attitudes that consumers have with McDonalds.

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CHAPTER 5: RECOMMENDATIONS

In this chapter a set of proposed recommendations as well as supporting analysis of the

options for McDonalds will be depicted. In addition the implementation plan to support the

key recommendation, including description of resources required will be illustrated.

Now that factors that influence the consumer decision-making process regarding fast food

have been identified and analysed, the following recommendations that McDonalds might

pursue is proposed. From the introduction chapter it can be seen that the company is, despite

its traditionally unhealthy image, performing in fact really good.

There still are, however, few areas that McDonalds might improve in, to boost current rising

sales and secure escalating share prices. Options like Increase awareness of the quality of

McDonalds’ products, promotion of active lifestyle through celebrity football player, new

healthy menus along with redecorating its restaurants, and hiring celebrity chef to promote

McDonalds brand might help McDonalds improve its business of operation.

Due to word limit restrictions for this dissertation, author decided to further describe and

evaluate two options that could be beneficial for McDonalds. The proposed two options are

illustrated in Ansoff’s Matrix.

Figure 5.1 Options for McDonalds illustrated in Ansoff’s matrix

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5.1 Option description and evaluation

It is important that options are presented with a concept of success criteria, by which these

strategic options can be judged. According to Johnson (2005, p.357), there are three main

success criteria:

Suitability- is concerned with whether a strategy addresses the circumstances in

which firm is operating.

Acceptability- is concerned with whether expected performance outcomes (such as

the return on risk) of a strategy and the extent to which these would be in line

with the expectations of stakeholders.

Feasibility- is concerned with whether the strategy could be made to work in

practise. It requires an emphasis on more detailed practicalities of strategic

capability.

5.1.1 Option 1: Increase awareness of the quality of McDonalds’ products

From the analysis of focus group and questionnaires it is clear that people simply do not trust

McDonalds. The fact of the matter is that their perception, their attitudes towards McDonalds

food are negative. On top of that the high public obesity debates, documentaries and various

books stressing extremely negative facts and consequences of fast food, have impact on

consumer’s risk perception towards fast food. Hence, it is important that McDonalds attempts

to reduce that perceived risk with providing consumers with information about nutritional

content of their food. This can be done through various ways.

One of them is to persuade people to visit www.mcdonalds.co.uk. From the questionnaire

analysis 61% of participants who have not visited their website, do not plan to do so. It is

important therefore to persuade this large percentage of consumers to go on their website.

This could be done using promotional material such as special coupons at the restaurants,

which would be collected after the purchase with a receipt. On that coupon there would be a

number which must be entered on their website in order to win (if to be selected) attractive

prices. (E.g. iPods, Sony cameras) That would make people go on their website more often.

The content of website would have to be attractive that they would read everything regarding

54

nutritional content of the food, animal welfare, super size me documentary, etc. From the

analysis 34% (for beef burgers) and 39% (for chicken sandwiches) of respondents claimed

that if they had been given a fact that McDonalds uses 100% beef and chicken, they would eat

there more often. (Appendix C, questions 9 and 15) If McDonalds manages to inform these

people about the leanness of its meat and the truth behind its apple pies and chicken

McNuggets- that might reduce consumers risk perception, since they would feel more

confident of what they are eating, and where did that meat come from.

Besides that they could attract more people to visit their website and spend more time there by

introducing various games and healthy quizzes that could be launched form their website.

They could increase consumer’s knowledge regarding its product by giving away (after the

purchase with a receipt) each customer a special voucher booklet, in which the information of

the ingredients they use how they treat the animals and what parts of animals goes into their

burgers would be described. In addition, this booklet would contain the story of the

McDonalds brand in a ‘warm and engaging way’ and therefore try to create and increase the

consumers’ emotions with McDonalds brand. Such booklets/fliers would also be distributed

in front of each McDonalds restaurants. They would also put their nutritional facts list on

every back of the tray paper, give the chance to their customers to see how much fat, sugar,

proteins, calories etc. their meal consists of. That would be a good start of building trust with

their customers.

This option is suitable since it fits perfectly in the environment. People are concerned with

what goes into their bodies. Referring to findings, people would go more often to McDonalds

if they would be guarantied that what they are eating is 100% good quality food. People want

to know what they are eating. By providing all these information regarding nutrition quality,

McDonalds would increase sales as well as increase and improve their brand value.

What are the risks and returns? That is the question of acceptability. This option is

considered as not particularly risky. In case of failure, this would not be disastrous for

McDonalds (apart from for money invested in that promotional campaign). Regarding

possible returns associated with that option are incomparable with the risk of that option. In

55

addition, there is no critical issue attached to that option that would not be accepted or

approved by McDonalds stakeholders.

Is it feasible, will it work in practise? This option should work in practise, since author

presume that McDonalds is capable of such marketing investment. Improving their website,

purchasing of prizes, providing voucher booklets and other point of purchase promotional-

informational material to increase their awareness is relatively inexpensive for a giant like

McDonalds. Moreover author believes that McDonalds possesses all resources and

competences in order to make this option work in practise.

5.1.2 Option 2: Introduction of new healthier menus along with refurbishment of

restaurants

Nowadays customers demand quality and healthy food. Thus, McDonalds should consider

introducing new range of healthier sandwiches, salads, fruit salads and other more nutritious

food. For French fries, apple pies and other fried food, they could, for instance, instead of

frying it, prepare it in oven, which would be a lot healthier and it would eliminate the trans fat

it uses in cooking fried food. Instead of white bread they could use wholemeal bread. They

would start position themselves as healthier food chain. The interior design of their typical

restaurant would change from combination of red-yellow colour, to softer browns-

emphasizing the nature. Moreover they could start introducing computers equipped with

Internet in some of their restaurants as well as newspapers. This could attract new customers

going to their restaurants- they could broaden its customer base. They would be promoting

healthy living by new advertising campaigns in which advertising message would be designed

in such way to show explicitly how more nutritious and healthier their food is.

From suitability perspective, it fits completely with trends in domestic environment and

current health concerns. That option might result in changing peoples’ perception they

presently possesses with McDonalds brand, which is anything else than healthy.

Is it acceptable? From stakeholder’s prospective it is likely to be acceptable, since it is in line

with current healthy trend. However, there is a risk that this option would not work because

people simply would not go there to eat “healthy”, as it was always known as the ‘lower

56

quality fast food chain’. Furthermore not all McDonalds shareholders might agree with that

option, since it would require significant investments, which would most probably mean no

dividends for them in the short-medium term. Furthermore there could be a risk of

cannibalisation effect on traditional burgers, which would suffer on expense of new healthier

menus.

Is this feasible? From financial perspective it would be probably one of the most expensive

investments in the history of the company. Money required for financing refurbishment of all

restaurants and offering healthier, better quality products (which are obviously more

expensive than products they offers now), on the top of new advertising campaigns, would

definitely be a difficult task, even for a giant like McDonalds.

Both presented options are attractive for McDonalds and furthermore both fit in the

environment. However, according to authors’ findings, he believes that option 1 is more

appropriate than the second one. Moreover first option meets criteria (suitability,

acceptability, feasibility) better than the second option. It is very straightforward, it can be

employed immediately and it does not require heavy investments. Above all, it does not shy

away from McDonalds core (traditional) business, which is making burgers and French fires.

5.2 Implementation plan

Following implementation plan will set out stages McDonalds will need to go through to turn

proposed option into reality.

In order for McDonalds to successfully implement this new strategy, the author created a

Gantt chart. In the following Gantt chart, the author listed all the different tasks assigned and

the timeframe allocated to achieve each of them.

The timescale to implement proposed tasks can vary, nevertheless, author presume that the

implementation could approximately take 3 months for the design and creation of promotional

material and another 6 months to distribute the material.

The main objectives for increasing awareness of the quality of McDonalds products are:

57

Redesigning the website (in order to make people read about the facts of their products

and spend more time in their website)

Promote their website (coupon with a number that has to be entered on their website in

order to win prizes)

Designing special voucher booklet, designing list of nutritional facts (which goes on

the top of the tray), and other point of purchase promotional material

Table 5.2: Gantt chart for 2007

TASKS Jan Feb Mar Apr May Jun Jul Aug Sep Oct RESPONSABILITIESSet promotional campaign objectives                     MGT/MKTG directorPreliminary budget                     MGT/MKTG directorRedesigning website                     MKTG dep.(design team)Contact Apple and Sony dealers for prizes                     MARKETING departmentDesigning voucher booklet                     MKTG dep.(design team)Designing other promotional material                     MKTG dep.(design team)Press release                     MKTG dep. (PR)Finalize budget                     MKTG dep/FINANCE dep.Distribution of promotional material                     MARKETING departmentLaunch of new website*                     IT departmentEvaluation of the project                     MGT/MKTG director                                                                     *Once the new website is launched, it will be available in the future as well and not just in the first 6 monthsas it is illustrated on the chart.                         

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CHAPTER 6: CONCLUSION

In this chapter author will conclude his research with how the research question has been

solved. In addition a brief re-cap of the whole dissertation will be provided.

My research question:

What factors are currently influencing the consumer decision-making process in the fast

food restaurant industry in the UK, and how is McDonalds responding to changing

environment and consumer behaviour?

The need for fast food comes impulsively. People do not spend significant time thinking on

whether they will go eat in McDonalds or not. Attitudes that consumers have with McDonalds

are predominantly associated with their knowledge regarding fast food. Their

knowledge/information they have acquired regarding fast food is primarily negative. As a

result their attitudes are also negative. Research revealed that majority of people link

McDonalds food with adjectives unhealthy, cheap, tasty and fatty. Furthermore people ranked

McDonalds food as of worst quality. The reason for eating in their restaurants was described

as the ‘last resort’, underpinning the fact that McDonalds is still (traditionally) perceived as

typical junk food restaurant. There are also external influences that have impact on consumer

decision-making process. These have direct impact on consumer’s psychology, resulting in

changing their attitudes and perceptions they currently possess. These external influences are

current high public obesity debates in the UK, which according to research have negative

impact on consumers purchasing behaviour. All factors above contribute towards risk

perception that consumers have with McDonalds food. The research also revealed that

consumers do not trust McDonalds, which negatively impact on their decision-making

process of eating in such restaurants.

How is McDonalds responding on above changes in environment and consumer behaviour?

Marketers at McDonalds try to reduce the perceived risk that consumers have with their

products. They try to reduce the perceived risk by providing consumers with information

regarding their food. They also strive to gain consumers trust, change their attitudes and hence

increase their sales. McDonalds does everything to be as ready as possible for the threats

arising from external environment. As PEST analysis has shown that one of the key drivers of

59

change that might have an impact on the industry in the future is high- profile political and

public debate on obesity and other health issues in the UK.

Nonetheless, McDonalds is used to that. Having said that, McDonalds has been battered by

books (Fast Food Nation), thousands of dietary experts stressing dangerous facts about

McDonalds food, criticized by celebrity chefs (Jamie Oliver) and they even made a

documentary (Super size me) to reveal the truth behind the fast food. On top of that it had

gone through several lawsuits (in the US), fortunately (for McDonalds) neither of them

succeeded. Indeed, these had negative impacts on the company as people became aware of the

consequences of fast food. As a response on that McDonalds introduced healthier menus, cut

the amount of trans fat it uses in cooking fried food and introduced the website that offers

their side of the story as a response on the ‘Super size me’ documentary. And it seems like its

effort has paid off. McDonalds sales are now increasing and as a consequence its shares price

ended at highest point in past six years. Perhaps McDonalds became immune on all those who

want to harm its reputation and it even got stronger with all these many years of accusations.

Perhaps in a ten years time they might be famous for their salads and organic food as they are

now for their burgers and fries.

To conclude, author has not found anything particularly new regarding consumer attitudes

towards such food. Consumers still (and probably will) have negative attitudes towards

McDonalds. They will perceive it as something greasy, fatty and bad for their body.

McDonalds cannot change people’s perception over night. What they can do, though, is they

can show people what their food is made of- it is then up to us consumers, whether we will

trust them or not. And that is what will make us go and eat their burgers.

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limited (8th Ed.)

SOLOMON, M. BAMOSSY, G., ASKEGAARD, S., HOGG, M., (2206) Consumer

behaviour- European perspective, Person Education Limited (3rd Ed.)

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Harlow, Pearson Education Limited

Academic Journals:

BLACKMAN, C. (2005), ‘A healthy future for Europe’s food and drink sector?’

Vol.7 no. 6, pp.8-23

BROWN, K. (2000) et al., ‘Nutritional awareness and food preferences of young

consumers’

Vol. 30, no.5, pp.230-235

GOLDSMITH, R., FREIDEN, J., HENDERSON, K., (1997) ‘The impact of social

values on food related attitudes’

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Vol. 99/9 pp.352-357

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Vol.9 No. 2, pp.207-220

LYE et al., (2005), ‘Decision waves: consumer decisions in today’s complex world’

Vol. 39 no. 1/2 pp.216-330

SCHROEDER, M., McEACHERN, M., (2005) ‘Fast Foods and ethical consumer

value: a focus on McDonald’s and KFC’

Vol.107 No. 4 pp.212-224

VERBEKE, W. ‘Influences on the consumer decision-making process towards fresh

meat’

Vol. 102 No. 7, pp. 522-538

VIGNALI, C. (2001) ‘McDonald’s: think global, act local- the marketing mix’

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Newspaper articles:

WIGGINS, J. (2006) Fast food chains curb targeting of children, Financial Times,

Wednesday November 15 2006

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APPENDIX A

FOCUS GROUP

Focus group took place at Regents College campus (room 106) on the 16th of November 2006.

It consisted of seven students, four men and three women (the initial plan was to interview

nine people but two female students cancelled one hour before the session). All participants

were EBS students.

The moderator (author of the dissertation) was not trained for doing such research. Before the

actual session, the invitation with a proposed agenda, session time and list of questions the

group will discuss, was sent to all participants via email. Before the session began the ground

rules were also explained. Furthermore the PowerPoint slides with one question on a slide

were showing throughout the whole focus group in order to imply the participants to stay

focus on the question discussing at that time. The discussion was recorded with an audio-

video recorder. The content of which is available on DVD.

QUESTIONS ASKED DURING FOCUS GROUP

1) What do you know in general about the fast food restaurants (McDonalds) and typical

products they offer?

a) Food quality (nutritional value- quality of ingredients of fast food products)

b) Ethical aspects (animal welfare, environmental issues, etc.)

2) What do you feel about the fast food restaurants and fast food products in general?

3) What makes you go (if you go) in the fast food restaurant?

4) Are you familiar with the current obesity issue in the UK (e.g. the government anti-

obesity policy, Jamie Oliver campaign, etc.), and is it affecting you in any way

whatsoever?

5) Should the government bring in laws to stop companies promoting and producing

unhealthy food or let the industry self-regulate and allow customers make their own

choices?

6) Should fast food restaurants (McDonalds) be held responsible/be blamed for rising obesity

rates in the UK?

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APPENDIX B

QUESTIONNAIRE

Hi! I’m doing this for my dissertation and I would really appreciate if you could answer

following questions. The topic is FAST FOOD & MCDONALDS.

I’m looking for your attitudes and perceptions regarding fast food products and restaurants,

particularly McDonalds. Moreover I’m trying to find out the impact of current high pubic

anti-obesity debate in the UK, that it has (if it has) on your behaviour.

1. Please choose your sex

o Male

o Female

2. Please choose your age bracket:

o Under 15

o 16-25

o 26-35

o 36-45

o over 46

3. How often do you eat fast food (i.e. McDonalds)?

o Every day

o 3 times a week

o Once a week

o 3 times a month

o Once every month

o I don’t eat fast food

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4. On a scale from 1 to 7 (1 being the worst quality and 7 as the best quality) how nutritious

are McDonalds’ products?

o Beef Burgers 1 2 3 4 5 6 7

o Vegetables in burgers 1 2 3 4 5 6 7

o Salads 1 2 3 4 5 6 7

o Fruit 1 2 3 4 5 6 7

o Apple pies 1 2 3 4 5 6 7

o Chicken sandwiches 1 2 3 4 5 6 7

o McDonalds McNuggets 1 2 3 4 5 6 7

o French fries 1 2 3 4 5 6 7

5. Have you ever seen a list of nutrition facts at the McDonalds restaurants?

o Yes

o No

6. If you have seen it, do you trust it?

o Yes

o No

7. Do you believe McDonalds put chemicals in their food? (to improve the taste and/or

improve the texture of vegetables)

o Yes

o No

8. McDonalds claims on their website that they use “the best raw ingredients in their highly

quality food”! Do you believe that? Please mark on a scale from 1 to 5 (1 as least believable)!

1 2 3 4 5

9. If you were given the fact that McDonalds uses 100% lean beef along with fresh

vegetables, apples in their apples pies, etc. would that make you go eat there more often?

o Yes

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o No

10. Have you ever checked McDonalds Web page?

o Yes

o No

11. If yes, do you find it appealing and/or useful?

o Yes

o No

12. If you haven’t visit it yet, do you intend to visit their website in the future?

o Yes

o No

13. What makes you go to McDonalds?

o Dying of hunger and nothing else is available

o It’s the most convenient option (as you are either in a hurry and you want something

quick or you often pass it by as you feel hungry, etc.)

o Because it offers great value for money (good food for good price)

o Because I love the taste of it

o I never go to McDonalds because it’s not healthy to eat such food

14. How well are you aware of the ethical issues (animal welfare- for example feeding

chicken with steroids, etc.) regarding McDonalds chicken farming?

o Very familiar

o Quite familiar

o Don’t know what that is

15. When you eat chicken sandwich at McDonalds, does the ethical issue regarding chicken

bothers you?

o Yes it bothers me, and that’s the reason I don’t eat chicken in McDonalds

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o Yes it bothers me, but I eat it anyways

o It doesn’t bother me at all

o I don’t eat chicken

16. If you were given the fact that McDonalds uses 100% naturally raised chicken meat in

their sandwiches, would that make you go eat there more often?

o Yes

o No

17. Please write 3 adjectives you would link them to McDonalds products they offer!

________________________________________________________

18. Are you familiar with the current obesity issues (the government anti-obesity policies,

Jamie Oliver campaigns, etc.) in the UK?

o Yes

o No

19. Do these high public obesity debates from the government and media have any impact on

you (in terms of what makes you change your attitudes towards fast food products)?

o Yes, I now have different perception of fast food and I don’t eat it any more

o Yes, but I still go and it in fast food restaurants, just not as often as I used to

o No, it didn’t affect me in any way and I still eat in fast food restaurants

o I never eat in such restaurants

20. Are you familiar of the documentary about McDonalds “Super Size Me”?

o Yes

o No

21. Did that make you go less in McDonalds?

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o Yes, I don’t eat there anymore

o Yes, at the beginning, but now I go as often as I used to

o No, I still eat there

22. UK has been recently chosen as the fattest country in Europe. What do you think is the

reason for that? Please apply everything that you consider as a reason!

o Busier lifestyle

o Sedentary lifestyle (lack of exercise)

o Lack of education

o Eating too much “junk food”

THANK YOU FOR YOUR PARTICIPATION!!!

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APPENDIX C

On a scale from 1 to 7 (1 being the worst quality and 7 as the best quality) how

nutritious are McDonalds’ products?

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72

73

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