Reasons Why Students of San Beda College – Mendiola Patronizes McDonald’s – Mendiola rather than any other Fastfood Chains nearby
A Thesis Presented to The College of Arts and Sciences San Beda College – Mendiola
In Partial Fulfilment Of the Requirements in English 04 Bachelor of Science in Business Administration Major in Marketing and Corporate Communications
By: Kristine Dianne Caballa Philipp Gibran Cahilig Ruth Claire Paat Xavier Quizan Daphne Valenzuela January 2010
CERTIFICATION OF THE ADVISER
This is to certify that the thesis of Kristine Dianne Caballa, Philipp Gibran Cahilig, Ruth Claire Paat, Xavier Quizan and Danielle Daphne Valenzuela, entitled “Reasons Why Students of San Beda College – Mendiola Patronizes McDonald’s Mendiola Rather Than Any Other Fastfood Chains Nearby”, has met the partial fulfilment of the requirements in English 04.
___________________________ ADVISER
TABLE OF CONTENTS PAGE TITLE PAGE ---------------------------------------------------------------------------CERTIFICATION OF THE ADVISER ---------------------------------------------TABLE OF CONTENTS ---------------------------------------------------------LIST OF GRAPHS AND ILLUSTRATION --------------------------------------ACKNOWLEDGEMENTS ----------------------------------------------------------
Chapter I: The Problem and Its Background Rationale ------------------------------------------------------------------Conceptual Framework ------------------------------------------------Statements of the Problem ------------------------------------------------Hypothesis ------------------------------------------------------------------Assumptions ------------------------------------------------------------------Importance of the Study ------------------------------------------------Scope and Delimitation of the Study ---------------------------------------Definition of Terms ---------------------------------------------------------Chapter II: Review of Related Literature and Studies Conceptual Literature ---------------------------------------------------------Research Literature ---------------------------------------------------------Chapter III: Research Design Methods of Research to be used ---------------------------------------Research Instruments ---------------------------------------------------------Research Setting and Instruments ---------------------------------------Research Procedure ---------------------------------------------------------Statistical Treatment ---------------------------------------------------------Chapter IV: Results Presentation of Data ---------------------------------------------------------Interpretation of Data ---------------------------------------------------------Data Analysis ------------------------------------------------------------------Chapter V: Summary, Major Findings, Conclusion and Recommendations Summary ------------------------------------------------------------------Major Findings ---------------------------------------------------------Conclusion ------------------------------------------------------------------Recommendations ---------------------------------------------------------BIBLIOGRAPHY
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i ii iii iv v
APPENDICES
CHAPTER 1 The Problem and Its Background
Rationale McDonald's brand mission is to "be our customers' favorite place and way to eat." Their worldwide operations have been aligned around a global strategy called the ‘Plan to Win’ centring on the five basics of an exceptional customer experience – People, Products, Place, Price and Promotion. They are committed to improving their operations and enhancing our customers' experience. For over 50 years, McDonald’s has been giving opportunities to people who share the same vision. Now, there are more than 7,000 McDonald’s franchisees in 119 countries. In the Philippines, McDonald’s started opening its doors to franchising in 1985. Since then, franchised stores in the Philippines grew to over 100 stores with more than 60 franchisees (Most have been part of the McDonald’s Family for around 10 to 15 years!). McDonald’s is a customer-oriented company that strives to offer Filipinos a combination of great tasting, quality food products at value prices with excellent service. It means to be the first to respond to the fast changing needs of the Filipino family. The first choice when it comes to food and dining experience! And the first mention as the ideal employer and socially responsible company. The corporation grew to be more consumer-oriented as to they innovate in order to go with the fad of the generation. Consumers seek more health-friendly foods that are free from bad cholesterol and harmful ingredients.
Conceptual Framework Dependent Variable:
Independent Variables: -
The Marketability of McDonald’s Mendiola
Affordability Accessibility Quality Service Marketing Strategy
- Time Environment Finance Customers Other Factors (Secondary factors)
Figure 1: Conceptual Paradigm
Upon studying the Marketability of McDonald’s Mendiola, there are factors that affect the variables. Among the college students of Mendiola Consortium, Bedans are only few of the customers of this food chain. Most of their customers are from the nearby colleges specifically La Consolacion and CEU. Often times during weekdays between 12pm – 3pm, which means the Lunch Rush, group of students were rushing to this food chain. This doesn’t include the passers-by customers that lived or worked nearby the foodchain.
Statement of the Problem As McDonald’s Mendiola continue to dominate the fastfood chain industry in Mendiola, there are certain problems that a consumer must take importance of.
General Statement: Why do students patronize McDonald’s?
Specific Statement: 1.) How does a Fastfood Chain play a role in college students? 2.) What makes McDonald’s popular among the college students? 3.) What are the views of the college students regarding Fastfood Chains?
Hypothesis Fast food also known as Quick Service Restaurant or QSR within the industry itself, is the term given to food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with low quality preparation, preheated or precooked ingredients, and served to the customer in a packaged form for takeout/take-away. The concept of ready-cooked food for sale is closely connected with urban development. Nearly from its inception, fast food has been designed to be eaten "on the go", often does not require traditional cutlery, and is eaten as a finger food. Common menu items at fast food outlets include fish and chips, sandwiches, pitas, hamburgers, fried chicken, French fries, chicken nuggets, tacos, pizza, hot dogs, and ice cream, although many fast food restaurants offer "slower" foods like chili, mashed potatoes, and salads.
Assumptions Traditional street food is available around the world, usually from small operators and independent vendors operating from a cart, table, portable grill or motor vehicle. Common examples include Vietnamese noodle vendors, New York City hot dog carts, and taco trucks. Turo-Turo vendors are a feature of Philippine life. Commonly, street vendors provide a colorful and varying range of options designed to quickly captivate passers-by and attract as much attention as possible. Depending on the locale, multiple street vendors may specialize in specific types of food characteristic of a given cultural or ethnic tradition. In some cultures, it is typical for street vendors to call out prices, sing or chant sales-pitches, play music, or engage in other forms of "street theatrics" in order to engage prospective customers. In some cases, this can garner more attention than the food itself; some vendors represent another form of tourist attraction.
Importance of the Study Modern commercial fast food is often highly processed and prepared in an industrial fashion, i.e., on a large scale with standard ingredients and standardized cooking and production methods. It is usually rapidly served in cartons or bags or in a plastic wrapping, in a fashion which minimizes cost. In most fast food operations, menu items are generally made from processed ingredients prepared at a central supply facility and then shipped to individual outlets where they are reheated, cooked (usually by microwave or deep frying) or assembled in a short amount of time. This process ensures a consistent level of product quality, and is the key to being able to deliver the order quickly to the customer and eliminate labor and equipment costs in the individual stores.
Scope and Delimitation Among other fast food chains, McDonald’s is the largest in the industry. With over 180 company-owned branches nationwide, McDonald’s was having difficulty in managing and maintaining the day-to-day operations of its various hardware and software store system. This innovation of McDonald’s would cost a lot of money. Since the Golden Arches makes its way through innovation, they started up installing Wi-Fi devices that makes customers connect free to the internet without any charges. As soon as this technology covers the rest of the branches, they will maximize their profit to give customer more satisfying foods and services. After a full and satisfying meal in McDonald’s, you will feel that your money was worth a while. If chances that McDonald’s is far from your location, they’re just a phone away and they will make sure that your orders are posted immediately. These advantages of McDonald’s give its consumers great satisfaction. By doing this, consumers will continue to patronize their product. McDonald’s is a foreign aboriginal fastfood chain. When it came here to the Philippines, they started crawling through the taste of the Filipinos. Its biggest rival is when Jollibee boomed the fastfood industry. Jollibee make a way how to sink into the Filipino taste. Hence, this threat to McDonalds’s gives them a hint on how to make their strategy – by producing Fried Chicken Meals. From any other branches of McDonald’s, Philippines is the only country that serves Fried Chicken Meals to their customers. Until now, they are seeking for new way of enriching their menu to cope up with the fad of the generation.
Separately, McDonald's began a bid to grab market share in the Philippines from fast-food leader Jollibee Foods, by launching the first McCafé coffee unit in Manila. The Philippines' Board of Investments recently gave approval for McDonald's Corp. to have majority control in the Philippines operation, which the parent company expects will help strengthen the brand's position against Jollibee.
Definition of Terms A language is a particular kind of system for encoding and decoding information. In trying to understand what the study is, these terminologies will identify what is the scope of the research. Advertising - a form of communication intended to persuade its viewers, readers or listeners to take some action. Chain Store - retail outlets which share a brand and central management. Franchising – a business method that involves licensing of trademarks and methods of doing business. Marketability – similar to liquidity, except that liquidity implies that the value of the security is preserved, whereas marketability simply indicates that the security can be bought and sold easily. Marketing - the process by which companies determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. McDonald’s - is the world's largest chain of hamburger fast food restaurants, serving nearly 47 million customers daily. Rival - a competing person, company, team, or other organization. Rivals are not always similarly matched, but they are well known to each other.
CHAPTER II Review of Related Literature & Studies
Conceptual Literature McDonald’s commitment to its franchisees does not end with the training. It recognises that the success and profitability of McDonald’s is inextricably linked to the success of the franchises. A highly qualified team of professional consultants offers continuous support on everything from human resources to accounting and IT business controls. These field consultants can become valued business partners and are a sounding board for ideas. Every franchisee has to complete a full-time training programme, which they must fund and which lasts about nine months. This training is essential and begins with working in a restaurant, wearing the staff uniform and learning everything from cooking and preparing food to serving customers and cleaning. Further training at regional training centres focuses on areas such as business management, leadership skills, team building and handling customer enquiries. The franchisees will have to recruit, train and motivate their workforce, so they must learn the skills of human resource management. During the final period, they learn about stock control and ordering, profit and loss accounts and the legal side of hiring and employing staff. Consequently, no McDonald’s franchisee would have to ask a member of his or her staff to do something that they couldn’t do themselves. Knowing this can also be a powerful motivator for the staff. (Smith, 2005) A brand is a name, term, sign, symbol or design - or a combination of these which identifies one organisation’s products from those of its competitors. (Kroc, 2007)
Related Literature The McDonald's brand is almost as global as Coke. The group's 32,000th restaurant opened in 2009, and those golden arches now spread across almost 118 countries, welcoming some 58m customers every day. Not enough, the company says. On any day McDonald's still only serves less than 1% of the world population, leaving plenty of room for growth. However profits fell dramatically in 2002 and the group took unprecedented steps to close under-performing outlets, even pulling out of a few markets altogether. That move appeared to have paid off by 2004, and the group has reported strong growth ever since, even in the face of an economic downturn. A key factor has been the broadening of the McDonald's menu with an enhanced range of breakfast items, chicken and salad meals and premium beverages. Advertising Age estimated global measured advertising expenditure of $2.0bn in 2008, making McDonald's the world's #14 advertiser (Stevenson, 2005). Cahn (2002) stressed that as more than one billion burgers have now been sold, Ronald McDonald is enjoying great success. This is all despite rampant childhood obesity and the fact that Americans are, as whole, a very fat nation. We once wondered at the stresses that McDonald’s PR agents must feel every time news show mentions obesity. You know they realize they are certainly going to be mentioned and debated. While Alexander (1988) emphasized that one neat thing McDonald’s has done is to partner with Nintendo for Wi-Fi. We are following the US market in terms of growth, so this year, we will continue with the specific projects that have been started last year and the consolidation of the different applications, so that the stores can access the applications using the Internet (Yang 2008).
CHAPTER III Research Design
Method of Research Used Bibliometrics is a type of research method used in library and information science. It utilizes quantitative analysis and statistics to describe patterns of publication within a given field or body of literature. Researchers may use bibliometric methods of evaluation to determine the influence of a single writer, for example, or to describe the relationship between two or more writers or works. When one author cites another author, a relationship is established. Citation analysis uses citations in scholarly works to establish links. Many different links can be ascertained, such as links between authors, between scholarly works, between journals, between fields, or even between countries. Citations both from and to a certain document may be studied. One very common use of citation analysis is to determine the impact of a single author on a given field by counting the number of times the author has been cited by others (Osareh, 1996) Recently, a new growth area in Bibliometrics has been in the emerging field of web metrics, or cyber metrics as it is often called. Web metrics can be defined as using of bibliometric techniques in order to study the relationship of different sites on the World Wide Web. Such techniques may also be used to map out areas of the Web that appear to be most useful or influential, based on the number of times they are hyperlinked to other Web sites. The survey is a non-experimental, descriptive research method. Surveys can be useful when a researcher wants to collect data on phenomena that cannot be directly observed.
Surveys are used extensively in library and information science to assess attitudes and characteristics of a wide range of subjects, from the quality of usersystem interfaces to library user reading habits. Cross-sectional surveys are used to gather information on a population at a single point in time. An example of a cross sectional survey would be a questionnaire that collects data.
Research Instrument A sample is representative when it is an accurate proportional representation of the population under study. Questionnaires are helpful to be able to find out the different opinions of every participant of the study. The questionnaire purely talks about the marketability of McDonald’s and its factors that affect the good performance of service in the food chain industry. Interview is another instrument that is accurate and efficient. Especially, when the person is an expert of the given field you wish to discuss. Structured interview is one of the types of interviews that have a list of questions to be answered by the interviewee as confident as he can.
Research Setting and Respondents The respondents of the study are the College Students of San Beda College – Mendiola. It is an advantage that the respondents are within the same vicinity where the research is studied. College Students have enough knowledge of the topic. By this, a researcher will be able to know if students took importance of the topic.
Data Gathering Procedure The questionnaires were distributed among College Students of San Beda College – Mendiola. There were 10 representatives for each year and the questionnaires were given to them and all of it was answered. This amount of the given questionnaires is enough to determine the views of the students regarding the topic.
Statistical Treatment The data analysis will be done through percentage and application of various statistical methods. Percentages and ratios which are useful when comparing two or more series of data, while statistical method for significant proportion and the mean of grouped data which can be applied in this research. The researchers used this formula to determine the result: n=
___N___ 1 + N(e)2
The researchers used the random sampling as its method of sample selection. This procedure is one that is based on probability considerations.
CHAPTER IV Results of Data
Presentation of Data These are the results of the questionnaires that were distributed to 40 people in different year levels. Every graph represents the percentage of answers for each number.
How often do you eat at McDonald's? Everyday
At least once a week
At least once a month
At least once every semester
15%
10% 28%
47%
Figure 2: Frequency of Students who eat at McDonald’s
The greatest number of percentage as shown in Figure 2, 47% (19 respondents), shown that, students eat at McDonald's at least once a month. Nevertheless, 28% (11 respondents) of them eat at McDonald's least once a week. Likewise, 15% (6 respondents) of the respondents eat at least once every semester in McDonald’s and the least which is 10% (4 respondents) of the respondents eat at McDonald’s everyday.
Is McDonald's affordable? Yes
No
33%
67%
Figure 3: Percentage of Respondents who says that McDonald’s is affordable
The largest percentage of respondents directed to Figure 3, which is 67% (27 respondents) said that McDonald’s is affordable and the rest doesn’t agree which is 33% (13 What respondents). do you think is the edge of McDonald’s among other fast food chains? Food and Promos
Ambiance
Service
Affordable
25%
28%
29%
18%
Figure 4: The Edge of McDonald’s
29% (12 respondents) of the respondents, as shown in Figure 4, believed that foods and promos were McDonald’s greatest edge among any other fastfood chains. The 28% (11 respondents) of the respondents agreed that the edge of McDonald’s is their service. Hence, the 25% (10 respondents) of the respondents stuck to the fact that McDonald’s is affordable while the rest 18% (7 respondents) said that the ambiance of McDonald’s is their greatest edge.
How do you rate the value meals in McDonald's? Cheap
Expensive
Very Expensive
Just Right for the Budget
20% 45%
30% 5%
Figure 5: Ratings of Value Meals in McDonald’s
The 45% (18 respondents) of the respondents, directed to Figure 5, said that McDonald’s was just right for a students’ budget but a big number of respondents which is 30% (12 respondents) said that McDonald’s value meals were expensive. In the contrary, certain number of respondents which is 20% (8 respondents) defended that McDonald’s value meals, described by the name itself, were cheap and only few respondents which is 5% (2 respondents) stuck to their decision that McDonald’s sell very expensive value meals which is opposite to its description. Are you satisfied w ith the meals you eat in McDonald’s? Yes
No
28%
72%
Figure 6: Satisfaction of customers to McDonald’s Meals Majority of the respondents, as shown on Figure 6, which is 72% (29 respondents), said that they are much satisfied with the meals served by McDonald’s while 28% (11 respondents) were not satisfied with McDonald’s meals. Food Excellent
Very Good
Fair
Needs Improvement
13% 30% 18%
39%
Figure 7: Customers rating to McDonald’s Foods
Directed to Figure 7, 39% (16 respondents) rated McDonald’s foods as very good, 30% (12 respondents) believed that McDonald’s food was excellent, 18% (7 respondents) thought that its fair and the rest 13% (5 respondents) said that it has needs improvement. Service Excellent
Very Good
Fair
Needs Improvement
18%
27%
23% 32%
Figure 8: Customers rating to McDonald’s services
As shown on Figure 8, 32% (13 respondents) of the respondents relied that McDonald’s services were very good, positively, a big number of respondents, which is 27% (11 respondents), believed that McDonald’s services were excellent. Knowing the fact that certain number of people rated fair with 23% (9 respondents) and needs improvement with 18% (7 respondents). Facilities Excellent
Very Good
Fair
Needs Improvement
8% 20%
35%
37%
Figure 9: Customers rating to McDonald’s Facilities
In figure 9, 37% (15 respondents) said that McDonald’s facilities were very good. Closely to 35% (14 respondents) which answered excellent. 20% (8 respondents) of the respondents were not really satisfied and chose fair and a least percentage of 8% (3 respondents) wasn’t like McDonald’s facilities at all and chose needs improvement.
Customers Excellent Very Good Fair
13%
Needs Improvement
5% 44%
38%
Figure 10: Consumer’s rating to McDonald’s customers
In Figure 10, 44% (18 respondents) of respondents believed that McDonald’s customers were very good in all aspects and a great number of respondents which is 38% (15 respondents) said that customers were excellent. 13% (5 respondents) answered fair and 5% (2 respondents) chose needs improvement. Crew Excellent
13%
Very Good
5%
Fair
Needs Improvement
25%
57%
Figure 11: Consumers rating to McDonald’s crew
As shown in Figure 11, 57% (23 respondents) of respondents answered very well when it comes to McDonald’s crew. Far related to 25% (10 respondents) that answered excellent. 13% (5 respondents) of the respondents replied fair and 5% (2 respondents) was not satisfied with McDonald’s crew performance.
