indian fast food industry

Chapter 1. Introduction and Needs & Objectives 1.1 Introduction Fast food 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 and served to the customer in a packaged form for take-out/take-away. Outlets may be stands or kiosks, which may provide no shelter or seating, or fast food restaurants (also known as quick service restaurants). Franchise operations which are part of restaurant chains have standardized foodstuffs shipped to each restaurant from central locations. The capital requirements involved in opening up a fast food restaurant are relatively low. Restaurants with much higher sit-in ratios, where customers tend to sit and have their orders brought to them in a seemingly more upscale atmosphere may be known in some areas as fast casual restaurants.

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1.2 Needs & Objectives

1. To study overall view of Fast Food industry in India. 2. To study the various services provided by the Fast Food Restaurant. 3. To study the future of Fast Food industry in India. 4. To study the actual working of Fast Food Restaurant. 5. To study the customer satisfaction level. 6. To study the reasons for growth of Indian fast food industry. 7. To study challenges in fast food industry. 8. To study problems in fast food industry.

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LITERATURE REVIEW

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Chapter 2. Conceptual framework 2.1 History The concept of ready-cooked food for sale is closely connected with urban development. In Ancient Rome cities had street stands that sold bread and wine. A fixture of East Asian cities is the noodle shop. Flatbread and falafel are today ubiquitous in the Middle East. Popular Indian fast food dishes include vada pav, panipuri and dahi vada. In the French-speaking nations of West Africa, roadside stands in and around the larger cities continue to sell—as they have done for generations—a range of ready-to-eat, chargrilled meat sticks known locally as brochettes.

The Start of Fast Food Culture: The concept of fast food pops up during 1920s.The 1950s first witnessed their rapid proliferation. Several factors that contributed to this explosive growth in 50‘s were: (1) America‘s love affair with the automobiles. (2) The construction of a major new highway system. (3) The development of sub-urban communities. (4) The baby boom subsequent to world war second.

The development of Indian cuisine has a very long and turbulent history and is ever changing even today as Indians try new cuisines and are exposed to new influences and people from other nations. Sen (2004) traced the historical origins of Indian cuisine and a summary of these different influences is shown next page:

Prehistory

Early cultivation of plants and spices couple with early domestication of animals.

3000–1500 BC

Crops such as wheat, barley and lentils are developed and meat and fish are staples. [4]

2000–800 BC

Aryan tribes migrate to northern India. Sugar cane is grown and processed in southern India.

1000–500 BC

Hinduism develops and castes develop. This leads to a rejection of eating meat, and particularly cows.

6th century BC

Buddha and Mahavira found Buddhism and Jainism. Jains practice strict vegetarianism.

1st century AD

Christianity arrives in India.

5th century AD

Ayurveda (system of medicine based on food) develops.

1206–1536

Central Asian dynasties introduce Central Asian and Persian cuisines.

Late-15th

Portuguese arrive in India, found an empire,

early-16th

and bring new ingredients such as tomatoes

century

,chillies, potatoes etc.

17th century

East India Company is formed.

1830–1850

Tea plantations established by British in Assam and Darjeeling.

1857

British crown takes over government of India and hybrid foods begin to develop.

1947

Tandoori chicken invented in Delhi.

1977

Indian food grows in popularity in UK and the first Balti restaurant opens in Birmingham.

1996

McDonald‘s and Pizza Hut open in India.

2003

Restaurants continue to open offering new international cuisines as the Indian economy grows and urbanisation develops at a rapid rate.

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2.2 Emergence The fast food culture emerged as early as the 19th century. During the Industrial Revolution, a large workforce was required to work for 10 to 12 hours a day. With so much work to be done, fast food was the idea of a quick and easy lunch. In India, fast food culture emerged in the decades after independence, starting from the 1950‘s. Eating at home used to be a significant aspect of Indian culture, so the change was gradual. Over a period of time, with a growth in the number of nuclear families, economic growth and increasing per capita income as well as globalization, fast food culture gained prominence. Women were shifting from their conventional roles of managing the household and taking care of the children. With growth in literacy, they started joining the workforce in large numbers. Fast food became a time-saving alternative to cooking for them. Similarly, children resorted to fast food to fill their stomachs in school and college. Their exposure to global urban culture and Western cuisine accelerated their want for cheap and delicious fast food. Moreover, fast food costs less than traditional long meals commencing with appetizer and concluding with dessert. Nirula‘s and Pizza Corner – India‘s most popular domestic fast food chains – gained rapid popularity during this period. Though the fast food culture originated abroad, these domestic food chains could create a perfect blend of international food with Indian ingredients. Paneer pizzas and aloo tikki burgers were indeed able to satisfy Indian taste buds. With the liberalization of the economy in 1992, new multinational fast food giants started dotting India with their outlets. Burger King, Wimpy‘s, Pizza Hut, Domino‘s Pizza, McDonald‘s, and KFC outlets can be seen today in nearly every shopping mall and

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other public areas. In fact, these multinationals have given their domestic counterparts a run for their money. They are growing at a much faster pace than the Indian chains.

REASON FOR EMERGENCE Gender Roles: Gender roles are now changing. Females have started working outside. So, they have no time for their home and cooking food. Fast food is an easy way out because these can be prepared easily.

Customer Sophistication and Confidence: Consumers are becoming more sophisticated now. They do not want to prepare food and spend their time and energy in house hold works. They are building their confidence more on ‗ready to eat and easy to serve‘ kind of foods.

Paucity of Time: People have no time for cooking. Because of emergence of working women and also number of other entertainment items. Most of the time either people work or want to enjoy with their family.

Double Income Group: Emergence of double income group leads to increase in disposable income. Now people have more disposable income so they can spend easily in fast food and other activities.

Working Women: Working women have no time for cooking, and if they have then also they don‘t want to cook. Because they want to come out of the traditionally defined gender roles. They do not want to confine themselves to household work and upbringing of children‘s.

Large population: [7]

India being a second largest country in terms of population possesses large potential market for all the products/services. This results into entry of large number of fast food players in the country. Relaxation in rules and regulations: With the economic liberalization of 1991, most of the tariff and non tariff barriers from the Indian boundaries are either removed or minimized. This helped significantly the MNC‘s to enter in the country.

Menu diversification: Increase in consumption of pizzas, burgers and other type of fast foods.

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2.3 Impact The emergence of the fast food industry has, to an extent, transformed urban food culture in India. It is common knowledge that too much fast food is bad for health and may lead to obesity. An essential component of most fast food is fat – the kind of fat that in excess can lead to artery clogging. In large quantities, fast food may lead to obesity as well as hypertension, diabetes, high cholesterol and heart diseases. Even certain types of cancers have been observed to spread due to lack of safety standards in some sectors of the fast food industry. There are also several environmental problems associated with how fast food outlets process and package their products. Food packaging is done using plastic, Styrofoam and other synthetic products which are not biodegradable. In recent times, many fast food outlets have switched to paper bags. Though paper is biodegradable, at the large quantities in which paper waste is generated in India, currently paper is seen more as a pollutant. Metal and glassware would be more favorable to serve food, but they destroy the whole purpose of consuming food on-the-go. The need of the hour is a law or regulation that forces these outlets to recycle the paper, plastic and foam they use everyday. India‘s fast food industry is growing at 40% per annum and generates over Rs. 4800 crores in sales. The multinational segment of the industry generates over Rs. 7000 crores. Fast food has, in a way, impacted the Indian economy by creating jobs. Outlets require a large number of unskilled workers who are willing to work for low wages. On the one hand, this generates widespread employment. On the other hand, some analysts feel that it weakens the economy by forcing people to take up jobs in which there is little room for advancement.

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Fast food industry has been very successful in India, both in financial terms as well as in popularizing its quick service culture among the population.

2.4 Jobs and labor issues Today, more than 10 million workers are employed in the areas of food preparation and food servicing including fast food in the world. Employees are the backbone of the fast food industry. Proper training is crucial to the orderly and quick service customers expect. Yet, employee turnover can be as high as 200% per year. With such a turnover, owner-operators of franchise and non-franchise restaurants have the daunting task of constantly training an entirely new workforce. Policies and procedures need to be explained to each new employee.

2.5 Globalization In 2006, the global fast food market grew by 4.8% and reached a value of 102.4 billion and a volume of 80.3 billion transactions. In India alone the fast food industry is growing by 40% a year. McDonald's is located in 120 countries and on 6 continents and operates over 31,000 restaurants worldwide. KFC is located in 25 countries. Subway has 29,186 restaurants located in 86 countries, Pizza Hut is located in 26 countries, Taco Bell has 278 restaurants located in 12 countries besides the United States.

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2.5 Health issue Tran‘s fats which are commonly found in fast food have been shown in many tests to have a negative health effect on the body. The fast food consumption has been shown to increase calorie intake, promote weight gain, and elevate risk for diabetes. The Centers for Disease Control and Prevention ranked obesity as the number one health threat for Americans in 2004. It is the second leading cause of preventable death in the United States and results in 400,000 deaths each year.

Is Indian Fast Food HEALTHY?? One of the richest diets high in calories is Indian Food. If you can pinch more than an inch, it‘s probably time for you to cut down on the calories you eat in Desi food, especially if you want to lose some pounds to be healthier and look fitter. It may seem so innocent just to have that bite size Pakora but we really don‘t know what fat or calories it contains. This is true; most of us don‘t actually know what were eating when we have an Indian meal at home or at an Indian restaurant. A small spicy plate of curry is enough usually to fill our appetites but we don‘t know how many calories are in it. Today, the younger generation is more aware of calories and fat than before. Therefore, if you‘re seeking to control the calories when choosing a dish, make sure you minimise the ghee or oil content and have more of the other ingredients. If cooking, use alternatives such as Olive oil. When ordering in a restaurant, request less fat to be used in your dish.

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Seasonal eating plays a key role in our diets. During the winter we tend to eat heavier foods such as deserts and spoil ourselves with scrumptious hot meals usually full of comforting ingredients, thus, making it harder to shift the pounds with exercise. Eating out can always be a dilemma between choosing a tasty dish and one that is low in calories. Therefore, choosing your courses wisely can help you manage the calorie count. When considering what to eat for your starter, it is perhaps best to choose something light, such as a Popadom as this contains only 65 calories. Unlike Samosa‘s or Onion Bhaji‘s which contain higher calorie content in each portion Dips are used to enhance the taste of a starter, but don‘t be fooled, these also contain calories. A Cucumber Raita or a Tomato Sambal contains approximately 20 calories each. This is significantly less than Mango Chutney or Lime Pickle; a little as 1tbsp can contain up to 70 calories. Yes, you read correctly, 70 calories!

In the present times, it is the fast food craze that has created sensation all over. The fast food has occupied a demanding position in the list of top hot fad foods. People are getting lured into trying yummy fast food dishes, without possessing adequate knowledge regarding Indian fast food nutrition. Well, there is a need for bringing forward some eye opener nutrition facts about fastfood. These days, the fast food chains are booming in number and witnessing flourishing business. Abraham Lincoln had once said, "let the people know the facts and the country will be safe". Well, it also holds true regarding the information about fast food nutritional content. The prime motive is to make the people aware of the fact and then let them take conscious decision.

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Here are some facts about fast food nutrition: 

In the list of fattening dishes, Korma and Biryani are on the top.

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If a sauce solidifies in room temperature, it's an indication that it consists of high saturated fats.

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Pappadums contain relatively high calories.

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Indian curry makes use of green chilies that are rich in Vitamin C.

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All food items like Tikka dishes that are cooked in dry oven contain low fat.

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Instead of creamy pasta sauce, eating tomato sauce is a better option, as pasta sauce contain high fat content.

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Lasagna contains multiple cheese layers; therefore it is a very fatty item.

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Chips are high in fat and calories.

Well, the basic reason that can be attributed to the increasing consumption of fast food is the fact that fast food is readily available, quick to make and easy to serve. Media truly deserves the credit for the wide publicity of fast food stuff. But it is always advisable to eat healthy nutritious food that can help maintain your overall fitness.

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Research Methodology  Research fall into two distinct types:1) Primary Research 2) Secondary Research

1) Primary Research:It involves the collection of data that does not already exist. This can be through numerous forms, including 

Questionnaires

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Interviews of customers

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By visiting the Fast Food Restaurant

2) Secondary research:It involves the summary collection and /or syntheses of existing research rather than primary research, 

News papers

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Books

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Magazines

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Previous project

Various internet sites 

Websites of Monginis and baskin-robbins.

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Fast Food related organizations.

Sample size : 100

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EXPLAINATION

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Chapter 3. Profile of Fast Food Industry 3.1 Indian Fast Food Industry Overview The fast food industry in India has evolved with the changing lifestyles of the young Indian population. The sheer variety of gastronomic preferences across the regions, hereditary or acquired, has brought about different modules across the country. It may take some time for the local enterprise to mature to the level of international players in the field. Many of the traditional dishes have been adapted to suit the emerging fast food outlets. The basic adaptation is to decrease the processing and serving time. For example, the typical meal which called for being served by an ever alert attendant is now offered as a Mini-Meal across the counter. In its traditional version, a plate or a banana leaf was first laid down on the floor or table. Several helpers then waited on the diner, doling out different dishes and refilling as they got over in the plate. In the fast food version, a plate already arranged with a variety of cooked vegetables and curries along with a fixed quantity of rice and Indian flatbreads is handed out across the counter against a prepaid coupon. The curries and breads vary depending on the region and local preferences. The higher priced ones may add a sweet to the combination. Refills are generally not offered. The diversity of Indian cuisine poses logistical problems when it comes to handling. Hence it is common to serve different cuisines at different counters within the same premises. Presence of a large vegetarian population, who eschew non-vegetarian food, has given rise to outlets which exclusively serve vegetarian fast food. Also, different variety of food may be served depending on the times of the day. Beverages [16]

such coffee, tea, soft drinks and fruit juices may also be served in such outlets. Some outlets may additionally have specially designed counters for ice-cream, chaata etc. India isn‘t probably the type of country you‘d associate with an abundance of fast food restaurants, and to some extent that‘s the case but along with everywhere else in the world, fast food is becoming part of the lifestyle in India. The big fast food chains have all made brave attempts to conquer the Indian market. McDonald's, Domino's and KFC all found it difficult to cater for Indian tastes, but then decided to change their own menu to adapt rather than expect a cultural shift – and now McDonald's and Domino's have a wide presence in India. KFC have struggled. The key to the success of the big chains is adapting the traditional Indian snacks and cuisine to make them fast food friendly. Generic Indian Street Food: The street food in India is as diverse as the population, but there are some snacks that you‘re likely to find all over the country. You really can‘t visit India and not sample some of the native Chaat – a hugely variable spicy snack mix, often seasoned with lemon, pomegranate seeds, Kala Namak (black salt), tamarind, and various chutneys. Chaat can be anything from a fruit dish with guava, banana, apple or melon, crisp pancakes called paapri, served with yogurt, or sometimes potatoes sauteed with black cumin powder. Also on the street carts as standard are Pani Puri – hollowed out crispy dough balls with various fillings, Aaloo Tikki - deep fried mashed potato and masala patties usually served with a curry called Chholey (chick peas). They are most popular in Northern India in the winter. If you‘re on a train, you‘ll often be offered a Chaap, a potato patty dipped in flour batter and deep fried, usually dished up with onion slices. Indian Tea and Biscuits: For a quick sweet snack, try a Chai-faen which is simply a combination of tea with a roasted biscuit called "faen", or occasionally ‗khaaree biscuit‘. Another tempting [17]

sweet treat is Vada pav – a great example of West Indian street food, eaten with Masala chai which is a delicately spiced tea. For anyone with a real sweet tooth though, the ideal snack is a jalebi or jangri, which is a syrup-covered deep-fried sweet available throughout India. Regional Variations on Indian Fast Food: What‘s available on the streets to eat can understandably vary depending on where you are. For example in Calcutta you can find ample street food, and the wide selection includes phuchka, which is much loved in the city and thought to be the favourite snack. It consists of little dough balls filled with all sorts of goodies, like mashed potato and herbs, and dunked in tamarind water and cumin for flavour. Jhaalmudi, another Calcutta specialty, consists of puffed rice spiced with lemon and coriander and sometimes also mixed with peanuts, chopped onions, and chilli. In Calcutta, common varieties of fritter are the beguni (aubergines fried in chickpea batter), phuluri (fried chickpea batter), and pakodas (assorted vegetables fried in chickpea batter). If you want to stop and pass the time while you eat, Calcutta is also known for its rice hotels, which serve rice-centric snack style meals. Moving on to Kerala, in South India, the fast food there is available from ‗thattukadas‘ which are covered catering carts fully kitted out stoves and utensils. They usually offer ‗thattu dosa‘ which are rice-flour crepes fried in coconut oil and served with coconut chutney. You‘ll also find thattukadas serving up omelettes, spicy pork , and parottas (like naan breads, but beaten and mixed with oil). Popular formats of fast food business in India have the following features in common: 

Wide opening on the road side

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Easy to maintain and durable décor

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A cash counter where food coupons are sold

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A food delivery counter which invariably is granite topped [18]

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Additional counters for Ice Creams, Chaats, Beverages etc.

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A well fitted kitchen located so as to be visible to the customers

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Tall tables, usually of stainless steel, where one can eat while standing

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A drinking water fountain adorned with a water filter

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Rust-proof and non-breakable crockery

Most of the fast food outlets in India are stand alone establishment, few of them having more than one branch. Fast food and its different categories: •

Indian fast food/finger food-local

•

Family diners-udupi joints,thalis

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Sandwich & salad parlours-Subway

•

Multi-cuisine food courts-Hangouts

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Ice-cream and juice/beverage parlours-Baskins Robins,Mamamia

•

Indian "desserts" and "snack food" chains- Haldirams

Varieties of food offered: The kind of fare they offer as of date could be just anything and everything. Preference of the local population and the location of the outlet influence the menu more than anything else. Some of the popular dishes offered at Indian fast food outlets are: South Indian: 

Idlis – Rice Idli, Rava Idli

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Vadas – Uddina Vada, Rava Vada, Masala Vada, Maddur Vada

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Dosas - Masala Dosas, Set Dosa, Rava Dosa

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Upma, Kesaribhath

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Puliyogere

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Pongal

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Vangibhath [19]

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Vegetable Bonda

Others: 

Bonda Soup

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Bajjis– Banana Bajji, Green Chili Bajji

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Pakoras– Onion Pakora, Vegetable Pakora

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Thalis- vegetable, Chicken, Mutton

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Rajma rice

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Omelette bread

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Chinese food

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Pasta

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Burgers(chicken, mutton, veg)

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Wraps & rolls

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Grilled chicken

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Samosa, patties, bread pakoda

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Milkshakes

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Doner kabab

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Dum biryani

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Fish & chips

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Salads

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Momas

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Fruit beer

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Chicken wings

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Grilled Sandwich

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Mutar kulcha

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Pav bhaji

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Stuffed paratha

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Fruid salad

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Idli sambar

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Vada sambar [20]

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Dahiwada

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Fried Rice

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Noodles

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Mini Meals

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Pizzas

Beverages: 

Coffee

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Tea

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Lassi

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Aerated Drinks

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Fresh fruit juice

Fast Food Counters:

These high quality Fast Food Counters are made by using very high quality raw material which ensures hassle free work performance at its user end. These Fast Food Counters are widely finds its applications in various commercial sectors. [21]

Display Counters:

A quality oriented company engaged in manufacturing, exporting, importing, trading and retailing Food Serving Counters. These Food Service Counters are made from superior raw materials for facilitating their reliability and durability of Stainless Steel Food Counters. For offering heavy-duty Stainless Steel Countertops, we send all products for quality testing, which is performed by proficient professionals. Our company, Ensign Equipments bestows with service equipments and fast food counters, which is comfortable and hygienic way of servicing food in the pantry, Juice area, barbeque, pav-bhaji and chat it is made up of completely stainless steel fabrication with all side grooved paneling, provided with overhead shelves unit for additional working area. Some of the models of fast food counters.

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Fast Food Trays:

These fast food trays are widely finds its application in both commercial as well as industrial sectors. These fast food trays are available in market at very competitive prices.

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3.2 Reason for Growth of Fast Food Industry

Fast food is one of the world‘s fastest growing food types. India is seeing rapid growth in the fast food and restaurant industries. It now accounts for roughly half of all restaurant revenues in the developed countries and continues to expand. The trend is radically changing the way people eat in India. Based on rising disposable income, changing consumer behaviour and favourable demographics, India is witnessing a tremendous growth in its fast food and restaurant industries. Additional reasons include exposure to western cuisine, the rising number of nuclear families and growth in the number of employed women, which are also having a significant impact on the eating out trends and growth of the fast food industry in the country. For a nation that is particular about its food and significantly fond of home cooked and fresh food, this trend is showing the globalisation of India and increase of new markets not witnessed in India before. With increasing number of people eating out the industry offers major opportunities to the players to capture a larger consumer base. As a result of the trend, all the international food players like Pizza Hut, Dominos, McDonalds and KFC are investing huge amount of money to grab a share of this highly lucrative market. Pizza Hut for example, is one of the flagship brands of Yum! Brands, Inc., which also has KFC, Taco Bell, A&W and Long John Silver‘s under its umbrella. Pizza Hut has 143 stores across 34 cities in India. A report by Research on India has found that traditionally, the Indian consumers have been eating at roadside eateries, dhabas and stalls which still occupy a major share of the unorganised sector, where fast food has been eaten traditionally. However, with the changes in the economy of the country and injection of modern employment from the West, the non-home food market has now changed. [24]

The market is highly competitive with a large number of Indian and foreign players seeking business in this upward trend. The market is dominated by global players, specially in the organised fast food segment. Growing trend of consumption of multi cuisines and increasing brand awareness has led to the increase of global players. Organised modern formats like malls and supermarkets have also become a favourite destination for the outlets. Larger companies are teaming up with small franchisors and mall owners to promote their brand. The growing segment comprises of formats like fast food chains, cafes and fine dining restaurants. Two sub segments of the fast food market are the Pizzas and Burgers. These have now developed into part of the nation‘s eating habits. Their share is continuously growing with the key global brands such as Dominos, McDonalds and KFC making their marks quickly. The chains have had no problems accommodating different menus for the Indian consumer. For example, McDonalds will not sell beef burgers but instead lamb and chicken burgers and have a larger selection of vegetarian food compared to the West. Changing behaviours of the Indian consumer have no doubt contributed to the success. Some of the brand outlets first started only in major cities such as Delhi and Mumbai. Now, they are continuously expanding to cities like Pune, Surat, Ahmedabad, Rajkot, Nasik, Aurangabad, Kolhapur, Chandigarh, Jammu, Chennai, Bhubhaneswar, Goa and Bangalore, to meet major demand. The challenges for the new style of Indian restaurants and fast food joints are food price fluctuations, cumbersome licensing laws, high cost of real estate and lack of skilled manpower. Another area experiencing growth is the ‗Ready To Eat‘ (RTE) market in India for food. RTE can be defined as food products that constitute complete meals; require minimal processing, if any, typically requiring re-heating to desired temperature or addition of water. They are often termed as ‗Convenience Food‘ since they are positioned [25]

as ‗value for money‘ products that solve the issue of time-constrains faced by consumers due to the pressures of urban life. RTEs are categorised into two product categories Shelf stable packaged food and Frozen packaged food. When RTE foods were introduced first in India the concept failed at that time and has only recently exploded. Changing consumer habits, preferences and perceptions has driven the market. A strong correlation exists between the growth of RTE foods and organised retail formats such as supermarkets and hypermarkets. Companies such as Taj Foods, Sangeeta Foods (Raja Foods), Rajbhog Foods Private Limited are all part of the Indian RTE industry. These trends show that the modernisation of India is well on its way. These changes in the eating habits Indians are more than likely referring to middle class and upward earning society of India. The prospect of seeing fast food such as burgers and pizzas being the staple diet for lower classes will not likely be the case, as it is perhaps is in Western societies, due to the contrast in affordability.

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3.3

Jumbo King: The Making of an Indian Fast-food Chain You won't get much variety if you visit an outlet of Jumbo King, a fast-food chain that is expanding in western India. On offer are vada pavs (a potato-based patty in a bun), Pepsi and lassi. This is fast food Mumbai style. It won't cost you more than a dollar. (The basic vada pav costs just 17 cents and the most expensive 59 cents.) "I was inspired by McDonald's: Behind the Arches, says Dheeraj Gupta, founder and managing director of Jumbo King, referring to the John F. Love book about the world's largest fast-food chain. "But my target is the suburban train traveler." Most Jumbo King outlets are close to railway stations, with their constant stream of commuters as potential customers. Many stop in to pick up a vada pav. In a city where commuting can take two hours each way and the railways carry 6 million-plus passengers daily, this is often breakfast or dinner. "You can get a vada pav at a roadside stall too," Gupta says. The difference between Jumbo King and the stalls, he says, "is that we are hygienic." Jumbo King is not Gupta's first venture. Shortly after completing an MBA from Symbiosis Institute of Business Management in Pune, he started Manali Foods to export sweets to places like Dubai, which have a large concentration of ethnic Indians. It didn't work. "I suddenly realized I was looking at the wrong market," Gupta says. "There were 800,000 to 900,000 Indians in Dubai; there were 2 million in [the Mumbai suburb] Malad alone." Having made a choice about his market, the next key decision was the product. Gupta's family was in the hotel and catering business and also had run sweetshops. But sweets had flopped once for Gupta, and he now decided bet on Indian snack foods. He [27]

opened an outlet in Malad under the name Chaat Factory. (Chaat is the Hindi word for small plates of savory snacks.) That worked. But Gupta soon discovered that the item on the menu that really moved was the vada pav. "We decided to stick to that alone," he says. Chaat Factory became a misnomer. When customers began complaining that there was no chaat in the Chaat Factory, the name was changed to Jumbo King. From one outlet in 1990, Jumbo King reached 45 by early this year. It is targeting 250 this year, and has already forayed to Gujarat from its home state of Maharashtra. The initial investment was Rs. 200,000 ($4,300). Now, the company plans to pump in Rs. 75 crore ($16.1 million) over the next three years. The money will come from private equity.

More Company-owned Outlets: According to the company's plans, the funds will be used for setting up more owner-operated outlets (outlets are franchised now), and kiosks within malls, retail chains and airports. A deal has been signed with Bharat Petroleum for kiosks at gasoline pumps. And Jumbo King plans to move inside railway stations; talks are on with Indian Railways for outlets on platforms. "Jumbo King is a brilliant idea," says Akbar Khwaja, managing director of United Pizza Restaurants, which has 62 franchised outlets in 26 cities. (Khwaja is planning to start a chain of franchised fast-food outlets called Satvik, serving "non-messy" items such as samosas, kathi rolls, paranthas, vada pavs and tikkis.) "Jumbo King has hit the right chord for Indian fast food," Khwaja says. "According to a recent survey that [United Pizza] did regarding the top five Indian fastfood items across the cities of Bangalore, Mumbai, Pune and Ahmedabad, vada pav tops the list, followed by pav bhajji, kathi rolls, samosas and pakodas." [28]

According to a 2004 online survey by ACNielsen, the marketing information company, India ranks high in fast-food consumption. The survey showed that 37% of the population ate at takeaway restaurants at least once a week. That was seventh globally and above the United States, at 35%. Of course, the U.S. market size is far greater, given price differences, but the trend is clear. "It doesn't matter where in the world you are or how well off, the fast-food culture has become a way of life for all of us," the Nielsen report says. For Jumbo King, striking the right lode doesn't translate into operating a gold mine. Although mark-ups in the restaurant business can be as high as 200%, overhead is challenging. "Our margins are barely 10% to 12%," Gupta says. "But that's healthy." Jumbo King made money from the first year, because it pared costs to the bone. "Initially, there was just my wife, a five-man crew and myself," Gupta says. Today, he has 30 people, including three in Gujarat. The outlets have their own staff. "One of our first lessons was getting our target clientele right," Gupta says. He recalls opening a store in Masjid Bunder, an area classified as SEC C, a low socioeconomic classification that accounts for 21% of the urban population. More than 50,000 people went past the store every day, "but hardly any customers. It was a disaster. We found that, while we expected to reach SEC C, 75% of our customers were actually SEC A."

Buying Roadside Snacks from Mercedes: "The price-quality equation is a big item on the Mumbaikar's mind," says Harish Bijoor, CEO of Harish Bijoor Consults and a visiting faculty member at the Hyderabadbased Indian School of Business. "If that is met, the offering works. If not, it does not." Value is key in India, where it's not unlikely to see someone driving a Mercedes stop to buy snacks from a pavement stall.

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But Gupta realized early on that he would have to work hard to gain customers. There was no money to spend on promotion. "We grew only through PR and word of mouth," he says. His wife, Reeta, was freelancing for certain newspapers around that time and persuaded friends in the media to write about Jumbo King. She says, "I found that the concept of hygienic vada pav was the subject of some curiosity. So my friends helped me give some initial news value to Jumbo King. After that I took care of marketing." Reeta, a Symbiosis alumna, has since stepped out of an active role in the business. "[Following] our MBA, we had become a joke when we started Jumbo King. People said, 'You are MBAs competing with roadside vendors.' I had to be supportive. From selling vada pavs physically at the counter to filling feedback forms at railway stations, I got my hands dirty at every stage." Today, Reeta is a sounding board for her husband while she tends to her own PR firm. The mom-and-pop operation has grown to a point where it needs to professionalize, so Jumbo King has brought in a professional CEO, Karandeep Singh, from Café Coffee Day. "My mandate is to make Jumbo King India's largest [quick service restaurant] chain in the next few years," Singh says. Other professionals have also come on board. The expansion drive brings tough work, starting with getting the menu right. As many multinational chains have belatedly realized, the Indian food market is fragmented. What works in one state may not in another. Jumbo King has already experienced that. In Gujarat, there are some items in addition to vada pav on the menu. Gupta justifies the variety. "In its formative years, McDonald's tried their new products in one location," he says. "If it worked, it was introduced all over. The Butter Jumbo King, first launched in Gujarat, is now available in other places." The menu will change and perhaps expand, for Gupta doesn't see his business as just selling vada pav. "We are in the business of catering to people on the go," he says. Besides, the vada pav that Jumbo King serves is different from the one it competes with

[30]

in the streets of Mumbai. For one, it is larger. The bread is round. (The standard pav is square.) And the vada itself is flat instead of round. India's Standardization Challenge: The McDonald's recipe for success is standardization. Is that possible in India? Bijoor thinks it will be difficult. "Take the taste of the humble samosa," he says. "Every region and indeed every town of India has its own samosa with a taste all its own. Arriving at the true-blue national samosa is a game of lowest common denominator taste management. When a national player puts it together, he puts it with the lowest common taste acceptance parameters of the people of all regions. What emerges is what I call the ration-shop samosa. The taste is acceptable, but it is not a taste to kill for. Local players are able to offer this. It is possible to go national with brands of snacks such as the samosa, but the approach needs to be as localized as possible, with local kitchens and local recipes that differ city to city. Recipes have to approach the highest common denominator taste palates of each city and not the LCD palates." Khwaja of United Pizza disagrees. "Different tastes in food is certainly not an issue," he says. "There are items which are popular all over. If McDonald's can come and sell a concept like burgers to Indians across the country, why can't Indian food do well? The time is now ripe for Indian fast-food chains to catch on because the Indian middle class is getting more brand-conscious." Branding may evolve with expansion. Jumbo King's message in Maharashtra is "the hygienic vada pav." That's what differentiates it from the vada pav available at half the price from a cart perhaps just 100 meters away. In Gujarat, where vada pav is less known, it is being sold as "Mumbai's favorite fast food." Explains Gupta: "When we go to other states, we will probably say that this is what Mumbai eats on the go, and try a Bollywood connection. Bollywood sells all over India." Will it work? The proof is in the eating.

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Gupta inevitably will face competition. Some chains have already recognized that India's big markets exist down the price ladder. Domino's Pizza has extended its international Pizza Mania promotion to India. But while the cheapest pizza on its United Kingdom menu costs £4.95 ($9.11), in India the cheapest is Rs. 35 (75 cents). In India, you have to order at least four pizzas for free home delivery. But that works out to just over $3. Another U.S. chain, KFC, has launched a snack box for Rs. 49 ($1.05) and a chana snacker for Rs. 25 (54 cents). Like the Domino's Pizza Mania fare, these are not targeted at the bottom of the pyramid, but at middle-class customers seeking value. Gupta isn't fazed. He points out that the Future Group, which runs national-level stores such as Pantaloons, Big Bazaar and Food Bazaar, had started a chai (tea) and samosa chain some years ago. Called Chamosa Bars, about 200 were set up. They failed. The business was not big enough. "You need to be an entrepreneur to do something like Jumbo King," Gupta says. "You can't be part of a larger group. This is a maverick kind of business."

Jumbo King's Competitors: That may be why Gupta doesn't see the existing players as competition. This includes the multinational chains; the Udipi restaurants that dot Indian cities, serving similar fare but without common ownership; and even the low-price Indian Railways catering service, which has outlets at stations. Bijoor disagrees. "In the foods and snacks business, everyone is competition for everyone else," he says. "A snack is an impulse item. When the impulse strikes, one looks at local availability, compares offers, taste needs and prices, and decides. All this in a nanosecond. To that extent, the Jumbo pav and McDonald's compete with one another."

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United Pizza's Khwaja sees it another way. "The real competitor for Jumbo King is not McDonald's but the man selling vada pav on the roadside. They must turn each of them into a Jumbo King franchisee." Jumbo King's next challenge is getting the money together for expansion. Gupta will need funds because he is changing his model. "Currently we are into 100% franchising," he says. "In the future, the ratio will be 70% franchisees and 30% companyowned outlets." Jumbo King gets 10% of sales from franchisees as its fee. Both models have worked in India. Explains CEO Singh: "Café Coffee Day is a chain of company-owned stores and Jumbo King is into franchising. But at the bottom of it, both are a bunch of young guys trying to create a big brand." Gupta says finding private-equity funds won't be a problem. But what will make or break the chain is this, according to Khwaja: "Indian fast-food chains have not caught on because of the mind-set of Indian entrepreneurs. They under-invest and expect quick profits. Indians typically like to have complete ownership of their business, and so we end up having small companies. In the chain-food business one needs to have long-term vision and large investments." "The absence of Indian fast-food chains is not because of differences in taste or food habits," says Bidisha Nagaraj, Café Coffee Day's president of marketing. "The entry barrier is not so much the palate as the investment that is required. Rentals themselves are a huge cost. If one is looking at a chain of 100 outlets, it can be a huge amount for a small entrepreneur to invest." "Jumbo King has a great product and a great concept," she adds. "What it needs to do is to work on its distribution model. It needs to look at being present in places like cinema halls, food courts of shopping malls, railways stations and airports. As there is only one product, they can also look at backward integration to bring about more economies of scale."

[33]

Jumbo King may sell just vada pav. But, in terms of management strategies and decisions, it has a lot on its plate.

 Another information of Jumbo King The Jumbo King brand was founded by Dheeraj Gupta, a Hotel Management Graduate with a Masters degree in Financial Management. Dheeraj not only put up his own single product stores but also convinced others to invest in the brand through the franchise model. The vision has grown to encompass many cities and states, and Dheeraj believes that vada pav has as much universal appeal as the burger.

 Franchise Information: Jumboking operates as a fast food retail chain on franchise basis nationally. Investment in the correct technology, engaging partners like Johnson Diversey and inducting experienced professionals in the team from the food and marketing sector, Jumbo King is making a sincere attempt to upgrade the unorganised fast food industry.

 Master Franchises Jumboking is presently looking for master franchisees who can invest into 8 to 10 outlets at a time. Please contact us for more information.

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 Key Benefits and Opportunities From day 1 the franchisee will becomes a part of a successful business model and derive the benefits of a trusted brand name. The company has a fully automated central kitchen and a modern bakery providing world-class quality products. Thus you are in the restaurant business without the headaches of manufacturing. The company has very good purchasing power, which enables it to source raw materials at prices much lower than any individual restaurant. The company helps the franchisee in recruiting well-trained staff and provides continuous training to help them implement the quality, service and cleanliness standards. The highlight of the franchising model is that any franchisee adhering to the company‘s standards can build multiple stores and increase his income many times over.

 Testimonials ''On my visit to Mumbai in 2004 I saw a Jumboking Vada Pav being served. I was surprised and fascinated to know that it was our own local street food VadaPav prepared in a very hygienic condition and wrapped in food grade paper as burger. This was the day which saw the start of revolution in fast food chain ―Jumboking‖, culminated in national growth and poised for international expansion. Today I have first Jumboking outlet in Akruli-Kandivali, second in Bazar gate-V.T and third upcoming outlet at Thakur VillageKandivali, Mumbai. Mr. M Mody, Successful and proud franchisee of Jumboking. He is also a franchisee of Blimpy sandwiches in USA.

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Requirements from a Franchisee: • Investment of Rs.10-12 lac for express counter and Rs.15-20 lac for restaurant format store. • Reatil Space of 300--1000 sq.ft ownership / lease basis. • Time commitment of 10/12 hours per day to Jumboking business.

Recruitment Process: All Mumbai and Thane based enquiries are called to Mumbai Office for Jumboking presentation. Shortlisting is done for a second round where prospective franchisees are given details of project profit and loss account. In third round M.O.U is signed and franchisee is given hand book detailing how to make Jumboking outlet operational. For outside Mumbai/Thane a presentation is given in respective cities, then second follows and third round will be conducted in Mumba

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3.4 India – Emerging market for global players The percentage share held by foodservice of total consumer expenditure on food has increased from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in Indian culture and changes in eating habits are very slow moving with barriers to eating out entrenched in certain sectors of Indian society.. The growth in nuclear families, particularly in urban India, exposure to global media and Western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends.

Facts and figures: Fast food is one of the world‘s largest growing food type. India‘s fast food industry is growing by 40% a year and is expected to generate a billion dollars in sales by 2005.The multinational segment of Indian fast food industry is up to Rs. 6 billion, a figure expected to zoom to Rs.70 billion by 2005. By 2005, the value of Indian dairy products is expected to be Rs.1, 00,000 million. In last 6 years, foreign investment in this sector stood at Rs. 3600 million which is about one-fourth of total investment made in this sector. Because of the availability of raw material for fast food, Global chains are flooding into the country.

Market size and major players:

a) Dominated by McDonalds having as many as 75 outlets. b) Domino‘s pizza is present in around 100 locations. c) Pizza hut is also catching up and it has planned to establish 125 outlets at the end of 2005. d) Subways have established around 40 outlets. e) Nirulas is established at Delhi and Noida only. However, it claims to cater 50,000 guests every day. [37]

Major players in fast food are: 

MCDONALDS



KFC



PIZZA HUT



DOMINOS PIZZA.



COFFEE DAY



BARISTA.

The main reason behind the success of the multinational chains is their expertise in product development, sourcing practices, quality standards, service levels and standardized operating procedures in their restaurants, a strength that they have developed over years of experience around the world. The home grown chains have in the past few years of competition with the MNCs, learnt a few things but there is still a lot of scope for improvement.

[38]

3.5 DOMINO’S

Size of the market: Domino's Pizza is one of the biggest and fastest growing international food joints in South Asia. The very first Domino's Pizza outlet in India opened in Jan, 1996 at New Delhi. Today, Domino's Pizza India has become a wide network of Pizza delivery and food chain. There are close to 220 outlets in 42 cities of India and the brand is the top most among the food delivery business. Domino‘s Pizza outlets can be seen at major locations of Delhi and NCR. Their home delivery is free with a guarantee of ―Thirty Minutes Nahi to Free‖. Although they are expert in delivering Pizzas on time, their eating joints and outlets are also good. We plan to have a total of 500 stores in 75-80 cities by 2010 to 2011. It would entail an investment of Rs 200 million during the period Market growth: During last four months, dominoes have opened outlets in Jammu, Panipat, Surat, Baroda, Nashik, Trivandum, Meerut and Patiala. While earlier, 70 percent of our business used to be in metros and mini-metros, now the ratio is 50:50 between big cities and smaller Tier II and III cities. Domino‘s Pizza is expanding its base in India by opening 500 outlets to add to its current tally of 156 outlets, across 50 cities in India by 2011 with an investment of Rs.1, 000 crore.

[39]

Market strategies:  Promotional and Advertisement Campaigns(Coupons and discounts)  The '30 Minutes' Promise  Use of Technology(Digital interactive Television, Internet on the PC, Mobile telephony)  Premium Pricing Strategy  Indian fast food industry and entry of multinational players  Distribution strategies of fast food chains in India Market share: The organized pizza market in India is worth Rs.500 crore and Domino‘s has a substantial 45% market share, and registered a healthy growth of 60% over last year. The main target for new outlets shall be metro cities though Tier II cities would also receive a fair amount of attention. Currently Domino‘s sells around 35,000 pizza every day, of which around 1% are given free on account of its ―30 minutes or free‖ model. 65 percent of its revenue comes from home delivery service; around 35 percent is from sales in premise. Competitors: Fast food is one of the world's fastest growing food types. It now accounts for roughly half of all restaurant revenues in the developed countries and continues to expand there and in many other industrial countries in the coming years. But some of the most rapid growth is occurring in the developing world; where it's radically changing the way people eat. People buy fast food because it's cheap, easy to prepare, and heavily promoted. This paper aims at providing information about fast food industry, its trend, reason for its emergence and several other factors that are responsible for its growth. India is a developing country with

2 percent of organized and 98 percent of unorganized sector. So

most of the fast foods came into Indian market as India has a high growth in every sector.

[40]

Some of the competitors of domino‘s are  McDonald's  Pizza Hut  Barista  Coffee Day

3.6 Challenges for the industry 

Social and cultural implications of Indians switching to western breakfast food: Generally, Hindus avoid all foods that are believed to inhibit physical and spiritual development. Eating meat is not explicitly prohibited, but many Hindus are vegetarian because they adhere to the concept of ahimsa. Those seeking spiritual unity may avoid garlic and onions. The concept of purity influences Hindu food practices. Products from cows (e.g., milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can improve the purity of impure foods when they are prepared together. Some foods, such as beef or alcohol, are innately polluted and can never be made pure. But now, Indians are switching to fast food that contain all those things that are considered impure or against there beliefs. Some traditional and fundamentalist are against this transformation of food habit and number of times they provoke their counterparts to revolt against such foods. And that is what happened when McDonald‘s decided to enter the complexity of Indian business landscape, counting only on its “fast food global formula”, without any apparent previous cultural training.



Emphasis on the usage of bio-degradable products: Glasses, silverware, plates and cloth napkins are never provided with fast food. Instead, paper plates and napkins, polyurethane containers, plastic cups and tableware, drinking cartons or PET (polyethylene terephthalate) bottles are used, and these are all disposable. Many of these items are tossed in the garbage instead of being recycled, or even worse, merely thrown on the ground. This burdens nature unnecessarily and [41]

squanders raw materials. In order to reduce soil and water pollution, government now emphasis more on the usage of bio-degradable products. 

Retrenchment of employees: Most of new industries will be capital intensive and may drive local competitors, which have more workers, out of business.



Profit repatriation: Repatriation of profits is another area of concern for Indian economy. As when multinational enters the any countries, people and government hope that it will increase the employment rate and result in economic growth. However, with the multinational operation, host country experiences these benefits for a short time period. In long run neither employment increases (because of capital intensive nature of MNC‘s) nor it increases the GDP or GNP because whatever MNC‘s earn they repatriate that profit back to their home country.



Increase in Chinese Food stalls: There are large numbers of Chinese food stalls are present in India and they are increasing day by day. It is becoming a big challenge to Indian fast food industry.

[42]

3.7 PROBLEMS OF INDUSTRY 

Environmental friendly products cost high: government is legislating laws in order to keep check on the fast food industry and it is emphasizing more on the usage of bio-degradable and environment friendly products. But associated with this issue is the problem that fast food player faces - the cost associated with the environment friendly product. They cost much higher than the normal products that companies uses for packaging or wrapping their products.



Balance between societal expectation and companies economic objectives: To balance a society‘s expectation regarding environment with the economic burden of protecting the environment. Thus, one can see that one side pushes for higher standards and other side tries to beat the standard back, thereby making it a arm wrestling and mind boggling exercise.



I.

Health related issues: obesity:

Studies have shown that a typical fast food has very high density and food with high density causes people to eat more then they usually need. \

II.

Low calories food: Emphasis is now more on low calorie food. In this line McDonald has a plan to introduce all white meat chicken Mcnuugget with less fat and fewer calories. 

Changing trends



Changing consumer preferences.



Long service hours.



Underdeveloped Infrastructure. [43]

3.8 Trends in Indian market Marketing to children's: fast food outlets in India target children‘s as their major customers. They introduce varieties of things that will attract the children‘s attention and by targeting children‘s they automatically target their parents because Children‘s are always accompanied by their parents.

Low level customer commitment: Because of the large number of food retail outlets and also because of the tendency of customer to switch from one product to other, this industry faces low level customer commitment.

Value added technology services: There is continuous improvement in the technology as far as fast food market in India is considered. The reason behind that is food is a perishable item and in order to ensure that it remain fresh for a longer period of time. Earlier, Indian people prefer eating at home but now with the change in trend there is also need for improvement and up gradation of technology in food sector.

Attracting different segments of the market: Fast food outlets are introducing varieties of products in order to cater the demands of each and every segment of the market. They are introducing all categories of product so that people of all age, sex, class, income group etc can come and become a customer of their food line.

The success of fast foods arose from the changes in our living conditions:

1. Many women or both parents now work 2. There are increased numbers of single-parent households 3. Long distances to school and work are common 4. Usually, lunch times are short

[44]

5. There's often not enough time or opportunity to shop carefully for groceries, or to cook and eat with one's family. Especially on weekdays, fast food outside the home is the only solution.

3.9 Indian Fast Food Industry growth and its important Players With the rapidly growing middle class population and changing lifestyle, India is blessed with one of the fastest growing fast food markets in the world. The Indian fast food market is growing at an annual rate of 25-30%. Almost all the world‘s big fast food brands have succeeded in making their presence felt in the country and most of them are posting appreciable growth. Consequently, all the popular fast food chains have chalked out massive plans for expanding their business and presence throughout the country. Foreign fast food chains are aggressively increasing their presence in the country. For instance, Domino‘s has planned to open 60-65 outlets every year for the next three years (2010-2012) while Yum Brands Inc is also preparing for massive expansion across the country with plans to open 1000 fast food outlets by 2015. According to our new research report ―Indian Fast Food Market Analysis‖, although the market has witnessed robust growth over the past couple of years, it remains largely underpenetrated and concentrated in metropolitan cities. However, there is a large room for growth in untapped tier-II and tier-III cities. Therefore, the future of the Indian fast food industry lies in tier-II and tier-III cities. Owing to this, major fast food retailers are on the way to market their brands by using different marketing strategies such as campaigns and putting up billboards in tier 2 and tier 3 cities.

The report provides an extensive research and objective analysis of the fast expanding Indian fast food market. The report analyzes all the vital industry trends and [45]

possible growth areas for future expansion. It also analyzes important driving forces in detail, which will help clients to understand the market better. Moreover, we have identified the important players operating in the sector and have made a separate chapter which talks about their business expansion plans in detail. Most importantly, the report features forecast for fast food sales in the country. The forecast is based on the correlation between past market growth and growth in base drivers such as middle class, urbanization, cultural shift and lifestyle changes.

[46]

3.10 Indian Fast Food Market Analysis ―Indian Fast Food Market Analysis‖ is a comprehensive market report that provides qualitative research and rational analysis of the fast food market in India. The report identifies the key players operating in the India fast food industry and has made a separate section that talks about their business expansion plans and also gives an overview of strength and weakness of each player. Government regulation and consumer behaviour are separately discussed in detail in the report. Most importantly, the report also features the forecast on fast food sales important economic parameters. The forecast is based on the correlation between past market growth and growth in base drivers such as growth in middle class, urbanization, cultural shift and lifestyle changes. As per our research report ―Indian Fast Food Market Analysis‖, India has seen a massive rise in the consumption of fast food over the past few years. In fact, the country has emerged as one of the fastest growing fast food markets in the world. Improving living standards, rapid urbanization, and westernization of Indian culture are some of the major factors responsible for such a robust growth. These factors and several other factors will help the industry to grow at a CAGR of 30-35% during 2010-2013. Although the market has witnessed a robust growth in the past few years, the market largely remains underpenetrated. The market largely remains concentrated in the metropolitan and Tier-I cities, while Tier-II and Tier-III cities as well as rural areas remains mostly untapped. However, all the major food chains have started realizing the potential of these untapped markets and are trying to increase their presence in Tier-II and Tier-III cities. According to our research, pizza, pasta and noodles market along with other fast food markets are expected to get double in 2013 compared to 2010. Owing to this trend, nearly all major international fast food players, such as McDonald, Pizza Hut, Dominos, KFC, etc. are investing huge amount of money to expand their presence and share in the highly lucrative Indian fast food industry. Customization of products, considering Indian choices and customs, has been one of the key strategies for the success of foreign fast [47]

food chains in India. Most of the food chains are busy in innovating and customizing their products. Although the multinational fast food restaurants have made strong presence and are found at almost every shopping malls and local markets, they are facing stiff competition from ethnic eateries/fast food chains that sell traditional items such as Wada Pav, Kaati Rolls, Kulfi, and Tikka. Though these restaurants are not big ticket like their foreign counterparts, they are fast becoming a part of day-to-day life of urban India. Fast-food restaurants seem to be big business in India, and so a many foreign chains have made an entry into the market to joint the early movers like McDonald's or KFC. On of the last entrants is Bembos, and that chain from Peru will not be the last one. Now ITCOT, a Chennai based, banks-promoted consultancy has presented the updated version of a ―Feasibility Report on Fast Food Restaurants‖ which has first been published in 2002. After an overwhelming response, so ITCOT, a revamped version was released in 2008 so to provide the latest statistics and information to entrepreneurs about the fast-food restaurant segment. The report covers both pure vegetarian and multi-cuisine type fast food restaurants which are classified into different types in the first chapters, including a history of the ―hamburger‖. The main focus of the report is on explaining franchise models and cost aspects of a fast-food venture, introducing necessary controlling tools, among them ―financial ratios‖, ―projected profitability‖ or ―projected cash flow‖. Regarding locations, for example, the report notes that the top five foreign brands, namely, McDonald‘s, Domino‘s Pizza, Pizza Hut, Subway, and Pizza Corner would be focused on New Delhi, Mumbai, Bangalore and Chennai which account for 53% of their total number of outlets. The principal factors that drive the demand for fast food restaurants would be the increasing disposable incomes among the target groups, increase in working women, urbanization, globalization, the consequent changes in life styles, and the brand pull, [48]

ITCOT says, but informs also that there would be no authentic estimates of demand for fastfood products in India. According to Down to Earth (March 2008), Indians would spend close to Rs 4,449 crore a year (approx. €767 million) at fast-food joints. The fast-food market would be growing at 40% per year. If one would assume a modest growth of 30% only, so ITCOT, then the business potential for fast food restaurants in the country may be reckoned at Rs.13,580 crore by 2011-12. Indian Fast Food on High Growth Trajectory: 12 Aug 2010 - New Delhi, India - As per our new research report, ―Indian Fast Food Market Analysis‖, India has seen a massive expansion in consumption of fast food in recent years. In fact, the country has emerged as one of the fastest growing fast food markets in the world. It has been found in our research that growing number of nuclear families, rising numbers of women employees and intensifying exposure to western food are driving the eating out trend in India that has resulted in growth of fast food industry. Further with increasing wealth of prospective customers in Tier 2, Tier 3 cities, demand for fast food is expected to grow at a faster pace in near future. As a result, Indian fast food industry is expected to grow at a CAGR of 30-35% during 2010-2013. According to our new research report, major international fast food chains present in India have now well understood the market potential in untapped Tier 2, Tier 3 cities and rural areas and have now started making investment to serve the growing numbers of prospective fast food customers into these untapped areas. The report has identified various other factors such as changing life style and westernization of Indian culture that are further expected to fuel growth in Indian fast food Industry. The research report has covered the important fast food segments such as Pizza, pasta and noodles, etc and studied the consumption pattern in each segment extensively. The report also provides the emerging trends in Indian fast food market and identifies the potential growth areas for future expansion. [49]

4. Collection and analysis of data, Interpretation of data Sample and Research design:

A descriptive research design was adopted to do the survey with the help of the questionnaire. The study used non probability convenience sampling. The methodology of study is the interview method survey. The study is completely based on the primary data which is collected from different Fast food stores and the sample size taken for study is 100 people.

Tools and Methods of Data Collection:

The interview is conducted for about 15 minutes with each person and collected the data. The tool for the collection of data is a questionnaire. The questionnaire has 15 questions.

Data Processing and Analysis: The data processing consists of coding the data collected in the form of questionnaire. The data collected with the help of questionnaire is having the closed replies. One open ended replies have been taken for that if any problems they are facing and for the close ended the replies are measured using scales.

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ANALYSIS & INTERPRETATION: 1) VISIT: Frequency Daily

14

Weekly

38

Fortnightly

19

Monthly

9

Total

100

visit 38

40 35 30 25

19

20 15

14 9

10 5 0 Daily

Weekly

Fortnightly

Monthly

Interpretation: - From the above table and graph, it says that majority of the customers visit the fast food retail store weekly (i.e. 38%) and minority of them (19%) visit fortnightly [51]

2) PRICE RANGE

Range

Frequency

100-200

24

200-500

60

Above 500

16

Total

100

price range 70 60 50 40 30 20 10 0 100-200

200-500

Above 500

Interpretation:-From the above table and graph, it says that majority of the customers are willing to spend money of price range 200-500 (i.e. 60%) and minority of them says that they will spend money of price range 100-200 (i.e. 24%) in the fast food retail store.

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3) Preference

Frequency Brand image

21

Easy accessibility

29

Special offer

50

Total

100

preference of store 60 50 40 30 20 10 0 Brand image

Easy accessibility

Special offer

Interpretation:-From the above table and graph, it says that majority of the customers (i.e. 50%) prefer special offers in the store and minority of them (i.e. 29%) prefer easy accessibility

[53]

4) Visiting hours

Frequency Morning

40

Afternoon

29

Evening

31

Total

100

45 40 35 30 25 20 15 10 5 0 Morning

Afternoon

Evening

Interpretation:-From the above table and graph it says that majority of the customers are willing (i.e. 40% ) to visit the store on morning session and minority of them (i.e.31% ) of them visit the store on evening session

[54]

5) Preference of store due to friendliness of staff

Response

Frequency

Strongly disagree

2

Disagree

5

Neutral

44

Agree

40

Strongly agree

9

Total

100

50 45 40 35 30 25 20 15 10 5 0 Strongly agree

Disagree

Neutral

Agree

Strongly agree

Interpretation:-From the above table and graph it says that majority of the customers (i.e. 44%) of them are neutral to prefer the store for friendliness of staff and minority of them (i.e. 40% ) of them agree that they will prefer the store for friendliness of staff.

[55]

6) Preference of store due the variety of menu available in the store

Response

Frequency

Strongly Disagree

5

Disagree

15

Neutral

21

Agree

39

Strongly agree

15

Total

100

preference due to variety of menu 45 40 35 30 25 20 15 10 5 0 Strongly agree

Disagree

Neutral

Agree

Strongly agree

Interpretation:-From the above table and graph it says that majority of the customers ( i.e. 39%) of them agree that they will prefer the store due to the variety of menu and minority of them (i.e. 21% ) of them neutral about the variety of menu in the store [56]

7) Preference of store due the service speed

Response

Frequency

Strongly disagree

5

Disagree

20

Neutral

39

Agree

15

Strongly agree

20

Total

100

preference due to service speed 45 40 35 30 25 20 15 10 5 0 Strongly agree

Disagree

Neutral

Agree

Strongly agree

Interpretation:- From the above table and graph it says that majority of the customers (i.e. 39%) are neutral about the preference of store due to service speed and minority of them are disagree that (i.e. 20%) of them prefer the store due to service speed [57]

8) Preference of store due to good calorie content exist in the food

Response

Frequency

Strongly disagree

9

Disagree

33

Neutral

19

Agree

31

Strongly agree

20

Total

100

preference for calorie content 35 30 25 20 15 10 5 0 Strongly agree

Disagree

Neutral

Agree

Strongly agree

Interpretation:-From the above table and graph it says that majority of the customers (i.e. 33%) of them disagree that they will prefer the store due to the calorie content in the food and minority of them (i.e. 31%) agree that they will prefer the store due to the calorie content in the food. [58]

9) Preference of store due to the cleanliness and store atmosphere

Response

Frequency

Strongly disagree

2

Disagree

7

Neutral

25

Agree

40

Strongly agree

26

Total

100

preference due to ambience 45 40 35 30 25 20 15 10 5 0 Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 40% ) of them agree that they will prefer the store for ambience provided in the store.

[59]

10) Preference store due the delivery speed offer by the store

Response

Frequency

Strongly disagree

4

Disagree

20

Neutral

15

Agree

41

Strongly agree

20

Total

100

preference due to delivary speed 45 40 35 30 25 20 15 10 5 0 Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Interpretation:- From the above table and graph it says that majority of the customers (i.e. 41%) of them prefer the store due to delivery speed that is offered.

[60]

11) Satisfaction with the menu offer for my family

Response

Frequency

Strongly disagree

7

Disagree

16

Neutral

34

Agree

35

Strongly agree

6

Total

100

preference of menu for my family 40 35 30 25 20 15 10 5 0 Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Interpretation:- From the above table and graph it says that majority of the customers (i.e. 35% ) of them agree that they are satisfied with the menu that was offered in the fast food store and followed by some of them are neutral about the menu for their family. [61]

12) Preference of store due to facilities offered

Response

Frequency

Strongly disagree

11

Disagree

20

Neutral

41

Agree

14

Strongly agree

14

Total

100

preference due to facilites 45 40 35 30 25 20 15 10 5 0 Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Interpretation:- From the above table and graph it says that majority of the customers (i.e. 41% ) of them says that they are neutral about preferring the store due to the facilities.

[62]

13) Preference of store due to easy accessibility and locational advantage

Response

Frequency

Strongly disagree

4

Disagree

18

Neutral

15

Agree

45

Strongly agree

15

Total

100

50 45 40 35 30 25 20 15 10 5 0 Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Interpretation:- From the above table and graph it says that majority of the customers (i.e. 45%) of them agree that they will prefer the store due to easy accessibility and locational advantage. [63]

14) Advertising strategy

Response

Frequency

Strongly disagree

9

Disagree

20

Neutral

33

Agree

28

Strongly agree

10

Total

100

35 30 25 20 15 10 5 0 Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Interpretation:- From the above table and graph it says that majority of the customers (i.e. 33%) of them are neutral about the advertising strategy provided by the store and followed by that customers agree the store for the advertising strategy.

[64]

15) Preference of store due to special offer and discounts

Response

Frequency

Strongly disagree

4

Disagree

20

Neutral

15

Agree

41

Strongly agree

20

Total

100

45 40 35 30 25 20 15 10 5 0 Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Interpretation:- From the above table and graph it says that majority of the customers (i.e. 41% ) agree that they will prefer the store because of special offers and discounts.

[65]

Chapter 5. Major Findings and Major Suggestions 5.1 Major Findings  This study indicates that majority of the customers visit the fast food retail store weekly (i.e. 38%) and minority of them (19%) visit fortnightly  This study indicates that majority of the customers are willing to spend money of price range 200-500 (i.e. 60%) and minority of them says that they will spend money of price range 100-200 (i.e. 24%) in the fast food retail store  This study indicates that majority of the customers (i.e. 50%) prefer special offers in the store and minority of them (i.e. 29%) prefer easy accessibility  This study indicates that majority of the customers (i.e. 44%) of them are neutral to prefer the store for friendliness of staff and minority of them (i.e. 40% ) of them agree that they will prefer the store for friendliness of staff  This study indicates that majority of the customers ( i.e. 39%) of them agree that they will prefer the store due to the variety of menu and minority of them (i.e. 21% ) of them neutral about the variety of menu in the store  This study indicates that majority of the customers (i.e. 33%) of them disagree that they will prefer the store due to the calorie content in the food and minority of them (i.e. 31%) agree that they will prefer the store due to the calorie content in the food  This study says that majority of the customers (i.e. 40% ) of them agree that they will prefer the store for ambience provided in the store  This study says that majority of the customers (i.e. 35% ) of them agree that they are satisfied with the menu that was offered in the fast food store and followed by some of them are neutral about the menu for their family [66]

 This study indicates that majority of the customers (i.e. 45%) of them agree that they will prefer the store due to easy accessibility and locational advantage  This study indicates that majority of the customers (i.e. 33%) of them are neutral about the advertising strategy provided by the store and followed by that customers agree the store for the advertising strategy  This study indicates that majority of the customers (i.e. 41% ) agree that they will prefer the store because of special offers and discounts.

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5.2 Major suggestions

 As majority of customers (38 percent) visit the store weekly especially weekends. So it is suggest to stores give special offers and discounts to capture more customers and retain loyal customers.  As study refers more customers are looking for the special offers ,so it suggest stores to more concentrate on the special offers but no compromise in the quality of food.  It is found that majority of customers are not fully satisfied with the friendliness of staff. So it is suggest that the stores should conduct soft skill training and make them give more customer service .Regular monitoring of the staff behavior towards customers is also suggest here.  Customers are happy with the MENU verities available in the stores .But it is suggested that add more customized menu and review the menu for every 3 months.  As study shows that customers are not aware of the calorie contents exist in the food. So it is suggest that stores should display the calorie contents available in a particular food. 

It is suggest the stores to concentrate on the areas of ambience and locational strategy.

 Advertising strategy of the stores are not making attention the customers .So it is suggest the stores to think of the design of different innovative advertising campaigns.

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WORK DONE

[69]

Chapter 6. Analysis and Interpretation Interview taken at Jumbo King Restaurant, Sanpada.

6.1 Summary On 16 November 2010, I visited the fast food restaurant of Jumbo King at Sanpada, Plot no.24, Sector-30.Navi Mumbai. The restaurant is exactly opposite to the railway station of Sanpada. The place of the restaurant is not that big but we can stand outside and have a tasty vada pav. Then, I met some employees of Jumbo King. There are 3 people working at that time. They all are making the vada pav and also serving to the customers. Then I met the store manager Mr. Rakesh Kumar age: 30, working for Jumbo King from last 3 years. I asked him some questions to him related to Jumbo King and also fast food industry of India. Mr. Rakesh Kumar answered my every question very nicely. Following is the analysis of answers given by him.

6.2 Analysis & Interpretation Mr. Rakesh Kumar stated that the fast food industry in India is very fast growing. There is very bright future to this industry that‘s the main reason he entered in this industry. He also mentioned that Jumbo king Pvt. Ltd. is also having great strategies for future & they want to increase their market share. The Reason for opening of franchisee of jumbo king at Sanpada is to cover more market. Jumbo King is having many restaurants in the Mumbai but there was no restaurant of Jumbo King at Navi Mumbai. There are lots of people in Navi Mumbai who love Jumbo Kings vada pav. So for them they started their franchisee at Sanpada. Mr. Rakesh Kumar mentioned that Indian fast food industry is a very big industry, there is vast variety of foods in India and also Indians love to eat different kind of foods. So that there are many foreign fast food restaurants coming to India and also [70]

there is high growth in local restaurants. So there is very cut throat competition in this industry, but the restaurant who is serving good quality food can survive for longest and Jumbo King is one of them. He also mentioned that the food at Jumbo King is very healthy; the pav is made in very hygienic condition also other items are also made in healthy environment. This is the USP of Jumbo King. There are five employees at Jumbo King Sanpada and two managers, they all are working in two shifts from 10-4 and 4-10.They all are well educated and also they had training for one month before joining the restaurant. The employees are well trained about how to talk and behave with the customer. That‘s why the relation with the customers is very good. Jumbo King Sanpada have regular rush of people as there are lots of people coming everyday but during morning 10-12 and evening 4-8 there is very high rush, but the employees at Jumbo King are very well trained so they treat every customer very well at each time. That‘s the reason there are many customers who regular to the restaurant. Some of them come daily twice a day. This proves that the relation between Jumbo King and customer is very well. Jumbo King do not have different strategies at different time and days as they have large variety of vada pav and beverages. The franchisee at Jumbo King Sanpada is working quite well having a very bright future. So, they are going to increase the space of store. As stated by Mr. Rakesh Kumar they are having some future plans such as to increase timings and variety of vada pav. Also they are trying to include different beverages. So, Jumbo King Pvt. Ltd. is very good at its quality and customer relation also they are having great future plans to improve it. They are setting a standard for fast food industry. This is the analysis of the interview of Mr. Rakesh Kumar Jumbo King. Wishing Best of Luck to them for their future…

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Chapter 7. Trends of Fast Food Industry

7.1 Past trends:  Change in gender roles  Sub-urban communities  Rise of automobiles  New highway system  Double Income Group  Relaxation in rules and regulations

7.2 Major trends:  Drive Through Service OR On the Go  Consumerism  Food for specific group(e.g., dieters, women, athletes, older adults)  Menu diversification  Convenience food

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7.3 Future trends & Conclusion  Stage 1: According to Observation of 2002-2010, the fast food companies have introduced healthier menu options.  Stage 2: Commitment: 2010-2013 Gain internal support for change: In order to make significant changes in the health of the industry and the consumers, fast food companies will start making business decisions with the end promise in mind. Full commitment is mandated at this stage. Educational Employee Motivation Program: The employees are the link between the company and the customer. If the employees are not educated and excited about the new initiatives, they will not be invested, which is vital to success.  Stage 3: Groundwork: 2013-2018 Get consistent messaging implemented: After the internal initiatives have been set in motion, companies will begin to lay the groundwork for external changes. Portion Sizes: Caloric intake can be reduced by decreasing the portion size.  Stage 4: 2018-2025 The industry will begin to make larger internal and external business decisions. The food at fast food establishments will all be brought to an acceptable level of nutrition value. 

By 2025 the fast food industry will have transformed from a food provider to one that serves a specific health benefit.



Industry will move from healthy to functional. Food Industry will concentrate on basic nutrition.

[73]



The balancing of the food will allow people to eat fast food meals and gain a balanced diet from every menu. One way to achieve this transformation is vitamin burgers.



The positive evolution of the industry in the future will be healthy lifestyles. As technology progresses, scientists will find ways to replace the unhealthy ingredients with healthier alternatives that keep taste consistent.



The fast food industry will give importance to taste and health.



Companies will Add nutritional meals in daily menu.

Conclusion Fast food is one of the world‘s fastest growing food types. India is seeing rapid growth in the fast food and restaurant industries. It now accounts for roughly half of all restaurant revenues in the developed countries and continues to expand. The trend is radically changing the way people eat in India.The fast food industry in India has evolved with the changing lifestyles of the young Indian population. It may take some time for the local enterprise to mature to the level of international players in the field. India‘s fast food industry is growing at 40% per annum and generates over Rs. 4800 crores in sales. The multinational segment of the industry generates over Rs. 7000 crores. The main reason behind the success of the multinational chains is their expertise in product development, sourcing practices, quality standards, service levels and standardized operating procedures in their restaurants, a strength that they have developed over years of experience around the world. The home grown chains have in the past few years of competition with the MNCs, learnt a few things but there is still a lot of scope for improvement.

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7.4 Interesting facts about fast food industry

 At many fast-food restaurants, a single meal gives a disproportionate share— sometimes more than 100 percent—of the recommended daily intake of fat, cholesterol, salt, and sugar.  A recent study showed that children who drink sodas and other sugar-sweetened drinks are more often obese and that this risk increases another 60 percent with each additional beverage consumed.  India's fast-food industry is growing by 40 percent a year and is expected to generate over a billion dollars in sales by 2010. Meanwhile, a quarter of India's population remains under-nourished—a number virtually unchanged over the past decade.  Coca-Cola and PepsiCo, the world's two largest soft drink companies, are the thirteenth and twentieth largest advertisers in the world; together, they spent $2.4 billion on ads in 2001.  Coca-Cola sells more than 300 drink brands in over 200 countries and employs 60,000 people in Africa alone. Its net revenues reached $19.6 billion in 2002— with more than 70 percent of its income originating outside of the United States.

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Chapter 8. Appendices 8.1 Bibliography

1. www.google.com 2. www.indianfastfoodindustrty.net 3. www.scribd.com 4. www.wikipwdia.com

8.2 Questionnaire Questionnaire for Manager: 1) Why you entered in this industry? 2) Why you decide to open this franchisee at Sanpada? 3) Describe the Indian fast food industry? 4) Is your all food items are healthy? 5) What are the expectations of customers? 6) How many workers are under this franchisee? 7) Do you gave some training before joining the work here? 8) How the persons handle the customer‘s problems? 9) What is the timing of this franchisee? 10) How is the relation you having with the customers? 11) How many customers are regular? 12) Is there always a rush at your store or at specific timings? 13) Do you have different strategies for weekends? a. Yes b. No 14) If yes then what? 15) What are the different strategies do you have for this particular franchisee? 16) What do you think future of your franchisee at Sanpada? [76]

8.3 Questionnaire for customers:

1) How many times do you visit a fast food restaurant? a. Daily b. Weekly c. Fortnightly d. Monthly

2) What is your price range? a. 100-200 b. 200-5000 c. Above 5000

3) Why to choose a specific fast food restaurant? a. Brand image b. Easy accessibility c. Special offer

4) When do you visit a fast food restaurant? a. Morning b. Afternoon c. Evening

5) Do you visit fast food restaurant due to friendliness of staff? a. Strongly disagree b. Disagree c. Neutral d. Agree [77]

e. Strongly agree 6) Do you prefer the fast food restaurant due to variety of menu available? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

7) Do you prefer fast food restaurant due to service speed? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

8) Do you prefer a fast food restaurant due to good calories content exist in food? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

9) Do you prefer the fast food restaurant due to cleanliness and store atmosphere? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

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10) Do you prefer the fast food restaurant due to delivery speed offer by them? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

11) Do you prefer the fast food restaurant due to menu offer for family ? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

12) Do you prefer the fast food restaurant due to facilities offered? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

13) Do you prefer the fast food restaurant due to easy accessibility and locational advantage? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree [79]

14) Do you choose a fast food restaurant after watching its advertisement? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

15) Do you choose a fast food restaurant due to special offer and discounts ? a. Strongly disagree b. Disagree c. Neutral d. Agree e. Strongly agree

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