full version Consumer preference of fastfood brands over local brands Essay

Consumer preference of fastfood brands over local brands

Category: Business

Autor: saira_iu 20 April 2011

Words: 5397 | Pages: 22

Research Proposal

I. Introduction and Theoretical Framework
As globalization is increasing rapidly and new products from the foreign countries are finding their way into the country, the trend of utilization by our inhabitants is gradually changing. They are becoming more disposed to buying. The reason why consumers are more inclined towards global or local brands is associated to their desire for maximum satisfaction.
With the passage of time, the international fast food brands are getting more precedence in comparison to the local brands due to the influence by the western world. As the markets have globalized, complex marketing strategies have been developed. If any predisposition resulting from these strategies is seen in the buying decision, a close consideration should be given by the manufacturers, distributors, importers, exporters and other channel intermediaries to examine how it influence their businesses and employ appropriate strategies to counter this phenomenon, Samiee (1994).

The notion that called globalization has guided many organizations to operate on a global level which as a result has changed the buying behavior of consumers and an increase in his knowledge regarding global fast food brands. Due to the societal and cultural effects of telecommunication, more awareness is spread in consumers about other cultures, lifestyles and brands. It has now been examined that foreign fast food brands are consumed more on a frequent bases in contrast to local ones. People feel modernized in consuming foreign fast foods which has brought a rise in the power of global brands.

It is a common viewpoint that consumers consider only "external" factor while purchasing a foreign fast food brand. However, reality tells that there are a number of varied factors involved while evaluating a product.

Studies show that consumers who dwell in developed countries give more preference to foreign fast food brands, particularly from the west, not only because of the perceived quality but also of social status. Hence, a brand's country of origin serves as a "quality halo" or summary of product quality, cf. Han (1989), and consumers prefer these types of fast food brands for status-enhancing reasons. Quality is conceptualized in terms of the "dominance" or "excellence" of a product's performance, Zeithmal (1988).

A consumer's standard of living and his purchase pattern can also be determined by his income, education, occupation and family background, Magnar and Hulpke (1990) found that demographics significantly verify the exposure to, and thus the purchase of expensive foreign goods.

Like many other developing countries, Pakistani social classes also exhibit very evident brand preferences. Amongst the different social classes, elite class and the upper-middle class are more observed to be dining out at fast food foreign brands to sustain in the noticeable position in society. Karachi city has most of its people having the status consciousness characteristic. Whereas, foreign fast food brands are considered as a luxury for lower class, they do not consume them more often.

The researchers intend to study that how the internal lay out of dine-in restaurants, advertisements, celebrities showing up in the brand ads, friend's circles and families, are affecting the consumer's perception and making them aware to take informed decisions regarding their social status.

The data collection sources for research will be questionnaires, internet search and books. This research will be conducted in the city of Karachi.

II. Statement of the Problem

The researchers intend to study the perceptions, preferences and buying behavior of consumers towards the foreign fast food brands over the local brands.
Nowadays the young population is getting more diverse in nature. Consumers prefer choices in everything they consume. As they have more alternatives available to them due to global effects of the foreign companies operating in their local region, so they have a vast range of substitutes available, and if they feel dissatisfied with the one, they can easily switch to another. Also the young consumers are more aware about the local and foreign brands, so they can better evaluate their preferences based on different factors. Such as quality, price, country of origin, brand image and brand loyalty, services, current fashion trends and status consciousness.

III. Purpose of the Study

The purpose of the study is:
• To identify the factors which persuade consumers to buy foreign fast food brands rather than the local brands
• To know the buying behavior patterns of Pakistani young consumers towards foreign and local brands and the preference for foreign brands
• To recognize how local fast food businesses can improve their products in terms of quality, durability and reliability to compete with foreign brands.

IV. Review of the Literature

Before proceeding to the past researches done on preference of people about foreign and local fast food brands, let's take a look at the definition of few terms.
Consumer is any individual who purchase goods or services for direct use instead of its resale or use in production and manufacturing. "The term "Consumer" has a literal meaning ‘one that consumes.
According to the legal definition of consumer, it is an individual who purchases a good or service daily in retail.

Brand is a product, service, or concept that is distinctive from other products, services, or concepts for the ease of communication and marketing. In general, brand means any unique design, words, symbols or integration of all these for the identification of a product that can be distinguished from its competitors. Usually, brands are protected by a secure trademark in order to avoid its use by any other person. Before opting for a trademark, it's important to find out that no other person has obtained one for the company's name. After confirmation, the company can use its brand name freely as a trademark.
Brand recognition can be created through advertising, design and media remark. A brand represents a symbolic picture of all the information that is related to the product and develops association and hopes around it John Philip Jones, (2000). Organizations sometime use their brands and its public awareness as one of the factor in evaluation of the company. Market research firms are also hired by corporations of the study of its brand name recognition along with the attitude people hold towards the brand.
A brand is an intangible summation of the characteristics of a product, its reputation and how it is advertised.
Consumer Behavior
Customer behavior is defined as the mental and physical activities undertaken by household and business customers, which result in decisions and actions to pay for you, purchase and use products and services. Examples of mental activities are assessing the suitability of a product or service brand, making inferences about a product or service's qualities from advertising information,

and evaluating actual experiences with the product. Physical activities include visiting stores, reading consumer reports, talking to sales people, and issuing a purchase order. In short, Consumer behavior understands how and why consumers behave.
A consumer can benefit from a better understanding of how we make our decisions so that we can make wiser ones. Marketers can benefit from an understanding of consumer behavior so that they can better predict what consumers want and how best to offer it to them.
There are two major forces that shape who we are and what we buy. Our personal motives, attitudes, and decision-making abilities guide our consumption behavior. At the same time, our families, cultural background, and the ads we see on TV, and the sites we visit on the Internet influence our thoughts and actions.
Brand Image
Brand image is defined as the notion of overall brand personality in the consumers mind. Brand image is build up as time passes by through the ad-camps through advertisement promotions with a steady theme, and is verified through direct experience of consumers.
According to the marketing dictionary, the term Brand Image refers to the association of qualities with a specific brand, expressed in terms of an individual needs and actions. Also, it is related to quality, price the brand usage. Czinkota & Ronkainen in their book "Global Marketing" states that an image of a product or service is communicated by the brand names. This study examines consumer perception of global brands vs. local brands in the Pakistani food market. Marketing plays a vital role in generating consumer perception for any product...The secondary objective will be accomplished by

exploring the perception of consumer about local fast food over on foreign fast food brands. Fast food industry has been playing a vital role nowadays in Pakistan. As the result, everyone mostly the young generation prefer it the most .In Pakistan there are many fast food brands including local and foreign like McDonalds KFC Nandos pizza hut are the major players as a foreign brand in Pakistani market, where as Bovichic student biryani, Mr. burger , Kaybees are serving good as a local brand here in Pakistan.
With the increasing demand on fast-food in the food industry of Pakistan, both the local and foreign brands have to compete to get consumers' attention to purchase their products. Thus, it is crucial to find out what perception does the Pakistani consumer have on local and foreign fast food brands to identify their needs and issues that influence their purchase. However, local fast food restaurants did not have any clear information on consumers' perception to help them in their strategy plans attract consumers into buying their products. Therefore, this research decided to do an in depth study of the consumers perception towards nation and foreign restaurants in the fast food industry of Pakistan.

Consumer perception refers to how your brand is perceived by your potential customers. Customer will perceives the value and benefit in the product and service you are selling and the value they derive from that product matches with the price you have set and the experience they receive. When a consumer is satisfied with the particular product, they will build up a positive perception on the brand. However when the product fails to meet the expected outcome by the consumer, bad perception will be placed on that brand. In this research, we will be conducting a study on consumers' perception towards the nation and foreign fast food brands.

Scholars have noted that country-of-origin perceptions lead to cognitions. It also lays emphasis on specific product and marketing attributes. These were noted as the factors that could bring affect to the people in the country of where the product or services were marketed, Gary A. Knight (1999). Brands are made of various attributes which affect the overall preference and purchase. Attributes refers to products and services that are described in terms of characteristics or features. It can be divided into cues which is the physical attributes of a product such as color and cues which are product-related but not part of the physical product itself such as brand name, price, and country-of-origin. Attributes is important to consumers because those are the characteristics that deliver the benefits and values to them. In past studies, it is found that brand name and country-of-origin could affect the brand purchase decisions.

Consumers often rely on brand names which are an extrinsic cue, to evaluate a product when they are facing difficulties to detect the product intrinsic qualities. It has been generally agreed that country-of-origin affects the choice of product and brands. Studies show that country-of-origin it is more important than brand name cue in evaluations of foreign products and domestic vs. foreign products. However, a few studies also indicated that country-of-origin can be a very important factor in a developing country until the extent to which this is true varies by product category and ethnicity.
Consumers tend to evaluate their own country's products more favorable than foreign-made products.

Price is often viewed as a dominant factoring guiding choice when it comes to making a purchase decision. Price in general has always been a determinant factor on consumers' brand choice when selecting a product or service. It is assumed that when a consumer is facing a buying decision in a product category, when consumer faces brand with varying prices and perceived quality levels, they would have to make a choice consistent with the relative importance attached to both attributes

however, according to other studies, it is believed that customers often look upon on additional services provided that comes together with the product or service rather than looking on the price factor. Customers were believed to put different weights on every factor when it comes to the evaluation process. Analysis shows that customers who had experienced bad customer service tend to consider more thoroughly all aspects of the service when it comes to choice of product.

In another study research, it is found that fast food industry is facing tough challenges to improve quality to achieve higher customer satisfaction in improving their business effectiveness. Customer satisfaction is one of the factors that could help the company to assess their product quality in the market to enable them to set future targets. In fast food industry, there are several measurements of satisfaction and quality and reliability is the most major factor that determines the consumer's choice of food .Other studies shows that there are large quality differences among brands in several product categories.

It was proven that there were quality differences within local brands, within foreign brands and between local and foreign brands in a specific product category or in different product categories when comparisons were made. Consumers with quality conscious will perceive quality as an important attribute in their brand decisions. Thus, they are willing to spend more money to pay higher price to get better quality brands.

Consumers in developed countries generally believe that local brand is more superior to foreign brand in terms of quality. Thus, many consumers in developed countries would prefer local brands or products.

What Do Consumers Relate To Global Brands?
Up till now, the focus of consumer research has been upon the positive effects of an international brand image. Indications of the research tells that international fast food brands are valued by consumers mainly for their perceived high quality and esteemed image e.g., Nguyen, Barrett and Miller (2005); Steenkamp, Batra and Alden (2003). An international brand name that is established properly can act as a "halo" that influences quality beliefs (Han 1989). If consumers perceive the brand that it is available worldwide, they are likely to link it as a brand having a greater quality, in view of the fact that such quality is considered of as a requirement for global acceptance.
Besides, prestige and status benefits have been shown to constitute as one of the key drives of consumers for preferring international fast food brands. International fast food brands are found more costly as compared to local brands particularly in Non-Western countries due to this reason, global brands hold an exclusive appeal Batra et al. (2000); Steenkamp, Batra and Alden (2003).
Furthermore, the International fast food brands that are consumed by people, exhibits a modern and sophisticated lifestyle – an association that extremely attracts some consumer segments, Alden, Steenkamp and Batra (1999). Up till now, if seen from a consumer's perspective, the drawbacks of international brands have not been given much attention in the marketing community. One exception is provided by Schuiling and Kapferer (2004) by whom facts are provided that people perceive local brands as more trustworthy and reliable in comparison to the international brands. In depth insight about the "dark sides" of international fast food brands are put forward by interpretive researchers. Global brands becoming the prevalent concern in some of the consumer segments interpret a growth in global consumer culture, Belk (1995); Thompson and Arsel (2005). As a result, the authenticity of international fast food brands is sometimes challenged by consumers.

Highly standardized brands may be viewed and estimated by consumers as inauthentic as if compared with local substitutes, which are recognized as unique appearance of local cultures, Thompson, Rindfleisch and Arsel (2006).
Also, it happens that the international brands are often pushed into markets with a huge budget of marketing, though being produced in low-income countries at a very lower cost, they could also be considered as violent or hasty.
A topic to be focused on now-a-days is the change in consumer behavior and the influence that an individual has regarding the foreign brands. Motameni and shahrokhi (1998) noticed that every consumer goes through three main steps which are: considering the brand to evaluating it and finally making the purchase decision. The factors which affect the purchasing decision include mainly the socio-economic and socio-cultural conditions.

Local Brands and Global Brands
Wolfe (1991) has defined local brands as products which exist in any particular country or in a restricted terrestrial area. There are local, international or global firms with whom the local and foreign brands can be related, according to Schuiling et al (2004). Economy of any nation and well-being of its individual are linked together and this link between them is provided by local brands.

Global brands are marketed with the single strategies followed all over the world in a particular span of time. International brands do enjoy their existence in multiple markets hence having more popularity due to its scale and scope. Sankar (2006) defines global brands as the brand following

similar strategies and marketing mix in most of the countries under the same name. There are few global brands which have same strategies but with different names in different countries. Despite of the fact that international fast food brands are playing vital role in transforming consumer's preferences in a progressive and ethical way, yet the advantages of the local or in-house fast food brands are there and is going to be examined in the succeeding part.

Pros and Cons of Local Brands and Global brands
Schuiling et al (2004) conducted a research on the database of Y&R (Young and Rubicam's) in which UK, France, Germany and Italy was included. They explained that local brands enjoy stronger brand equity in comparison to the foreign brands. Kotler (12th edition) explained brand equity as the effect of brand name on consumer's response towards purchasing any product or service. Brands are more than just names and symbols they are considered as one of the key element in making strong relationship between company and consumer.

Local brands are expected to have benefit of being known amongst the nationals and have stronger brand image than foreign brands do, noted by Sankar (2006). Value of local fast food brands are linked with their prices because they usually sell at lower prices as compare to foreign brands, this fact provides the consumer with healthier money value sense.

Local fast food brands are considered as being more "down to earth" than international brands means that local brands offer such packages and convenience which relates a lot with traditional and cultural practices such as meal sizes, local tastes and religious issues. Local brands do not take much time to be marketed and get popular in the local market as they are generated by studying the existing

behavior and preference of consumer who will be using that particular brand. According to Sankar (2006), trust is the most important pro that local brands enjoy, because it provides a relationship of its kind which is difficult to maintain and take years to develop. It is also seen that consumer may get attracted towards the international fast food brands but in reality there exist a particular social class which prefers to pay for the local fast food just to have the same traditional taste and convenience.

Researchers observed that International fast food brands i.e. Mc Donald's; KFC etc. do have success in high-profile and high involvement social class or there is a new taste shift observed in teenagers nowadays, they insist their families to dine-out in foreign restaurants operating in their area. Also, people who are trendier and love to try different tastes they dine-out more often in international fast food restaurants. Eckhardt (2005) noted that local brands doesn't show flexibility as compare to Global brands in foreign brand category when the marketing activities are taken in to account, due to association of cultural categories with the product categories. Sometimes local brands need to follow the already existing assumptions about any particular product category, same is the case with international brands which needs to imitate global marketing mottos.

Global fast food brands are known and trusted for their perceived quality. After discussing pros and cons it becomes essential to know the facts behind the shift in consumer preference, from local to global.

Local Brands to Global Brands: A Shift
From past years, in favor of global brands many multinational firms have decided to shrink their brand portfolios to controllable sizes. Taking example of P&G and Unilever, researchers studied

that both of these firms have cropped the quantity of brands they market. Increasing similarity in consumptions and habits of a consumer, fuel the huge presence of global brands. Global brands are supposed to be more value-added for consumers because of two main factors: better quality and increased self-perception of consumer for considering global brands as more up-to-date, superior and different. All over the world people are becoming more sophisticated and aware.

Despite of the fact that we exist in a global market place still we have more local dine-out restaurants than foreign fast foods, UK is one of those countries where local food restaurants are given more preference. Those local restaurant chains when operate in any other place in the world will be then considered as an international food brand. Same is the case with any other country. Plenty of reasons have been offered by different researchers in the world for the moves towards global brands. In the view of Terpstra (1987), consumer preference is not the only primary reason for firms to decide for going global. With the passage of time world is shrinking and becoming an international market place.

It has become important to understand the perception of people about global brands to local brands. Skeenkamp (2003) noticed the behavior of a consumer in which people turn into perceptive to foreign brands when they have this believe that a particular brand is marketed in multiple countries. The preference that consumers give to any global fast food is not only linked with the quality but also to their social status, Alden et al (1999). Generally the people of developing countries try to imitate the practices and lifestyles followed by the people in western countries and purchase those brands.

It is declared that people around the globe possess somewhat similar needs and wants and they keep on changing as the time passes by. And this huge change is mainly due to mobility across the

border and Ease of communication because of technological advancements. There exist some differences too, between different geographical regions due to their native culture, tradition, geography etc.

V. Questions and Hypotheses
The researchers aim to investigate the problem with the help of following research questions:
• What are the factors considered by consumers while selecting fast food brands?
• Why consumers pay more for foreign fast food brands than local brands?
Based on the literature review done in chapter two, the researchers intend to identify the consumer preferences for foreign fast food brands over local brands with the help of the following two hypotheses.

• H0: Consumers in upper middle and middle class do not give preference foreign fast food brands over local brands.
• H1: Consumers in upper middle and middle class give preference to foreign fast food brands over local brands.

VI. The Design--Methods and Procedures

VI.I Introduction
This chapter is about methodology that the researcher adopts during the research. It provides the way and the guidelines to acquire the data and to interpret the results. It helps in making the research more authentic. It also helps in identifying a logical relationship among the variables.

VI.II Research Approach
The objective of quantitative research is to develop and employ mathematical models, theories and/or hypotheses pertaining to natural phenomena. The process of measurement is central to quantitative research because it provides the fundamental connection between empirical observation and mathematical expression of quantitative relationships.

The researchers have selected quantitative approach because they had to measure the impact of international and local fast food brands on the consumer preferences. Further, the study helps to identify the core factors that determine the consumer preference towards certain brands.

VI.III Variables:

Dependent Variable:
The dependent variables in this research are perceptions, preferences and buying behavior of consumers.
• Perception
Perception is the process of attaining awareness or understanding of sensory information

• Preference
The term "preferences" is used in a variety of related, but not identical, ways in the scientific literature. In psychology, preferences could be conceived of as an individual's

attitude towards a set of objects, typically reflected in an explicit decision-making process Alternatively, one could interpret the term "preference" to mean evaluative judgment in the sense of liking or disliking an object. Preference can be notably modified by decision-making processes, such as choices

• Buying Behavior

Buying Behavior is the decision processes and acts of people involved in buying and using products

This research will be determining the factors that develop the perception of consumers, what factors are considered in building their preferences and what affects their buying behavior. These three variables are dependent on various factors. Hence, they are the dependent variables:

Independent Variables:
Following are the independent variables involved in the study:

• Quality
It is defined as the measure of excellence or state of being free from defects, deficiencies, and significant variations. ISO 8402-1986 standard defines quality as "the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs."

Consumers are reluctant in compromising with the quality of product. Its impact on consumers' perception lasts for a long period. Therefore, it is considered a key factor by consumers while purchasing a product.

• Price
It is defined as the market value, or agreed exchange value, that will purchase a definite quantity, weight, or other measure of a good or service. (businessdictionary.com)

Price is another important factor considered by consumers during the purchase of a product. The products having a high price are perceived as luxurious products and people prefer it buying occasionally. People also perceive price as the mirror image of a products quality. Products having high price tags are perceived to be of a superior quality. On the other hand, products having low price are regarded to be of an inferior quality.

• Income
Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business (wordiq.com). Income also plays a vital role in the product purchasing. Consumers who have a huge amount of income definitely have a high
purchasing. So, they purchase the premium priced products on frequent basis for their own satisfaction or to impress other people.

• Country of origin
Country of origin is the country of manufacture, production, or growth where an article or product comes from. It is the factor that is sometimes used as the only factor for evaluation of a product. There are certain countries that are well known for their products and quality they provide and contain a good repo in the market and in mind of consumers. Therefore, these factors are relied upon by consumers during their purchases.

• Status consciousness
One of the reason that consumers buy international fast food brands is the enhancement of their status. These types of consumers are very status conscious; hence, they are very cautious in choosing their brands. They purchase international fast food brands on frequent basis even if they are high in cost. They are after the image of the product which can help them in boosting their status and self-image in society.

• Current fashion trends
It's a general term for a currently popular style or practice, especially in clothing, foot wear or accessories. Fashion references to anything that is the current trend in look and dress up of a person (Wikipedia.com). Current fashion trends are taken into consideration by majority of consumers when they go to purchase a product. The taste and desires regarding the current attributes in a product differ in each consumer. They have got more understanding about the current trends that are popular in the society. Due to this reason, they prefer buying the products that are in current fashion during the purchase time.

VI.IV Research Design

The quantitative research design is used in this study, which will quantify the factors that affect the preferences of consumers towards buying foreign fast food brands over local brands. In descriptive design the plan of action was based on cross sectional type because it identifies the cause, impact and roles that were conducted in the research. By adopting the cross sectional descriptive designs for the research, the researchers intend to study the consumer preference of international fast food brands over local brands.

VI.V Population and sampling

The target population for this research is the young adults dwelling in Karachi, both male and females aged between 18 to 28. The researchers have selected the sample of 300 people belonging to the upper middle and middle class who are university students. The researchers have adopted the random procedure to conduct the research.

VI.VI Data collection

The researchers have adopted the questionnaire survey as a tool for collection of the data. The reason for using questionnaire as a research instrument is its convenience for the researchers. Also, it is less time consuming for data collection from the participants because the questionnaires are filled on the spot and do not require any specific appointment time from the participants. The questions will be close ended, based on Likert scale. The questions will be developed by extracting the variables from the literature review. The questionnaire formed in this pattern will lend a helping hand to researchers for quantifying the data and bringing objectivity in research.

VI.VII Data analysis
For the purpose of data analysis a software SPSS, version 13.0 is used. Certain statistical and analytical tests were applied to the data to get valid results and to draw required information from the results.

VI.VIII Pilot study

VI.IX Reliability and Validity

For the verification of reliability and validity of the research instrument, the researchers will be using the pilot study test. The pilot study test will extract a little amount of sample size among the participants and with the help of that, will check the validity of the instrument that whether there is any problem occurring in the instrument. The pilot study will be useful in removing problems if any and enhance the reliability of the instrument.

In order to check the validity of the research instrument, the researchers will seek for advice from the research supervisors and knowledge experts.

VI.X Ethical Considerations

The researchers have respectful attitude towards the correspondents and do not share the information that is received and do not use the information for any personal use or any other purpose or abuse it. The researchers have also included the reaction of the correspondents throughout the research.

VII. Limitations of The Study
• This research is limited to Karachites.
• The research is based on limited number of respondents which are mostly university students.
• The respondents may not be honest and fill in the questionnaires half-heartedly, giving a false or biased picture.
• The research does not cover all the categories of local and foreign fast food brands. It in fact deals with the brands related to edible items only.

VIII. Significance of the Study

This research is focusing on the young consumers of Karachi. It deals with the factors that influence consumer preferences while selecting a brand and what consumers look for in a product when they buy it. The research is specifically focused upon fast food local and foreign brands operating in Karachi.

The results of this research are intended to suggest the improvements which can be incorporated to build the local brand's image. So that our local brands can also compete well with the other immense foreign brands in terms of quality, price, country of origin, brand image and brand loyalty, services, current fashion trends and status consciousness.

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