ABSTRACT
Recent years the fast food restaurant industry in the Umuahia metropolis of Nigeria has witnessed a tremendous rise in the number of new restaurants. This is as a result of changing new life style coupled with the increase in urbanization. The study evaluates the marketing strategies that have been employed by the competing firms in order to sustain growth and profitability. This study evaluates monetary strategies and adopted a descriptive design. For convenient sake, out of total number of 85 medium sized fast food firms in Umuahia metropolis, 20 was selected for the study and out of 478 operators, 105 was chosen for study. A total number of 384 fast food customers were chosen for study using Topman’s formula. Data collection was both structured and unstructured questionnaire. The data were analyzed using Chi-square and Z-test. The test for Chi-square was used for hypothesis 1 and Pearson product moment correlation coefficient was used for hypothesis 2 while Z-test was used for hypothesis 3. The finding shows that a comprehensive customer research enhances sustainability and profitability of the fast food business. Secondly, advertising is an effective strategy in promoting fast food business. Thirdly, it can also be concluded that the strategy for sustainable growth could be not just by enhancing the roles of personal selling and public relations, but by the use of effective customer relationship management. The major implication for the fast food operators in the Umuahia metropolis is that they should put more emphasis on conducting, analysis and implementing the results from a comprehensive customer research. This is to enable them have a proper knowledge of the needs and wants of the customers and accordingly satisfy them. In addition, the operators should try and accord more impetus to their customer relationship management by ensuring that a customer receives accurate information and has a consistent and stiff experience every time he/she interacts with the company.
TABLE OF
CONTENTS
Title page . . . . . . . . .
i
Declaration . . . . . . . . . ii
Certification . . . . . . . . . iii
Dedication . . . . . . . . . iv
Acknowledgment . . . . . . . . . v
Table of
contents . . . . . . . . . vi
List of
tables . . . . . . . . . viii
Abstract . . . . . . . . . x
CHAPTER ONE
INTRODUCTION
1.1
Background of the Study 1
1.2 Statement of the problem 3
1.3 Objective of the Study 4
1.4 Research Questions 4
1.5 Research Hypotheses 5
1.6 Significance of the study 5
1.7 Scope of the Study
7
1.8 Problems That Will Be Encountered In The Course Of This
Study 8
1.9 Definition of key terms 8
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1
Introduction 11
2.2 What is Small and Medium Scale
Enterprise (SME) 12
2.3 Preliminary Consideration Before
Venturing Into SME 13
2.4 The
Concept of Effective Marketing 15
2.5 Strategic Business Planning 17
2.6
Strategic Marketing Effectiveness 20
2.6.1 Factors Deriving Marketing Effectiveness 21
2.6.2 Key
Marketing Success Factor 21
2.7
Customer Research 22
2.7.1
Importance of Customer Research 22
2.7.2
Areas of customer research 23
2.7.3
Doing Research Right 23
2.8
Research Trends 24
2.8.1 Location of restaurant 24
2.8.2 Restaurants’ Facilities &
Equipment 25
2.8.3 Methods Of Cooking 25
2.8.4 Components of Food Service
Operation 26
2.9 Management of Small And Medium
Enterprises 29
2.10 Customer Service
Trends 34
2.11 Customer Information Sharing 40
2.12 Advertising 25
2.12.1 Importance of Advertising 46
2.12.2 Managing Advertising Decisions 47
2.12.3Evaluation Of Strategic Marketing Of The Fast Food
Restaurants
In The South East Zone 48
2.13
Prospect Of Fast Food Venture In The South East Zone Of Nigeria 51
2.14
Theoretical framework. 52
2.14.1 The
Relevance of Marketing Strategy Evaluation 52
2.14.2 Review of Some Marketing
Strategy Evaluation Models 53
2.15Concluding Statement 54
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.1
Introduction 56
3.2 Research
Design 56
3.3 Area of
study 56
3.4 Source of Data 57
3.5
Population 57
3.6 Reliability and Validity of Instrument 57
3.8 Method Of Presentation And Analysis 58
CHAPTER
FOUR
4.2
RETURN OF QUESTIONNAIRE
CHAPTER FIVE
SUMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary Of Findings 85
5.2 Conclusion 86
5.3 Recommendations 87
REFERENCES 88
LIST OF TABLES
Table 4.1:
Questionnaire Distribution and Returns 60
Table 4.2: Responses on How Long the
Operator Have Been
In the Fast Food Business 61
Table 4.3:
Responses on the Number of People Working With Them 62
Table 4.4:
Responses on Respondent’s Education Qualification 63
Table 4.5:
Respondents Have Followed Up On New and Old Customers 63
Table 4.6:
Channel Used To Follow Up Customers 64
Table 4.7:
Some Friendly Relationships between Firms and Its Customers 64
Table 4.8:
Customer’s Opinion Box like Toll Free Class for Feed Back 65
Table 4.9: Restaurant Provides
Information about Food and Nutrition
for Its Customers 65
Table 4.10:
Media Used By Restaurant to Advertise to Its Target Customers 66
Table 4.11:
Engage In Research for the Target Customers 66
Table 4.12:
Conducting of Research 67
Table 4.13
Knowledge about Customers’ Data Base 67
Table 4.14
Sale Traffic for Products and Menus 68
Table 4.15 Consideration of Customer’s
Income and While Setting
Price Of Menus 68
Table 4.16
Public Relations And Restaurant Reading Target Customers. 68
Table 4.17
Sponsored Events like Sports Festivals or Carnivals 69
Table 4.18:
Printing And Distribution Of Calendar For Their Customers 69
Table 4.19:
Specification on What the Sales Force Is Expected To Achieve 70
Table 4.20:
Sales Force Actualizing Their Goals. 70
Table 4.21:
Sales Force Effectiveness 71
Table 4.22:
Sales Force Contribute To The Success Of The Restaurant Business 71
Table 4.23:
Respondent’s Age Range 72
Table 4.24:
Sex of the Respondents: 72
Table 4.25:
Marital status of the Respondents 73
Table 4.26:
Income status of the Respondents 73
Table 4.27:
Responses on Customers Occupation 74
Table 4.28:
Responses on Education Qualification. 74
Table 4.29:
Responses on Customer Discovery of Restaurant. 75
Table 4.30
The way the customer are served. 75
Table 4.31: Friendliness of the Restaurant
Staff 76
Table 4.32:
Attraction about the RESTAURANT 76
Table 4.33:
Getting Complimentary Message from the Restaurant 77
Table 4.34:
Reception of Gift Items like Calendars or Greeting Cards 77
Table 4.35:
Reinforcement of Continued Patronage 78
Table 4.36:
Frequency of Patronizing Restaurant per Week 78
4.37:
Special Occasion for Patronizing Restaurants 79
Table 4.38
Descriptive Statistics 80
Table 4.38:
Friedman Test 80
Table 4.39:
Test Statistics 81
Table 4.40:
Descriptive Statistics 82
Table 4.41:
Correlations 82
Table 4.42:
Descriptive Statistics. 83
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Fast food in the traditional sense is
not new to Nigeria. We have sellers of suya, akara(fried bean cakes), roasted
plantain, fried yam and roasted corn; this have been an age-old feature of many
Nigerian towns serving snacks for those on the go for everyone: from little
children to walking adults. While traditional fast food delicacies still remain
as well as mobile market fast food vendors, what has contributed to the growth
of fast food restaurant in Nigeria has been increased urbanization, changing
work roles and life style.
Food is one of the integral parts of
culture and varies just like culture. This is supported by (Aka. 2002:22) when
he said that what serves as fast food varies from one geographical location to
the other. It also varies according to race tribe and even locality. For
instance, European fast food menu differs significantly from those of Africans
against the background of geographical locations, temperature and occupation.
The list of African light foods, which constitute fast foods are inexhaustible;
generally, this consist of light edible foods that can be consumed fast with
convenience.
Since 1960s Nigeria has had one of
the fastest population growth rates in the world. In 2010 almost half of all
Nigerians live in cities-a number totaling 73million. As more people choose to
settle in Nigeria’s crowded cities, the time to prepare meals has become more
demanding. With more women joining the work force their traditional role has
changed, As a result many urban people now choose to eat some of their meals
outside the home. To meet the demand, many small restaurants known as bukas
have mushroomed all across Nigerian cities to serve the working population.
This restaurant generally serves Nigeria traditional meals either in open air
areas or in low cost small rudimentary dinning buildings. Meals are relatively
cheap and as a result they have gained a loyal following among the Nigerian
urban masses. Indeed, the size of the informal fast food factor is estimated at
S600-7S0 million a year, (Research and Market
(2010), ‘’Fast Food in
Nigeria: Businesswire.com/accessed7/2/2012.
More recently, modern Nigerian fast
food restaurants have also sprung up to cater to a more up market consumer with
western tastes. Unlike bukas which tend to vary in quality and service, modern
fast food restaurant place emphasis on cleanliness, hygiene and comfort. Care
is taken with food handling and the dinning environment is kept clean, air
conditioned and furnished with comfortable seating and premium television.
These serve western snacks and fast foods such as meat pies, fries, buggers and
ice cream together with traditional Nigerian dishes.
The fast food industry is highly
competitive and dominated by large companies. Smaller business must be savvy in
developing marketing strategies that drive consumer traffic. This entails
staying in constant touch with customers. One of the best way for smaller fast
food companies to stay in touch with their companies is through marketing
research. A small fast food companies must know what key customers want and
will buy before developing marketing and advertising strategies.
1.6Statement of the problem
Fast food is growing fast
in Nigeria because of people change of lifestyle. This change no doubt is as a
result of increased urbanization and the fact that many women who were
housewives are being engaged in eight hourly jobs. This trend therefore makes
their traditional role as homemakers that prepare family meals more
challenging. The need to combine the family role with work challenges creates
opportunities for outside shopping of food, going by this trend the outburst of
fast food restaurant business is expected. Based on this premises, it is
observed that the restaurant industry has responded as sustainable fast food
concept and this has continued to emerge and operators are building
sustainability into their existing business models. There is still great demand
for fast food as many consumers; including those on low incomes, lead a busy
life style. Many work an read for long hours, while others are busy either
bringing up their children or doing other jobs in addition to their official
jobs. Many therefore have little time to prepare meals at home due to the
nature of their jobs and this is compounded by the decline in cooking skills
throughout the society. Among the modern women, is another problem that
contributes to the patronage of fast food restaurant in our country. Hence, we
need to evaluate the marketing strategies adopted in the firm to make these
people patronize the business.
There is no doubt that the
success rate of the fast food restaurant business has attracted newer entrants
both local and foreign to this industry. The battle line is drawn amongst
competing firms resulting in cluttering of marketing management programmers in
order to stay afloat. This in turn has resulted in increasing marketing
management budgets. The operators of fast food restaurant businesses are
becoming more concerned about evaluating the effectiveness of the various
marketing strategies employed by their firms. The more the management does not
know the best and most suitable marketing strategies to employ in its target
market; the more unlikely sustainable growth can be achieved at the long run.
More so, even the best formulated and effectively implemented strategies become
obsolete asa firms internal and external environments change. Therefore, there
is an urgent need for a systematic evaluation of the marketing strategies
adopted by the fast food restaurant in Umuahia metropolis.
1.7 Objective of the Study
The main objective of this
study is to evaluate the marketing as a strategyadopted by restaurants in the
Umuahia metropolis. The specific objectives are:
1. To determine the extent of use of customer
research as a strategy in the marketing of fast food products by fast food restaurants in the
Umuahia metropolis.
2. To ascertain the
suitability of advertising as a strategyin fast food restaurants in the Umuahia
metropolis.
3. To examine the
effectiveness of personal selling as a strategy by fast food restaurants in the
Umuahia metropolis.
4. To examine the use of
customer relationship as a strategy in ensuring repeat purchase in the fast
food restaurants in the Umuahia metropolis.
1.8Research Questions
The main research question
that the study aims to answer is how do fast food companies in the southeast of
Nigeria evaluate the marketing strategies in the operation of their business?
Other specific questions include:
1. To what extent is customer
research as a strategy used by fast food restaurants in the Umuahia metropolis?
2. How suitable is the use of
advertising as a strategy in the marketing of fast food in the Umuahia
metropolis?
3. How effective is personal
selling strategies in the marketing of fast food in the Umuahia metropolis?
4. To what extent do customer
relationship as a strategy ensure repeat purchase in the fast food restaurants
in the Umuahia metropolis?
1.9 Research Hypotheses
Consistent with the
statement of the problem, the research objectives and the research questions,
the following null hypotheses have been formulated to further guide this study:
HO1: Customer research strategies do not impact positively
on fast food restaurant business in Umuahia metropolis.
HO2: There is no relationship between advertising
strategies and sustainability of fast food restaurant business in Umuahia
metropolis.
HO3: Personal selling strategies do not significantly
improve fast food restaurant business in Umuahia metropolis
1.6 Significance
of the study
The significance of study shows the
usefulness to the fast food operators,the government, student and individual
members of the society to running a successful restaurant. It will illustrate
how to set up a professional management structure for an upscale restaurant and
shows how the structure operates.
Secondly, the government will through
this study understand the viability and prospect of fast food business and so
entrepreneurship in this industry this will provide a means of living for many
unemployed school leavers and graduates. Entrepreneurship has a prominence that
derives not only from the economic impact, but for the fact that they seem to
be the place where Nigerian can claim the freedom and independence promised in
the Nigeria independence dream. Policy makers are by this study encouraged with
creating regulatory frame work that can lead to more businesses and more job
creation.
According to business day
online,(2009),fast food franchise account from $200m.current annual market size
for franchising in Nigeria from all industry sector in put a $1.5 billion
(N223.7 billion)approximately ,according to industry and market analysis ,in a
report by the US commercial service In Lagos .the analysts set fast food
franchise account for $200 million and that fast food market potential is above
$550milllion. The report says Nigerian offers the US franchisors a large pool
of potential franchisees for international masters franchise and area
development agreements, that it could offer a return on investment
(worldnews.com 2010).going by this report ,investment in this industry
requires a consortium on the government
and other stakeholders to reap the huge success which it promises .it is
hopeful the government does not turn it back from investment of this nature
which is bound to invigorate the entrepreneurial spirit that is innate in the
Nigerian citizenry .
Thirdly, individual member of the
society will see the need to patronize the operators and prospect of the
business .The peace of modem man’s life is fast and in no generation is it
faster than in the present generation . We want fast transport ,fast
communication ,fast computers ,fast repairs and the from the business
painstaking efforts at surveying consumers of fast food and noted their
perception of an ideal fast food joint ;their perception were be carefully
analyzed and included work .based on
the above, it is hopeful that individual members society will give this wok consideration .the
business proposal of this study formed a frame work for those who want t
and invest In this industry and accordingly there is
bound to be explosive employment opportunities for our teeming unemployed youth
.
Finally, the study will be serve as a
databank for other students and researchers who will carry out relative studies
in the future .Furthermore, the research findings can prove the basis for
further studies with consumers their game plan .Increasing competition in an
already struggling market will cause fast food restaurant to change their menus
and broaden their product offering in order to stay afloat.
1.7 Scope of
the Study
The scope of this study covers the
evaluation of marketing strategies of fast food restaurant in the Umuahia
metropolis. The effective strategic management approach to running a fast food
business was followed in unlocking the key to successful management in this
industry.
Given the study’s interest in
evolution of marketing strategies, it is important to focus on such fast
growing industry as the fast food organization .businesses such as this
provides a clear picture of strategy-making procedures because they are likely
to be fewer complications in the formulation and implementation of their
strategies unlike the corporate level organizations. Single industry studies
although limited in their generalizing, are common in both the strategic
management and the strategic marketing fields because they have the advantage
of providing greater control over market and Environmental Peculiarities.
1.8 Problems
That Will Be Encountered In The Course Of This Study
·
Time:
·
Finance:
·
Uncooperative attitude from the respondents:
·
Lack of related materials:
1.9 Definition
of key terms
In this context of study the
following key terms are defined:
Ambiance: this a mood or typical
type atmosphere of a place (Encarta dictionary 2009) some fast food restaurant
use this as a strong tool to command patronage
Business proposal: this is a written
document that summarizes what the marketers have learned about the market place
that indicates how the firm plans to reach its marketing objectives and helps
direct and coordinate the marketing effort (Kotler 2009:747) it sets forth the
organization’s marketing programme. It set forth both a short and long term
programme on how the organization is to be run. Among other things in this
document are the target customers of the organization the competitive market
segment the organization seeks to go into the selection of a suitable
distribution channel, pricing strategy.
Consumers: somebody or something
that consumes something by eating it or drinking it or using it up. In this
context consumer are those who patronize the fast food chain. Individuals,
household or organization patronize fast food chain on various occasion.
Fast food: This is the food
prepared from home. It is called fast food because it is the food prepare for
commercial purposes.
Fast food
restaurant: it is a place where meals and drinks are sold and serve to customers.
This is a business environment of the fast food chain.
Marketing
strategy:
Is a game plan for getting that goal a business unit wants to achieve. Every
programme in form of promotion pricing, distribution aimed t ensuring a higher
market share for itself is what is referred as marketing strategy.
Menu: This is a list of the
dishes that can be ordered in a restaurant or that are in a fast food chain.
Some fast food restaurants have menu board which displays the available food
items at the given time. Other big fast food restaurants have electronic board
as a kind of point of sale advertisement of their products.
Mini mart: It is a smaller version
of sales room or large store (Encarta
dictionary 2010), it
Is an outlet in a petrol station were
some fast food items and other assorted beverages sold. Here the target
consumers are motorists who buy petrol and allied petroleum product in the
petrol station.
Set up cost: It is the money provided
with somebody to start a business or buy a house (oxford advanced learner
dictionary) it is the initial capital meant for the running of the business.
Personal savings and borrowings from friend or relation could form set up
capital for running of the fast food business.
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