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Statistics: Analyzing
customer behavior in
Restaurant Business
Awareness in Statistics Promotes Better Evaluation of
Programme
WMP10047
WMP10048
WMP10055
WMP10062
WMP10073
WMP10080
WMP10087
Table of Contents
I. Objective ................................................................................................................ 2
II. Literature Review .................................................................................................. 2
III. Who are your potential customers? ....................................................................... 3
IV. Research Methodology .......................................................................................... 4
Demographical distribution of the respondents
V. Descriptive Statistics ............................................................................................. 6
VI. Inferential Analysis ................................................................................................ 8
Average Spend
Criteria for Picking of Restaurant
Preference for Alcohol
Do females spend more than males!! Answer is
YES!
Do Non Veg diners spend more at restaurants?
Yes
Willingness to Travel for eating-out
Age Vs Spend Analysis
Do Average age and average Spending have
any correlation? No
Income Analysis
Average Spend vs Marital Status
VII. Multiple Linear Regression .................................................................................. 18
Least squares multiple regression
Regression Equation
Analysis of Variance
VIII. Conclusions .......................................................................................................... 19
IX. Appendix............................................................................................................... 21
X. References............................................................................................................ 22
Objective
Our objective is to research the eating-out habits of Indian Consumers and identify domestic
food trends. This report presents the results of the analysis and includes the following
Analysis of the demographic changes occurring in India and their potential impact on the
restaurant industry
Analysis of responses collected via the questionnaire representing a snapshot of trends
in the Indian eating-out habits
Literature Review
Restaurant Industry in India. Trends and opportunities: This is a report prepared by HVS
International for The Federation of Hotel and Restaurant Industries in India (FHRAI). The
report talks about global trends in the industry and along with guidelines for conducting
feasibility study before opening a restaurant
For starting a restaurant, one should know what types of restaurants are present, what locality it
needs to serve, what are their eating habits?
A fast food restaurant is an eatery where patrons can order and receive food quickly. The food
is often taken to go, with a few seats provided for eating, but typically there is no table service.
Fast food restaurants can be a franchise (such as Subway) or an independently developed
business idea. The cuisine at a fast food restaurant often consists of standard fare, such as
sandwiches, hamburgers, chips, French fries, fried entrees (chicken, fish), and/or pizza, etc.
A small restaurant is an eatery that provides patrons with table service. Small Restaurant
businesses often have a casual, family style atmosphere, and a limited menu. The facility is
often small, with limited seating. The number and type of small restaurants, vary greatly from
community to community, as do the menu and number of customers.
The fine dining establishment is less common to rural areas, and usually found in an urban or
even metropolitan setting. This type of restaurant provides a formal dining experience at the
premium end of the market.
In conducting the market assessment and research, once goal is to better understand potential
customers
Location and demand are the most important factors in determining the market. Remember,
most likely customers will come from nearby places. Potential customers choose to eat out for
many reasons. Families may come to your restaurant as a special treat or as a break from
cooking. Children and teens might visit your restaurant for after school snacks and socialization.
Visitors traveling on business might use the restaurant as a source of meals, which they cannot
readily cook for themselves. However, the majority of the markets in most rural areas will be
selling to locals, as well as the potential customers who might come through a small community.
Research Methodology
Data was collected from primary sources via questionnaire prepared for this purpose. A total of
170 responses were received which are the basis of the analysis presented in this report. The
questionnaire comprised of 6 demography related questions and 13 direct questions on the
eating out habits of the respondents. The questionnaire is available in the appendix section of
this report.
1) Age Distribution of the respondents: The age distribution of the respondents varied from
20 to 50. A majority of the respondents (44%) were in 30-40 range while there were
more than 8 (5%) respondents above 50. The pie chart distribution is shown below
AGE DISTRIBUTION
>50 20-25
40-50
25-30
30-40
2) Income distribution: We believed that the income level would be an important factor in
the eating out habits of the respondents. Nearly 23% of our respondents were in the high
income category of more than 15 lacs per annum.
Income Distribution
23% 20%
<5
5-10
24% 33% 10-15
>15
3) Gender and marital status distribution: 80 % of the respondents were Male as shown
below. Nearly 70% of the respondents were married
4) No. of children and No. earning members: In nearly 30% of the cases, both spouses
were found to be working. There was a single earning member in 39% of the cases with
other being single. 28% of the respondents had 1 children while 19% had no children.
The following charts give a view of the distribution
Earning members
No of Chidren
80
60
40
20
0
1 Earning Member 2 Earning Members 0 1 2 >2
Descriptive Statistics
1) Eating patterns: While the respondents were nearly divided in half between
vegetarians and non-vegetarians, a majority of those who responded did not
consume alcoholic drinks.
Yes No 26%
74%
3) Preference of day of the week for eating out: As expected, weekends are the
preferred days for eating out. A very small percentage of people venture out on week
days.
4) Preferred Cuisine: A majority of the respondents prefer North Indian food when
eating out. This is expected as most of the respondents belonged to the northern
part of India. However tolerance for other cuisines is increasing with Chinese food
being the second most popular
PREFERRED CUISINE
Others
South Indian
North
Indian
Continental
Chinese
5) Reasons for eating out: most of the people eat out with the intent of having a good
time.
6) Criterion used for choosing a restaurant: Food quality is the most important criterion
for people while choosing a restaurant with the Hygiene/ambiance being the second
most important factor
7) People are willing to travel to eat in a restaurant. This is evident from the pie chart
below. More than 60% of the people are willing to travel over 5 KMs to eat in a place
of their choice.
Inferential Analysis
Average Spend
Based on the data received, Indian consumers typically do not want to spend more than 500
rupees per person during a restaurant visit.
Amount No of Persons
below 250 22
250-500 71
500-1000 51
above 1000 26
70
60
50
Frequency
40
30
20
10
0
below 250 250-500 500-1000 above 1000
Per Person Spend - in Rs
It is also observed there is not significant increase in spending when salary increased from
below 5 lacks to above 15 lacks. For calculation point of view we considered that average salary
of person below 5 lacks is 4 lacks and above 15 lacs is 20 lacs.
400
300 Total
200
100
0
4 7.5 12.5 20 (blank)
Irrespective of income, average person spends equally in range of 500-600 per person. Persons
whose salary is in range of above 15 lacks spends most i.e. above 600 per person
Salary Expenditure
(X) (Y) X2 Y2 XY
4 515.384 16 265621.3 2061.53
7.5 572.28 56.25 327507.4 4292.12
12.5 580.30 156.25 336751.6 7253.78
20 654.37 400 428206.6 13087.5
Sum 44 2322.345 1936 1358087 26694.95
Mean 11 580.586
Coefficient of regression (B) =
B 0.791424
A 571.8806
so equation be Y=571.9+0.79X
It has been observed that approx. 70% prefer for food quality while preference for others like
cost, Proximity, Hygiene and Service quality are in similar range of 10-30.
Criteria for selection of Restaurant
80
70
60
50
40
30
20
10
0
Cost Proximity Food Quality Hygiene / Service Quality
Ambience
The numbers of persons who are consuming alcohol are less but they are spending more than
non-alcoholic persons
Alcohol Average of Per meal (in Rs) Sum people per visit(in Rs)
No 542.2 407.5
Yes 726.67 172.5
Grand Total 591.029 580
1400
Average spend per person per visit
1200
1000
800
Female
600 Male
400
200
0
20-25 25-30 30-40 40-50 >50 All
700
600
500
Veg
400 Non Veg
300
200
100
-
> 50 20-25 25-30 30-40 40-50 All
700
600
500
Veg
400 Non Veg
300
200
100
0
Female Male All
Willingness to Travel for eating-out
The data of respondents is as per table appended below:
70
60
50
40
30
20
10
0
0-2 kms 2-5 kms 5-10 kms >10 kms
This shows that maximum no. of people who are willing to travel distance
between 5-10 kms for a meal in a restaurant i.e. total 61 respondents which is the
average norm also.
Its shows that the relation between average spending per meal and age has no correlation. This
can be explained as that the spending on restaurant outings does not increase when average
age of the consumer increases except in a few exceptional occasions.
The spending is more commensurate with the eating & drinking habits of the respondents & less
with the age bracket. It means that the people with lesser age group are willing to spend
relatively higher & people with higher age group does not always spend too high amount while
eating out and the same condition holds good vice versa also.
Average Spending Per Meal
1400
1200
1000
800
400
200
0
0 10 20 30 40 50 60
Income Analysis
Not
available 25
4 lacs 26
7.5 lacs 46
12.5 lacs 33
20 lacs 40
This data is illustrated in the chart below
No of respondant
Not avb
4 lacs
7.5 lacs
12.5 lacs
20 lacs
This illustrates that the maximum number of Lacs to 10.00 lacs (7.5 Lacs) i.e. total 46
respondents. Whereas the average income group of people fall in the range of 10- 15 lacs
(12.00 lacs).
This shows that the relation between income earning is not that as compared to the spending
per trip. Suppose a person who is earning 20 lakhs per annum is not spending too high as
compared to the person who are earning on lower brackets .This can be explained as that the
spending on restaurant outings does not increase when the income level rises except a few
exceptional cases and vice versa.
The spending is more commensurate with the eating & drinking habits of the respondents & less
with the income bracket. It means that the people with lesser income were willing to spend
relatively higher & people with higher income does not always spend too high amount while
eating out.
People are of the income group is that of people who earn between Rs 5.00
spending
20
20
20
20
20
20
20
Aveg Spend
UnMarried
Married
500 520 540 560 580 600 620 640 660 680
Multiple Linear Regression
We ran multiple linear regression with Average per person spent as the dependent variable with
6 different dependent variables. The results of the regression are shown below
Dependent Y Spent
Method Enter
R2-adjusted 0.1454
Regression Equation
(Constant) 467.7066
Analysis of Variance
F-ratio 4.453
As indicated by the coefficients of the regression, the biggest factor determining the average
amount spent are a) gender of the person paying the bill and b) whether alcohol is consumed
during the meal.
Conclusions
Restaurateur can use inference below as strategy to increase revenue.
The two major factors which determine the average spend of an Indian consumer are
gender and alcohol consumption. Average tends to be higher in females and alcohol
drinking groups.
Weekday foot falls are less however restaurant is open for full week, To improve
utilization factor
o Weekdays promotional schemes or specific cuisine should be marketed to bring
most customers on lean days(Monday, Tuesday being the most lean)
o On weekdays restaurant facility can take orders from customers not mentioned
here like corporate functions, celebration occasions like marriage, birthday
parties etc.
Most critical factor for selection of restaurant by customers are Food quality and
Hygiene/Ambience. Therefore these must be give highest priority by restaurant to focus
upon.
People who consume alcohol tend to spend more in restaurants and also tend to visit
restaurants more (3.83 visits vs 3.2 for non-drinkers). In this light, a restaurant owner will
do well to have a bar in the restaurant so that repeat visits and higher total bills are a
more frequent occurrence.
One interesting fact which has come up is people dont mind travelling far for good
quality food as per survey. This has further been supported by another question in the
survey that Proximity is the least concern of selection of restaurant by customers.
Revenue come more from females however volume comes from male customers.
Restaurant should try to increase volume of female customers by female customer
oriented discount schemes.
An interesting point is that irrespective of salary drawn, average spend is even, except
for higher salary where there is increase in spending.
Appendix
Questionnaire for collecting data:
Demography Options
Please specify your age group 20-25, 25-30, 30-40, 40-50. 50-60,60+
Sex M,F
Marital Status Yes No
How many children you have? Yes (1, 2, more than 2)/No
Are both, you and your spouse, working? Yes No
Please specify your income level
Closed Ended
When you go out to restaurants, do you eat non-vegetarian
food? Yes No
When you go out to restaurants, do you consume alcoholic
drinks? Yes/No
On an average, how many time ins a month do you go out
to eat in a restaurant? 1-2, 3-4, 5 and above
What is the average amount spent, per person, during your
restaurant visits? <500, 500-1000, 1000-2000, 2000+
When you go to a restaurant, what is the average number of
people in the group that you go out with? 1-2, 3-4, 5-8, 8+
Which day of the week do you prefer for visiting a
restaurant? MTWTFSS
For which meal of the day do you prefer going out to a
restaurant? Lunch/Dinner
Which cuisine do you prefer when you go out to a North Indian, South Indian, Chinese,
restaurant? Continental
Change/cook absent/party/no time to
Why do you visit a restaurant?
cook
Below 2 kms /2-5 kms /5-10 kms/ above
How far you are willingly to travel to visit a restaurant? 10 kms
According to you, what is the most important aspect while Service quality/Cost/Menu/Approach
picking a restaurant? (nearness)
References
1) http://ced.uaa.alaska.edu/publications/manuals/FINALRestaurantHandbook.pdf
2) http://www.ranw.com/starting-a-restaurant