Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2022 Vol: 21 Issue: 3

Factors Affecting Consumers Preferences during Covid-19 Pandemic: An Empirical Study with Evidence from Fast Food Industry in Karachi

Rehana Qurban Ali, ILMA University

Citation Information: Ali, R. Q. (2022). Factors affecting consumers preferences during covid-19 pandemic: An empirical study with evidence from fast food industry in karachi. Academy of Strategic Management Journal, 21(S3), 1-13.

Abstract

The Covid-19 pandemic, which began in late 2019, has slowed Pakistan's economy, and the government has asked citizens to comply with health rules as quickly as feasible. As a result, numerous fast-food restaurants, including national and international brands, witnessed revenues decline. Pakistan, without a doubt, is handling the Corona Virus better than many other developing countries. The primary aim of this study is to identify and evaluate the factors that impact customers' fast food choices in Karachi. In this study, the independent variables were food quality, service quality, price, perceived value, and brand image, whereas the dependent variable was consumer preference. In this study, descriptive and explanatory research designs were applied. The study used a sample size of 213 people. This is a quantitative study that collects data from fast food consumers in Karachi using an online questionnaire. To discover the link and effect between an independent variable and dependent variable, descriptive statistics, the data were evaluated using Pearson regression and correlation analysis. To process the data and determine the results of the data analysis, SPSS was adopted. During the epidemic of COVID-19, correlation analysis revealed strong connections between independent and dependent variables. According to the findings, consumer preference for fast food items is influenced by food quality, service quality, perceived value, and brand image. It suggests that while eating fast food, people are significantly more worried and aware of these concerns. Similarly, for the respondents in the survey, pricing had little or no impact on customer choice for fast food items.

Keywords

Consumer’s Preference, Food Quality, Service Quality, Price, Perceived Value, Brand Image, COVID-19.

Introduction

The present research's main goal is to discover the causes that affect the consumer perception and preferences on Fast Food brands during the COVID-19 pandemic and find out the changing behavior of the customer. When choosing fast food brands or going out for dining by focusing on significant factors like hygiene, quality of food, quality of services, food variety, food price, reliability, trust, online services, selection of global brands such as Hardees', KFC, Subway, Pizza Hut or local fast-food restaurants. The Coronavirus illness has become pandemic in 2019 and spread worldwide, which affected not only human health but also became the cause of the downfall of the economy of the world. This pandemic increases the ratio of unemployment as well, which becomes the most terrifying situation for the governments. The proposed study focuses on customers preferences of the industry of Fast Food in Karachi, Pakistan. According to (Dixon, 2020), the COVID-19 epidemic has impacted several industries are the consumption and beverage industry. Similarly, Haas et al. (2020) also reported that the casual-dining and fine-dining restaurants had faced a decline in their revenues by 85 percent, as mentioned in the McKinsey report. The consumer preferences about products have been changed during the epidemic of COVID-19 and also customer perception and preferences about fast-food products changed and consumers are more conscious about the new aspects which are due to precautions of this pandemic like isolation, quarantine, cleanness, and hygiene.

Becker (2009) said Crisis events have occurred in the restaurant line over and above natural disasters, for instance, so the food safety issues raised (Reynolds & Balinbin, 2003; Seo et al., 2014; Seo et al., 2018). This is a danger of death impression that may deter people from eating out during the epidemic. Perceptions of danger have an important role in influencing health-related activities (Ferrer & Klein, 2015). Therefore, Pakistani Consumers cannot afford such risk now as they have seen the horrible situation in many countries as well as in the neighboring country. The people of Karachi are so much fond of eating outside at a restaurant and therefore there is numerous local and international fast-food restaurant facilitating their services 24/7 but during the COVID-19 pandemic, particularly in the year 2020 all the restaurants were closed and social distance precautions were strictly practiced and not allowed to eating inside restaurant caused meaninglessness of some attractive aspects of global brands like ambiance, inside the restaurant's atmosphere, inner service of the fast-food restaurant, decoration. Music, and other different services but at the same time, other factors and variables have arisen and changed the fast-food consumer preferences.

Literature Review

Food Price

Price put an important effect on consumers' preferences because as the price of fast food decreased, restaurants were less eagerly existing. Analyzed occur in the year of 1997–1999 The National Longitudinal Survey of Youth (NLSY) (Liu et al., 2005). Other side lots of researches recognized that the reduction of fast food can do well towards increasing the number of customers. (French et al., 2001) so, falling prices on fast foods is a strategy of increasing customers which be supposed to be implemented (Choi, 2003). The most crucial elements that impact a client's decision to purchase food online are prices and promotional deals (Papaioannou et al., 2015). To explore the impact of each aspect on restaurant choices, such as brand names, pricing, taste, sanitation, amount of food, diversity, originality, dining location, customer feedback and comment, nourishment, and wellness (Azim et al., 2014; Kaynak et al., 1996; Papaioannou et al., 2015). This research takes into account special deals & discounts, as well as food packing and faster delivery.

The cost of fast food numbers was taken from the cost of living index report in 2009 by ACCRA. The reports grasped journal in sequence on prices transversely other 300 United States cities (Auld & Powell, 2009). Fast food restaurants have increased significantly every year there, so consumers spend less and choose extra reasonably priced options during financial downturns to earn not as much income (Bohlen et al., 2010). Most of the Fast food restaurants propose low-cost food options in comparison to other restaurants, so this is the need of current situation which we facing during this epidemic. COVID-19 and the connected countrywide lockdown have been the reason for an economic disaster (Ozili & Arun, 2020)

More than a few kinds of research gave the importance of the low price which mostly works as promotion of that particular restaurant and the attainment of that Fast Food while rising of Fast Food prices mostly dispirit of it (He et al., 2012). Thus age groups, the role of income, education, culture, and ethnicity are not accessible as the level of the likely fast-food price effects and it is losing its numerical implacable meaning (Auld & Powell, 2009). Here due to the COVID-19 many businesses faced declined, while most of the hotels and restaurants have already reopened business, they are operating at a significantly reduced capacity.

Food Quality

The quality of global branded fast-food restaurants is well-known. Customers trust that the global brands are carrying the best and higher quality of standards, they do research on their taste, and they use very good quality of ingredients, provide and focus on delivering healthier meals. Food quality always provides satisfaction because it is observed connected to fulfill the requirements inside Fast Food Restaurants (Johns & Howard, 1998; Kivela et al., 1999; Law et al., 2004). Numerous people were failed or did not succeed in giving a perfect definition of safety when it encouraged (Van Rijswijk & Frewer, 2008). Food Quality and safety are two main important rudiments for costumer in decision making (Grunert, 2005). Generally, the “words” Food quality and food safety are both worn in the same way (Röhr et al., 2005). Food quality may be characterized as a means of increasing consumer happiness. (Hanaysha, 2016)

Generally, consumer preferences are Fast food quality and food safety (Van Rijswijk & Frewer, 2008). The quality of the food is directly influenced by the amount of client happiness. The customer is also influenced by the seeming value because it is the ability to create a center of attention or stay away from customers (Fornell et al., 2020; Gilbert et al., 2004; Kara et al., 1995; Lee & Ulgado, 1997). Food quality may provide a high rank of customer satisfaction (Qin & Prybutok, 2009) food quality as well as food safety and the tracking ability because trackability is possibly placing a contact on consumer's preferences (Ireland, 2021). It is obvious that the factors that most influence food choice are culture, food quality, and safety (Askegaard & Madsen, 1995; Hoogland et al., 2005; Nayga, 1999; Overby et al., 2004). Moreover, these Prime factors which consumers look for at the same time are the freshness of food, taste of food, and quality (Chambers et al., 2007; Seyfang, 2006).

Service Quality

Customer satisfaction was shown to be positively influenced by factors such as atmospheric quality, responsiveness, Halal, interior design, assurance, cuisine, accuracy, outdoor environment, hygiene, menu, and pricing in a study of a hundred restaurants in Saudi Arabia. (Memon et al., 2019) Customer happiness is heavily influenced by price, quality, and service (Memon et al., 2019). When it comes to restaurant and service provider quality, it appears that the latter has a greater influence on customer satisfaction (Ganapathi & Abu-Shanab, 2020). According to a study conducted in Pakistan, Physical environment, food quality and flavor, staff contact, sanitation, and an ideal atmosphere for family gatherings all played a part in the decision (Azim et al., 2014) Food Service quality is effectuating to satisfy the faithful customers and awful service quality will generate displeasure level, and the chances are that customers will move on to a competitor (Gilbert et al., 2004)

Consumer feedback on food service quality is taken seriously by the service to develop the best strategy and develop stronger marketing techniques (Jain & Gupta, 2004). Restaurants are providing better food service quality has earned more and more satisfaction intentions from customers ( Gilbert et al., 2004). Customers prioritized service quality over cuisine and ambiance while choosing restaurants in Delhi for dine-in dining (Mohsin & Sahni, 2017). The outburst of coronavirus disease 2019 has traumatized the global world in an unequaled way. The U.S has declared in surplus 100,000 deaths and 1.8 Million cases registered in May 2020 (Dong et al., 2020). In response to this various countries executed strict measures to hold back this deadly disease infection. A stay safe at home is the main priority (Chicago, 2020).

Brand Image

The establishment of a favorable brand image aids customer satisfaction (Song et al., 2019). Brand image is a subjective aspect of marketing since it is an impression that is formed via consumer interpretation. The pleasure of casual dining establishments is influenced by their brand image (Espinosa et al., 2018). A company's customer satisfaction level can be determined by studying the company's brand features (Khan & Afsheen, 2012). We also included research such as Kucharska et al. (2018) that define brand value as the strategic consequence of a firm's marketing initiatives that may be used to measure the efficacy and efficiency of other organizational strategies. Anam & Faiz researched to determine the impact of brand loyalty on consumer satisfaction in Pakistan. In this study, it was discovered that consumer delight is influenced by brand loyalty (Anam & Faiz, 2016). Personal selling, direct marketing, and advertising all played a key part in building customer- based brand equity (Sadek et al., 2015). Younger customers are more open- minded and loyal to brands (Budac & Baltador, 2014). Social media has a significant influence on brand recognition, loyalty, and quality, with the greatest positive impact on brand loyalty and quality (Schivinski & Dabrowski, 2015). To understand the influence of each factor on the selection of restaurants online during COVID-19, past studies have incorporated relevant factors such as brand image and price (Kaynak et al., 1996; Mohsin & Sahni, 2017).

In contrast, brand competitiveness refers to a company's ability to beat competitors in a certain market (Muniz & O'guinn, 2001; Tong & Wang, 2011; Winzar et al., 2018). Marketing experts such as Winzar, Baumann, and the Chu have increasingly focused on the function of brand value (2018). Previous research, such as Ahmed & Latif (2019); Winzar et al. (2018), and Romaniuk et al. (2007), has looked at these components individually, but not in combination, to see how they affect brand competitiveness. Based on current academic literature, the authors claim that the ability of brand value to define brand distinction and encourage marketing and strategy. There are a few early contributions from tales that characterize brand competitiveness as a component of brand image driven by innovation and build on the perspective of brand equity (Foroudi et al., 2020). Meanwhile, during COVID-19, the minor Purchase intention variable has a significant influence on the decision to buy a local franchise (Hutabarat & Tua, 2021).

Perceived Value

Perceived value, according to McDougall & Levesque (2000), is a person's evaluation of what is received and what is supplied Because consumer food purchases reveal what they want, what they care about, and how frequently they can afford it, customers must have good evaluations of food product features (Kim et al., 2018), Customer happiness is heavily influenced by the customer's perceived value (Ryu et al., 2012). Customer pleasure in organic restaurants is influenced by perceived value (Konuk, 2019). Customers' perceptions of value in consuming healthy foods are influenced by restaurant quality (Jin et al., 2018, Ali et al., 2018). In addition, when it comes to the customer service quality experience and customer satisfaction, the restaurants' perceived value has been taken into account (Sahay & Sharma, 2010)

They also expect to save time by avoiding the time spent going to grocery stores and shopping for meals. Its significance in predicting future purchasing behavior, consumer topics, and perceived value has been intensively explored in a range of industries (Cronin et al., 2000). Customers believe that the overall image of fast-food restaurants influences their perception of value (Ryu et al., 2008). Consumer perception, on the other hand, suggests that providing high-quality service to customers and producing superior customer value can lead to customer pleasure, which will improve the firm's corporate image and, in turn, lead to customer loyalty (Hu et al., 2009).

Consumer Preference

COVID-19 created unpredicted changes in very little time in the way of taking food due to regrettably health issues generated, apart from a national level even internationally. Consumer preferences in the whole world have changed (Borsellino et al., 2020). Changes that occur in eating activities and buying activities are understandable (Haas et al., 2020) A lot of countries that faced the economic shock in a smaller amount than other countries felt, the revised in buying behavior was not as pronounced (Janssen et al., 2021). Despite the overall uncertainty, global research published by (Haas et al., 2020) demonstrates that the pandemic's impact is felt differently in different regions. Consumers in most countries direct their spending toward necessities such as food and home goods, rather than discretionary items such as travel and apparel (Haas et al., 2020). From an economic and social standpoint, the global spread of the SARS-CoV-2 virus marked the final period (2020-2021) and had a significant influence on both industrialized and emerging or developing countries. The medical crisis produced by Covid-19 prompted many changes in people's lives due to its quick evolution. The perceived level of risk and anxiety generated by the pandemic had significant effects on food consumption (Janssen et al., 2021).

On the other hand, quality and a desire to support essential local businesses are considered the primary drivers of customer decision-making (Haas et al., 2020). Moreover, COVID-19 has shown a significant decline in demand for food used in hospitality, necessitating significant modifications in food supply chains (OpenTable, 2020). Financial, economic, and technical limitations have all become important for determining the impact of the coronavirus pandemic on food consumer buying decisions (Borsellino et al., 2020).

Consumer preference is to get the best and better online services, food quality at an economical price during this deadly disease. On the other side, the pandemic is considered a psychological risk (Figure 1).

Figure 1: Conceptual Framework.

Independent Variables

1) Food Quality
2) Quality of Service
3) Food Price
4) Brand Image
5) Perceived Value

Dependent Variable

1. Consumer Preferences

Resesarch Methods

Research Design and Method

Using research methodology is to collect data, investigate the answers of hypothesis in more effective ways, and use a systematic way to get a better conclusion of this research. In this research paper, we use quantitative data instead of qualitative. The data is composed through the help of a questionnaire which is circulated online because of the breakout of COVID-19, among the consumer of Fast Food Brands, students, employees, and middle-class people in Karachi, and around 213 responses were received. Many responses are concerned in the research paper to systematically recognize the relation between dependent and independent variables.

Respondent of the Study

The Collection of data obtained from the common people for research is the best rising method. There are several fast food establishments in the area are in Karachi and several consumers are regular customers who mainly get meals online. Hence, collecting data through a questionnaire is incredibly cooperative. In this regard, we have decided to at least receive 200 responses for this questionnaire.

Research Instrument

The Questionnaire is considered a very low-cost resource that gathers a huge number of responses in a short time. It is also a very easy way to understand and read the given questions asked from the respondent that they give replies according to their experiences. Thus, for this intention, I prefer a questionnaire to collect maximum online responses from a large number of samples.

Data Collection

I pick out the primary data to see the sights of consumer preference on Fast Food brands during the deadly disease of COVID-19 in Karachi. A study questionnaire shaped for the purpose, wherein statements included on the dependent and the independent variables.

Results

Demographic Profile

The findings of the demographic profile of the respondents are shown in Table 1.

Table 1
Demographic Profile (n=213)
  Frequency Percent Valid Percent Cumulative Percent
Gender
  Female 43 20.2 20.2 20.2
Valid Male 170 79.8 79.8 100
  Total 213 100 100  
Age Group
  Below -25 35 16.4 16.4 100
  25-30 76 35.7 35.7 35.7
  31-40 64 30 30 65.7
  41-50 30 14.1 14.1 79.8
Valid Above 50 8 3.8 3.8 83.6
  Total 213 100 100  
Salary
  less than 20,000 15 7 7 100
  20,000- 40,000 77 36.2 36.2 36.2
  40,000- 60,000 49 23 23 59.2
  60,000 - 80,000 42 19.7 19.7 78.9
Valid Above 80,000 30 14.1 14.1 93
  Total 213 100 100  

The above table has been based on 213 respondents in which 170 (79.9%) respondents are male and 43 (20.2%) are female. There are 35 (16.4%) respondents from below 25 years, 76(35.7%). Respondents are from 25-30 years, 64 (30%) respondents from 31-40 years, 30(14.1%) respondents are 41-50 and 8(3.8%) above 50 years. There are 15 (7%) respondent which are earning less than 20,000. 77 (36.2%) respondents from 20,000-40,000; 49 (23%) respondents from 40,000-60,000; 42 (19.7%) from 60,000-80,000 and 30 (14.1%) are earning above 80,000 per month.

Descriptive Analysis

The findings of descriptive statistics for this study are shown in Table 2. Food Quality has a mean of 5.3067, a standard deviation of 1.16816, a minimum of 1.00, a maximum of 7.00, and 213 observations, as indicated in the table above. With 213 observations, Service Quality has a mean of 5.3333, a standard deviation of 1.22432, a minimum of 1.00, and a high of 7.00. With 213 observations, the Price has a mean of 5.0861, a minimum of 1.33, a standard deviation of 1.28790, and a high of 7.00. The average Perceived Value is 5.1925 a standard deviation of 1.25809 minimum value of 133, and a maximum value of 7.00 and 213 observations. The brand Image has a mean value of 5.3897 standard deviation of 1.23113 minimum value of 1.00, and maximum value of 7.00 and 213 observations. The Consumer Preference has a mean value of 5.0485 standard deviation of 1.51244, a minimum value of 1.00, and a maximum value of 7.00 and 246 observations.

Reliability Analysis

The findings of this research's reliability analysis are presented in Table 3.

The table above has been based on Nunnally & Bernstein's (1994) recommendation that all Cronbach's alpha values must be more than 0.70 to be accepted. The table has the lowest perceived value of 0.804, indicating that reliability analysis was completed.

Correlation Analysis

The findings of this research's Correlation analysis are shown in Table 4 below.

The following table is showing the multiple correlations by independent variables with the dependent variable. Almost all correlations are strongly significant. There is a strong correlation between service quality, food quality, price, brand image, perceived value and consumer preferences with correlation values are 0.633, 0.711, 0.645, 0.667, and 0.719 respectively with firm performance. The p-values are 0.000 which means that the result is significant.

Regression Result

Model summary

The results of the Model Summary of this study are shown in Table 5.

The correlation “R” in the following table is 0.788, indicating that the independent and dependent variables have a positive relationship. Here is the R Square and Adjusted R-Square coefficients of determination, which show that our examined independent variables explained 0.612 models and further models will be defined by unknown variables.

ANOVA

The findings of the ANOVA for this study are shown in Table 6.

The above mention table is showing the f statistic value of sigma 0.000 which describes that the model is high affinity.

The outcomes of the Coefficients of this research are shown in Table 7.

H1: Food Quality has a positive impact on Consumer preferences.


H2: Service Quality has a positive impact on Consumer preferences.


H3: Price has a negative impact on consumer preferences.


H4: Perceived Value has a positive impact on Consumer preferences. H5: Brand Image has a positive impact on Consumer preferences.

The above table result shows that beta value in food quality is positive .181 and significant level of food quality is 0.026 which displays a significant contact between food quality and consumer preference. Our hypothesis “H1: food quality has a positive impact on consumer preference” is accepted as the figures are positive and significant. The variable service quality also falls on the positive side and the value of beta is .375. The significant value is .000 showed the strong significant level, so our hypothesis “H2: Service Quality has a positive impact on Consumer preferences” is accepted. The value of beta in the price factor is positive .066 and the significant level is very high which shows the insignificant level that why our hypothesis “H3: Price has a negative impact on Consumer preference” is rejected. The beta value is perceived value is positive .284 and the significant level of perceived value is .000 which displays a significant contact between food quality and consumer preference. Our hypothesis “: Perceived Value has a positive impact on Consumer preferences” is accepted. . The factor brand image is reflected in positive side and value of beta is .210. The significant value is .048 showed the significant level, so our hypothesis “H5: Brand Image has a positive impact on Consumer preferences” is accepted.

Conclusion

This research aims to help researchers better understand the elements that influence customer satisfaction and preferences in the fast-food restaurant business in Karachi, Pakistan. Consumer preferences for food quality, price charging, and service quality, as well as perceived value and brand image, were discovered to be important determinants of consumer happiness. When consumers perceived that the food they are eating is of excellent quality, they are more likely to be satisfied. Customers will be more satisfied with high-quality meals if they believe the pricing is fair and reasonable. Furthermore, the brand image may influence consumer preferences, and during COVID-19, consumers had a variety of experiences based on perceived value.

Customers' perceptions and experiences of service quality are positive during COVID-19 because online services are entertaining during the lockdown. When compared to other criteria such as food quality, price, brand image, and perceived value, the service quality component has the highest positive impact on consumer preferences. Theoretically, when a customer perceives that a restaurant's service and surroundings are pleasant and appealing, they are more likely to use it, particularly online services, because outside eating is no longer feasible owing to Covid-
19. As a consequence of this research, the empirical findings validate this theoretical reasoning. There is a significant correlation between service quality and perceived value, according to the findings of this study. Finally, pricing has little bearing on customer preference since, particularly in the fast-food market; consumers are unconcerned with the price.

Recommendation

1. To match the requirements of customer preferences, the Covid-19 epidemic, which is expanding over the world and causing a decline in the economy, especially for fast food, requires a better product quality of food.
2. Since everyone has a varied view of pricing and service quality, fast food vendors must give a level of quality and price that is acceptable to the majority of the population to stimulate customer interest in local fast-food chains during the Covid-19 epidemic.
3. As the government has declared the 5th wave of the Coronavirus, it appears that it has become a part of our lives. As people are frightened to go outdoors, the online service should provide more efficiently.
4. Fast food restaurants must meet several standards, including learning sophisticated cleaning and hygiene techniques, sanitizing surfaces and establishing social distance, training their employees, and carefully enforcing new policies and SOPs related to the Covid-19 outbreak.
5. During the Covid-19 epidemic, fast food restaurants should provide a variety of deals that are realistic and inexpensive for people of all socioeconomic classes.

Limitation and Suggestion

Although this study adds to our understanding of the factors that impact food quality, service quality, price, perceived value, and brand image in the fast-food restaurant industry, it does have certain limitations. For starters, it's restricted to a single city (Karachi) and a segment of the restaurant industry (e.g. fast food restaurant). Second, the information was acquired using a practical sampling approach. The outcomes of this study will be subject to generalization constraints. Third, fast food restaurant patrons were regarded as a group; they were all treated the same. For the restaurant category, more study is required. Fourth, price awareness varies by demographic categories, such as male vs. female, married vs. single, elderly vs. young, and so on. Local, Chinese, and Continental restaurants are among the other options, which can be studied further with different factors. Finally, to adequately comprehend the link of variables across research components, a restaurant's brand and brand value should be included as contributing factors.

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Received: 02-Jan-2022, Manuscript No. ASMJ-22-10932; Editor assigned: 04-Jan-2022, PreQC No. ASMJ-22-10932(PQ); Reviewed: 07-Jan-2022, QC No. ASMJ-22-10932; Revised: 09-Jan-2022, Manuscript No. ASMJ-22-10932(R); Published: 16-Jan-2022

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