[pic] ECON235 Methodology of Research Proposal: The effect of new Fast food franchising on the consumption patterns In Ramallah City Handed to: Almutasem Abu Daqa Prepared by: Karma Abu-Ayyash Student Number: 1101469 Table of Contents Introduction3 Purpose of the study4 Research Questions4 Problem Statement5 The Relevance of the study6 Literature Review7 Theoretical Frame work, the research methodology 13 • Research Design15 • Hypothesis15 • The Population and the sample of the study 16 • Data Analysis16 • Data Sources and Collection method 17
Bibliography and Reference list 18 Introduction: In this decade franchising is becoming a vital factor that plays a crucial role in the growth of many popular brands around the world. During these past couple of years, fast food franchising was introduced to the city of Ramallah. The introduction of this new concept of franchising had a huge impact on the Palestinian society, whether in the consumers’ life style or in his/her consumption patterns of the different products offered in the market. This evident change in the consumer behavior in the society raised many questions.
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My proposed study will be addressing the consumer experience in the different franchises in Ramallah city, in terms of the buying behaviors/patterns and how those patterns are affected by the overall atmosphere of the franchise and its’ level of comfort, in addition to examining the possible relationships among and between the perceived value of the franchise in the minds of the customers and the augmented products offered to them, not to mention the franchises’ advertisements within the city of Ramallah and the effect it has on the consumers behavior and the perceived image already developed. Purpose of the study:
The main objectives of the research are: • To find out the impact of the new franchising on the consumption patterns in the city of Ramallah. Research questions: – How the introduction to franchising affects the consumer behaviour in ramallah city? – How does the overall atmosphere of the franchise and it’s’ level of comfort play a role in altering the buying patterns of the customers? – What are the possible relationships among and between the perceived value of the franchise and the augmented products? – How does the franchises’ advertisement affect the behaviour of the different customers within ramallah city
The Problem statement: What impact would new franchises have on the consumption patterns of the fast food sector in Ramallah city? Relevance of the study This study will cast a light on the new fast food franchising in Ramallah which is a rapidly growing food sector that plays a fundamental role in changing the consumption patterns and the buying behaviors of the customers. In addition, it will discuss a number of issues that correlate this new introduction of fast food franchising including the overall atmosphere of the franchise and the comfort level it offers with the behavior of the customers.
This particular issue will make it easier for the franchises owners to design their stores in a way that suits their prospects best and eventually yield the most profits. This study will also discuss and clarify the benefits as well as the challenges that franchising will gain and encounter when illustrating the relationship between the perceived value of the franchise in the minds of the prospects and the augmented products the franchise offers, in other words, it will help in understating the way to gain a competitive edge.
This study will be beneficial for all students and researchers who show interest in the consumer behavior in the Palestinian society and how it’s related to the new trends such as franchising. Moreover, organizations and businesses that seek to franchise in Ramallah in the future would find this study valuable when studying the market and their prospects. The results of this study will also help them in their future strategies in attracting customers and become more productive than their competitors.
Literature Review Literature Review I A research by (Gary J. Castrogiovanni & Robert T. Justis) studied the different franchising configurations and transitions in the USA. the study shows that basic franchising strategies are associated with certain products or services therefore; franchising ensures easier access to resources lowers costs and uses more autonomy. In order to further understand the franchise organizations, the study reviewed several prior researches on franchise organizations.
The study reviewed an exploratory study, done by Carney and Gedajlovic (1991) that analyzed 128 Quebec franchisors that revealed five franchisor configurations and compared it to another study done Castrogiovanni et al. (1995) that analyzed a sample of 717 US franchisors. In order to generate propositions about alternative franchising configurations, the study used Mintzberg’s (1979) typology of organizations. Moreover the study at hand studied the fragmented markets and found that they are highly perused, due to highly repetitive purchases on a frequent basis.
Moreover it compared the fragmented markets to professional or near-professional service companies, which can be reached through coordinating mechanisms and operative procedures. Literature Review II A research by (Denise Cumberland & Rod Githens) demonstrates the various barriers of tacit knowledge transferred in a franchise environment and offers a compendium of solutions that encourage franchisees and franchisors to leverage tacit knowledge as a resource for competitive advantage.
The study found that there are five barriers to tacit knowledge transfer that present a challenge to both vertical and horizontal information flow in a franchise environment. Moreover, the study suggested that when specific behaviors and Processes are adopted to encourage sharing tacit knowledge it would be possible to reduce tension and promote collaboration in the franchise relationship. The study reviewed several prior studies concerning this particular topic.
Furthermore, the study emphasizes the intangible asset of tacit knowledge in the franchise relationship and provides a collection of ideas for how to create conditions which diminish the barriers that impede tacit knowledge transfer. This study is broken into the following sections: a definition of tactic knowledge, a discussion on the importance of tacit knowledge in franchising, a review of five barriers to tacit knowledge sharing, and a range of macro and micro approaches that could help foster tacit knowledge sharing in a franchise relationship.
The study found that through many various methods, tacit knowledge can ensure a better flow of information, and a larger, highly developed communication network through the organizational culture, in addition to the traditional franchising methods and sources checking and how they are very vital in the process of tacit knowledge. Literature review III A research by (Avinandan Mukherjee), the articles studies how two independent retail outlets in a franchise chain would react to each other on he quality of services , and it initially discusses the interaction the franchise as an organizational form and its peculiar characteristics compared to the integrated firm on the one hand and market transactions. The study basis its methodology on the various prior studies it reviewed. Furthermore the study proposes a theoretical model of the “free-riding phenomenon” related to the quality of services in the franchise chain, and interactions on the quality of services between the independent outlets in different environments.
Moreover the study shows two negative aspects of the futuristic franchise management which are: Free riding and low-powered contract, however it emphasizes on putting an accurate equilibrium obtained from static analysis and based on market research. Literature review IV A research by (Sheng-Tsung Hou & Mu-Yen Hsu and Se-Hwa Wu) studies the Psychological ownership and franchise growth of a Taiwanese taxi franchise.
The primary purpose of this study is to verify the importance of psychological ownership in the organizational context of a franchise by testing predicted relationships concerning feelings of ownership towards branding, legal ownership of complementary assets, organizational commitment, and a willingness on the part of franchisees to diffuse a franchise brand to peers. The study’s evidence is presented from an empirical study on the largest taxi franchise fleet in Taiwan.
The study also outlines data concluded from two formal questionnaires/surveys that were conducted in May 2005 and September 2005, from which data were collected from 147 franchisees. Moreover the study found that the empirical results demonstrate that analyzing the psychological ownership of a franchise brand from two dimensions sees an increase in explained variance in organizational commitment and brand diffusion in the context of the franchise organization.
It also illustrates that both dimensions of psychological ownership are negatively affected by the ownership of the non-brand-specified complementary assets owned by a franchisee. Literature review V Research by (Eugene Y. Roh & Ji-Hwan Yoon) studies the Franchisor’s ongoing support and franchisee’s satisfaction in a case of ice cream franchising in Korea. The Purpose of the study is to investigate franchisees’ satisfaction based on franchisors’ pre-opening support, central purchasing, congeniality and ongoing business support.
The study outlined data gathered from a sample that was drawn from ice cream franchising operations in Seoul, South Korea, and its vicinity. Personal interviews were conducted, followed by a self-administered questionnaire. The study found that the franchisees learned about their business opportunities through friends and relatives, and that the major motive for franchisees to engage in franchising is the brand recognition by the consumer. The study implies and offers valuable insights for strategic management as to recruitment, selection, and ongoing support provided by franchisors.
Literature review VI A research by (Scott Weaven , Lorelle Frazer, and Jeff Gidding) studies the New perspectives on the causes of franchising conflict in Australia. The primary Purpose of the study is to extend the conflict literature in dyadic exchange relationships through investigating the causes of conflict from the franchisor and franchisee perspectives, taken into consideration that the Australian franchising sector regulation promotes system disclosure and provides for mandatory conflict mediation, and that there is some concern that inequities exist within the conflict management process.
The study puts great emphasis on the perceived imbalance of power in the franchisor-franchisee relationship, which often results in conflict between the two parties. The study undertook an exploratory research in order to identify the major causes of franchising conflict. Further more the study conducted Face-to-face interviews with 24 franchising experts, such as lawyers and mediators, to draw upon their considerable experience in the sector.
The study suggests that a lack of due diligence is associated with the formation of unrealistic expectations which increases the potential for future relational conflict. Since this research is exploratory, therefore the findings are tentative. The study’s preliminary conceptual models will be tested in a large quantitative survey of key franchising stakeholders in the near future. Theoretical. framework “Behavior is a mirror in which everyone displays his own image” Johann WolfGang Von Goethe.
There have been many research studies that investigated the consumer experience and how it affects the buying behaviors/ patterns. This research studies the consumer experience in the different franchises in the city of Ramallah, in terms of the buying behaviors/ patterns and how they are affected by the comfort level (the overall atmosphere of the franchise), and the perceived value of the franchise in accordance with the augmented products offered to the customers and the effect of the franchises’ advertisements on the consumers within the targeted city.
The dependent variable is the consumer behavior which is “the study of the process involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires” It depends on another variable which is the experience provided by the franchises (independent variable). Several factors play a role in determining the positive nature of the experience provided by the franchises, such as: the overall atmosphere of the franchise, the perceived value of the brand itself in the consumer’s minds, and the brands advertisements.
One variable moderates the relationship between the independent and the dependent variable, which is the business model of the franchise itself. The business model in general is a turn key of the franchise; it offers a simplified way of delivering the products and services. We look at the uniqueness and the customization of the service delivered (the delivery method) in the franchise, the more customized the service is the more positive the experience would be, the positive relationship is pretty clear between those two variables. [pic][pic]
The research design: A correlational design will be used for the research that will be conducted. Hypothesis testing: • The better the consumer experience in the franchises is, the greater the effect will be on the buying behaviors/ patterns. • There’s a positive relationship between the comfort level (the over all atmosphere of the franchise) and the perceived value of the franchise. • The more unique and customized the service delivered (the delivery method) in the franchise is, the more positive the experience would be. Population and sampling: The Population of Study: the population of the study consists of the Palestinian society in Ramallah area which is roughly 319,418 residents based on the Palestinian central bureau of statistics. • The Sample of the study: it will be a purposive or judgemental sample because the sample that will be selected is going to be based on the knowledge of a population and the purpose of the study. After conducting the questionnaires, they will be distributed to a randomly selected sample consisting of 150 customers from Ramallah City only and not the whole area. Probability Sampling will be used to scrutinize the change of the consumption patterns after the introduction of franchising in the city. Data analysis: The data gathered by the questionnaires conducted will be analyzed in order to obtain usable and useful information which will help in the study and in answering the research’s problem statement which is “What impact would new franchises have on the consumption patterns of the fast food sector in Ramallah city? “ and in testing the research hypotheses.
When analyzing and describing the data, identifying the relationships between the different variables will become easier and the type of the relationship will be apparent. Moreover, analyzing the data will help in forecasting the outcomes. Data Sources and data collection methods: Primary data – assembled through questionnaires- will be utilized to perform profound research in order to answer the problem statement (What impact would new franchises have on the consumption patterns of the fast food sector in Ramallah city? . Moreover, secondary collected by the literature review will be used to demonstrate the relationship between the different variables that play a strategic role in the research to be conducted. Bibliography and Reference list: – Gary J. Castrogiovanni, Robert T. Justis, (1998),”Franchising configurations and transitions”, Journal of Consumer Marketing, Vol. 15 Iss: 2 pp. 170 – 190 – Denise Cumberland, Rod Githens, (2012),”Tacit knowledge barriers in franchising: practical solutions”, Journal of Workplace Learning, Vol. 4 Iss: 1 pp. 48 – 58 – Avinandan Mukherjee, (2003),”Franchise management: a model of service-quality interactions”, International Journal of Quality & Reliability Management, Vol. 20 Iss: 3 pp. 325 – 344 – Sheng-Tsung Hou, Mu-Yen Hsu, Se-Hwa Wu, (2009),”Psychological ownership and franchise growth: An empirical study of a Taiwanese taxi franchise”, International Journal of Entrepreneurial Behaviour & Research, Vol. 15 Iss: 5 pp. 415 – 435 – Eugene Y.
Roh, Ji-Hwan Yoon, (2009),”Franchisor’s ongoing support and franchisee’s satisfaction: a case of ice cream franchising in Korea”, International Journal of Contemporary Hospitality Management, Vol. 21 Iss: 1 pp. 85 – 99 – Scott Weaven, Lorelle Frazer, Jeff Giddings, (2010),”New perspectives on the causes of franchising Conflict in Australia”, Asia Pacific Journal of Marketing and Logistics, Vol. 22 Iss: 2 pp. 135 – 155 – Michael R. Solomon, (2010) “Consumer Behavior”, Ninth Edition, page. 33.