i

Sheffield Business School

BSc (Honours) Hospitality Business

Management

Title The impact of premium and repurchase behaviour in fast food restaurant - A case study of McDonalds Hong Kong

Name YU YAN YAN

Student No 91206526

Month Year April 2011

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Sheffield Hallam University

Sheffield Business School

Title The impact of premium and repurchase behaviour in fast food restaurant - A case study of McDonalds Hong Kong

FULL NAME YU YAN YAN

STUDENT No 91206526

Supervisor: MS DOROTHY TSUI

In partial fulfilment of the requirements for the degree of Bachelor of Science in Hospitality

Business Management.

Month Year April 2011

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Acknowledgements

I would like to take this opportunity to thanks my supervisor, Ms Dorothy Tsui, for her

professional guidance and assistance. It has been a real pleasure and excellent learning

opportunity to be able to work with Miss Tsui. During the research, Ms Tsui always

supports me and gives me encouragement.

Besides, I would like to say thanks to my parents for their spiritual support and

encouragement. Last but not the least; thanks all respondents are willing to finish the

questionnaire since it provided useful data to analyze the research.

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Executive Summary

The aim of this research is to identify the effect of premiums on repeat purchase behaviour

in McDonalds. McDonalds is the one of the large fast-food restaurant in the market. In

fact, free premiums have become very popular in the restaurant industry, particularly

among fast-food chains such as McDonalds, which use premium offers in their kids

meals to attract children. Nowadays, McDonalds not only offer a free premium with

happy meals, but also can add extra money to redeem the premium. Actually, McDonalds

has provided a series of premium from time to time on in special period. Such as Coca-

Cola FIFA glass. When McDonalds offer limited edition of premium, it bring a panic

buying at that time. Consumer may repeat purchase McDonalds more than more time to

save a series of premium. This study is to find out the impact of premium and repeat

purchase behaviour.

The research is through questionnaire to find out the result. The research focused on

several parts which to identify which type of premium is most popular and consumers are

willing to buy. It also investigate to the impact of premium for repeat purchase, and

analyze the potential of premium can become the drive factors to encourage consumer

repurchase. After discuss the details of premium strategy, it will verify functions in

McDonalds. Also, there are different of premium has used in the market, the organization

will base on its band to offer the premium to consumers.

About the methodology design, the first part will focus to verify respondents know the

premium and collect the information about how they know this action. It also investigate

whether the premium affect the repeat purchase or not. On the other hand, there were 54

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respondents took part in the questionnaire. The result is different with hypothesis at the

beginning. The age group of the respondents was 18-15. Almost seven out of ten

respondents said that they were not redeeming the premium in McDonalds before. But

most of them agree that premium can become a pull factor to encourage consumer repeat

purchase in McDonalds. According the result has founded, premiums crossover with other

brands and McDonalds character are the most popular premium type they want.

To conclude, McDonalds Hong Kong should identify clearly of its role which is the fast-

food restaurant. Since the premium has become more and more popular in the restaurant

industry, and McDonalds was well-development in offer premiums to attract consumers, it

can make premium as assistant tools to attract the consumers.

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Contents

Acknowledgements .................................................................................................................................... iii

Executive Summary ................................................................................................................................... iv

Contents ...................................................................................................................................................... vi

List of figures ........................................................................................................................................... viii

List of Tables .............................................................................................................................................. ix

Chapter 1 ..................................................................................................................................................... 1 Introduction ............................................................................................................................................ 1

1.1 Brief Background about McDonalds........1

1.2 Reasons of research....1

1.3 Aim and Objectives of research3

Chapter 2 ..................................................................................................................................................... 4 Instrumental Literature Review ........................................................................................................... 4

2.1 Sales Promotion4

2.2 Repeat Purchase...6

2.3 Definition of Premiums6

2.4 Types of Premiums..7

2.4.1 On-pack offers7

2.4.2 With-purchase premiums..8

2.4.3 Free mail-ins8

2.4.4 Self-liquidators.9

2.5 Goals of Premiums.10

2.6 Premium Strategy in McDonalds11

Chapter 3 ................................................................................................................................................... 13 Method of Investigation ....................................................................................................................... 13

3.1 Research Method13

3.2 Objective of research.14

3.3 Design of questionnaire14

3.4 Reliability and Validity of research.15

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3.5 Questionnaire collection procedures16

3.6 Benefits of questionnaire16

3.7 Limitations of questionnaire..16

Chapter 4 ................................................................................................................................................... 17 Findings and Analysis .......................................................................................................................... 17

4.1 Descriptive Data...17

4.2 Premium information identified in McDonalds by respondents19

4.3 The important of premium influence to purchase by consumers20

4.4 The different theme of premium in McDonalds Hong Kong21

4.5 Types of premium interested by consumers22

Chapter 5 ................................................................................................................................................... 24 Conclusions and Recommendations ................................................................................................... 24

5.1 Conclusions...24

5.2 Recommendations26

References .................................................................................................................................................. 27

Appendices ................................................................................................................................................ 30 Appendix 1 Questionnaire Sample...30

Appendix 2 Sample of premiums in McDonalds)34

viii

List of figures

Page

Figure 2.1 Consumer promotion scorecard 5

Figure 2.2 Consumer promotion techniques 5

ix

List of Tables

Page

Table 4.1 Summary of selected demographic data 18

Table 4.2 Channels to know premium strategy in McDonalds 20

Table 4.3 The important of premium may influence to purchase

McDonalds again

21

Table 4.4 Factors to push consumers draw attention on premium 22

Table 4.5 Types of premium interested by consumers 23

1

Chapter 1

Introduction

1.1 Brief Background about McDonalds

The first McDonalds established in Des Plaines, Illinois in 1955 which is a neighborhood

restaurant. From 1955 to today, there are more that 30,000 restaurants in more than 100

countries worldwide, McDonald's is the largest quick service restaurant organization in the

world. In Hong Kong, the first McDonalds established in 1975 and today there are over

200 McDonalds restaurant in Hong Kong.

1.2 Reasons of research

As we know that, there is high competition in fast food industry since there are lots of fast

food restaurant in the market. We can see it is difficult to tenable in the fast food market.

But McDonalds is a well-known fast food restaurant in Hong Kong. It is a successful

example which McDonalds can have competitive advantage in the market. In fact,

McDonalds know how to keep customers through different promotion channels and

provide some benefits to attract customers to repeat purchase from time to time. I believe

that most of you have heard about the some promotion from McDonalds before, such as

Coupons. But there have one of the promotion method which is premium strategy you may

not pay attention on it.

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About the premium strategy, it means that you can add extra money to redeem a premium

or give a free premium after have the happy meals. Actually, McDonalds provide a set of

premium or free toys from time to time which can attract people to purchase again. Most

important thing is a set of premium may become a push factor to drive customers purchase

in McDonalds more than one time to save a set of premium.

There was news about San Francisco mayor to veto curb on fast food toys on 12 November,

2011. The city would curb toy giveaways in unhealthy restaurant meals for children. Also,

it not allow McDonalds to use free toys as a tools to attract customers when there is

provide unhealthy meals. Although this law may not happen in Hong Kong McDonalds,

but we can see people who are drawn attention on provide premium to attract customers

purchase and customers may not care about the nutritional standard in Happy Meals in

McDonalds.

On the other hand, I have the question about that whether premium will affect customer

purchase behaviour in McDonalds again for redeem the premium but not for the food? Or

redeem the premium is become the first priority when purchase in McDonalds. I think it is

interesting people are looking to the premium more that food in a restaurant. Therefore, I

would like to find out the result about the impact of premium and repeat purchase

behaviour through this research.

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1.3 Aim and Objectives of research

The aim of this research is to identify the effect of premiums on repeat purchase of fast

food. There are three objectives of research. Firstly, it is to identify the current premium

offers and related strategies of McDonalds Hong Kong. Secondly, it is to study the effect

of those strategies on customer perception and behaviours. Thirdly, it is to make

recommendations to enhance those strategies in order to encourage repeat purchase.

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Chapter 2

Instrumental Literature Review

Literature Review provides a context for my research by critically discussing and

referencing work. Most important that is literature review is the first step which building

the basic framework and help me to develop details of the research. There will cover some

theories and key points in the following sections.

2.1 Sales Promotion

Sales promotion has plays an important role in the market. Successful sales promotion

techniques can attract consumers to purchase and help to increase the sales. Tellis (1998)

said that a sales promotion is a program that makes a firms offer more attractive to buyers

and requires buyer participation. Cummins & Mullin (2002) stated that Sales promotion

agencies and promotional suppliers are more frequently involved in this type of promotion

than in price promotions because selecting and sourcing the premium, organizing handling

and redemption and conveying the attractiveness of the merchandise is and industry in

itself. Because of this, premium promotions play a big role in the sales promotions that are

discussed in the marketing press. The relationship this can create with brand is one of the

longest-lasting effects of sales promotion. Sales promotion is the use of incentives to

generate a specific and short-term response in a household consumer, trade buyer, or

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business buyer. Free samples, coupons, premiums, sweepstakes and contests, rebates, and

price discount are some of the primary methods of sales promotion in the consumer market.

Sales promotion is designed to stimulate short-term purchasing in a target market and

enhance dealer effectiveness on promoting a firms brand. (Semenik, 2002)

Figure 2.1: Table Consumer promotion scorecard

The table shows the percentages of large and small firms that use various consumer

promotions.

Figure 2.2: Consumer promotion techniques

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2.2 Repeat Purchase

Consumer purchase of the same brand purchased on the previous purchase occasion, it also

called repurchase. (Marketing Dictionary, 2000) It means that consumer will purchase to

the same brand more that one time since the band has its pull factors which can attract

consumers purchase again.

2.3 Definition of Premiums

Premiums are rewards or gifts that a single firm gives consumers free or at a reduced

price. (Tellis, 1998) Whats more, Cummins & Mullin (2002) mentioned that premium

promotions are offers in which the benefit comes in the form of an item of merchandise.

Besides, premium promotions are the most frequently used value offer. They are

particularly good at giving the opportunity to enhance brand communication in a tangible

way. Arens & Bovee (1994) said that a premium is an item offered free or at a bargain

price to encourage the consumer to buy an advertised product. A recent survey shows that

premiums affect purchase behaviour the same way as rebates but tend to be more effective

at getting consumers to buy a product they didnt really need. Moreover, Tellis (1998)

mentioned a good premium is one that is inessential, infrequently purchased and has a low

turnover.

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2.4 Types of Premiums

There are several types of premiums, including 1) On-pack offers, 2) With-purchase

premiums, 3) Free mail-ins and 4) Self-liquidators. It is important to understand the

different characteristics of these mechanics.

2.4.1 On-pack offers

This is a form of premium promotion in which the premiums is physically attached to the

product. If it is in the product, as with breakfast cereals, it is sometimes called an in-pack

promotion. If the premium surrounds the product, replacing its normal packaging, as with

storage jar for coffee, it is sometimes called a container promotion. An example of a

straight on-pack is a magazine covermount- a premium taped or bound to the magazine

cover. (Cummins & Mullin, 2002)

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2.4.2 With-purchase premiums

These are promotions in which the premium is not physically attached to the product, but is

available at the point of purchase. They are sometimes called near-packs as a result of the

retailers habit of locating the premium near to the pack or product being promoted, and

sometimes gift with purchase (GWP). In the service and retail sectors, these promotions

all roll into one: when you buy the service, you collect the premium. Examples include a

free portable TV when you buy a car, a free carnation at the conclusion of a restaurant

meal. (Cummins & Mullin, 2002)

2.4.3 Free mail-ins

Free mail-ins are premium promotions in which the customer collects one or more proofs

of purchase and sends them in or the item on offer entirely free or at no cost beyond

postage. The benefit is delayed and not immediate. It is also subject to action on the part of

the consumer after purchasing the item. Unlike on-packs and with-purchase premiums, not

everyone who is encouraged by the promotion to buy will send in for the

premium.(Cummins & Mullin, 2002)

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2.4.4 Self-liquidators

A self-liquidators promotion (SLP) is one in which the customer pays for all (or almost all)

of the cost of the premium and its associated handling and postage. Such an offer cannot be

described as free. At the best, it can be described as a bargain when the cost is still

below what customers would pay in the shops. (Cummins & Mullin, 2002)

Besides, Belch (2009) said that self-liquidating premiums require the consumer to pay

some or all of the cost of the premium plus handling. The goal is not to make a profit on

the premium item but rather just to cover costs and offer a value to the customers.

Offer premiums is one of sales promotion technique, there is common to use free

premiums and self-liquidating premiums in fast-food industry. About the free premiums, E.

Belch & A. Belch (2004) mentioned free premiums are usually small gifts or merchandise

included in the product package or sent to consumers who mail in request along with a

proof of purchase. In/on-package free premiums include toys, balls. Surveys have shown

that in/on-package premiums are consumers favourite type of promotion.

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2.5 Goals of Premiums

Consumer promotion can become a pull strategy which can drive consumer purchase again.

On the other hand, there are some of the benefits when offer premiums.

Tellis(1998) defined that Effective premiums serve several goals. First, these small gifts

can earn the good will of consumers. Second, premium is to provide an incentive to buy

the product. Third, premiums is to stimulate repurchasing and possibly loyalty, by

requiring buyers to turn in several proofs of purchase, as in the mail-in premium or the

collectors set. Forth, premium is to remind consumers of the product being promote.

Rossiter & Percy (1987) mentioned about premiums therefore are a potentially powerful

consumer franchise building (CFB) technique, which can encourage repeat purchase.

As said by Lane & Russell (2001), premiums are designed to encourage customers to make

an immediate purchase. Premiums come in an infinite number of formats and are often

used in connection with other forms of advertising or promotion.

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2.6 Premium Strategy in McDonalds

E. Belch & A. Belch (2009) stated that free premiums have become very popular in the

restaurant industry, particularly among fast-food chains such as McDonalds and Burger

King, which use premium offers in their kids meals to attract children. Also, in the

summer of 1994, Burger King offered a premium with its Kids Meals. Each meal

contained one of seven plastic figurines modelled on the characters of the Disney film, The

Lion King. Actually, McDonalds and Burger King think that premium is a tool which can

attract consumer.

E. Belch & A, Belch also mentioned that McDonalds has become the worlds largest

toymaker on a unit basis, commissioning about 750 million toys per year for its Happy

Meals. Many of the premium offers used by the fast-food giants have cross-promotional

tie-ins with popular movies and can be very effective at generating incremental sales.

McDonalds gained a major competitive advantage in the movie tie-in premium wars in

1996 when it signed an agreement with Disney giving McDonalds exclusive rights to

promotional tie-ins with Disney movies for 10 years. McDonald can design the popular

Disney characters as its unique premiums. In fact, McDonalds is one of the successful

restaurant provide premiums with their food products. Nowadays, premiums are not just

offers in Happy Meal, but also offer with additional cost to redeem the premium when

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consumers purchase meal. Besides, McDonalds will offer a set of premium which is a

factor to push consumer purchase again for save a set of premiums.

Limited edition of Hello Kitty, Coca-Cola FIFA glass, toys of gingy, snoopy, have you

collected those items before at McDonalds? As mentioned before, you can get a free toy

when buy a happy meal or you can add extra money to get a toy. I am interested on

whether premium will affect customer repeat purchase behaviour or not. Also there is a

question about some customers main purpose in McDonalds which is to have food or

want to collect a set of premiums. Since McDonalds is the successful restaurant to

introduce premiums with their food product. Therefore, it is a good example to find out the

result about the impact of premiums and repeat purchase behaviour in McDonalds.

13

Chapter 3

Method of Investigation

After finished the literature review, a brief framework of research has built. The

information from literature view has provided which was useful for designed the primary

research. For the research, questionnaire has been selected as a tool to found out the result

about impact of premiums and repeat purchase behaviour in McDonalds. In the following

parts, there were the details of method of investigation.

3.1 Research Method

When doing a research, it was important to find out the most suitable research method for

conduct the study since there will have different outcomes from research methods. As we

know that, there were different types of research methods, such as questionnaire, focus

groups, individual interviews and analysis of statistical data. For this research,

questionnaire was the suitable research method in the study. It was because questionnaire

provided a different feedback from a large number from respondents in the same time.

Hague (1993) said that questionnaire design is one of the basic building blocks of markets

research. A questionnaire provides the interview with a form on which to record answers.

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3.2 Objective of research

It found out the result about the impact of premiums and repeat purchase behaviour in

McDonalds through questionnaire. Also, it also provided an outcome about how

premiums can affect the repeat purchase behaviour.

3.3 Design of questionnaire

A well structure questionnaire is very vital to collect a useful data to analyze. It should

think through the research question and objective before write questions. Oppenheim (1992)

stated that the drawing up of the research design takes place at the very beginning of the

research process. There are some things need to pay attention during design the

questionnaire. It should decide the aims of the study and, possibly, the theories to be

investigated and review the relevant literature. Besides, a good question should

accommodate all possible contingencies of response. It also needs to use specific and

sample language. Whats more, it has mutually exclusive response options, produces

variability in response. (Survey Research Laboratory, 2005)

Refer to part A in the questionnaire (See Appendix 1), question 1 and 2 asked respondents

whether purchased in McDonalds or not and the frequency of purchase. Question 3 to 8

asked respondents about the premiums. For example, how to know there have premiums in

15

McDonalds, have save premiums before, and is premium become a drive factor for repeat

purchase.

After that, question 9 found out the influence of premium for repeat purchase, respondents

can base on their intention to select the influence. Question 10 to 11 found out which types

of premium can attract consumers attention and drive repeat purchase.

For part B, there were some questions about the personal information which can as a part

of data analysis.

3.4 Reliability and Validity of research

Whenever a test or other measuring device is used as part of the data collection process,

the validity and reliability of that test is important. (The Virtual Psychology Classroom,

2002) Reliability has to do with the quality of measurement. A test is considered reliable if

we get the same result repeatedly. Validity refers to the degree in which our test or other

measuring device is truly measuring what we intended it to measure. (Knowledge base,

2006)

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3.5 Questionnaire collection procedures

The study was conducted over a period of two days in March, 2010. 54 respondents have

invited to do the questionnaire. It was happy that all respondents were finished the

questionnaire willingly. The questionnaire was through two channels to collect the result.

They were collected from the internet and asked people who purchased from McDonalds.

After received all the result, it was used Microsoft excel as a tool found out the result

analysis.

3.6 Benefits of questionnaire

Hague (1993) said that Questionnaire is to draw accurate information from the respondent

and provide a structure to the interview so that is flows smoothly and orderly. Besides,

questionnaire is to provide a standard format on which facts, comments and attitudes can

be recorded. In fact, questionnaire was a quick way to number of response as the analyze

data.

3.7 Limitations of questionnaire

As mentioned that before, validity and reliability were important in the research method.

Since there was only 54 questionnaires has been collected, that may not deeply to finding

the result. Although the questionnaires were limit, it should make good use of those

questionnaires to conduct the analysis.

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Chapter 4

Findings and Analysis

Miles & Huberman (1999) mentioned that good qualitative data are more likely to lead to

serendipitous findings and to new integrations. They help researchers to get beyond initial

conceptions and to generate or revise conceptual frameworks. Data collected in this study

were used to analyze the relationship between premium and repeat purchase in

McDonalds. Here were the findings and analysis in following sections.

4.1 Descriptive Data

An analysis of selected demographic data through frequencies and percentages is presented

in Table 4.1 Data are categorized by age, gender, educational level, occupation and

monthly income. Of the 54 respondents, 51 (94.4%) were 18-25 years old and 3 (5.6%)

were from 26-32. That include 32(59.3%) of total respondents were male and 22(40.7%) of

total respondents were female. About the education level, over than half respondents

(53.7%) were University or above level and 17(31.5%) of total respondents were

certificate/Diploma level. Also, 30(55.6%) of total respondents were student and 22

(40.7%) of total respondents were white collar. Most of respondents (72.2%) monthly

incomes were under $8000.

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Table 4.1: Summary of selected demographic data

Variables Total no. of respondents (54) Percentage (%)

Age

18-25 51 94.4%

26-32 3 5.6%

Gender

Male 32 59.3%

Female 22 40.7%

Education

Secondary School 8 14.8%

Certificate/Diploma 17 31.5%

University or above 29 53.7%

Occupation

Student 30 55.6%

White Collar 22 40.7%

Unemployed 2 3.7%

Monthly Income

$8000 or Below 39 72.2%

$8001-$10000 10 18.5%

$10001-$15000 3 5.5%

$15001-$20000 1 1.9%

$20001 or Above 1 1.9%

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4.2 Premium information identified in McDonalds by respondents

The respondents were asked to does they know it can redeem a premium after buy a meal

in McDonalds. The result showed that almost eight out of ten (75.9%) respondents said

they knew it can redeem a premium after buy a meal. There was 41 of total respondents

knew this action in McDonalds.

In fact, there was a long history provided premium with a meal in McDonalds.

McDonalds still provided different premium from time to time or in special period. Such

as Coca-Cola FIFA glass, toys with happy meal. E. Belch & A. Belch (2009) stated that

free premiums have become very popular in the restaurant industry, particularly among

fast-food chains such as McDonalds and Burger King, which use premium offers in their

kids meals to attract children. Also, McDonalds has become the worlds largest toymaker

on a unit basis, commissioning about 750 million toys per year for its Happy Meals.

McDonalds gained a major competitive advantage in the movie tie-in premium wars in

1996 when it signed an agreement with Disney giving McDonalds exclusive rights to

promotional tie-ins with Disney movies for 10 years.

On the other hand, respondents were asked to choose channels they know this action. Table

4.2 shows that the percentage distribution of promotion channels. Most of respondents

(36.3%) were through advertisement on television to know the premium action. Next

effective channel is the poster in store which is 22.1%. It seems television advertising is

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the most effective channel to consumers get the information. Television advertising is still

the best option Baack (2007). Television advertising remains one of the most powerful

mass communication media in existence (Blythe, 2006). Besides, poster in McDonalds

store is another effective channel since consumer may pay attention and have a look on

posters when they visit in McDonalds.

Table 4.2: Channels to know premium strategy in McDonalds

Channels Frequency Percentage (%)

Internet 8 10.4%

Newspaper 9 11.7%

From friends 11 14.3%

Popularize from Staff 4 5.2%

Advertisement on TV 28 36.3%

Poster in McDonalds Store 17 22.1%

*This question can select more that 1 choice, therefore the total number over than 54

respondents)

4.3 The important of premium influence to purchase by consumers

After evaluated the information about the importance of premium, it defined that the level

of influence about the premium of repeat purchase. There were 57 respondents in total, but

50% of respondents said that it was lease influenced of premium of repeat purchase in

McDonalds again. That was only one of the respondents said premium was the most

influenced of repeat purchase.

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Table 4.3: The important of premium may influence to purchase McDonalds again

Level of influenced Frequency Percentage (%)

Lease influenced 27 50%

Less influenced 10 18.5%

Neutral 11 20.4%

Quite influenced 5 9.3%

Most influenced 1 1.8%

*This question can select more that 1 choice, therefore the total number over than 54

respondents

4.4 The different theme of premium in McDonalds Hong Kong

Table 4.4 was revealed different factor of premium to push consumers draw attention in

McDonalds Hong Kong. It could be found that there were three elements scored at high

important compared with other factors. It was included design, feature and theme. Design

was the most important factor to affects audience repeat purchase in McDonalds Hong

Kong. It could be explained that younger like innovative products. They decided purchase

new product that appearance of product was better than other factors like color, size, price

and so on.

On the other hand, the factor of price was relatively less important. It could be seemed that

the respondents were less concerning the issue of price. The reason may be that the Hong

Kong economy staged a broad-based expansion in 2010, having successfully overcome the

22

severe challenges from the global recession of 2009 (Hong Kong Economy (2011). Thus,

they may concern quality of product rather than price of product.

Table 4.4: Factors to push consumers draw attention on premium

Reason Frequency Percentage (%)

Size 1 0.8%

Color 3 2.4%

Price 13 10.2%

Feature 26 20.5%

Design 29 22.8%

Cartoon 12 9.4%

Theme 26 20.5%

Limited Edition 17 13.4%

4.5 Types of premium interested by consumers

Table 4.5 has showed that types of premium interested by consumers. The most popular

type premium was crossover with brand which got the higher marks. As mentioned before,

the age of the respondents were 18-25 years old. This type of premium was feature and

there was very common that the brand cooperate together for designed some special

product. In fact, most product of the cross with other brands was attracted lots of consumer

attention, and it incurred a panic buying action. Thus, it was a trend about offer some

crossover bands product.

23

Table 4.5: Types of premium interested by consumers

Variables Mean (Average) Standard deviation

Happy Meal Toys 2.685 1.329

Crossover with brands 4.019 1.367

A set of McDonaldss Character 3.111 1.284

McDonalds Food Strap Miniature 2.778 1.040

McDonalds Hello Kitty n friends 2.389 1.497

24

Chapter 5

Conclusions and Recommendations

5.1 Conclusions

Since premiums have become very popular in the restaurant industry, particularly among

fast-food chains such as McDonalds and Burger King, which use premium offers in their

kids meals to attract children. Also, the premium strategy was well-development in

McDonalds, it not only offer free premium with kids meal, it also can add extra money

for the premium in the meals, and even you can use additional cost to buy the premium

without purchase. On the other hand, McDonalds usually offer a set of premium from time

to time, it may attract consumer who interested in those premium. It shows that premium

strategy has become more and more diversification. Therefore McDonalds is good to use

as the example to find out the result about premium and repeat purchase behaviour.

Retrace to the literature view, it has built a basic framework for the study. Before conduct

the study, it should find out lots of related information about the study. All information

was useful to develop in the following stages. Also, it is a need to have a clear definition

about premium. In fact, premiums are designed to encourage customers to make an

immediate purchase. There are different types of the premium, such as on-pack offer and

self-liquidators premium. Actually, premium is one of the consumer promotion techniques

which can call pull strategy to encourage repeat purchase in the same brand.

25

In term of the mythology, it played an important part in the research since the research is

base on the data to conduct the research. Since the study is about the consumer behaviour,

it is better to use questionnaire as the research method. It is because it can cover a large

number of opinions and provide a standard format from respondents. During the research,

it was happy to see that all respondents are willing to finish the questionnaire and provide

the opinions honestly. Since the data is for analyze the result it is vital to gain the cogency

data. There were total 54 respondents has participated the questionnaire in the research.

After collect all the questionnaire, the result was different with hypothesis at the beginning.

As we know that, premium was very attractive in kids meal in McDonalds. Offer

premium can drive children purchase again in McDonalds since to save a set of premium,

But most of respondents the age between 18-25, most of them were not interested in

premium. Especially for male, almost five out of ten respondents said that they nerve

purchase in McDonalds for getting a premium.

Over than seventy percentages of respondents said that they didnt repeat purchase in

McDonalds more than one time to save a set of premium. On the other hand, it was only

half of respondents said that premium can become a drive factor to repeat purchase in

McDonalds. It means that teenagers are less interest in premium. Most important thing is

there was seven out of ten (75%) respondents said that premium was lease influence

26

intention to purchase in McDonalds again. So we can see the impact of premium is not

powerful in this age of consumers.

To conclude, this study can find out that the impact of premium and repeat purchase

behaviour.

5.2 Recommendations

After finish this study, there are some recommendations for further research. There are

some limitations in this research, such as word limit, the amount of questionnaire has limit,

which may not deeply to conduct this study. In order to deeply understand the impact of

premium and repeat purchase behaviour, further research can set up fixed panels to

conduct the research which can make it more specific.

As mentioned that in previous part, some respondents who age between 18 and 25 were not interest

premium when purchase in McDonalds, it may loss the function of premium which is to encourage

consumers repeat purchase in the same brand. According the result has founded, most respondent

are interested in premium of crossover brand, it also popular to have product of crossover with

different brand in the market nowadays. It may help to find out which premiums can increase

consumers interest in further research.

27

References

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28

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30

Appendices

Appendices

Appendix 1

Questionnaire Sample

I am a final year student of Sheffield Hallam University with BSc (Hons) in Hospitality

Business Management. I am going to study The impact of premium and repurchase

behaviour in fast food restaurant. A case study of McDonalds Hong Kong. I would like

to collect the useful data from you to analysis my dissertation topic. Please take a few

minutes to answer the following questions in this survey. All your personal information

will remain confidential. Thank you very much for your participation.

Are you 18 or above?

Yes

No (If No, it end of the interview and thank you for your cooperation.)

)

Part A

1. Have you purchase in McDonalds? ? Yes Q2 No Exit

2. How often do you visit McDonalds in a week? ?

Less than once a week 2-3 times

4-5 times 6 times or above

31

3. Do you know it can pay for a premium after buy a meal in McDonalds? ?

Yes No

4. Which channel do you know this action? (You can choose 3 options in MAXIMUM) ? ( 3 )

Internet Newspaper From friends

Popularize from Staff Advertisement on TV

Poster in McDonalds Store Others

5. Have you purchase in McDonalds for getting the premium? ?

Yes No

6. How would you prefer redeeming the premium?? Purchase without extra cost (Happy meals) ()

Purchase with extra money

7. Have you repeat purchase in McDonalds to save a set of premium? ?

Yes No

8. Do you think premium will drive you purchase in McDonalds again? ?

Yes No

9. How important the premium may influence your intention to purchase McDonalds again? ?

Least influenced

Less influenced

Neutral

Quite influenced

Most influenced

32

10. What is/are the reason(s) make you draw attention on McDonalds premium? (You can choose 3 options in MAXIMUM)

? 3

Size Color

Price Feature

Design Cartoon

Theme Limited Edition

11. Which type of premium you are most interested in? (1- 5marks,5 means Higher Attractiveness, 1 means Lower Attractiveness)

? ( 5 1 , 5 1 )

Happy Meal Toys

Crossover with other brands , FIFA

A set of McDonalds Character

McDonald Food Strap Miniature

McDonalds Hello Kitty n friends

Part B

Personal Information

1. Age 18-25 26-32 33-39 40-47 48 or above

2. Gender Male Female

3. Education Lower than Primary School

Primary School

Secondary School

Certificate/Diploma

University or above

33

4. Occupation Student White Collar Blue Collar

Housewife Retired Unemployed

Others, please state , ____________________

5. Monthly Salary (HK Dollar) $ 8000 or Below

$8001-$10000

$10001-$15000

$15001-$20000

$20001 or Above

The End

Thank you very much for your time and cooperation!

All information will be used for academic purpose only.

!

.

34

Appendix 2 (Sample of premiums in McDonalds)