University of Technology, Jamaica

School of Business Administration

Module: Marketing Research

Module Code: MKT 4014

Tutor: Miss Suzette Townsend

Literature Review

How does product and price influence consumer purchase at Island Grill, UTech?

Date Submitted: March 7, 2020

Group Members:

Sheville Williams 0806599

Twana Scott 1608087

Romaj Rowe 1405011

Brandon Hayden

Mickalia Becaroo 1400244

Overview of Island Grill, UTech Ja

Founder and CEO of Island Grill Thalia Lyn opened its 18th outlet at University of

Technology, Jamaica Papine campus on February 17th, 2014. Miss Lyn was approached by

the President of UTech, Ja Professor Errol Morrison to have Island Grill on campus in order

to give students variety in culinary choices. In April 2012, Island Grill's presence at UTech

consisted of a food truck which gave evidence of success that another food truck was

provided in September of the same year. This success prompted Island Grill to open a full

outlet on the campus bringing its total in the chain across the country to eighteen.

Background

Consumers not only prefer good food and beverages but also an enjoyable dining

environment. Consumers pay attention to price and the merchandise but are more detailed on

the atmosphere of one’s business. There are a large number of studies which focus on the

influences of store environment on consumer behaviour in the retail world, but only a few

studies explore the influences of the product and price on consumer behaviour and

satisfaction in the restaurant business. The price and product of a good or service helps with

the growth and profitability of a business and seek how a product may be developed. Certain

elements of the marketing mix mainly the price and product helps to sell a certain brand to

the world. It helps to do this by looking at four key concepts which includes branding, added

value, exchange of goods and services and lastly customers being satisfied, (Alvaranga,

2016). This research is important as it helps employers and owners of businesses to be in the

known about influences a business to grow in its competitive environment.

To understand how product and price affects an organization a research problem has to be

developed. The research question that is developed is “How does product and price influence

consumer purchase at Island Grill, UTech?”

Research Question and hypotheses

How does product and price influence consumer purchase at Island Grill, UTech?

Sub-Questions:

1. To what extent does price impact purchase at Island Grill, UTech?

2. In what way do product offerings influence consumer purchases at Island Grill,

UTech?

3. How does the quality of Island Grill’s products influence consumer purchase?

Hypotheses

1. There is a significant relationship between price and consumer purchase.

2. There is a significant relationship on how product offerings influence purchases.

3. There is a significant relationship between the quality of Island Grill’s products and

its influence on consumer purchase.

Purpose of Study

The purpose of this study is to recognise what influence price and product has on consumers’

purchase. This study aims to find out the relationship between Island Grill, UTech and UTech

students in regards to price and its products. It investigates the relationship between product

and price and the impact it has on consumer purchases.

This study will benefit Island Grill, UTech Ja as it will show the must haves that a restaurant

should have in order to satisfy the need and wants of its consumers. It will also help the

company to understand their target market and how to set prices and products to retain the

market for growth and profit of the business.

Assumptions

The assumptions made could be that there are set elements that may affect the daily

operations of a business and the end purchase that is made by a consumer. Product and price

are a part of the marketing mix which is important to the impact an organization will have on

customers and the environment at large.

Limitations and Delimitations

During our research, we will encounter both controllable and uncontrollable factors. We

intend to garner much of our responses from students attending the University of Technology

due to the fact that this is a controllable area for the study. However, this will be delimitation

to the research as the student’s population is not necessarily representative of the entire

UTech, Ja population.

The limitations are that it will take us a long time for us to collect our responses from our

respondent because they will take a while to complete the questionnaires. Secondly, the

sample size is too small, so therefore it will be difficult to identify significant relationships

among the variables. In addition, the scope and depth of our discussion will be limited

because we don’t have much experience conducting research in comparison to works of

experience scholars.
Definition of Key Terms

Place - “In the marketing mix, the process of moving products from the producer to the

intended user is called place. In other words, it is how your product is bought and

where it is bought”, (Martin, 2014).

Price – The amount of money charged for a product or service; the sum of the values that

customers exchange for the benefits of having or using the product or service is the

amount of money customers must pay to obtain the product.

Product - “Product as anything that can be offered to a market for attention, acquisition, use,

or consumption and that might satisfy a want or need” (Kotler and Armstrong,

2005).

Promotion – “Promotion compasses all the tools in the marketing mix whose major role is

persuasive communications”
Literature Review

To what extent does price impact purchase at Island Grill, UTech?

According to an article, “Fast food price hike - Customers paying more at KFC, Burger King,

Island Grill” written by Dionne Rose, from the gleaner, it stated that “Island Grill, too, said it

held out for a while but became almost punch drunk from absorbing price increases. "We had

a price increase from suppliers in November and we tried to hold out as far as possible

because we know that with the recession, disposable incomes have diminished," said

proprietor Thalia Lyn. Then the drought did them in. Lyn said for her 15 outlets nationwide,

on top of increased overhead costs from soaring utility rates, the recent drought forced them

to purchase water at exorbitant prices. "We had a big problem with water. We had to be

buying water for $8,000-$10,000. All those costs we tried to control, but we found that it

went out of sight," she said. But even now, Lyn is suggesting that Island Grill's bump-up in

menu prices has been kept below five per cent across the board, and has not given her chain a

push into profits. "It is not even a five per cent increase. Our margins are still nil," she told

Sunday Business. Island Grill has tacked a near seven per cent increase on to its popular

Yabba meal, a small bowl of which is now sold for $235, up from $220. Chicken sandwiches

have seen a 5.5 per cent price rise to $380, from $360. And as a sign of the tighter times, the

restaurant no longer offers a drink with its meal combo. Customers are now required to

exercise the "option" of paying an extra $55 for soda. Nevertheless, Lyn is declaring: "We are

not that bad. We only hand two price increases for the year." The biggest price hikes - up to

12.5 per cent - have been imposed by Burger King.” [ CITATION Dio10 \l 8201 ]

Another article written by, John Myers, “Fast-food restaurants feel inflation pinch:

Operators respond with 'value meals” states that the Jamaican restaurant scene for over three
decades, but mushroomed in the 1990s with the liberalisation of the island's economy.

However, some of the foreign-food franchises that took the trek to Jamaica have retreated in

the face of the market shake-out. However, fast-food restaurants still represent the largest

segment of the island's restaurant sector, accounting, according to estimates by the United

States Department of Agriculture, for 48 per cent of meals away from home.

But with rising utilities and commodity prices helping to drive inflation in Jamaica

last year to nearly 20 per cent, and prices projected to rise another 14 per cent in 2008,

consumers are increasingly opting to eat at home. Fast-food restaurants that rely heavily on

middle-to low-income clientele are feeling the pinch. Restaurant Associates of Jamaica,

owners of the local Burger King and Popeye's franchises, says that its sales have dropped

approximately five per cent. Marketing manager Diana Blake-Bennett attributes the

shrinkage to the erosion of people's disposable incomes. And she does not expect the outlook

to grow brighter in the immediate future. "I don't anticipate an improved position because we

all know that salaries haven't changed and we in the fast-food industry rely on disposable

income," said Blake-Bennett. The tight environment is forcing the restaurants to adapt and

innovate - which, according to Island Grill's Lyn, is in sync with the philosophy of her

company. "In the last month, we have seen a drop-off in sales," she said. "But with us

constantly innovating and trying to be as creative as possible to meet the customer's need, we

will manage to hold our own," she said. For instance, Lyn, whose stores serve Jamaican

foods, says menu shifts, mirroring traditional Sunday meals, have helped to shore up

weekend business. [ CITATION Joh08 \l 8201 ]

Consumer participation refers to what motivates a consumer to identify with a product

or service offerings, their consumption patterns and consumption behaviour. Consumers will

develop the urge to search for the available product category before selecting the brand

preferred and then purchasing the product they have an interest in. product involvement refers

to a consumer’s interest in purchasing a product and the commitment to a particular brand.

“Product is anything that can be offered to a market for attention, acquisition, use or

consumption and that might satisfy a want or need” (Kotler and Armstrong, 2005).

Stephen Mahar (2017) author of the article “Simultaneous use of customer, product

and inventory information in dynamic product promotion” stated that by vigorously adjusting

set of products presented to customers it helps with personalised product offerings and

promotions. At the same time, 58% of retail customers are highly in favour of receiving

product offerings and promotions whenever they provide recommendations at a company

they have done business with in recent times. The author considered a variety of optimisation

where the retailer chooses a selection of products to maximise profit subject to a capacity

constraint. The authors consider product assortments that maximise expected reward but

ignore inventory considerations, Mahar (2017). It also proved evident that assortment

planning was considered when consumers accept substitutes when a product that they desire

is not readily available, so an iterative optimisation was proposed for solving the problem of

assortment.

A study by Chein-Huang Ling and Ming Chen (2018) stated that a common

promotional tactic used by companies is to supplement a focal product by offering a free

product. In the research consumers were willing to pay for a supplementary product that had

higher attributes than the complimentary product. However with this literature there was little
research on how the relationship between the focal and supplementary products influences

consumer judgement. Promotional bundles with matching benefits specifically, those with

high attribute complementarity and benefit congruency would produce higher purchase

intention. When consumers increase environmental knowledge they will be more willing to

pay for pro-environmental products because they will understand how it is to the

environment. This is evident with customers of Island Grill knowing the materials they use to

prepare and serve products are environmentally friendly and they believe in recycling of

materials to preserve the environment in any way possible. A result from a study shows that

Chinese consumers pay more attention to the information of Corporate Social Responsibility

(CSR) and are willing to purchase environmental products if they knew that the company

takes responsibility for being an environmentally friendly company. (Yang Li, 2018). It has

been evident that for previous years Island Grill has been in line with the eco-friendly

recommendations for instance they provide healthy food and beverages for customers in

environmental friendly containers that are biodegradable and also recyclable.

Companies plan to introduce mixed offerings of vices and virtues, it states that vices

have more immediate benefits but more long-term costs, and virtues provides less utility in

the short run but more utility in the long run, (Wiley Periodicals, 2016). The research by

Wiley Periodical, 2016 observes consumers’ emotional response to perceptions of mixed

offerings versus pure vice offerings, and then link differences in emotional response to

overall perceptions and evaluations. In an article entitled “Product Offerings Testing through

Customer Satisfaction” written by Tina Vukasovic it referred to customer being satisfied is

imperative in a business to become successful. The paper measures customer satisfaction to

the product of a drugstore chain. This paper was limited to only the female population of

Croatian territory who bought product offerings at the drugstore. There should always be
room for improvement in wanting customers to purchase products for the company to stay

competitive in the market.

To conclude, in previous research pertaining bundled products, researchers mainly

focused on consumers’ perception of the price of central products after a promotion whereas

consumers’ perceived value of the supplementary products has been relatively ignored.

Bundled products not only boost short-term sales for focal products, but can also effectively

introduce a new product to the market. The articles should have stated how consumers judge

the value of the bundles when purchasing whether it’s the individual value of each

component or the bundle all together. The internal reference price is important for

consumers’ willingness to pay for products they may have an interest in.

How does the quality of Island Grill’s products influence consumer purchases?

In today’s world, there are many options available to customers and so for businesses

to compete in the market, the quality of their product offerings is crucial to their success.

Many may wonder if quality matters, if it is still important. It is, as quality products help to

maintain customer satisfaction and loyalty and reduce the risk and cost of replacing faulty

goods. Satisfaction has always been a cornerstone of what we understand to be total quality in

products and services, as perceived by the customer (Lowenstein, 2015). Total Quality

Management is exercised under the philosophy that the best way for a corporation to expand

sales and make a profit is to provide its customers with satisfaction through its products and

services. Quality products make an important contribution to long-term revenue and

profitability, due to the fact that studies have shown that customers will pay more for a

product or service that they think is made well or exceeds the standard. Your customers

expect you to deliver quality products (Quain, 2019). Therefore satisfying one's customers’
expectation of a product is very crucial else customers will start looking to the competitors

product offerings to satisfy them.

Correspondingly, research shows that consumers will prefer products that offer the

best quality, performance and features, therefore it is necessary for producers or organizations

to further improve their product quality, because the quality of the product plays an important

role to attract consumers to make a decision to purchase a product or service; hence why in

the research this research is said that the product quality is a factor that has positive influence

on purchasing decisions (Iswanto & Melinda, 2014). The quality of the product is really what

assists consumers in differentiating it from that of the competitor’s; Good product quality

must be able to drive the purchasing decisions of consumers. Without delay, there is a theory

called the Product Quality Theory. It states, product quality is the ability of a product to

perform its functions which include durability, reliability, accuracy, ease, operation and

improvement as well as other attributes. Therefore, to be regarded as a good quality product,

a product has to be able to properly perform its functions (Imaningsih, 2018). From the point

of marketing, quality must be measured from the buyer's perception about the quality of the

product in order for them to make a purchase decision. According to Philip Kotler (2009), the

definition of a purchase decision is a process of problem solving consisting of analyzing or

recognizing needs and wants, searching information, valuing sources of selection on

alternative purchases, purchasing decisions and behavior after purchase.

What helps in creating good quality products are perfecting the product attributes.

According to the business dictionary product attributes are characteristics of a raw material or

finished good which make it distinct from other products. Attributes include size, color,

functionality, components and features that affect the product's appeal or acceptance in the

market. Consumers’ value attributes because they are used as the basis for evaluating a

product in relation to the benefits consumers seek when purchasing such a product
(Akpoyomare et al, 2012). Consumers use product attributes as a basis through which

marketers differentiate and set its product (brand) apart from that of the competitors based

on a specific attribute or often several attributes or product benefits, hence why the attributes

are somewhat linked to the purchasing or consuming of products; The attributes of a product

therefore, influence consumer product choice.

Methodology

Research Method and Reason for Selection

To conduct this research, both primary and secondary data will be implemented. Quantitative

research design will be implemented in the research. The sampling method that was utilized

in this research is convenience sampling as we have decided to only include Island Grill

customers who are in our immediate surroundings which is specifically the University of

Technology Campus. Based on the nature of the research, a structured questionnaire was

deployed. Additionally, this will be a descriptive research as we seek to assess the effects that

the independent variable which is product and price has on the dependent variable consumer

purchase.

Quantitative research focuses on gathering numerical data and generalizing it across groups

of people or to explain a particular phenomenon” (Babbie, 2010). Based on the fact that the

population is large quantitative approach will allow the researcher to gather a larger amount

of information in a shorter period which is also easier to analyze. The researcher aims to use

questionnaire to collect data.

Population and Sample

campus students to collect the data. The population from which the sample was selected

consist of more than 1500 School of Business Administration students. The researcher

decided to utilize simple random sampling. When conducting a research, it is critical that the

sample selection is done in an unbiased manner to ensure that the data collected is accurate

and not skewed to reach a particular conclusion. According to Hayes (2019) simple random

sample is a subset of a statistical population in which each member of the subset has an equal

probability of being chosen. A simple random sample is meant to be an unbiased

representation of a group. The researcher will select one hundred persons out of the 1500

SOBA students to participate.

Sampling Technique

The sample consists of one hundred (100) School of Business Administration students. It

consists of a mixture of male and female.

Instrument Design

Our research required a quantitative method of data collection. The data collection instrument

that will be used for this research is a questionnaire and this instrument design was chosen

based on the nature of the research problem. Being that the sample size is large a

questionnaire would be best fit for distribution as it would ensure that we get a good amount

of answers in order to properly analyse the data received.

Data Collection Technique

An online survey method in the form of a questionnaire will be used to collect primary data

from the calculated sample size. This medium was selected as it offered more ease and

convenience for collecting data and questionnaire in itself offers a speedy response time. The
survey will be created with the aid of Google forms and the participants will be invited to

answer the questions. After the desired amount of questionnaires has been completed the

team will then proceed to doing the analysis of the findings in order to answer to proposed

research questions.

Data Analysis

The responses from the questionnaires done by Business students at Utech, Ja will be

analysed using Pearson Correlation, Description Analysis and Frequency Distribution.

Pearson Correlation is a technique for investigating the relationship between two quantitative,

continuous variables. Pearson's correlation coefficient (r) is a measure of the strength of the

association between the two variables. This method will be used to find the relationship

between the variables of the research, which are the product and price components against

consumer purchases.

Descriptive statistics provide simple summary of the sample and its measures. The analysis of

description includes mean and mode, where Mean is the average, or the sum of the values

divided by the number of values and Mode is the most frequently occurring score in a data

set. This will be used in the research to analyse the purchases made by students at Island

Grill, Ja based on how the product and price influences them. A frequency distribution for

example a graph or tabular will be used as example to display the number observations within

given intervals. The frequency distribution will help with representation of participants’

response in percentages.

Ethical Considerations:

Ethics are norms or standards of conduct that distinguish between right or wrong, they help to

determine acceptable and unacceptable behaviour Ethical Considerations (2015). In order for
the research process to run smoothly, the establishment of rules that will govern the process is

paramount. Some of those guidelines are:

● Items on the questionnaire will not be too lengthy neither will they be complex so as

to confuse the respondent as to what is being asked of them.

● The research design will be so that it is convenient to both the researcher team and the

participants.

● The research team will maintain confidentiality of all respondents.

● The research team will not intentionally cause any form of discomfort to participants.

● The research team will not engage in any inappropriate form of research.

● Conclusions and recommendation will be free from bias decisions.

Timeline

The estimated timeline for this research procedure is 7 weeks. The breakdown of

activities is as follows:

Activity Duration

Correction of proposal 1 Week

Pilot study 1 week

Data collection 2 weeks

Analysis of the Data 2 weeks

Preparation of Report 1 Week

Proof Reading of Report 2 days

Presentation of Report 1 day

Total duration of the project should last for thirteen (13) weeks.
Budget

Expenses Costs

Transportation to UTech, Ja Papine $2000

campus

Phone credit to call relevant personnel $1500

Printing and binding document $3200

Miscellaneous 4500

Total $11200
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