A Project Report on

COMPARITIVE ANALYSIS OF SERVICE OF PIZZA

HUT AND DOMINO’S PIZZA

POST GRADUADTE DIPLOMA IN

BUSINESS MANGEMENT

(Approved by AICTE, Govt. of India)

ACADEMIC SESSION

(2007 – 2009)

Submitted to: Submitted by:

Dr. Manish Agarwal Parinita Rastogi (096)

Priyanka Tiwari (110)

Reema Goyal (122)

Saumil Gupta (133)

Siddharth Agarwal (149)

Tanusha Agarwal ( )
 Acknowledgement

This report bears the imprint of many people and without their support it would not have
existed. First of all we would like to express our sincere indebtedness and profound
gratitude to our parents whose support in all manners had made us capable to complete
this project.
We acknowledge our deepest thanks to Prof. Timira Shukla and Dr. Manish
Agarwal for all their care and encouraging words and giving suggestion at different point
of times. At the outset we would like to put on record our sincere gratitude to all of our
friends for giving us valuable ideas throughout of our project.

Team members:
Parinita Rastogi
Priyanka Tiwari
Reema Goel
Saumil Gupta
Siddharth Agarwal
Tanusha Agarwal
Table of Content

Introduction 4
Domino’s 5
PIZZA HUT INDIA 10
DATA ANALYSIS 13
MODEL 13
Factor Analysis : 15
Conclusion 26
BIBLIOGRAPHY 27

LIST OF TABEL

TABEL1: Pizza hut Communalities 17

TABEL2: Rotated component Matrix 18
TABEL3: Component Transformation Matrix 19
TABEL4: Domino’s Communalities 19
TABEL5: Rotated component Matrix 20
TABEL6: Component Transformation Matrix 21
TABEL7: GAP Model Output 21
TABEL8: GAP Of Both Pizza joint 22
TABEL9: Interpretation pizza hut 23
TABEL10: : Interpretation Domino’s 24
RECIEW OF LITERATURE
This study is completely based on the servqual gap model. In this study we are trying to
know the GAP in services between the pizza hut and dominos in the NCR(INDIA). Its not
always possible that all customer are satisfied for every service encounter they have. We
have taken 29 points on the basis of which we are trying to get the gaps and the factors
are important for a customer for the service. There are number of studies that have been
conducted in the past from which our research also get a direction and clearing out the
queries. The gap between the expected and perceived service is called as zone of
tolerance if company is able to minimize the gap then the level of satisfaction of customer
increases more. For services it is said that “Do right first time and every time”.
Keywords: ServQual, Quality Assessment, Survey Validation, Gap Scores, factor
analysis and T-test.

INTRODUCTION

This research is based on service comparsion of pizza hut and domnios. Dilvering quality
service is of utmost important. This research is based to test the quality of service and
comparsion between two pizza joints, with seeking the factor with the GAP. With this
study, we wanted to demonstrate the easiness of use of SERVQUAL instrument in the
case of the HEI, showing that the questionnaires can easily be reproduced and adapted to
any services organization. Therefore the present model in order to be applied in this kind
of organization needs future and profound refinements.
LITERATURE REVIEW
A consumer’s perception of quality levels has long been a focus for marketing literature
research. For example, the consumer’s judgement concerning an entity’s overall level of
excellence or superiority has been used as a measurement of perceived quality . Objective
measures of quality, measured by elements such as the “conformance to requirements” or
“freedom from deficiencies” have been defined as the basis for quality assessment.
However, these objective measures are difficult to translate into methods for assessing
service (as opposed to product) quality. This difficulty led to the development of
ServQual, intended to assess user perceptions of quality in a service environment
From the methodological point of view:Respondents fatigue at having to rate all
service attributes twice.They also tend to rate most dimensions as being highly important,
since they are unable to distinguish between aspects that are very and extremely
important Respondents may interpret the expectation / importance questions in different
ways.

[Parasuraman, Zeithaml and Berry (1988) “SERVQUAL: A Multiple-Item

Scale for Measuring Consumer Perceptions of Service Quality.” Journal of Retailing
(64.1) 12-37]developed the original 22 item ServQual scale with questions intended to
assess five specific dimensions (tangibles, reliability, responsiveness, assurance, and
empathy). [Parasuraman et al. (1985)] identify the 10 core components of service
quality as reliability (consistent performance and dependability), responsiveness
(willingness/readiness to serve), competence (possessing knowledge and skills), access
(approachability and ease of contact), courtesy (politeness, consideration and friendliness
of staff), communication (updating and listening to customers), credibility (trustworthy
and reputable, with customer interests at heart), security (freedom from danger and risk),
customer knowledge (understanding needs and personalized attention), as well as
tangibles (facilities and physical features). The ServQual instrument utilizes a “gap (or
difference)[ Carman, James M. (1990) “Consumer Perceptions of Service Quality]:
score”] analysis methodology, wherein the user’s expectations for service quality are
assessed at the same time as the user’s perception of the actual system performance. The
difference between these two scores (performance minus expectation) is used as the basis
of analysis.
CONCERNS ABOUT SERVQUAL’S UNDERLYING DIMENSIONS IACIS 2002 463
Multiple Marketing-oriented researchers have identified factor stability as a
problem for the ServQual instrument’s assessment of service quality. At least two studies
have found evidence that ServQual represents a unidimensional model. [Charles W.
Lamb. (1991) “An Evaluation of the ServQual Scales in a Retailing Setting”,] A 1993
study concluded that the performance-only element of ServQual (referred to as ServPerf)
“performs about as well as ServQual itself”. The authors found that “Overall, the
nomological validity evidence somewhat favors the non-difference score measure to the
ServQual measure”.
CONCERNS ABOUT SERVQUAL’S UNDERLYING DIMENSIONS
One of the aims of this study involves the use of SERVQUAL instrument in order
to ascertain any actual or perceived gaps between customer expectations and perceptions
of the service offered. Another aim of this paper is to point out how management of
service improvement can become more logical and integrated with respect to the
prioritized service quality dimensions and their affections on increasing/decreasing
service quality gaps. In the following, after a brief review of the service quality concept,
the model of service quality gaps and the SERVQUAL methodology is demonstrated and
an example is presented to pinpoint the application of the SERVQUAL approach. Then,
after a discussion, major conclusions are derived.
The point (the number and dimensions of service quality vary depending on the
context and culture involved) is of particular concern when evaluating service quality in
developing countries. For example, [Imrie et al. (2002)] highlight interpersonal relations
as a dimension important to Taiwanese customers not adequately addressed by
SERVQUAL. [Sureshchandar et al. (2003)] emphasise the significance of technological
and human factors with bank customers in India. Other studies such as [Angur et al.
(1999) and Wang et al. (2003)] have also found the SERVQUAL dimensions to be
inadequate in that they do not fully describe the service criteria important to customers of
emerging markets
INTRODUCTION

The project undertaken is about the comparative analysis of service between the two
pizza giants PIZZA HUT and DOMINO’S which are very popular for their excellent
service and attractive schemes.

Customers always have some kind of expectations from the service provider but many
times there is a the difference between perceived and expected level of services . So in
order to study this gap between the perceived and expected GAP model is applied and the
main purpose is to reduce the gap and make the service more satisfactory and customer
oriented.

In this project we have studied the gap between the perceived and expected services
provided by the pizza giants and along with that the major factors which are responsible
are also studied with the help of factor analysis. So these are the two tools applied for
conducting the research.

The study provides us with the deep insight of the different services provided by pizza
giants and also about the perception of the customers about that.
Domino’s Story

The Domino's Pizza story is one of passion, determination, the ability to overcome
adversity and,
most importantly, a single-minded dream of becoming number one in the pizza home-
dining industry.

Four Decades Of Experience

The '60s

Domino's Pizza began with one store in Ypsilanti, Michigan on December 9, 1960. Its
owner, Thomas S. Monaghan, was a 23-year-old student at the University of Michigan
School of Architecture who was looking for a business venture to sponsor his studies.
With his brother James, he bought an existing pizza store called Dominick's Pizza. He
soon found himself absorbed in the pizza business and immediately began to make
improvements. Although a novice in terms of pizza making skills and knowledge of the
industry, Monaghan had the self-determination to get the job done and to do it better than
anyone else. What was needed was to consistently make great pizzas fast and safely
deliver them to the customer's door.

His partnership with his brother was dissolved in 1961, By 1965, Monaghan own three
stores and officially changed the company name to Domino's Pizza, Inc. A pioneer and
innovator in the pizza delivery industry, Monaghan continuously looked for better and
faster ways to handle the rush. He developed a fast pizza-making method and an efficient
order taking system. From the moment the phone rang to the time the pizza was delivered
to the customer's door, Monaghan stressed the need for hustle. "Never get behind" was
the operating motto.

Even though delivery drivers were instructed to abide by the traffic laws at all times, once
they got out of their delivery vehicles they were to run to the customer's house, ensuring a
piping hot pizza. Capitalising on the success he had found in his three stores servicing
college campuses, Monaghan adapted the same successful system at Michigan State
University in 1967. A massive pizza craving population of 20,000 students living on one
campus, offering one size of pizza with only six toppings to choose from and introducing
the company's 30 minute pledge soon made this store the company's biggest money
maker. This store is also notable because it solidified in Monaghan's mind the need to
expand. Monaghan sold his first franchise to Charles Gray on April 1, 1967, after
personally training Gray for the job himself.

The company suffered its first serious setback when on February 8, 1968 the company's
central office and commissary were destroyed by fire. The company was inadequately
insured and Monaghan was only able to recoup $13,600 in losses. Nevertheless,
Monaghan's belief in his dream drove him to push the company forward once again. By
the end of 1969, Domino's Pizza, Inc., consisted of 42 stores reporting an estimated $8.1
million in total sales.

The '70s

Despite its high turnover, Domino's was $1.5 million in debt. By 1970, its creditors took
action and 200 lawsuits were filed against it. Monaghan lost control of the company to
the banks, only to have it returned to him 10 months later in worse condition than when
they had taken it over. Monaghan and his wife managed to salvage what was left of the
company and once again took off in pursuit of their dreams.

Monaghan focussed on rebuilding the trust of his creditors and the company's reputation
and spent much of his time visiting his stores, talking with store managers and team
members, and observing them in action. He continued to emphasise the Domino's system
of simplicity and speed. Passing on his enthusiasm for the nature of the business and
creating a friendly, competitive environment, Monaghan also implemented the "Manager
of the Year" award, a national honour presented to the company's best store crew chief.

Knowing what made Domino's different, primarily its unparalleled successful system of
promoting from within, pizza makers, delivery drivers and order takers all knew they had
the opportunity to advance through the ranks to become a store manager or even a
franchisee. This not only encouraged a spirit of entrepreneurship, but also ensured a
dedicated, industrious workforce. Ten years later Monaghan's vision of promoting from
within to build the best company with the best people paid off as 92% of Domino's Pizza
franchisees had started their careers in the company at entry level jobs.

Maintaining his persistence on making training a top priority, a week-long new employee
orientation program was developed as Monaghan toured the country visiting stores. After
a decade and a half of sixteen hour shifts and endless obstacles to overcome, Monaghan
and Domino's Pizza were finally running smoothly. By the end of 1974, there were nearly
100 stores amassing $20.4 million in sales. Late in 1974, Monaghan received a letter
from Amstar Corporation which had been using the trademark "Domino" since 1900. It
demanded that he change his company's name. With nearly 100 stores nationwide and
growing public recognition and acceptance, Domino's Pizza was being told to return to
the starting gate.

On September 30, 1975, Amstar filed suit against Domino's Pizza for trademark
infringement. Domino's lost the case and was forced to operate all new store openings
under the name Pizza Dispatch. But 1980 brought a positive conclusion to the lawsuit,
with the company being permitted once again to operate under its long-established
identity of Domino's Pizza. The company ended that year with 398 stores recording $98
million in sales.
Franchising also continued to grow. In fact, by this time, most of the company's growth
came from its strong franchise base, and the majority of the franchisees were from the
internal ranks. Opportunity kept the Domino's Pizza team motivated and highly
productive. There was something big waiting for everybody who was willing to work for
it. Monaghan often referred to his franchisees as the very heart of the company and time
and time again they have proven this to be true. With their energy, dedication and
financial investment, they would help bring Domino's Pizza to a level of success beyond
what Monaghan had ever imagined possible.

The '80s

In 1983 the company celebrated the opening of its first international store in Winnipeg,
Canada. Domino's Pizza International, which Monaghan called the company's "hope for
the future," became in part responsible for much of the company's later movement and
growth. 1983 also saw the opening of the company's 1000th store in Colorado Springs,
Colorado. After a quarter of a century of honing its pizza making and delivery systems,
Domino's Pizza knew the pizza delivery business. In 1985 tens of thousands of customers
around the world showed their confidence in the company by ordering 135 million pizzas
during that year, an astonishing 69% increase over the previous year's sales. By 1989
Domino's had opened its 5000th store.

The 90s

By 1992 the international division had opened its 500th store outside the United States.
The domestic market continued to grow with the introduction of innovative variations to
the original pizza recipe as well as creative up-sell items. 1993 was shaping up as another
major year for Domino's until December brought one more crisis: a $79 million
judgement against the company in a lawsuit alleging the 30 minute guarantee was at fault
in a St Louis traffic accident. After days of soul-searching, Monaghan decided to
withdraw the guarantee permanently, a move that made headlines worldwide - such was
Domino's reknown. Not only is Monaghan credited with pioneering the multi-billion
dollar pizza delivery industry, but also with numerous inventions. He is responsible for
the corrugated pizza box, conveyor ovens, doug mixers, insulated bags to transport pizzas
in, the pizza screen, doug trays and, most important to the success of his own business, a
unique franchising system enabling managers and supervisors to become independent
business owners.

In 1999 Monaghan, a deeply spiritual man, decided it was time to give back to the
community much of the wealth he had accumulated as a result of his 39 years at the helm
of this great company. So he sold Domino's Pizza to Bain Capital, an organisation with a
proven track record of identifying companies with significant growth potential, and
steering them to achieve that potential.
The Future

Many changes have been made since Domino's was sold to Bain Capital, and a new spirit
of excitement has paved the way for the future. Despite encountering setbacks and
obstacles along the way, the story of Tom Monaghan's 39 years at the helm of Domino's
Pizza is one of never giving up on your dreams. What began as one man's vision evolved
into a thriving worldwide industry.

Domino’s Pizza India Limited

Domino's Pizza India Limited (DPIL) is the master franchisee for India, Srilanka,
Bangladesh and Nepal from Domino’s Pizza International Inc., USA. The company had
been promoted by Mr. Shyam S. Bhartia and Mr. Hari S.Bhartia of the Jubilant
Organosys Group (Formally Vam Organic Group).

The Company was Incorporated in March 1995. The First Domino's Pizza store in India
was opened in January 1996, at New Delhi and today after nine years Domino's Pizza
India has grown into a countrywide network of over 100 outlets in 27 cities, which
includes:-

North - Delhi, Gurgaon, Chandigarh, Ludhiana, Amritsar, Jallandhar, Dehradun, Shimla,

Agra, Kanpur, Lucknow, Noida, Faridabad, Mussoorie

South - Chennai, Bangalore, Hyderabad, Coimbotore, Mangalore, Cochin, Secundrabad,

Manipal,

East - Kolkatta

West - Mumbai, Pune, Ahmedabad, Goa

Domino’s intends to penetrate completely within these markets by opening up 20-25

outlets per year in these cities. Domino’s has a young and enthusiastic team of over 2,100
employees. Today, Domino’s has emerged as the leader in the fast food segment with
about 65% of market share of pizza delivery in India and have outlets more than any
other corporation in the business of food, not just the pizza business. All the Company
outlets are corporate outlets invested by the company and also managed by the company.

Over a period since 1996, Domino's Pizza India has established a reputation for being a
home delivery specialist capable of delivering its pizzas within 30 minutes to its
community of loyal customers from its entire stores around the country. Customers can
order their pizzas by calling the single countrywide "Hunger Helpline" - 1600-111-123
and Domino’s was the first one to start this facility for its customers.
Domino’s vision is “Exceptional people on a mission, to be the best pizza delivery
company in the world!”. Domino’s is committed to bringing fun and excitement to the
lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or
less, and all our strategies work for fulfilling this commitment towards our large and
ever-growing customer base.

Domino's constantly strives to develop the product that suits the taste of its customers to
bring out the 'WOW' effect (i.e. the feel good factor). Domino’s believes in the strategy of
“Think local and act regional” that is blended with a playful image personified by our
"Hungry Kya?" positioning. Thus, time and again Domino’s has been innovating
toppings, suitable to the tastebuds of the locals and these have been very well accepted by
the Indian market, are doing extensively well in the market. We are constantly in the
process of innovating further, we introduce new topping every 3 –4 months

Domino’s understands customers demand and is constantly developing local flavours

understanding the local sentiments. Also, the ingredients, sauces etc. are made keeping in
mind the tastebuds of Indian consumers while retaining the international flavour.

Domino’s constantly strive to make the company an integral part of the lives of the target
audiences by getting involved with the clientele at the emotional level and building long-
term relationship with them. Thus, Domino’s concentrate more on carrying out below-
the-line activities in the area it serves.

Domino’s believe in bringing fun and excitement into the lives of our clientele. We take
our delivery proposition very seriously and our entire corporate ethic is based on it.
Domino's is the recognized world leader in Pizza delivery. But it isn't just about
delivering, it's also about giving back to the community. Domino’s believes that an
essential component of corporate responsibility is to provide support to charitable
organizations that benefit the communities where its employees and customers work and
live. Domino’s worldwide is known for its commitment toward social causes and believes
in adding fun to the lives of our customers and communities it serves.

In India, Domino’s has been associated with the NGO’s devoted to the cause of
underprivileged
children’s. Domino’s conducts Store Educational Tour (SET) for the underprivileged
children time-to-time. Recently this was done in the one of the Domino’s outlet in Delhi
and Mumbai with the underprivileged children from CRY (Child Relief and You) where
Domino’s took the pledge to provide part-time employment to the eligible wards from
CRY who are above 18 years, reiterating its commitment towards social causes. Also,
fifty- percent of that days first 20 deliveries of the store were given to CRY toward the
cause of the underprivileged children. The children had a gala time while they learned to
make and bake pizzas at the store and finally tasted the sumptuous offerings made by
them during the Store Educational Tour.
Domino’s Pizza India also boasts about its commitment to serve its customers on time by
implementing the “30 MINUTES OR FREE” service commitment, They have been able
to achieve this as a result of continuous efforts and dedication of the entire team in
improving operating efficiencies.

Domino’s Pizza India has been consistently rated amongst the top 2 pizza chains
worldwide in the Domino’s family by Domino’s International, in terms of quality of
operations . Our pizza delivery times have also been judged as the best delivery times in
the world across all Domino’s .

PIZZA HUT INDIA

Background

Pizza Hut entered India in 1996, and opened its first restaurant in Bangalore. Since then it
has captured a dominant and significant share of the pizza market and has maintained an
impressive growth rate of over 40 per cent per annum. Pizza Hut now has 95 outlets
across 24 cities in India; and employed nearly 4,000 people by end of 2004. Yum! has
invested about US$ 25 million in India so far; this is over and above investments made by
franchisees.

Yum! Brands Inc is the owner of the Pizza Hut chain worldwide. A Fortune 300 company,
Yum! Brands owns Kentucky Fried Chicken, Pizza Hut, Taco Bell, A&W and Long John
Silver’s restaurants worldwide. Yum! generated more than US$ 25.9 billion in worldwide
sales in the year 2003, and has more than 33,000 restaurants in over 100 countries.

A major player in the Indian fast food and beverage sector

Market share

Pizza Hut is believed to have close to 50 per cent market share of the organised pizza-
retailing segment in India.
Financial performance

According to an article in Financial Express, the market size of the pizza segment is
around US$ 87 million and currently growing at the rate of 15 per cent to 17 per cent per
annum. According to Pizza Hut sources, most of their outlets are financially successful,
encouraging further expansion. In India, the average investment for each outlet is US$
275,000-335,000 and is borne by the franchisee.

Factors for Success

Offering value food

Employing economies of scale, Pizza Hut has made its offerings more affordable. Its
delivery offer of US$ 4.4 for four personal pan pizzas has been very successful, helping it
grow the business by 25 per cent. They have recently introduced a range of vegetarian
personal pan pizzas for US$ 1.1. Most Pizza Hut restaurants are located in the metros and
smaller metros. In taking long strides across the country, Pizza Hut is consolidating its
position by opening more restaurants in the metros where it already has a presence as
well as opening outlets in new markets.

Moving beyond metros

According to company sources, Pizza Hut is moving beyond the metros and foraying into
12 to 13 new markets including Trichy, Nagpur, Bhubhaneswar, Thiruvananthapuram and
Pondicherry to increase penetration.

Aggressive marketing and tie-ups with local and popular brands

Pizza Hut has increased its visibility by launching a well-received TV campaign aimed at
the young crowd. It has formed partnerships with recognised brands such as Nestle and
Pepsi. It also holds regular promotional campaigns targeted at children and uses these
alliances to offer packages during these campaigns.

Developing the local supply chain

The local supply chain for Pizza Hut was developed by Yum! and currently 95 per cent of
the ingredients they use are locally produced. They now import very few specialty items
like pepperoni.
Leveraging the India Advantage : International brand with an Indian
heart

Pizza Hut is one of the first international pizza chains with purely vegetarian dine-ins at
Chowpatty (Mumbai), Ahmedabad and Surat, which also serve Jain menus. Pizza Hut has
even opened two all-vegetarian restaurants in the western state of Gujarat to cater to the
Jain religious community, whose members prefer not to eat at places where meat is
served.

Offering more than the international menu

International food chains typically offer only a few localised products in other parts of the
world. However, Pizza Hut’s local menu is as large as the international one. According to
Pizza Hut, the Indian food heritage is very rich, and hence Indians like local flavours. The
Tandoori range of pizzas, which was developed locally, has a menu mix of over 20 per
cent.

Indigenous sourcing of raw materials

Pizza Hut has reduced costs through indigenous sourcing of raw material. It has tied up
with a local company Dynamix Dairy Industries Ltd (DDIL) for sourcing mozzarella
cheese. The landed cost of imported mozzarella comes to US$ 3.3 - 3.5 per kilogram. The
domestic price, however, works out to US$ 2.99 - 3.1 per kilogram. Pizza Hut is adding
to the bottom line by localising equipment as well as by paying attention to inventory
replenishment, which has been reduced from 60 to 30 days.

Future plans

According to Yum! Restaurants International, India is amongst the top five growth
markets for Pizza Hut. Pizza Hut is also experiencing double-digit growth in India and
hence is confident about expanding its operations in India.

Pizza Hut hopes to increase the number of Pizza Hut outlets in India to 180 by the end of
2008 from the present figure of 130. The expansion programme will make Pizza Hut the
fastest growing western restaurant chain in India. In addition, Yum! plans Pizza Hut to be
in 42 cities by end of 2007, and 55 cities by end of 2008.
DATA ANALYSIS
Type Of Data : Primary data has been used through method of questionnaire
Sampling Method: Convenience sampling
Sample size : 120 respondants
Sampling Frame : Outlets located in Delhi/NCR of Pizza Hut and Domino’s
Tools Used : Factor analysis followed by service GAP Model

Model of Service Quality Gaps

There are seven major gaps in the service quality concept, which are shown in Figure 1.

Gap1: Customers’ expectations versus management perceptions: as a result of the

lack of a marketing research orientation, inadequate upward communication and too
many layers of management.

Gap2: Management perceptions versus service specifications: as a result of

inadequate commitment to service quality, a perception of unfeasibility, inadequate task
standardisation and an absence of goal setting.

Gap3: Service specifications versus service delivery: as a result of role ambiguity and
conflict,
poor employee-job fit and poor technology-job fit, inappropriate supervisory control
systems, lack of perceived control and lack of teamwork.
Gap4: Service delivery versus external communication: as a result of inadequate
horizontal
communications and propensity to over-promise.

Gap5: The discrepancy between customer expectations and their perceptions of the
service
delivered: as a result of the influences exerted from the customer side and the shortfalls
(gaps) on the part of the service provider. In this case, customer expectations are
influenced by the extent of personal needs, word of mouth recommendation and past
service experiences.

Gap6: The discrepancy between customer expectations and employees’ perceptions:

as a result of the differences in the understanding of customer expectations by front-line
service providers.

Gap7: The discrepancy between employee’s perceptions and management

perceptions: as a
result of the differences in the understanding of customer expectations between managers
and service providers.
 Fig : 1

Factor Analysis :

Factor analysis is a statistical method used to explain variability among observed

variables in terms of fewer unobserved variables called factors. The observed variables
are modeled as linear combinations of the factors, plus "error" terms. The information
gained about the interdependencies can be used later to reduce the set of variables in a
dataset. Factor analysis originated in psychometrics, and is used in behavioral sciences,
social sciences, marketing, product management, operations research, and other applied
sciences that deal with large quantities of data.
Factor analysis is often confused with principal components analysis. The two methods
are related, but distinct, though factor analysis becomes essentially equivalent to principal
components analysis if the "errors" in the factor analysis model are assumed to all have
the same variance.

Analysis

The analysis will isolate the underlying factors that explain the data. Factor analysis is an
interdependence technique. The complete set of interdependent relationships are
examined. There is no specification of either dependent variables, independent variables,
or causality. Factor analysis assumes that all the rating data on different attributes can be
reduced down to a few important dimensions. This reduction is possible because the
attributes are related. The rating given to any one attribute is partially the result of the
influence of other attributes. The statistical algorithm deconstructs the rating (called a raw
score) into its various components, and reconstructs the partial scores into underlying
factor scores. The degree of correlation between the initial raw score and the final factor
score is called a factor loading. There are two approaches to factor analysis: "principal
component analysis" (the total variance in the data is considered); and "common factor
analysis" (the common variance is considered).

Factor Analysis Output

Pizza Hut
 Communalities

Initial Extraction
Location 1.000 .978
Service 1.000 .912
Sincerity 1.000 .934
IndividualAttention 1.000 .917
ParkingSpace 1.000 .928
WorkingHours 1.000 .793
NeedUnderstanding 1.000 .980
PromptService 1.000 .865
EmployeesKnowledge 1.000 .966
StaffBehaviour 1.000 .805
EquipmentsPizzaHut 1.000 .806
EmployeesCourtesy 1.000 .978
CustomerBestInterest 1.000 .921
EmployeeReliability 1.000 .759
PhoneAttending 1.000 .978
CorrectionofMistakes 1.000 .932
Ambiance 1.000 .930
AvailabilityServices 1.000 .904
Complaints 1.000 .952
ServiceCharges 1.000 .909
Neatness 1.000 .951
WaitingTime 1.000 .972
FriendlyAtm 1.000 .958
CreditCard 1.000 .943
Pricing 1.000 .932
ImageofBrand 1.000 .861
PromotionalScheme 1.000 .941
Customization 1.000 .967
GroupingServices 1.000 .959
Extraction Method: Principal Component Analysis.

Table 1
Rotated Component Matrix(a)

Component
1 2 3 4 5 6 7
Location .183 .150 .304 .891 .149 .112 -.040
service .263 -.078 .849 .331 -.044 .064 .003
sincerity .292 .365 .730 .248 .192 .005 .291
IndividualAttention .516 .405 .559 -.371 .165 .077 .064
ParkingSpace -.091 .134 .908 .155 .109 .195 -.049
WorkingHours .506 .207 .386 .099 .539 -.004 .212
NeedUnderstanding .754 .295 .087 .126 .211 -.478 .171
PromptService .865 -.118 -.054 .293 .105 -.031 -.042
EmployeesKnowledge .375 .201 .451 .376 .556 .359 -.053
StaffBehaviour .697 -.001 .250 .436 .172 .191 .002
EquipmentsPizzaHut .196 -.136 .010 -.070 .109 .356 -.778
EmployeesCourtesy .521 .262 .091 .267 .739 -.102 -.036
CustomerBestInterest .839 .306 .160 .147 .262 .038 .078
EmployeeReliability .680 .009 .383 .143 .270 .199 .132
PhoneAttending .869 .062 -.069 -.106 .215 .372 -.139
CorrectionofMistakes .381 -.036 .634 .106 .422 -.184 .401
Ambiance .181 .523 .217 .738 .029 .141 .109
AvailabilityServices .164 .788 .377 -.065 .241 .226 -.015
Complaints .654 .439 .283 .388 -.023 -.073 .308
ServiceCharges .411 .333 .220 .025 .094 .295 .696
Neatness .501 .743 .012 .383 .035 -.027 -.004
WaitingTime .005 .531 .131 .664 .232 -.250 .340
FriendlyAtm .055 .892 .040 .213 .103 .081 .307
CreditCard .438 .047 .079 .073 .765 .375 -.104
Pricing -.086 .874 -.037 .114 -.006 -.379 .041
ImageofBrand .644 -.020 .193 .447 .173 .380 .186
PromotionalScheme .727 .072 .339 -.221 .437 .219 .071
Customization .246 -.062 .214 .158 .173 .883 -.145
GroupingServices .780 .207 .420 -.129 .218 .194 -.173
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 9 iterations.

Table-2
Component Transformation Matrix

Component 1 2 3 4 5 6 7
1 .678 .346 .417 .290 .351 .151 .131
2 -.378 .655 .012 .334 -.163 -.408 .351
3 -.496 -.224 .687 .316 -.038 .359 -.041
4 .072 -.169 -.473 .816 -.063 .146 -.226
5 -.208 .597 -.180 -.182 .116 .548 -.469
6 -.220 -.061 .060 .068 .724 -.488 -.420
7 .235 .107 .308 .022 -.554 -.349 -.640
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Table-3

Domino’s

Communalities

Initial Extraction
Location 1.000 .894
Service 1.000 .891
Sincerity 1.000 .603
IndividualAttention 1.000 .949
ParkingSpace 1.000 .941
WorkingHours 1.000 .734
NeedUnderstanding 1.000 .816
PromptService 1.000 .930
EmployeesKnowledge 1.000 .977
StaffBehaviour 1.000 .903
EquipmentsPizzaHut 1.000 .889
EmployeesCourtesy 1.000 .834
CustomerBestInterest 1.000 .857
EmployeeReliability 1.000 .947
PhoneAttending 1.000 .782
CorrectionofMistakes 1.000 .914
Ambiance 1.000 .896
AvailabilityServices 1.000 .894
Complaints 1.000 .636
ServiceCharges 1.000 .859
Neatness 1.000 .896
WaitingTime 1.000 .890
 FriendlyAtm 1.000 .939
CreditCard 1.000 .845
Pricing 1.000 .942
ImageofBrand 1.000 .874
PromotionalScheme 1.000 .952
Customization 1.000 .956
GroupingServices 1.000 .937

Extraction Method: Principal Component Analysis.

Table-4

Rotated Component Matrix(a)

Component
1 2 3 4 5
Location .539 .176 .650 .267 -.281
service .287 .886 -.092 .100 -.068
sincerity .266 .719 -.043 .100 .058
IndividualAttention -.062 .855 .170 -.076 .423
ParkingSpace -.066 .902 .285 -.078 -.187
WorkingHours -.168 .789 .021 -.265 .114
NeedUnderstanding .288 .720 -.229 .113 -.386
PromptService .757 .423 .270 .009 .324
EmployeesKnowledge .691 -.158 .529 .405 -.175
StaffBehaviour .844 .037 .008 .430 .059
EquipmentsPizzaHut .151 -.025 .358 .856 -.063
EmployeesCourtesy .659 .400 .083 .289 .386
CustomerBestInterest .886 .137 -.028 .224 .057
EmployeeReliability .832 .174 .367 .290 .078
PhoneAttending .121 -.079 .161 .856 .055
CorrectionofMistakes .821 .358 .245 .156 .166
Ambiance .905 .004 .245 .130 .023
AvailabilityServices .818 -.071 .401 .136 -.199
Complaints .737 .208 -.159 .134 -.075
ServiceCharges .702 .233 .510 .128 -.191
Neatness .832 -.145 .230 -.156 -.326
WaitingTime .781 -.240 .235 .180 .367
FriendlyAtm .926 .069 .230 -.149 .044
CreditCard .105 -.273 .807 .277 .177
Pricing .710 .051 .530 .224 .323
ImageofBrand .870 -.020 .276 -.078 -.187
PromotionalScheme .877 .305 .116 .270 -.055
Customization .414 .370 .796 .121 .012
GroupingServices .355 .135 .680 .557 .140
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 8 iterations.
Table-5
 Component Transformation Matrix

Component 1 2 3 4 5
1 .863 .205 .380 .261 .026
2 -.091 .959 -.176 -.201 .035
3 -.493 .178 .646 .534 .151
4 .037 .042 -.637 .761 .106
5 -.052 .072 .034 .164 -.982
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Table-6

GAP Model Output

Average Scores Of Pizza Hut and Domino's

Components Expected pizza perceived pizza Expected perceived
hut hut domino domino
Location 3.64 3.69 4.31 2.62
service speed 4.26 4.08 4.62 3.92
sincerity 4.21 3.62 4.31 4.08
IndividualAttention 4.46 4 4.23 3.77
ParkingSpace 4.07 3.23 3.69 3.54
WorkingHours 3.85 3.46 3.38 3.23
NeedUnderstanding 4.23 4.07 4.23 4.08
PromptService 3.92 3.76 4 3.92
EmployeesKnowledge 3.69 3.46 3.85 4.08
StaffBehaviour 3.77 3.62 4.46 4.23
EquipmentsPizzaHut 3.92 3.7 3.69 3.23
EmployeesCourtesy 3.85 3.77 4.77 3.69
CustomerBestInterest 4.07 3.84 4.31 3.92
EmployeeReliability 3.77 3.38 3.92 3.69
PhoneAttending 3.69 3.62 3.85 3.38
CorrectionofMistakes 4.15 4.23 3.46 3.92
Ambiance 3.92 3.77 4.54 4.23
AvailabilityServices 4.23 4.15 4.08 4.00
Complaints 4.07 3.93 3.92 3.62
ServiceCharges 4.15 3.92 4 3.54
Neatness 4.15 4.38 4.31 4.23
WaitingTime 3.54 4 3.85 4.38
FriendlyAtm 3.69 3.85 3.92 4.00
CreditCard 3.61 4 4.15 3.69
Pricing 3.54 4 3.77 4.08
ImageofBrand 3.54 3.69 3.85 4.23
PromotionalScheme 3.31 3.92 3.92 4.08
Customization 3.77 3.3 3.76 3.38
GroupingServices 3.85 3.46 3.46 3.38

Table-7

Components GAP A GAP B

Location 0.05 -1.69

service speed -0.18 -0.70
sincerity -0.59 -0.23
IndividualAttention -0.46 -0.46
ParkingSpace -0.84 -0.15
WorkingHours -0.39 -0.15
NeedUnderstanding -0.16 -0.15
PromptService -0.16 -0.08
EmployeesKnowledge -0.23 0.23
StaffBehaviour -0.15 -0.23
EquipmentsPizzaHut -0.22 -0.46
EmployeesCourtesy -0.08 -1.08
CustomerBestInterest -0.23 -0.39
EmployeeReliability -0.39 -0.23
PhoneAttending -0.07 -0.47
CorrectionofMistakes 0.08 0.46
Ambiance -0.15 -0.31
AvailabilityServices -0.08 -0.08
Complaints -0.14 -0.30
ServiceCharges -0.23 -0.46
Neatness 0.23 -0.08
WaitingTime 0.46 0.53
FriendlyAtm 0.16 0.08
CreditCard 0.39 -0.46
Pricing 0.46 0.31
ImageofBrand 0.15 0.38
PromotionalScheme 0.61 0.16
Customization -0.47 -0.38
GroupingServices -0.39 -0.08

A- Pizza Hut
B- Domino’s

Table -8

Interpretation
Pizza Hut :

Factors Components

1. Customer Best Interest, Need Understanding, Prompt

Service,Growings Services, Employee Reliability, promotional
Schemes, Staff Behaviour,phone Attending, Complains, Image brand

2. Availability of Services, Neatness, Friendly Atmosphere, Pricing

3. Parking Space, Service, Sincerity, Individual Attention, Correction of

Mistakes

4. Location, Ambiance, Waiting Time

5. Working Hours, Employees Knowledge, Employees Courtesy, Credit

Card

6. Equipments, Customization

7. Service Charges

Table-9

Domino’s
 Factors Components

1. Neatness, Waiting Time, Friendly Environment, Pricing, Correction of

Mistakes, Ambiance, Prompt Service, Staff Behaviour, Service Charge,
Emp. Knowledge, Courtesy, Image Brand, Customers Best Interest,
Availability of Services, Complains, Promotional Schemes, Reliability

2. Service, Sincerity, Individual Attention, Parking Space, Working Hours,

Need understanding.

3. Location, Credit Card, Customization, Services

4. Equipments, phone attending

5.
-----------

Table-10

After applying factor analysis on components of Pizza hut , it is further divided into 7
factors which tells that service quality of Pizza hut basically influenced by Customer
Best Interest, Need Understanding, Prompt Service, Growings Services, Employee
Reliability, promotional Schemes, Staff Behaviour, phone Attending, Complains,
Image of brand out of 23 components(Table-2) or it can be interpreted that the quality
of service depends on employees skills and their behavior with the customers.

For Domino’s , components are divided in 5 factors and factor consists of Neatness,
Waiting Time, Friendly Environment, Pricing, Correction of Mistakes, Ambiance,
Prompt Service, Staff Behaviour, Service Charge, Emp. Knowledge, Courtesy,
Image Brand, Customers Best Interest, Availability of Services, Complains,
Promotional Schemes, Reliability (Table 5)
From analyzing the GAPs of Pizza Hut (Table-8) , it can be concluded that Pizza Hut
leads in various promotional schemes and offers and most of the customers are attracted
by this , with a greatest positive gap of 0.61 . It also means that the customer’s perceived
value is much more than expectation of cutomers . Further they are very good at their less
waiting time and reasonable pricing of the products which are other two components
having a positive gap of 0.46 and 0.39. But they have scored a negative gap of 0.84 ,0.59
and 0.47 in providing parking space , sincerity and customization and these are the
components in which they are lacking.

For Domino’s , they are also a leader in terms of providing very less waiting time for the
customers with a positive gap of 0.53 and very prompt while correction of mistakes
(0.46) . They are having a very strong brand image in the customer’s mind for their fast
delivery services . Now coming to the negative part, location of the outlets are still a
problem for the customers having a highest negative gap of 1.69 .

Now moving one step further we check both for the following hypothesis

H0: There is no difference between the services of Pizza hut and Domino’s

Paired Samples Statistics

Mean N Std. Deviation Std. Error Mean

Pair 1 pizzahut -.1041 29 .33049 .06137
dominos -.2231 29 .45074 .08370

Paired Samples Test

Paired Samples Test

Sig. (2-
Paired Differences t df tailed)
 Std. 95% Confidence
Std. Error Interval of the
Mean Deviation Mean Difference

Upper Lower
Pair pizzahut -
.11897 .48199 .08950 -.06437 .30230 1.329 28 .195
1 dominos

According to paired t-test , the significant value is 0.195 which is greater than 0.05 which
means that null hypothesis is accepted. We can say that there is no difference between the
services of Pizza hut and Domino’s . They both are leaders in terms of service quality and
both are at par.

Conclusion - We can conclude that both Pizza hut and Domino’s are known for their
best services and according to the factor analysis and GAP model we can summarize the
whole that Employees behavior is the major factor which influence the customer
perception most about the pizza outlets while they are followed by environment , parking
space and external factors .

Bibliography

www.dominos.co.in/
www.pizzahut.co.in/
classshares.student.usp.ac.fj/TS401/SERVQUAL/Servqual.pdf