Organizational buyer behaviour: a study of UK

restaurant chains
Elizabeth Mawson
Millward Brown International plc, Warwick, UK
Andrew Fearne
Wye College, University of London, Wye, UK
The food service sector represents almost two fifths of
total household expenditure
on food and continues to
grow at a pace. While the
major part of the food service
industry remains highly fragmented, the importance of
restaurant chains is increasing. Examines procurement
policies adopted by chain
restaurants using the buygrid model and presents the
findings from six case studies. Concludes that restaurant chains have adopted
many of the procurement
practices introduced by the
multiple retailers (centralized
buying and distribution) and
tend to look for similar characteristics in their suppliers
volume, quality, consistency
and competitive prices. The
buygrid model was found to
be a good predictor of buyer
behaviour among restaurant
chains.

British Food Journal

99/7 [1997] 239243
MCB University Press
[ISSN 0007-070X]

Characteristics of the UK food

service industry
In 1996 the turnover of the food service sector
in the UK was approximately 25 billion.
Over the past ten years the proportion of
household expenditure on food has declined
from almost 16 per cent to just over 12 per
cent, yet the share of household food expenditure outside the home has increased from 25
per cent to almost two fifths (HMSO, 1996).
The growth in the number of food service
establishments continued throughout the
recession (late 1980s and early 1990), driven
by changing demographics (more single
households and working women), the demand
for convenience foods and the increase in
leisure time (Payne and Payne, 1993; Slater
and Cawley, 1992). This suggests that the
social pressures of demographic and occupational change have actually outweighed the
economic constraints (Loader, 1992). Virtually any trip from home for recreation and
leisure can be translated into a food service
opportunity. The prospects for growth are,
therefore, encouraging as the time spent on
recreation and leisure activities looks set to
increase.
While the major part of the food service
industry remains highly fragmented, the
importance of restaurant chains is increasing, with the fast food sector in particular
becoming progressively dominated by large
multinational companies. Far from reaching
saturation, chain restaurants have as yet only
tapped a small segment of the potential market in the UK. The top 40 chains account for
around 14 per cent of the total turnover of the
UK food service industry (Duffil and Martin,
1993). The growth of these chains has been
achieved by franchising, which has led to the
rapid expansion of store numbers with minimum corporate finance. There has also been
importation of already successful concepts,
usually with a local company as a partner, at
least at first (e.g. Forte plc and PepsiCo with
Kentucky Fried Chicken, Whitbread plc and
PepsiCo with Pizza Hut). The marketing
strengths that are offered to customers are
consistency, convenience and value for
money.

As the chain restaurants become larger

they also begin to enjoy scale economies
which facilitates central procurement and
distribution. With this growth comes new
opportunities for those farmers and growers
who are looking for higher value market
outlets for high quality produce. However, the
emergence of a significant number of restaurant chains provides a challenge to the market oriented supplier, as the procurement
process becomes increasingly centralized and
buying policies dictated by established organizational structures. Centralization of procurement and distribution is also driven by
legislation, such as the Food Safety Act 1990
which requires companies to demonstrate
due diligence in their food handling procedures.

The research problem and

methodology
The research project from which this paper is
drawn[1] was concerned with identifying the
opportunities which this growth market
represents for UK farmers and formulating
appropriate strategies to ensure that these
opportunities are fully exploited. This
required a detailed understanding of the
procurement policies and buyer behaviour of
chain restaurants.
There has been very little academic
research on the UK food service sector, so
little is known about buyer behaviour
therein. The analysis undertaken in this
study focused on the decision-making unit
and incorporated a dyadic aspect using the
conceptual framework of the Buygrid
model (Robinson et al., 1967) with six case
studies of chain restaurant companies two
roadside (Granada and Forte[2]), two pizza
(Pizzaland and Perfect Pizza) and two hamburger (Burger King and McDonalds). These
companies were selected in order to cover the
different types of outlets and product offerings encompassed within the chain restaurant sector.
Organizational buyer behaviour is a complex subject, the study of which is made particularly difficult by the lack of published
data and the problems associated with collect-

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Elizabeth Mawson and

Andrew Fearne
Organizational buyer
behaviour: a study of UK
restaurant chains
British Food Journal
99/7 [1997] 239243

ing primary data on commercial practices.

There have been numerous attempts to model
organizational buyer behaviour from a theoretical perspective, but most of the more
recent approaches (e.g. Anderson and Chambers, 1985; Choffray and Lilien, 1978; Sheth,
1973) have substantial data requirements,
which means they are of limited value in an
empirical context.
Given the difficulty which was anticipated
in obtaining detailed information on buyer
behaviour in such a concentrated sector as
restaurant chains, and the requirement for
detailed understanding of the decision-making processes involved in procurement, the
buygrid model developed by Robinson et al.
(1967) was chosen as the framework for
analysing the procurement process adopted
by chain restaurants.
The buygrid model focuses on two aspects
of purchasing:
The buyclass, which is the buying situation and is the central unit of analysis.
The buyphase, which is the activity performed during the procurement process
the sequence of activities which must be
performed in the resolution of a buying
situation.
There are three buyclasses: new task, straight
rebuy, and modified rebuy. A new task situation represents the greatest difficulty for
management, as it usually represents the
greatest risk and thus involves the greatest
number of decision makers and buying influencers. A new task may raise policy questions
and require special studies, whereas a modified rebuy is likely to be more routine and a
straight rebuy essentially automatic.
There are eight buyphases, the first is anticipation or recognition of a problem (need).
The second is determination of the characteristics and quantity of the required item. The
third phase involves the description of the
characteristics and quantity of the required
item. Fourth is the search for and qualification of potential sources. This is followed by
the acquisition and analysis of proposals.
Next is an evaluation of proposals and selection of suppliers. The selection of an order
routine is the seventh phase. The last
buyphase identified by this model is performance feedback and evaluation. The resulting model provides an analytical framework
which combines each of the buyphases with
each buyclass (new task, modified rebuy,
rebuy).
The relative emphasis given by decision
makers to each phase is by no means equal,
either in the case of any given purchase or
when comparing several purchases. The
existence and duration of each phase depends

[ 240 ]

on the buying situation. Johnston and

Spekman (1982) argue that the buyphases
may not progress sequentially and the entire
process may consist of a number of iterative
loops, depending on the complexity of the
purchasing situation.
When a purchase is a new task all the
phases apply and are assumed to be extensive.
New tasks are the most complex buying situations because of the large number of decision
makers and buying influences that are
involved. A new task may also involve asking
policy questions and may require special
studies to be done. Under the conditions of a
straight rebuy, the firm is assumed to pass
quickly through the phases, perhaps even
skipping some.
The case studies were structured in two
phases. The first phase involved the detailed
analysis of the procurement process adopted
by the chain restaurants. The information
gathered in this phase was then triangulated in phase two, which involved a survey
of account managers from the supply companies. This triangulation technique is an
essential part of case study methodology and
allowed the dyadic aspect of organizational
buying behaviour to be analysed.
The six case studies were conducted using
semi-structured interviews and a
snowballing technique so that all those
involved in the decision-making process were
identified and interviewed. This addressed
Johnstons (1981) criticism that individuals
exaggerate their involvement in the decisionmaking process, since Kohli (1989) found that
this exaggeration in personal involvement
does not affect estimations of other peoples
participation. The data generated for both
new task and rebuy buying situations were
examined using structural role analysis
(Calder, 1977).

Results
All six companies studied were found to operate a policy of central procurement. Chain
restaurants are striving to achieve a brand
image, bolstered by consistency of products
and ambience in all of the chain outlets. In
addition to this, central procurement allows
the buyers to use the volumes purchased as a
lever in their negotiations with suppliers.
Limited regional delegation of procurement
is used in some sectors where some variation
in the products offered to the public is permissible and where local sourcing confers
benefits either in financial terms or quality
aspects.
In all the cases the procedures adopted for
the selection of suppliers for a new task were

Elizabeth Mawson and

Andrew Fearne
Organizational buyer
behaviour: a study of UK
restaurant chains
British Food Journal
99/7 [1997] 239243

more complex and involved more stages than

the procedures adopted for a rebuy. The rationale for this is clear. There is more uncertainty attached to a new task buying decision,
not only with respect to the suppliers but also
the product itself. For example, the exact
specification of a new product has to evolve
from the samples evaluated through tasting,
and their appearance. The ability of a product
to survive the distribution process and the
environment in the outlets is also considered.
It is because the procedure for the selection of
a supplier for a new task involves specialist
skills, such as the tasting of samples, that
more personnel are involved.
It is interesting to note that each of the
companies studied followed very similar
procedures with a comparable number of
tasks (see Table I) and that the differences
observed between the procedures adopted for
new task and rebuy buying decisions were
similar in all cases. That is, the procedure for
a rebuy involves fewer individual tasks and,
therefore, fewer personnel. This is because
many of the tasks relating to a new product,
such as the formulation of the product specification, do not apply.
When the procurement procedures for a
new task which were observed in the case
studies are compared with that proposed by
the buygrid model, the model is found to be a
good predictor (see Table I). All of the companies studied conform not only to the
buyphases predicted, but also to the predicted
order of occurrence. However, in the rebuy
situation all the companies, with the exception of McDonalds, conform to the same

Table I
Case study results compared to the buygrid model

Buyphases

Buyclasses
Model
All companies studied
New task Rebuy
New task Rebuya

Anticipation or recognition of a
X1
problem (need) and a general solution
X
X
X1
Determination of the characteristics and
quantity of the needed item
X

X2
Description of the characteristics and
quantity of the needed item
X

X3
X2
Search for and qualification of potential sources
X

X4
Acquisition and analysis of proposals
X

X5
X3
Evaluation of proposals and selection of
X4
supplier(s)
X
X
X6
Selection of an order routine
X

X7
X5
Performance feedback and evaluation
X
X
X8
X6
Source:
Adapted from Ferguson, 1979, p. 41; Robinson, Faris and Wind, 1967, p. 143
Notes:
a Excluding McDonalds
X1 indicates occurrence of the relevant task, subscript indicates the chronological order
indicates non-occurrence of the relevant task

order and occurrence of the buyphases, but

they differ from the model owing to the occurrence of buyphases four and five. These two
buyphases refer to the search for a qualification of potential suppliers and the acquisition
and analysis of proposals from these suppliers. The model suggests that these two
buyphases are not required in a rebuy situation because the supplier has already been
found.
The reason for their observed occurrence in
the case studies is that the buyers wish to
ensure the competitiveness of their suppliers.
This is done by monitoring the market and a
direct comparison of potential suppliers with
the incumbent suppliers. However, despite
this search for new suppliers the buyers will
usually return to the incumbent suppliers
and give them the opportunity to match the
proposals put forward by competitors. The
reasons for this are twofold. First, any change
of supplier involves an element of risk for the
buyer since the reliability of a current supplier has been proven and that of a potential
supplier can only be predicted. Second, the
loyalty displayed by this action indicates the
partnership between the two parties.
All the companies studied, with the exception of McDonald's, follow very similar buying procedures. However, because each buyer
is an individual and there are differing company structures the procedures adopted are
not identical. The differences in buying procedures between the companies studied is
more apparent in the new task buying situation because of its increased complexity
owing to the risk involved. For example, the
structures of the companies dictate how new
product development is carried out.
It was established in the case studies that
the common criteria adopted by the six chain
restaurants studied are: the financial stability of the supplier; the ability to supply the
required volume to consistent specifications;
and the ability to supply into the distribution
facilities. The information from the supplier
survey supported the case study findings.
The company background provides information regarding the financial stability of the
supplier, and this information was offered by
most of the suppliers surveyed. The client
portfolio not only provides information
regarding the financial stability of a supplier,
but also regarding the consistency of supply
and the ability to meet specific and varied
delivery requirements. If a supplier has longstanding business relationships with reputable clients then this would suggest that the
supplier is reliable. However, only half of the
suppliers surveyed said they provided this
information to prospective customers, and
some of these respondents added the caveat

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Elizabeth Mawson and

Andrew Fearne
Organizational buyer
behaviour: a study of UK
restaurant chains
British Food Journal
99/7 [1997] 239243

[ 242 ]

that this information would only be provided

when specifically requested.
Other information volunteered to potential customers included product lists, product
illustrations and product samples. This was
done to promote other products available
while a supplier has the chain buyers attention. List pricing was occasionally used but
prices were usually negotiable with chain
restaurants because of the volume of product
that they demand.
Other information provided by suppliers to
potential customers included product demonstrations, factory tours, and visits to existing
customers, with a personalized approach
emphasizing the strengths of the company.
Factory tours were described as a good
source of information by the buyers.
The criteria that each buyer applied to the
evaluation of potential and existing suppliers
were common to all products whether frozen,
ambient or chilled. The buyers repeatedly
stressed the need to know that suppliers are
technically competent, have the volume
capacity, and are financially stable and reliable.
It is important to note that existing suppliers have a proven track record in terms of
their abilities in the areas of technical competence, volume capability and consistency. All
the buyers interviewed were reluctant to
move business away from the incumbent
suppliers, unless the price offered was not
competitive.
Potential suppliers were evaluated in much
the same way as the existing ones apart from
one key difference. All suppliers are evaluated for their technical competence, volume
capability, and the competitiveness of their
pricing. These criteria are used to judge
whether a supplier can produce the goods
required. In addition to this, a supplier must
be able to produce quality on a consistent
basis. As noted before, existing suppliers
have a proven track record regarding their
reliability. Potential suppliers have to have
their reliability predicted by the buyers. This
is done by amassing information from factory
visits and by the scrutiny of the customer
portfolios of potential suppliers. The assumption which is made is that if suppliers have a
long-standing relationship with other customers then they are likely to be reliable.
The evidence obtained from each of the
companies studied would seem to indicate
that the importance of the factors used to
evaluate existing and potential suppliers is
task specific. This would appear to be due to
the uncertainty involved in the development
and introduction of a new task product,
which leads to an increased emphasis on the
technical aspects of the evaluation criteria.

However, in situations where potential suppliers share the same technical and volume
capabilities, the deciding factor in the choice
of supplier will invariably be the price.
Price is also a factor which occasionally
prompts research into a potential supplier in
the rebuy situation. In this case, the product
specification is known and the experience of
handling the product reduces the emphasis
on the technical aspects of the evaluation
criteria. However, any supplier must convince the buyer that they are capable of producing the product, not only to the required
specification but also in the required volumes.
Although no vertical integration was found
in the sectors studied, there were many
instances of very close relationships between
the chain restaurants and their suppliers.
Both members of the buying dyad considered
that they were working in partnership with
the other. In some cases this meant that there
was no formal contract, but a business relationship built purely on trust and a gentlemans agreement. The loyalty observed
towards suppliers varied between companies
but all the companies indicated risk avoidance tendencies when considering new suppliers.

Conclusions
An important feature of the UK food chain is
the continued and rapid growth in the value
of the food service sector. Chain restaurants
have had a large part to play in that growth.
The chain restaurants characteristically have
very specific requirements for farm produce
and processed foods. They seek suppliers who
can produce to a high specification, supply a
consistent and standardized quality and
deliver promptly and regularly to their
depots, processing points and retail outlets.
The atomistic nature of primary production
in the UK and the lack of market orientation
appears to be at odds with these requirements.
Yet opportunities exist for UK farmers to
increase their share of this growing market,
if they can meet the needs of the buyers.
The case studies indicate that chain restaurant personnel regard the procurement procedure as a process and not as a series of individual steps. This was highlighted by the fact
that the tasks in the procurement procedure
were undertaken by several individuals. This
meant that individuals had difficulty in commenting on tasks other than those for which
they were personally responsible. Therefore,
the enforced categorization of the process
was an artificial representation of what actually occurs.

Elizabeth Mawson and

Andrew Fearne
Organizational buyer
behaviour: a study of UK
restaurant chains
British Food Journal
99/7 [1997] 239243

The limitations of the buygrid model meant

that there was little discovered concerning
the motivations behind the observed actions.
However, the buygrid framework is ideal for a
very detailed descriptive study, as was
required for this research. It also facilitated
the comparison of procedures between different companies. Efforts were made to combat
some of the limitations of the model. Informants were allowed to describe the whole
process and the validity was checked since
each member of the buying centre was interviewed and the final procedure identified was
a composite of all the interviews. There were,
in fact, very few discrepancies between the
descriptions of different members of the buying centre and those that did occur were
resolved between the relevant members.
Thus, overall, the buygrid model was found to
be a good predictor of the procurement procedures adopted by the chain restaurants.

Notes
1 The original research was conducted as part of
a MAFF sponsored postgraduate studentship.
2 The research was undertaken before the
takeover of Fortes roadside business by
Granada, in 1996.

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