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INFINITY BUSINESS SCHOOL BUSINESS STRATEGY GROUP PROJECT REPORT ON FAST FOOD INDUSTRY IN INDIA

Submitted To: Rear Admiral Dr Rakesh Chopra Submitted On: 19th March, 2010 Submitted By: Group No:6

Roll No. 806 815 823 824 831 839 847 855 863 871

Name Adnan Abbas Dhruv Mittal Jasveen Kaur Kajoli Gupta Misal Anand Prerna Mehta Rohan Saraswat Shanu Kukreti Tushar Kashyap Kashish Hans

DECLARATION We declare that the work contained in this report is the result of our own efforts. We have not copied it from any other printed source. Submitted by: Group No: 6

Submitted to: Rear Admiral Dr Rakesh Chopra

AKNOWLEDGEMENT We must express our deep sense of gratitude to Rear Admiral Dr Rakesh Chopra for his kind, liberal support as well of his valuable advice and directions, without which it would have been impossible for us to prepare this report. We also express our indebtness to Mr. Umesh Kumar, Assistant Restaurant Manager, Pizza Hut and Mr. for giving their valuable time to answer our questions.

Submitted by: Group No :6

TABLE OF CONTENTS
Sl No. 1 2 3 4 5 6

TOPIC
Declaration Acknowledgemnt Introduction to fast food industry at large

PAGE
3 4 6 8 13 18 22 27 33 36 39 43

Company Introduction Product Market And Target Market Customer Behaviour

Firms 4Ps, Marketing Strategies, Listening 7 System


8 9 10 11 12

Competition Analysis Firms Differentiation Strategy Firms Positioning Strategy SWOT Analysis Conclusion Appendix:Interesting Articles

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Bibliography

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FAST FOOD INDUSTRY


Introduction
Fast food is the term given to food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with low quality preparation and served to the customer in a packaged form for take-out/take-away. Outlets may be stands or kiosks, which may provide no shelter or seating, or fast food restaurants (also known as quick service restaurants). Franchise operations which are part of restaurant chains have standardized foodstuffs shipped to each restaurant from central locations. The capital requirements involved in opening up a fast food restaurant are relatively low. Restaurants with much higher sit-in ratios, where customers tend to sit and have their orders brought to them in a seemingly more upscale atmosphere may be known in some areas as fast casual restaurants.

History
The concept of ready-cooked food for sale is closely connected with urban development. In Ancient Rome cities had street stands that sold bread and wine. A fixture of East Asian cities is the noodle shop. Flatbread and falafel are today ubiquitous in the Middle East. Popular Indian fast food dishes include vada pav, panipuri and dahi vada. In the French-speaking nations of West Africa, roadside 5

stands in and around the larger cities continue to sellas they have done for generationsa range of ready-to-eat, char-grilled meat sticks known locally as brochettes.

The Start of Fast Food Culture


The concept of fast food pops up during 1920s.The 1950s first witnessed their rapid proliferation. Several factors that contributed to this explosive growth in 50s were: (1) Americas love affair with the automobiles. (2) The construction of a major new highway system. (3) The development of sub-urban communities. (4) The baby boom subsequent to world war second.

On the go
Fast food outlets are take-away or take-out providers, often with a "drive-through" service which allows customers to order and pick up food from their cars; but most also have a seating area in which customers can eat the food on the premises. People eat there more than five times a week and often, one or more of those five times is at a fast food restaurant. Nearly from its inception, fast food has been designed to be eaten "on the go", often does not require traditional cutlery, and is eaten as a finger food. Common menu items at fast food outlets include fish and chips, sandwiches, pitas, hamburgers, fried chicken, French fries, chicken nuggets, tacos, pizza, hot dogs, and ice cream, although many fast food restaurants offer "slower" foods like chili, mashed potatoes, and salads.

Variants
Although fast food often brings to mind traditional American fast food such as hamburgers and fries, there are many other forms of fast food that enjoy widespread popularity in the West. Chinese takeaways/takeout restaurants are particularly popular. They normally offer a wide variety of Asian food which has normally been fried. Most options are some form of noodles, rice, or meat. Sushi has seen rapidly rising popularity in recent times. A form of fast food created in Japan. Pizza is a common fast food category in the United States, with chains such as Domino's Pizza, Sbarro and Pizza Hut. Fish and chip shops are a form of fast food popular in the United Kingdom, Australia and New Zealand. A Dutch fast food meal often consists of a portion of French fries .

Business
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In the United States alone, consumers spent about US$110 billion on fast food in 2000 (which increased from US$6 billion in 1970). The National Restaurant Association forecasted that fast food restaurants in the U.S. would reach US$142 billion in sales. In comparison, the full-service restaurant segment of the food industry is expected to generate $173 billion in sales.

Jobs and labor issues


Today, more than 10 million workers are employed in the areas of food preparation and food servicing including fast food in the world. Employees are the backbone of the fast food industry. Proper training is crucial to the orderly and quick service customers expect. Yet, employee turnover can be as high as 200% per year. With such a turnover, owner-operators of franchise and nonfranchise restaurants have the daunting task of constantly training an entirely new workforce. Policies and procedures need to be explained to each new employee.

Globalization
The global fast food market grew by 4.8% and reached a value of 102.4 billion and a volume of 80.3 billion transactions. In India alone the fast food industry is growing by 40% a year. McDonald's is located in 120 countries and on 6 continents and operates over 31,000 restaurants worldwide. KFC is located in 25 countries. Subway has 29,186 restaurants located in 86 countries, Pizza Hut is located in 26 countries, Taco Bell has 278 restaurants located in 12 countries besides the United States.

Health issue
Trans fats which are commonly found in fast food have been shown in many tests to have a negative health effect on the body. The fast food consumption has been shown to increase calorie intake, promote weight gain, and elevate risk for diabetes. The Centers for Disease Control and Prevention ranked obesity as the number one health threat for Americans in 2004. It is the second leading cause of preventable death in the United States and results in 400,000 deaths each year.
FAST FOOD INDUSTRY IN INDIA INDIA EMERGING MARKET FOR GLOBAL PLAYERS The percentage share held by foodservice of total consumer expenditure on food has increased from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in Indian culture and changes in eating habits are very slow moving with barriers to eating out entrenched in certain sectors of Indian society.. The growth in nuclear families,

particularly in urban India, exposure to global media and Western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends. FACTS AND FIGURES Fast food is one of the worlds largest growing food type. Indias fast food industry is growing by 40% a year and is expected to generate a billion dollars in sales.The multinational segment of Indian fast food industry is up to Rs. 6 billion, a figure expected to zoom to Rs.70 billion. In last 6 years, foreign investment in this sector stood at Rs. 3600 million which is about one-fourth of total investment made in this sector. Because of the availability of raw material for fast food, Global chains are flooding into the country. MARKET SIZE & MAJOR PLAYERS a) Dominated by McDonalds having as many as 75 outlets. b) Dominos pizza is present in around 100 locations. c) Pizza hut is also catching up and it has planned to establish 125 outlets at the end of 2005. d) Subways have established around 40 outlets. e) Nirulas is established at Delhi and Noida only. However, it claims to cater 50,000 guests every day.

Major players in fast food are: MCDONALDS KFC PIZZA HUT DOMINOS PIZZA SUBWAY The main reason behind the success of the multinational chains is their expertise in product development, sourcing practices, quality standards, service levels and standardized operating procedures in their restaurants, a strength that they have developed over years of experience around the world. The home grown chains have in the past few years of competition with the MNCs, learnt a few things but there is still a lot of scope for improvement.

REASON FOR EMERGENCE


Gender Roles: gender roles are now changing. Females have started working outside. So, they have no time for their home and cooking food. Fast food is an easy way out because these can be prepared easily. Customer Sophistication and Confidence: consumers are becoming more sophisticated now. They do not want to prepare food and spend their time and energy in house hold works. They are building their confidence more on ready to eat and easy to serve kind of foods Paucity of Time: people have no time for cooking. Because of emergence of working women and also number of other entertainment items. Most of the time either people work or want to enjoy with their family. Double Income Group: emergence of double income group leads to increase in disposable income. Now people have more disposable income so they can spend easily in fast food and other activities.

Working Women: working women have no time for cooking, and if they have then also they dont want to cook. Because they want to come out of the traditionally defined gender roles. They do not want to confine themselves to household work and upbringing of childrens. Large population: India being a second largest country in terms of population possesses large potential market for all the products/services. This results into entry of large number of fast food players in the country. Relaxation in rules and regulations: with the economic liberalization of 1991, most of the tariff and non tariff barriers from the Indian boundaries are either removed or minimized. This helped significantly the MNCs to enter in the country. Menu diversification: increase in consumption of pizzas, burgers and other type of fast foods.

CHALLENGES FOR THE INDUSTRY


Social and cultural implications of Indians switching to western breakfast food: Generally, Hindus avoid all foods that are believed to inhibit physical and spiritual development. Eating meat is not explicitly prohibited, but many Hindus are vegetarian because they adhere to the concept of ahimsa. Those seeking spiritual unity may avoid garlic and onions. The concept of purity influences Hindu food practices. Products from cows (e.g., milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can improve the purity of impure foods when they are prepared together. Some foods, such as beef or alcohol, are innately polluted and can never be made pure. But now, Indians are switching to fast food that contain all those things that are considered impure or against there beliefs. Some traditional and fundamentalist are against this transformation of food habit and number of times they provoke their counterparts to revolt against such foods. And that is what happened when McDonalds decided to enter the complexity of Indian business landscape, counting only on its fast food global formula, without any apparent previous cultural training. Emphasis on the usage of bio-degradable products: Glasses, silverware, plates and cloth napkins are never provided with fast food. Instead, paper plates and napkins, polyurethane containers, plastic cups and tableware, drinking cartons or PET (polyethylene terephthalate) bottles are used, and these are all disposable. Many of these items are tossed in the garbage instead of being recycled, or even worse, merely thrown on the ground. This burdens nature unnecessarily and squanders raw materials. In order to reduce soil and water pollution, government now emphasis more on the usage of bio-degradable products. Retrenchment of employees: Most of new industries will be capital intensive and may drive local competitors, which have more workers, out of business. Profit repatriation: Repatriation of profits is another area of concern for Indian economy. As when multinational enters the any countries, people and government hope that it will increase the employment rate and result in economic growth. However, with the multinational operation, host country experiences these benefits for a short time period. In long run neither employment increases (because of capital intensive nature of MNCs) nor it increases the GDP or GNP because whatever MNCs earn they repatriate that profit back to their home country.

PROBLEMS OF INDUSTRY
Environmental friendly products cost high: government is legislating laws in order to keep check on the fast food industry and it is emphasizing more on the usage of biodegradable and environment friendly products. But associated with this issue is the problem that fast food player faces - the cost associated with the environment friendly

product. They cost much higher than the normal products that companies uses for packaging or wrapping their products. Balance between societal expectation and companies economic objectives: To balance a societys expectation regarding environment with the economic burden of protecting the environment. Thus, one can see that one side pushes for higher standards and other side tries to beat the standard back, thereby making it a arm wrestling and mind boggling exercise. Health related issues: obesity: I. Studies have shown that a typical fast food has very high density and food with high density causes people to eat more then they usually need. \ II. Low calories food: Emphasis is now more on low calorie food. In this line McDonald has a plan to introduce all white meat chicken Mcnuugget with less fat and fewer calories.

TRENDS IN INDIAN MARKET Marketing to children's: fast food outlets in India target childrens as their major customers. They introduce varieties of things that will attract the childrens attention and by targeting childrens they automatically target their parents because Childrens are always accompanied by their parents. Low level customer commitment: Because of the large number of food retail outlets and also because of the tendency of customer to switch from one product to other, this industry faces low level customer commitment. Value added technology services: There is continuous improvement in the technology as far as fast food market in India is considered. The reason behind that is food is a perishable item and in order to ensure that it remain fresh for a longer period of time. Earlier, Indian people prefer eating at home but now with the change in trend there is also need for improvement and up gradation of technology in food sector. Attracting different segments of the market: Fast food outlets are introducing varieties of products in order to cater the demands of each and every segment of the market. They are introducing all categories of product so that people of all age, sex, class, income group etc can come and become a customer of their food line. The success of fast foods arose from the changes in our living conditions: 1. Many women or both parents now work 2. There are increased numbers of single-parent households 3. Long distances to school and work are common 4. Usually, lunch times are short 5. There's often not enough time or opportunity to shop carefully for groceries, or to cook and eat with one's family. Especially on weekdays, fast food outside the home is the only solution.

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COMPANY INTRODUCTION
MC Donalds
Introduction:

McDonald's is the world's leading food service retailer with more than 35,000 restaurants in 119 countries serving 46 million customers each day. McDonald's is one of the world's most well-known and valuable brands and holds a leading share in the globally branded quick service restaurant segment of the informal eating-out market in virtually every country in which we do business. McDonald's is the
leading global foodservice retailer with more than 31,000 local restaurants serving more than 58 million people in 118 countries each day. More than 75% of McDonald's restaurants worldwide are owned and operated by independent local men and women. The strong foundation that he built continues today with McDonald's vision and the commitment of our talented executives to keep the shine on McDonald's Arches for years to come. To read more about McDonald's history, vision and executives, click on their links in the left menu. We drive our business momentum by focusing on what matters most to customers. Our owner/operators, suppliers and employees work together to meet customer needs in uniquely McDonald's ways. The powerful combination of entrepreneurial spirit and System wide alignment around our Plan to Win enables us to execute the best ideas with both large-scale efficiency and local flair.

Products
McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. Portugal is the only country with McDonald's restaurants 11

serving soup. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia).

Advertising
McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy. To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.

It operates via its restaurants and franchises to local business players (about 70% of the world's McDonald's are franchised [1].) . The corporations' revenues come from the rent, royalties and fees paid by these franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion. McDonald's makes money by operating its own restaurants and franchising to third parties. Of the 31377 McDonalds restaurants around the world, 20505 (65%) are operated by franchisees, 3966 (13%) are operated by affiliates, and 6906 (22%) are company-operated. In the last few years, McDonalds has sought to enfranchise more and more restaurants. For example, in 2007, it sold its businesses in Brazil, Argentina, Mexico, Puerto Rico, Venezuela and 13 other Latin American/Caribbean countries to one franchisee [3]. Steering in this direction has resulted in greater cash flow (which increased by 12% in 2007)[4], reduced spending on operations, and less corporate exposure to rising commodities prices. Both strategies have paid dividends- despite its size, sales have grown by a third since 2003[2]. Domestically, McDonald's continues to perform
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strongly despite a pullback in consumer spending and is even benefiting as consumers trade-down from more expensive eating options. At the same time, international operations are driving profit growth. A growing global middle class, particularly in emerging markets like China, India and Latin America, is a massive opportunity for McDonald's. McDonald's aggressive efforts to expand its global presence- most notably in 2008 Beijing Summer Olympics- have produced strong comparable sales and profit growth. The company experienced a dramatic turnaround in 2003, driven by a two-pronged strategy. In the U.S., McDonald's focused on increasing sales at existing locations by renovating stores, expanding menu options and extending store hours. Internationally, McDonald's expanded aggressively, opting to franchise rather than operate at its new locations which provided new income with little overhead. Keeping in mind the obesity trends in western nations and in the face of criticism over the healthiness of its products, The company has also expanded its menu in recent decades to include alternative meal options, such as salads and snack wraps, in order to capitalize on growing consumer interest in health and wellness. McDonald's primarily sells hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, milkshakes, and desserts.

McDonalds in India
McDonald's, a name that instantly triggers a smile for its scrumptious burgers, has a wide network of outlets throughout the country. McDonalds in India is classified as partnership operated by Indians. The company started its operations in India in 1996. In India, it is a 50-50 joint venture partnership between McDonalds Corporation (US) and two Indian businessmen Amit Jatia and Vikram Bakshi. The company has evolved special menu in the vegetarian category to suit Indian tastes and preferences. Taking in consideration the Indian culture, it doesnt offer any beef or pork items in India. Vision To be the best and leading fast food provider around the globe

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Mission McDonald's brand mission is to be our customers' favorite place and way to eat, and improve our operations to provide the most delicious fast food that meet our customers' expectations.

Values "Q.S.C. & V.". Provide good quality, services to customer. Have a cleanliness environment when customer enjoys their meal. The value of food product makes every customer is smiling.

The Five Forces Framework The Threat of Entrants : Large established companies with strong
brand identities such as McDonalds BKC, YUM, and WEN do make it more difficult to enter and succeed within the marketplace; new entrants find that they are faced with price competition from existing chain restaurants.

Bargaining Power of Buyers: Low bargaining power of buyers. Bargaining power of suppliers: Bargaining power of suppliers within
the fast food industry would be relatively small, unless the main ingredient of the product is not readily available.

Threat of Substitutes: This could range from a competitive fast food


restaurant to family restaurant to a home cooked meal.

Competitive Rivalry: The strength of competition in this industry is


very high; the main rivals are BKC, YUM, and WEN. They compete with international, national, regional, local, retailers of food products (restaurants, quick service, pizza, coffee shops, and supermarkets).

PESTEL Framework: PoliticaL:


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The international operations of McDonalds are highly influenced by the individual state policies enforced by each government

Economic:
McDonalds has the tendency to experience hardship in instances where the economy of the respective states is hit by inflation and changes in the exchange rates. Market leader. Very high target market. Low cost and more incomes. The rate at which the economy of that particular state grows determines the purchasing power of the consumers in that country.

Social:

Working within many social groups.

Increase employments. Technological Advanced technology development. Quality standards. Environmental: Quality packing. Local manufacture using foreign supplies. LEGAL: Legislation for product. Sustained logo.

SWOT Matrix

Swot Analysis
Strengths McDonald's has been a thriving business since 1955 and 20 of the top 50 corporate staff employees started as a restaurant level employee. In addition, 67,000 McDonalds restaurant managers and assistant managers were promoted from restaurant staff. Fortune Magazine 2005 listed McDonald's as the "Best Place to Work for Minorities." McDonalds invests more than $1 billion annually in training its staff, and every year more than 250,000 employees graduate from McDonald's training facility, Hamburger University. 15

The business is ranked number one in Fortune Magazine's 2008 list of most admired food service companies. One of the world's most recognizable logos (the Golden Arches) and spokes character (Ronald McDonald the clown). According to the Packard Children's Hospital's Center for Healthy Weight children age 3 to 5 were given food in the McDonalds packaging and then given the same food without the packaging, and they preferred the food in the McDonald's packaging every single time. McDonalds is a community oriented, socially responsible company. They run Ronald McDonald House facilities, which provide room and board, food and sibling support at a cost of only $10 a day for families with children needing extensive hospital care. Ronald McDonald Houses are located in more than 259 local communities worldwide, and Ronald McDonald Care Mobile programs offers cost effective medical, dental and education services to children. They also sponsor Olympic athletes. They are a global company operating more than 23,500 restaurants in 109 countries. By being spread out in different regions, this gives them the ability to weather economic fluctuations which are localized by country. They can also operate effectively in an economic downturn due to the social need to seek out comfort foods. They successfully and easily adapt their global restaurants to appeal to the cultural differences. For example, they serve lamb burgers in India and in the Middle East, they provide separate entrances for families and single women. Approximately 85% of McDonald's restaurant businesses world-wide are owned and operated by franchisees. All franchisees are independent, full-time operators and McDonald's was named Entrepreneur's number-one franchise in 1997. They have global locations in all major airports, and cities, along the highways, tourist locations, theme parks and inside Wal-Mart. They have an efficient, assembly line style of food preparation. In addition they have a systemization and duplication of all their food prep processes in every restaurant. McDonald's uses only 100% pure USDA inspected beef, no fillers or additives. Additionally the produce is farm fresh. McDonald's serves 100% farm raised chicken no fillers or additives and only grade-A eggs. McDonald's foods are purchased from only certified and inspected suppliers. McDonalds works closely with ranchers, growers and suppliers to ensure food quality and freshness. McDonalds only serves name brand processed items such as Dannon Yogurt, Kraft Cheese, Nestle Chocolate, Dasani Water, Newman's Own Salad Dressings, Heinz Ketchup, Minute Maid Juice. McDonald's takes food safety very seriously. More than 2000 inspections checks are performed at every stage of the food process. McDonalds are 16

required to run through 72 safety protocols every day to ensure the food is maintained in a clean contaminate free environment. . McDonald's was the first restaurant of its type to provide consumers with nutrition information. Nutrition information is printed on all packaging and more recently added to the McDonald's Internet site. McDonalds offers salads, fruit, roasted chicken, bottled water and other low fat and calorie conscious alternatives. Weaknesses Their test marketing for pizza failed to yield a substantial product. Leaving them much less able to compete with fast food pizza chains. High employee turnover in their restaurants leads to more money being spent on training. They have yet to capitalize on the trend towards organic foods. McDonald's have problems with fluctuations in operating and net profits which ultimately impact investor relations. Operating profit was $3,984 million (2005) $4,433 million (2006) and $3,879 million (2007). Net profits were $2,602 million (2005), $3,544 million (2006) and $2,395 million (2007). Opportunities In today's health conscious societies the introduction of a healthy hamburger is a great opportunity. They would be the first QSR (Quick Service Restaurant) to have FDA approval on marketing a low fat low calorie hamburger with low calorie combo alternatives. Currently McDonald's and its competition health choice items do not include hamburgers. They have industrial, Formica restaurant settings; they could provide more upscale restaurant settings, like the one they have in New York City on Broadway, to appeal to a more upscale target market. Provide optional allergen free food items, such as gluten free and peanut free. In 2008 the business directed efforts at the breakfast, chicken, beverage and convenience categories. For example, hot specialist coffees not only secure sales, but also mean that restaurants get increasing numbers of customer visits. In 2009 McDonald's saw the full benefits of a venture into beverages. Threats They are a benchmark for creating "cradle to grave" marketing. They entice children as young as one year old into their restaurants with special meals, toys, playgrounds and popular movie character tie-ins. Children grow up eating and enjoying McDonalds and then continue into adulthood. They have been criticized by many parent advocate groups for their marketing practices towards children which are seen as marginally ethical. They have been sued multiple times for having "unhealthy" food, allegedly with addictive additives, contributing to the obesity epidemic in America. In 2004, Michael Spulock filmed the documentary Super Size Me, where he went on an all McDonalds diet for 30 days and wound up getting cirrhosis of 17

the liver. This documentary was a direct attack on the QSR industry as a whole and blamed them for America's obesity epidemic. Due in part to the documentary, McDonalds no longer pushes the super size option at the dive thru window. Any contamination of the food supply, especially e-coli. Major competitors, like Burger King, Starbucks, Taco Bell, Wendy's, KFC and any mid-range sit-down restaurants.

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Strengths 1. Strong brand name, image and reputation. 2. Large market share. 3. Strong global presence. 4. Specialized training for managers known as the Hamburger University. 5. McDonalds Plan to Win focuses on people, products, place, price and promotion. 6. Strong financial performance and position. 7. Introduction of new products. 8. Customer focus (centric). 9. Strong performance in the global marketplace.

Weaknesses 1. Unhealthy food image. 2. High Staff Turnover including Top management. 3. Customer losses due to fierce competition. 4. Legal actions related to health issues; use of trans fat & beef oil. 5. Uses HCFC-22 to make polystyrene that is contributing to ozone depletion.

6. Ignoring breakfast from the menu.

Opportunities 1. Growing health trends among consumers. 2. Globalization, expansion in other countries (especially in China & India). 3. Diversification and acquisition of other quickservice restaurants. 4. Growth of the fast-food industry. 5. Worldwide deregulation. 6. Low cost menu that will attract the customers. 7. Freebies and discounts.

S-O Strategies 1. Focus on Plan to win to attract customers and expansion in other countries (S5, O2, O6). 2. Expansion in market share by more investments in Asia (S2, O2).

W-O Strategies 1. Minimize customers losses by provide low cost menu and discounts (W3, O6, O7).

Threats 1. Health professionals and consumer activists accuse McDonald's of contributing to the countrys health issue of high cholesterol, heart attacks, diabetes, and obesity. 2. The relationship between corporate level McDonald's and its franchise dealers.

S-T Strategies 1. More control on franchise dealers to maintain McDonald's reputation and quality (S1, T2). 2. Provide new product and keep innovation (S7, T3).

W-T Strategies 1. Applying 0 grams Trans fat in all worldwide McDonald's (W1, W4, O1). 2. Transfer from HCFC-22 to HFC (hydrofluorocarbon)free (W5, T6)

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Grand Strategy Matrix

Rapid Market Growth Quadrant II Quadrant I

Weak Competitiv e Position Quadrant III Quadrant IV

Strong Competitiv e Position

Slow Market Growth

The Boston Consulting Group (BCG) Matrix

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Relative Market Share Position

Industry Sales Growth Rate

MCD

Stars

Question Marks

Cash Cows

Dogs

MCDONALDS

PRODUCT MARKET & TARGET MARKET


Product Market
Is a market for a good or produced service and is a mechanism that allows people easily to buy and sell products. Services are often included in the scope of nth term. The product/service market consists of all types of consumers; however, groups of consumers have similar needs and wants. Beginning with market research; identifying your groups with shared characteristics; combining these groups into larger markets; and selecting your target audience which includes your target market. Before we create an effective advertising message, it is important to know who we are talking to.
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Target Market
Is the market segment which a particular product is marketed to. It is often defined by age, gender and/or socio-economic grouping. A target market is usually found after segmenting and analyzing the whole market. Target market selection depends on- 1. Number of competitors in the market 2.The preference/choice of customers 3.value attached to the product which company wants to convey to the market The process of determining who your target audience is begins with segmenting the consumer market; finding the right niche. This process begins with identifying groups of people with certain shared characteristics within a broad market. The categories of characteristics are geographic, demographic, behavioristic, and psychographic. Then combine these groups into larger market segments according to their mutual interest in the products utility or benefit. From these segments, choose your target market. Your target audience includes your target market. The target market in the previous McDonalds example is the person(s) who makes the purchase. Target audience is larger than the target market. Segmenting the business market is just as complex as segmenting the consumer market. Business markets are identified by using many of the same variables used to identify consumer markets. Additional variables used are business purchasing procedures, SIC Code, or by market concentration. In order to create an effective advertising message, it is important to know who your target audience is. The target audience includes the enduser, the person who makes the purchase, and the one who influences the purchasing decision. McDonalds main target audience is made up of children and their parents. The children influences their parents purchasing decision. Therefore, McDonalds advertising message is directed toward the children, as well as their parents. McDonald's target market is divided as follows: DEMOGRAPHICAL SEGMENTATION: Family McDonalds provides the comfortable and I am Lovin it environment for any family outing making it a place where both the adults and the children can sit together and a enjoy a Happy Meal.
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Gender Both working men and women equally find it a place where they can stop to pick a quick grab which is both economical and convenient at the same time. Age Kids, working professionals and elderly people Income Targets the middle class income group with its low priced meal combos. GEOGRAGHIC SEGMENTATION Is a market segmentation strategy whereby the intended audience for a given product is divided according to geographic units, such as nations, states, regions, counties, cities, or neighborhoods. Earlier McDonalds operated only in the US and then recognizing opportunities internationally expanded its network to a number of countries. McDonald's is expanding by targeting new customers. When we think of this fast-food restaurant chain, the image that comes to our mind is typically a family restaurant with lots of screaming kids running around. Ronald McDonald, the company clown, Happy Meals and playgrounds in the parking lot. The truth is, at first McDonald's target customers were children. But research showed that even though they had been hugely successful with this campaign, they were in fact missing a much larger customer base: adults. Research proved that adults consume more burgers than children do, so McDonald's decided to go after two new groups of target customers: teenagers and adults. They unveiled new ad campaigns that were much slicker and sophisticated than previous ones, while at the same time promising potential new customers a burger for adults called an "Arch Deluxe." But look carefully and you will see, despite the new name, what changed here was not so much the burger, but rather to whom the burger was being sold.

CONSUMER BEHAVIOUR ANALYSIS


Consumer Behaviour is the behaviour of individuals when buying goods and services for their own use or for private consumption. It is the study of when, why, how, where and what people do or do not buy products. It is affected by many uncontrollable factors like social, political, economic, legal, technological, ecological as well as psychological factors.
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Changes in consumer preferences Consumer preferences that gravitate towards more nutritional food (see Natural & Organic Foods Consumption and Health & Wellness) decrease the appeal of eating at McDonalds. As these consumer trends continue to shift towards the mainstream, public perception of McDonald's becomes increasingly negative. These changes may climax in lawsuits or media publications like Super Size Me, which criticizes McDonalds products for causing obesity, and Fast Food Nation, which decries McDonald's business practices. Since McDonald's is the most recognized brand name in the fast food industry, these negative publicity events have widespread impact on its brand equity. Furthermore, because there are many alternatives to fast food (such as cheap dine-in restaurants, street vendors and convenience stores), the corporation's sales depend on its ability to maintain its brand name and attract new customers. The introduction of salads and public nutrition campaigns are examples of McDonald's efforts to adapt its business model to changing trends in the market.

Firms 4Ps &Marketing Strategies,


A marketing strategy blends the elements of the marketing mix, also known as the four Ps (product, price, placement, promotion). The promotion element involves communication, and one type of communication is advertising. The advertising strategy combines the elements of a creative mix. This mix includes the target audience, product concept, communications media, and the advertising message. Product: Value-priced, fast-serviced meal Price: Value-pricing (offering just the right combination of quality and good service at a fair price) Place: Strategic location of most Mc Donald fast-food outlet is found in populated and easily accessible areas (eg; retail areas, airports, busy street) or most certainly locating closely where its top 3 competitors are also doing business eg;Burger King, Subway etc.. Promotion: Mc Donald has engaged in many short-term incentives for consumer promotion through limited value menus, promotional games to promote old/new items on the menu e.g.; Happy Meal toys, Big Mac
24

Hockey Contest, card games etc.. And McDonald focuses its ad campaigns on its overall Mc Donald experience and active life style. Business Strategies McDonalds has pursued two strategies since 2003. To keep up with rapidly changing consumer preferences, demographics and spending patterns, McDonald's has introduced new items (Premium Chicken sandwiches and the Angus Beef Burger) and campaigns to create more healthy foods (Premium Salads). The strategy reflects the philosophy that novelty, as opposed to loyalty to traditional products, is the key determinant of sales in the fast food industry. McDonalds has also focused on increasing sales at existing restaurants instead of opening new ones. To do so, McDonald's has remodeled many restaurants, kept stores open longer and increased menu options. Nevertheless, new McDonalds restaurants are still opening around the world at a rapid rate.

COMPETITIVE ANALYSIS
GLOBAL COMPETITION
Although McDonald's is the clear leader of the fast food industry in terms of revenues generated and restaurants established, it faces competition from other fast food chains, which are introducing new products themselves. Major direct competitors in the (hamburger-based) fast food industry include:

Burger King Holdings is the second largest hamburger fast food chain. Although more of Burger Kings restaurants are franchised than McDonalds restaurants, Burger King Franchise revenues trail behind that of its competitor, mainly due to the McDonalds size advantage.

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Wendy's is the third largest hamburger fast food chain. It has a lower operating margin that McDonalds, so it is likely to be more negatively impacted during a recession. Yum! Brands runs Kentucky Fried Chicken, Taco Bell, Pizza Hut, Long John Silvers, and A&W All-American Food Restaurants. Currently, Yum! brands are dominating the China market, posing a challenge to McDonald's attempts to enter the market. While McDonalds Corporation focuses on its flagship brand, Yum! splits its resources among a wide variety of restaurants.

In addition to the above competitors, McDonalds also competes with non-hamburger-based fast food restaurants, local and national dine-in restaurants (such as Red Robin), pizza parlors, coffee shops (Starbucks), street vendors, convenience stores and supermarkets. McDonald's is first in the Fast Food Hamburger Restaurant category for revenue followed by Burger King and then Wendy's. The Fast Food Hamburger Restaurant industry is dominated by McDonald's, who possesses approximately 90% of the market share for this component. The FFHR is a $67 billion segment. Burger King is second behind McDonalds with a 4% share of the segment. The QSR segment and FFHR category are extremely competitive because each FFHR restaurant offers similar menus and prices.

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27

DOMESTIC COMPETITION

The percentage share held by foodservice of total consumer expenditure on food has increased from a very low base to stand at 2.6% in 2001. Eating at home remains very much ingrained in Indian culture and changes in eating habits are very slow moving with barriers to eating out entrenched in certain sectors of Indian society.. The growth in nuclear families, particularly in urban India, exposure to global media and Western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends. FACTS AND FIGURES Fast food is one of the worlds largest growing food type. Indias fast food industry is growing by 40% a year and is expected to generate a billion dollars in sales by 2005.The multinational segment of Indian fast food industry is up to Rs. 6 billion, a figure expected to zoom to Rs.70 billion by 2005. By 2005, the value of Indian dairy products is expected to be Rs.1, 00,000 million. In last 6 years, foreign investment in this sector stood at Rs. 3600 million which is about one-fourth of total investment made in this sector. Because of the availability of raw material for fast food, Global chains are flooding into the country.

DIFFERENTIATION STRATEGY
Firms differentiation strategy is an approach under which a firm aims to develop and market unique products for different customer segments. Usually employed where a firm has clear competitive advantages, and can sustain an expensive advertising campaign. This strategy calls you to sell non standardized products to customers with unique need. In some or the other form all the firms uses various differentiation strategy to make their products or brand standout as a provider of unique values of customers in comparison with its competitors. The firm follows various differentiation strategies to be in league in the market as well as within its customers. They follow PERSONNEL DIFFERENTIATION STRATEGY The company is a leader in terms of the strategize training it gives to its personnel with its main motto being as the way we do
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business around here it. They have a well trained crew and managers who have long standing commitment to QSCV i.e. Quality, Service, Cleanliness and Value.

CHANNEL DIFFRENTIATION STRATEGY Companies can more effectively and efficiently design their distribution channels and coverage, expertise and performance. Location is one of its key advantage as its franchisees are conveniently placed and hence are easily accessible by all. These outlets are owned by other independent business players. For Example in India, Delhi NCR region the McDonalds outlets are spread across the entire regi.on strategically placed at key places like malls, metros, popular hangouts, corporate offices etc. IMAGE DIFFERENTIATION STRATEGY Companies can craft powerful and compelling images to further enhance their brand value. McDonalds popular Brand symbol Ronald McDonald with its colourful and happy appearance gives the promise of fun and a good time to all its customers.

Kentucky Fried Chicken


About the Company
KFC Corporation, or KFC, founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky. KFC is a brand and operating segment, called a "concept" of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc. The restaurants are known as Poulet Frit Kentucky or PFK in the province of Quebec in Canada. In France, however, the chain is known as KFC. KFC primarily sells chicken in form of pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of roasted chicken products, side dishes and desserts. Outside North America, KFC offers beef based products 29

such as hamburgers or kebabs, pork based products such as ribs and other regional fare. The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952, though the idea of KFC's fried chicken actually goes back to 1930. The company adopted the abbreviated form of its name in 1991. Starting in April 2007, the company began using its original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the United States as part of a new corporate rebranding program newer and remodeled restaurants will have the new logo and name while older stores will continue to use the 1980s signage. Additionally, Yum! Continues to use the abbreviated name freely in its advertising.

Products
The famous paper bucket that KFC uses for its larger sized orders of chicken and has come to signify the company was originally created by Wendy's restaurants founder Dave Thomas. Thomas was originally a franchisee of the original Kentucky Fried Chicken and operated several outlets in the Columbus, Ohio area. His reasoning behind using the paper packaging was that it helped keep the chicken crispy by wicking away excess moisture. Thomas was also responsible for the creation of the famous rotating bucket sign that came to be used at most KFC locations in the US. Menu items KFC's specialty is fried chicken served in various forms. KFC's primary product is pressurefried pieces of chicken made with original recipe. The other chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine. Kentucky Grilled Chicken - This marinated grilled chicken is targeted towards healthconscious customers. It features marinated breasts, thighs, drumsticks, and wings that are coated with the Original Recipe seasonings before being grilled. It has less fat, calories, and sodium than the Original Recipe fried chicken. Introduced in April 2009. Discontinued products The Colonel's Rotisserie Gold This product was introduced in the 1990s as a response to the Boston Market chain's roasted chicken products, and a healthier mindset of the general public avoiding fried food. Purportedly made from a "lost" Col. Sanders recipe, it was sold as a whole roaster or a half bird.[28] Tender Roast Chicken This product was an off-shoot of 'The Colonel's Rotisserie Gold'. Instead of whole and half birds, customers were given quarter roasted chicken pieces. For a time, customers could request chicken "original", "Extra Tasty Crispy", or "Tender Roast". Smokey Chipotle Introduced in April 2008. The chicken was dipped in chipotle sauce then doubled breaded and fried. It has been discontinued since August 2008. Nutritional value

KFC formerly used partially hydrogenated oil in its fried foods. This oil contains relatively high levels of trans fat, which increases the risk of heart disease. The Center for Science in the Public Interest (CSPI) filed a court case against KFC, with the aim of making it use other types of oils or make sure customers know about Trans fat content immediately before they buy food. 30

In October 2006, KFC announced that it would begin frying its chicken in trans fat-free oil. This would also apply to their potato wedges and other fried foods, however, the biscuits.

Advertising
One of KFC's latest advertisements is a commercial advertising its "wicked crunch box meal". The commercial features a fictional black metal band called "Hellvetica" performing live, the lead singer then swallows fire. The commercial then shows the lead singer at a KFC eating the "wicked crunch box meal" and saying "Oh man that is hot". In 2007, the original, non-acronymic Kentucky Fried Chicken name was resurrected and began to reappear on company marketing literature and food packaging, as well as some restaurant signage.

KFC Business Strategy


KFC fast-food chains are currently under the restaurant division of PepsiCo Incorporated. Some major threats include the changing attitudes of society toward healthier eating habits, KFC has more than 9,800 outlets located in 77 countries. In marketing, KFC restaurants are not restricted from locating within close proximity of other KFC restaurants. There are two alternative strategies for KFC. The first strategy involves keeping PepsiCo beverage division and snack foods division together, and a divestiture of PepsiCo restaurant division; selling Taco Bell, Pizza Hut, and KFC. Present Situation The organization is currently structured with two divisions under PepsiCo. David Novak is president of KFC. John Hill is Chief Financial Officer and Colin Moore is the head of Marketing. Peter Waller is head of franchising while Olden Lee is head of Human Resources. KFC is part of the two PepsiCo divisions, which are PepsiCo Worldwide Restaurants and PepsiCo Restaurants International. Both of these divisions of PepsiCo are based in Dallas.

Strengths
Strengths can be found internally in a company and can be used to the companys advantage. The strengths identified are as follows: 1. KFC's secret recipe. The secret recipe has long been a source of advertising, and allowed KFC to set itself apart. Also, KFC was the first chain to enter the fast-food industry, just before 31

McDonald's, which opened its first store a year later, and the "secret recipe" was the initial home replacement strategy.

2. Name recognition and reputation. KFC's early entrance into the fast-food industry in 1954 allowed KFC to develop strong brand name recognition and a strong foothold in the industry. The Colonel is KFC's original owner and a very recognizable figure, both in the U.S. and internationally, in their new logo. In fact, in the fourth annual LogoValue Survey, done by The Schecter Group, the KFC logo was the only one which significantly enhance the brand's image . 3. PepsiCo's success with the management of fast food chains. PepsiCo acquired Pizza Hut in 1977, and Taco Bell in 1978. PepsiCo used many of the same promotional strategies that it has used to market soft drinks and snack food. By the time PepsiCo bought KFC in 1986, the company already dominated two of the four largest and fastest-growing segments of the fast food industry. 4. Traditional employee loyalty. "KFC's culture was built largely on Colonel Sanders' laid back approach to management" (Wright, p.433). Before the acquisition of KFC by PepsiCo, employees at KFC enjoyed good benefits, a pension, and could receive help with other nonincome needs. This kind of "personal" human resources management makes for a loyal workforce. 5. Improving operating efficiencies by reducing overhead and other operating costs can directly affect operating profit. Due to the strong competition in the US, the fast-food chains are reluctant to raise prices to increase profit. Many of the chains are turning to operating efficiencies to increase profit. For many companies, operating efficiencies are achieved through improvements in customer service, cleaner restaurants, faster and friendlier service, and continued high-quality products.

Weaknesses
Weaknesses are also found internally like strengths. Weaknesses, however, can limit a companys potential. The weaknesses for KFC are identified as follows: 1. The many sales of KFC lead to a confusing corporate direction. Between 1971 and 1986, KFC was sold three times. The first two sales, to Heublein, Inc and to R.J. Reynolds, left the company largely autonomous. It wasn't until the sale to PepsiCo in 1986 that changes in top management started to take place. These changes happened almost immediately after the sale. 32

2. KFC has a long time to market with new products. Because of the nature of the chicken segment of the fast food industry, innovation was never a primary strategy for KFC. However, during the late 1980's, other fast food chains, such as McDonald's, began to offer chicken as a Menu option. During this time, McDonald's had already introduced the McChicken while KFC was still testing its own chicken sandwich. This delay significantly increased the cost of developing consumer awareness for the KFC sandwich. 3. Conflicting cultures of KFC and Pepsi Co. While KFC's culture was largely based on the Colonel's laid back approach to management, while PepsiCo's culture is more of a "fast track" attitude. Employees do not have the same level of job security that they enjoyed before the PepsiCo acquisition Problems Through an analysis of the strengths, weaknesses, opportunities, and threats of KFC, the following potential problem areas were identified:

1. No defined target market. The advertising campaign of KFC does not specifically appeal to any segment. It does not appear to have a consistent long-term approach. The U.S. has enormous changes in its demographics. Single-person households have increased from 12% in 1970 to 25% in 1995. With this kind of dramatic change, KFC does not have a proper approach to its target market. 2. Health Conscious Consumers. There has been a trend toward an increasingly healthy diet in America. This put KFC at an extreme disadvantage due to its fried product offering. 3. Increased Start Up Costs. Prime locations have increased in cost due to limited room for expansion. New technology has increased efficiencies, but resulted in greater increased start up costs. Restaurant and equipment packages range from $500,000 to $1,000,000. Achievements: KFC is one of the most renowned world gastronomic brand names. Kentucky Fried Chicken products are currently offered in 80 countries worldwide and in more than 11,000 restaurants which are visited on a daily basis by almost 8 million customers. Globally, KFC employs approximately 290,000 people, Worldwide, a new KFC restaurant is opened almost every day. 33

In 2004 the KFC Excellent range - three types of salad (Caesar, Garden and Mandarin) obtained the prize for Worldwide Best Practice Award 2004 in the category of best product and best marketing campaign and its implementation in the restaurants. This prize is distributed each year by YUM Restaurants International.According to the ratings for Most expensive world brands 2004 conducted by the American weekly Business Week, KFC was positioned 54th place; currently valued at 5.1 billion USD.

DOMINOS
SIZE OF THE MARKET Domino's Pizza is one of the biggest and fastest growing international food joints in South Asia. The very first Domino's Pizza outlet in India opened in Jan, 1996 at New Delhi. Today, Domino's Pizza India has become a wide network of Pizza delivery and food chain. There are close to 220 outlets in 42 cities of India and the brand is the top most among the food delivery business. Dominos Pizza outlets can be seen at major locations of Delhi and NCR. Their home delivery is free with a guarantee of Thirty Minutes Nahi to Free. Although they are expert in delivering Pizzas on time, their eating joints and outlets are also good. We plan to have a total of 500 stores in 75-80 cities by 2010 to 2011. It would entail an investment of Rs 200 million during the period MARKET GROWTH During last four months, dominoes have opened outlets in Jammu, Panipat, Surat, Baroda, Nashik, Trivandum, Meerut and Patiala. While earlier, 70 percent of our business used to be in metros and mini-metros, now the ratio is 50:50 between big cities and smaller Tier II and III cities. Dominos Pizza is expanding its base in India by opening 500 outlets to add to its current tally of 156 outlets, across 50 cities in India by 2011 with an investment of Rs.1, 000 crore. MARKET STRATEGIES Promotional and Advertisement Campaigns(Coupons and discounts) The '30 Minutes' Promise Use of Technology(Digital interactive Television, Internet on the PC, Mobile telephony) Premium Pricing Strategy Indian fast food industry and entry of multinational players Distribution strategies of fast food chains in India 34

MARKET SHARE The organized pizza market in India is worth Rs.500 crore and Dominos has a substantial 45% market share, and registered a healthy growth of 60% over last year. The main target for new outlets shall be metro cities though Tier II cities would also receive a fair amount of attention. Currently Dominos sells around 35,000 pizza every day, of which around 1% are given free on account of its 30 minutes or free model. 65 percent of its revenue comes from home delivery service; around 35 percent is from sales in premise. COMPETITORS Fast food is one of the world's fastest growing food types. It now accounts for roughly half of all restaurant revenues in the developed countries and continues to expand there and in many other industrial countries in the coming years. But some of the most rapid growth is occurring in the developing world; where it's radically changing the way people eat. People buy fast food because it's cheap, easy to prepare, and heavily promoted. This paper aims at providing information about fast food industry, its trend, reason for its emergence and several other factors that are responsible for its growth. India is a developing country with 2 percent of organized and 98 percent of unorganized sector. So most of the fast foods came into Indian market as India has a high growth in every sector. Some of the competitors of dominos are McDonald's Pizza Hut Barista Coffee Day

Subway
Subway is an American fast food franchise that primarily sells submarine sandwiches (subs), salads, and personal pizzas. It is owned and operated by Doctor's Associates, Inc. (DAI). Subway is one of the fastest growing franchises in the world with approximately 32,401 restaurants in 91 countries and territories as of February 2010. It is the largest single-brand restaurant chain globally and is the second largest restaurant operator globally after Yum! Brands (35,000 locations). 35

Subway's main operations office is in Milford, Connecticut, and five regional centers support Subway's growing international operations. The regional offices for European franchises are located in Amsterdam, Netherlands. Australia and New Zealand are supported from Brisbane, Australia; the Middle Eastern locations are supported from offices located in Beirut, Lebanon; the Asian locations from Singapore; India and the Latin America support center is in Miami, Florida. In the UK and Ireland the company hopes to expand to 2,010 restaurants by some time in 2010 Products Subway's main product is the submarine sandwich, or "Sub". Many stores also offer Cookies, muffins, and Danishes which may be purchased in a variety of flavors. In 2001, Subway added seasoned breads and a line of specialty items to its menu and in 2003, most Subway markets switched their beverage contracts to supply Coca-Cola products exclusively, having previously left it up to the individual market to decide whether to serve Coke or Pepsi. In order to ink the current deal with Coca-Cola, Coca-Cola helped pay for the initial rollout of toaster ovens to all existing restaurants in North America. Subway gave customers the option to have their sandwiches toasted in response to increased competition from a rival sandwich chain, Quiznos, which popularized toasted submarine sandwiches. In Australia, the introduction of Fresh Toasting enabled the Subway Franchise to prevent Quiznos from gaining market share. The TurboChef and Merrychef toaster ovens are a microwave and convection oven hybrid. The deal with Coca-Cola led to Quiznos switching to Pepsi chain wide, except in Canada. Subway menus vary by store, by country and by market. These are considered COP (country optional program), SOP (store optional program), MOP (market only program) but retain core items which are included at every store. The main food sold by the store is Submarine sandwiches, sold in "Six-inch", "Footlong", and the four inch "Mini Sub" sizes. All Subway stores offer customers lettuce, tomato, onions, bell peppers, cucumbers, olives, jalapeos and pickles, as well as market selected options such as carrot, corn, radish and avocado. Like other fast-food restaurants, they offer "limited time offers" or LTO from time to time. In addition to their standard menu, Subway also offers catering for all types of occasions. They offer "Giant Subs", which are a minimum of three feet long. These giant sandwiches can be ordered in bulk and to nearly any specification, something which Subway has promoted as a part of their campaign to tailor every sandwich to the individual customer's taste. Subway also offers sandwich platters, which consist of 5 footlong sandwiches per platter. Cookie platters are also offered. Each platter consists of 3 dozen freshly-baked cookies. One of the chain's best-known sandwiches is the BMT, which originally stood for Brooklyn Manhattan Transit, but now stands for Biggest, Meatiest, Tastiest. [7] The sandwich contains salami, pepperoni and ham. As of 2004, it was Subway's most popular cold sandwich in the United Kingdom.[8] 36

In 2006, the first kosher Subway restaurant in the United States opened in a suburb of Cleveland, Ohio. Subway spokesman Jared Fogle was in attendance at the opening. "With slight modifications, such as no pork-based products, and the use of soy-based cheese, the menu is virtually identical to that of any other Subway restaurant."[9]. Since then, kosher Subways have opened in New York, Los Angeles, Kansas City, and Baltimore[10], as well as Livingston, NJ, and plans have been announced for Milwaukee, Boston, and one inside the JCC in West Bloomfield, Michigan, a suburb of Detroit.[11] Some of these locations serve soy cheese, but most don't serve any form of cheese at all. All Subway restaurants in Muslim countries serve a halal menu. There are also at least two Subway restaurants in the United States that do the same, three in Canada, and a growing number in the United Kingdom. The success of these stores has been mixed, but the company will open more halal stores. [12] Subway also offers items other than sandwiches; breakfast items include such baked goods as bagels, egg & sausage sandwiches, and as of July and August 2006, "personal pizzas" are available in select markets to their menu. The personal pizzas are made upon order (as with their sandwiches) and heated "in less than 90 seconds" (cooking for 85 seconds) as advertised on televised commercials. Breakfast and pizza items are only available in some stores. Most stores offer additional toppings upon request. In November 2009, Seattle's Best Coffee announced that they'd signed an agreement to serve freshly brewed coffee as part of Subway's breakfast offerings. [13] The 2009 Zagat Fast-Food Survey rated Subway as the best provider of Healthy Options in the Mega Chain category. Subway was also first in the "Best Service" and "Most Popular" categories, although it was second overall behind Wendy's.[14]

Advertising
Subway uses the advertising slogan "Eat Fresh" to explain how every sandwich is made on freshly baked bread, using fresh ingredients, in front of the customer to their exact specification, by employees whom Subway terms "Subway Sandwich Artists". In 2008, Subway began to offer "Five Dollar Foot-long" submarine sandwiches in the United States as a limited time only promotion. Customer response prompted Subway to make a "Five Dollar Foot-long Everyday Value Menu" that includes 8 footlong sandwiches (Spicy Italian, Cold Cut Combo, Tuna, BLT, Black Forest Ham, Meatball, Veggie Delite & Oven Roasted Chicken) a permanent menu item. [15] The jingle from the commercials advertising Five Dollar Foot-longs has gained some popularity. In 2009, Subway brought back the "Five Dollar Foot-Long" sandwiches for a limited time. These sandwiches included every sub excluding Double Meat and Premium subs.

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Also in 2009, the Buffalo Chicken sub was introduced to the "Everyday Value Menu" as the newest Five Dollar Foot-Long. In November 2007, Subway's US commercials featured the Peter Griffin character from Family Guy in which he extols the virtues of its new Subway Feast sandwich. [16] Subway has also used instant win competitions based on the game Scrabble as promotional tools. Subway also notably has a product placement television advertisement campaign for the US series Chuck, ongoing since its first season. As ratings dwindled in the second season, a campaign to "save Chuck" was launched by fans, which involves purchasing a foot-long sandwich from Subway on April 27, 2009, the date of the season finale. Tony Pace, Subway's marketing officer, reportedly called it the best product placement the restaurant chain has done "in several years." [17]

Relevant Data: Low-income neighborhoods have fewer chain supermarkets with only 75% (p < 0.01) of that available in middle-income neighborhoods . Even after controlling for income and other covariates, the availability of chain supermarkets in African American neighborhoods is only 52% (p < 0.01) of that in White neighborhoods with even less relative availability in urban areas . Hispanic neighborhoods have only 32% (p < 0.01) as many chain supermarkets compared to non-Hispanic neighborhoods. Larger sized food stores such as supermarkets versus smaller stores and chain versus non-chain supermarkets have been shown to be more likely to stock healthful foods and to offer foods at a lower cost. Furthermore, given that low-income populations are less likely to have private means of transportation and given that the nature of food shopping involves either transporting multiple shopping bags or making more frequent shopping trips, the mobility strategies for food shopping among low-income families will exacerba

Tools and Methods of Data Collection:


The interview is conducted for about 15 minutes with each person and collected the data. The tool for the collection of data is a questionnaire. The questionnaire has 15 questions.

Data Processing and Analysis:

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The data processing consists of coding the data collected in the form of questionnaire. The data collected with the help of questionnaire is having the closed replies. One open ended replies have been taken for that if any problems they are facing and for the close ended the replies are measured using scales.

ANALYSIS & INTERPRETATION


1) VISIT

Frequency
Daily Weekly Fortnightly Monthly Total 14 38 19 9 100

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visit
40 35 30 25 20 15 10 5 0 Daily Weekly Fortnightly Monthly 14 9 19 38

Interpretation:From the above table and graph, it says that majority of the customers visit the fast food retail store weekly (i.e. 38%) and minority of them (19%) visit fortnightly

2) PRICE RANGE

Range 100-200 200-500 Above 500 Total

Frequency
24 60

16 100

40

price range
70 60 50 40 30 20 10 0 100-200 200-500 Above 500

Interpretation:From the above table and graph, it says that majority of the customers are willing to spend money of price range 200-500 (i.e. 60%) and minority of them says that they will spend money of price range 100-200 (i.e. 24%) in the fast food retail store

3) Preference

Frequency Brand image Easy accessibility Special offer Total


21 29

50 100

41

preference of store
60 50 40 30 20 10 0 Brand image Easy accessibility Special offer

Interpretation:-

From the above table and graph, it says that majority of the customers (i.e. 50%) prefer special offers in the store and minority of them (i.e. 29%) prefer easy accessibility

4) Visiting hours

Frequency
40

Morning
45 40 35 30 25 20 15 10 5 0 Morning Afternoon Evening

29

Afternoon Evening Total 31 100

42

Interpretation:From the above table and graph it says that majority of the customers are willing (i.e. 40% ) to visit the store on morning session and minority of them (i.e.31% ) of them visit the store on evening session

5) Preference of store due to friendliness of staff

Response
Strongly disagree Disagree Neutral Agree Strongly agree Total

Frequency
2 5 44 40 9 100

50 45 40 35 30 25 20 15 10 5 0 Strongly agree Disagree Neutral Agree Strongly agree

Interpretation:-

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From the above table and graph it says that majority of the customers (i.e. 44%) of them are neutral to prefer the store for friendliness of staff and minority of them (i.e. 40% ) of them agree that they will prefer the store for friendliness of staff

6) Preference of store due the variety of menu available in the store

Response
Strongly Disagree Disagree Neutral Agree Strongly agree Total

Frequency
5 15 21 39 15 100

preference due to variety of menu


45 40 35 30 25 20 15 10 5 0 Strongly agree Disagree Neutral Agree Strongly agree

Interpretation From the above table and graph it says that majority of the customers ( i.e. 39%) of them agree that they will prefer the store due to the variety of menu and minority of them (i.e. 21% ) of them neutral about the variety of menu in the store 44

7) Preference of store due the service speed

Response
Strongly disagree Disagree Neutral Agree Strongly agree Total

Frequency
5 20 39 15 20 100

preference due to service speed


45 40 35 30 25 20 15 10 5 0 Strongly agree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 39%) are neutral about the preference of store due to service speed and minority of them are disagree that (i.e. 20%) of them prefer the store due to service speed

8) Preference of store due to good calorie content exist in the food 45

Response
Strongly disagree Disagree Neutral Agree Strongly agree Total

Frequency
9 33 19 31 20 100

preference for calorie content


35 30 25 20 15 10 5 0 Strongly agree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 33%) of them disagree that they will prefer the store due to the calorie content in the food and minority of them (i.e. 31%) agree that they will prefer the store due to the calorie content in the food

9) Preference of store due to the cleanliness and store atmosphere

Response
Strongly disagree

Frequency
2

46

Disagree Neutral Agree Strongly agree Total 100

7 25 40 26

preference due to ambience


45 40 35 30 25 20 15 10 5 0 Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation: From the above table and graph it says that majority of the customers (i.e. 40% ) of them agree that they will prefer the store for ambience provided in the store

10) Preference store due the delivery speed offer by the store

Response
Strongly disagree Disagree Neutral

Frequency
4 20 15

47

Agree Strongly agree Total 100

41 20

preference due to delivary speed


45 40 35 30 25 20 15 10 5 0 Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 41%) of them prefer the store due to delivery speed that is offered

11)Satisfaction with the menu offer for my family

Response
Strongly disagree Disagree Neutral Agree Strongly agree

Frequency
7 16 34 35 6

48

Total

100

preference of menu for my family


40 35 30 25 20 15 10 5 0 Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 35% ) of them agree that they are satisfied with the menu that was offered in the fast food store and followed by some of them are neutral about the menu for their family

12)Preference of store due to facilities offered

Response
Strongly disagree Disagree Neutral Agree Strongly agree Total

Frequency
11 20 41 14 14 100

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preference due to facilites


45 40 35 30 25 20 15 10 5 0 Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 41% ) of them says that they are neutral about preferring the store due to the facilities

13)Preference of store due to easy accessibility and locational advantage

Response
Strongly disagree Disagree Neutral Agree Strongly agree Total

Frequency
4 18 15 45 15 100

50

50 45 40 35 30 25 20 15 10 5 0 Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 45%) of them agree that they will prefer the store due to easy accessibility and locational advantage

14)advertising strategy

Response
Strongly disagree Disagree Neutral Agree Strongly agree Total

Frequency
9 20 33 28 10 100

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35 30 25 20 15 10 5 0 Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 33%) of them are neutral about the advertising strategy provided by the store and followed by that customers agree the store for the advertising strategy

15)preference of store due to special offer and discounts

Response
Strongly disagree Disagree Neutral Agree Strongly agree Total

Frequency
4 20 15 41 20 100

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45 40 35 30 25 20 15 10 5 0 Strongly disagree Disagree Neutral Agree Strongly agree

Interpretation:From the above table and graph it says that majority of the customers (i.e. 41% ) agree that they will prefer the store because of special offers and discounts.

Major Findings
This study indicates that majority of the customers visit the fast food retail store weekly (i.e. 38%) and minority of them (19%) visit fortnightly This study indicates that majority of the customers are willing to spend money of price range 200-500 (i.e. 60%) and minority of them says that they will spend money of price range 100-200 (i.e. 24%) in the fast food retail store This study indicates that majority of the customers (i.e. 50%) prefer special offers in the store and minority of them (i.e. 29%) prefer easy accessibility This study indicates that majority of the customers (i.e. 44%) of them are neutral to prefer the store for friendliness of staff and minority of them (i.e. 40% ) of them agree that they will prefer the store for friendliness of staff This study indicates that majority of the customers ( i.e. 39%) of them agree that they will prefer the store due to the variety of menu and minority of them (i.e. 21% ) of them neutral about the variety of menu in the store This study indicates that majority of the customers (i.e. 33%) of them disagree that they will prefer the store due to the calorie content in the food 53

and minority of them (i.e. 31%) agree that they will prefer the store due to the calorie content in the food This study says that majority of the customers (i.e. 40% ) of them agree that they will prefer the store for ambience provided in the store This study says that majority of the customers (i.e. 35% ) of them agree that they are satisfied with the menu that was offered in the fast food store and followed by some of them are neutral about the menu for their family This study indicates that majority of the customers (i.e. 45%) of them agree that they will prefer the store due to easy accessibility and locational advantage This study indicates that majority of the customers (i.e. 33%) of them are neutral about the advertising strategy provided by the store and followed by that customers agree the store for the advertising strategy This study indicates that majority of the customers (i.e. 41% ) agree that they will prefer the store because of special offers and discounts.

CONCLUSION:

McDonald's is a top brand in the fast food industry. It has a very effective and efficient marketing strategy where the main focus of a marketer is to provide 100% customer satisfaction. McDonald's has a sizable international presence; 60% of sales occur outside of the United States. In addition to developed markets like the U.K., Canada, South Korea and Australia, McDonald's operates in fast growing emerging markets like China, India, Russia and Eastern Europe. By tapping into a growing global middle class, the company's international operations have consistently posted strong same-store sales growth. China is a particularly promising opportunity. In FY 2007, McDonald's launched the breakfast menu, extended store hours to 24 hours in major cities, and implemented drive-thru in China in its efforts to capitalize on this huge market. The corporation has adapted its menu items to local cultures, such as the Teriyaki Mac in Japan, variants of Filet-O-Fish in China, and using lamb instead of beef in India.

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McDonald's International Revenues Geographic Region US France, Germany, UK Rest of Europe Australia, China, Japan Percent of Total Revenues 35% 21% 14% 8%

Rest of Asia, the Middle East, Africa 8%

OUR SUGGESTIONS

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As majority of customers (38 percent) visit the store weekly especially weekends. So it is suggest to stores give special offers and discounts to capture more customers and retain loyal customers. As study refers more customers are looking for the special offers ,so it suggest stores to more concentrate on the special offers but no compromise in the quality of food.

It is found that majority of customers are not fully satisfied with the friendliness of staff. So it is suggest that the stores should conduct soft skill training and make them give more customer service .Regular monitoring of the staff behavior towards customers is also suggest here. Customers are happy with the MENU verities available in the stores .But it is suggested that add more customized menu and review the menu for every 3 months. As study shows that customers are not aware of the calorie contents exist in the food. So it is suggest that stores should display the calorie contents available in a particular food. It is suggest the stores to concentrate on the areas of ambience and locational strategy.

Advertising strategy of the stores are not making attention the customers .So it is suggest the stores to think of the design of different innovative advertising campaigns.

APPENDIX:SOME INTERESITNG ARTICLES ON THE FAST FOOD INDUSTRY


Revival of Consumer Expenditure Boosts Indian Fast Food Industry
Jan 13, 2010 56

The Indian fast food industry is likely to see opening of 70-100 new outlets in 2009 on the back of changing lifestyle of Indian consumers and rising disposable income.

With the revival of consumer spending, the Indian fast food industry (values Rs 3,000 Crore) is expected to see addition of 70-100 new outlets this year (2010) against 3050 outlets in 2009, as reported by Business Standard. KFCs Yum! Brand will remain at the forefront as it has planned to open nearly 45 outlets in 2010. Pizza Hut, another Yum! Brand, will also increase the number of its stores and is planning to extend the base by 10% this year (2010). Dominos has planned to add 65-70 stores in the financial year (2009-10). Of these, 33 had already been set up by the company till August 2009, which took its total number of stores to 274. The intensive focus on the increasing number of stores in 2010 is based on analyst reports showing that franchise driven Indian fast food restaurant industry sales grew at a rate of 7%-20% in last one year (2009) on account of reasonable value meals and price points. Besides, the transformation of Indian consumers lifestyles has tremendously helped the industry to grow and expand over the last few years. Other reasons like - rising number of nuclear families, exposure to western cuisine and global media, increasing number of employed women - have had a significant impact on the eating out trends and growth of the fast food industry. The industry experts believe that the middle class young population, with high disposable income, will spend more on eating out at chained fast food outlets. The demand for ready-to-eat packaged food is also expected to record strong growth in the country. According to a Research Analyst at RNCOS, The addition of new food outlets along with other favorable factors will take the Indian fast food industry to a new height of growth and boost its revenue. The fast food outlets are including new varieties of products to their menu in order to fulfill the demand of each and every segment of the society. This change in approach of leading fast food chains will help them to experience robust growth in coming years

Fast Food Eating Healthy Children Eating Food Kids Health Teens Womens Health
Nov 30 2009 Eating frequent fast food meals causes teens and young adults to gain more weight and face an increased risk of developing insulin resistance according to the results of a study funded by the National Heart,Lung, and Blood Institute(NHLBI) and published in the January 1, 2005 issue of The Lancet.* 57

After 15 years, those who ate at fast-food restaurants more than twice each week compared to less than once a week had gained an extra ten pounds and had a twofold greater increase in insulin resistance, a risk factor for type 2 diabetes. Diabetes is a major risk factor for heart disease. Obesity and diabetes are on the rise in this country and this important study highlights the value of healthy eating habits, said NHLBI Acting Director Barbara Alving, M.D. Fast-food consumption has increased in the United States over the past three decades. Its extremely difficult to eat in a healthy way at a fast-food restaurant. Despite some of their recent healthful offerings, the menus still tend to include foods high in fat, sugar and calories and low in fiber and nutrients, said lead author Mark Pereira, Ph.D., assistant professor of epidemiology at the University of Minnesota. People need to evaluate how often they eat meals at fast-food restaurants and think about cutting back, according to Pereira. One reason for the weight gain may be that a single meal from one of these restaurants often contains enough calories to satisfy a persons caloric requirement for an entire day. Participants were asked during the physical examinations given as part of the study how often they ate breakfast, lunch or dinner at fast-food restaurants. Researchers found that the adverse impact on participants weight and insulin resistance was seen in both blacks and whites who ate frequently at fast-food restaurants, even after adjustment for other lifestyle habits. Study participants included 3,031 young black and white adults who were between the ages of 18 and 30 in 1985-1986. The participants, who were part of the Coronary Artery Risk Development in Young Adults (CARDIA) study, received dietary assessments over a 15-year period. CARDIA centers are located in Birmingham, AL, Chicago, IL, Minneapolis, MN, and Oakland, CA. According to the study, men visited fast-food restaurants more frequently than women and blacks more frequently than whites. Black men reported an average frequency of 2.3 visits per week in 2000-01. White women had the lowest frequency, at an average of 1.3 visits per week in 2000-01. It is important to watch carefully what you eat, especially at a fast-food restaurant. Knowing the nutritional content is important. Consumers may want to ask for this information, said NHLBIs Gina Wei, M.D., project officer for CARDIA. Salads and grilled foods tend to be lower in fat than fried foods, she said. Keep portion sizes small, and ask that high-fat sauces and condiments, such as salad dressing and mayonnaise, be on the side and use them sparingly to reduce calories, Wei said. 58

Fast Food Obesity


Posted on October 26, 2007 Plenty of ads by fast food joints with their attractive and delicious recipes enforce fast food obesity. Many people are becoming obese because of lack of selfcontrol and anxiety. Causes of Fast Food Obesity Fast food obesity is striking in many countries because of the easy availability of fast food even in the grocery shops, gas stations and even on the roadsides. So it is difficult to escape from these delicious advertisements and showcases. With the increasing accessibility to the fast food and the high competition between the various fast food joints, fast food obesity has become a major problem for many countries to deal with. Although there are genetic reasons for fast food obesity, people are mainly affected because lack of self-control. Besides the above reasons lifestyle also plays an important role in making people obese. Many people think that money can buy anything from such cases fast food obesity cant be isolated. People with high ambitions or working hard to achieve a comfortable lifestyle many a times ignore their diet and health. Environment also has a great impact on the fast food obesity. Majority of people have accepted passive fast food consumption in their life style. Obesity may lead to health problems like diabetes, severe cardiac problems and various other health problems. Scientists and doctors have clearly exhibited that regular consumption of unhealthy food and reduced physical activity results in obesity. Along with the developed western countries, many eastern countries are also dealing with this problem. Neglecting traditional and healthy diet, eastern countries like China, Japan etc. are also affected with the fast food obesity.

Overeating Fast Food Carbs Causes Signs of Liver Damage


by Walter Jessen A recent study evaluating the effects of fast-food-based overeating on liver enzymes and liver triglyceride content has been making the news this week. However, most media sources have been incorrectly interpreting the results. The Swedish study, published in the British Medical Association journal Gut, suggests that eating too 59

much fast food can cause liver damage. The goal of the study was to examine the potential link between changes in serum alanine aminotransferase (gene symbol ALT) to the amount of fatty infiltration in the liver of healthy non-obese subjects. ALT is an enzyme that, when present at high levels in the blood, is a diagnostic indicator of nonalcoholic fatty liver disease . A high concentration of ALT in the blood is also a marker of risk for type 2 diabetes . The Swedish investigation assessed the effects of four weeks of fast-food-based hyper-alimentation (meaning overeating) on the levels of serum ALT in 18 young, lean individuals (12 men, 6 women). The participants increased their caloric intake by eating two fast-food-based meals a day while minimizing their physical activity. Over the course of the study, seventeen of the 18 participants increased their body weight by 5 15%. At the end of four weeks, 13 of the 18 subjects had developed pathological serum ALT concentrations (meaning ALT levels observed in diseased liver). Surprisingly, pathological levels of ALT were observed in most patients as early as one week after the study began, and were more than four times normal on average by the end of the study. Only two of the 18 individuals developed liver steatosis or fatty liver, a benign, non-progressive condition, whereby fat accumulates in liver cells

BIBLIOGRAPHY
1. http://www.mcdonaldsindia.com/aboutus.html 2. http://mcdonaldsindia.net/about/our_journey.htm 3. http://www.wsicorporate.com/article/mcdonalds_franchisee_in_India 60

4. http://info.shine.com/company/McDonalds-India/330.aspx 5. http://answers.yahoo.com/question/index?qid=20070312143750AACyEzp 6. http://wiki.answers.com/Q/What_is_mcdonalds_target_market 7. http://www.va-interactive.com/inbusiness/editorial/bizdev/ibt/new_mark.html 8. http://www.contactomagazine.com/biznews/targetaudience1007.html 9. http://en.wikipedia.org/wiki/Subway_(restaurant) 10. www.mcdonalds.com 11. www.moneycentral.msn.com 12. www.mcdonalds.ca 13. Strategic Management concepts and cases by Fred David 12 edition 14. Exploring Corporate Strategy text & cases 8th edition 15. U.S. Environmental Protection Agency 16. http://www.foodsectornews.com/News/2010/01/Revival-of-ConsumerExpenditure-Boosts-Indian-Fast-Food-Industry.html 17. http://womenshealth.about.com/od/girlshealth101/a/fastfoodteenwei.htm 18. http://obesity.ygoy.com/fast-food-obesity/ 19. http://www.highlighthealth.com/diet-and-nutrition/fast-food-and-liver-damageits-the-carbs-not-the-fat/

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