INTRODUCTION

The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 69 million customers daily in 122 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated either by a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 12 percent over the last years ending in 2012 to $27.56 billion, and 14.67 percent growth in operating income over last three years to $8.6 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken, French fries, breakfast items, soft drinks, milkshakes, and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies, and fruit. The McDonald's headquarters complex, McDonald's Plaza, is located in Oak Brook, Illinois. It sits on the site of the former headquarters and stabling area of Paul Butler, the founder of Oak Brook. McDonald's moved into the Oak Brook facility from an office within the Chicago Loop in 1971. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee". Speedee was eventually replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man having puffed out costume legs. McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961, with the description "Drive-In Restaurant Services", which continues to be renewed through the end of December 2009. In the same year, on September 13, 1961, the company filed a logo trademark on an overlapping, double arched "M" symbol.

McDonalds set up operations in India through a joint venture partnership with two local Indian companies - Hardcastle Restaurants Private Limited in the west and south region and Connaught Plaza Restaurants Private Limited in the north.

Mc Donalds Mission Statement

McDonald's brand mission is to be our customers' favourite place and way to eat and drink. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience People, Products, Place, Price and Promotion. We are committed to continuously improving our operations and enhancing our customers' experience.

Values
We place the customer experience at the core of all we do. We are committed to our people. We believe in the McDonalds System. We operate our business ethically. We give back to our communities. We grow our business profitably. We strive continually to improve.

McDonalds is driven by the philosophy of Quality, Service, and Cleanliness & Value for Money. This translates into a commitment to provide customers high quality products, served quickly with a smile, in a clean and pleasant environment at an affordable price. This effectively means that the McDonalds menu is priced at a value that the largest segment of the Indian consumers can afford, while at the same time ensuring that quality is not sacrificed for value rather, McDonalds leverages economies to minimize costs while maximizing value to customers. We take the burger business more seriously than anyone else- Ray Kroc

Fast Food industry in India

The fast food industry in India has evolved with the changing lifestyles of the young Indian population. The sheer variety of gastronomic preferences across the regions, hereditary or acquired, has brought about different modules across the country. It may take some time for the local enterprise to mature to the level of international players in the field. Many of the traditional dishes have been adapted to suit the emerging fast food outlets. The basic adaptation is to decrease the processing and serving time. 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. Fast food is one of the worlds largest growing food types. Indias fast food industry is growing by 35% a year and is generating multi billion dollars in sales since 2005. Due to the availability of raw material for fast food, Global chains are flooding into the country.

MAJOR PLAYERS: McDonalds 250+ Dominos 600+ KFC 86 Cafe Coffee Day 1481 Barista 250+ Pizza Hut 140+ Burger King 50+

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 most of them are

trying 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 in 1991, most

of the tariff and non-tariff barriers from the Indian boundaries are either removed or minimized. This helped the MNCs significantly to enter into the country. Consumption: Increase in consumption of portion sizes of pizzas, burgers and other

type of fast foods. Easy and Quick delivery: Not only do the fast food restaurants provide quick over

the counter service but home delivery as well which increases the frequency and consumption. Variation in Portion Sizes: The fast food restaurants have a variety of portion sizes,

so it makes it a snack as well as dinner for the consumers.

McDonalds Entry in India McDonalds entered the Indian market in 1996 as a joint venture (JV) between Oak Brook III. and 2 local partners Hardcastle Restaurants Private Ltd. in western and Southern India, and Connaught Plaza Restaurants Private Ltd. in northern India. To enter a market where consuming beef is off limits was very challenging and ambitious. McDonalds objective was to be inspired by the culture of India and to deliver the greatest of food experiences to the customers in India bringing in the splice of life. They were aiming for to change the local perception of the new product being American and remove the fear of unknown, where family dining in was a custom for centuries. The management wanted to advertise McDonalds as a stimulator and advocate of family and culture values. The diversity in language and communication is one of the greatest components of the culture. Until 2000, McDonalds advertised their brand mainly by putting the main focus on the outlet design and tailor made food menu for the needs and desires of the diverse Indian population. McDonalds entry into India was met with stiff opposition. Members of the Hindu organization, the Bajrang Dal, the militant arm of one of the dominant fundamentalist political parties in India, the Bharatiya Janata Party (BJP) openly protested against the company by attacking its branches across India on May 4th, 2001. The members of the Bajrang Dal demolished the restaurant in Thane, a northeastern Mumbai suburb. In southern Mumbai, a McDonalds store was besieged by protestors from the leading Bharatiya Janata Party, who shouted slogans and stained the restaurants mascot with cow dung. SHIV SENA another Hindu alliance also threatened to protest outside the McDonalds corporate office after reports of a lawsuit being filed against McDonalds in Seattle. The biggest problem McDonalds faced was during the launch of its product in India was the public image it was carrying as an International food chain and not matching Indian standards. There were concerns raised about how the burgers are made in McDonalds. Offering the cheapest burger in the world was not easy. In India, McDonalds offered a menu that did not had any beef or pork items as well as special product formulations for accommodating Indian culture and palate. Furthermore, all the vegetarian products, even the mayonnaise in vegetable burgers, were egg-less and 100% vegetarian. Additions to the menu have been a regular feature of McDonalds in India. The company in India conducted regular 6

qualitative as well as quantitative studies, which tracked the target consumer lifestyle in India, a practice that had followed internationally as well. It was under these circumstances that McDonalds India went about creating the cold chain infrastructure for its restaurants in the country. As McDonalds always considers the quality of all its products to be of primary importance, it sets high standards for its suppliers that are amongst the biggest in the food industry. World over, McDonalds always believed in development of close relationships with suppliers and this is precisely what it has done in India. As India being a very ancient country and one of the lands of the ancient river valley civilizations, McDonalds had to consider the cultural, economical and sociopolitical factors in India. The Indian population is very diverse and complex as nation is split between different communities, religions (e.g. Hinduism, Buddhism, Sikhism, Islam, Jainism and Christianity), beliefs and value systems. All these factors play a significant role in nations preference for food and dining in general. 80% of the entire population of India practice Hindu which forbids non-vegetarian food. Due to this, McDonalds initially only offered a vegetarian menu. Later they understood that this wasnt the correct approach. To honor the cultural differences between religions, the company categorized the cooking tools as well as employees in vegetarian and non-vegetarian category. The cultural factor had to be taken into consideration in such market, as any omission can destroy the reputation globally which may limit the chances of business expansion. McDonalds formulated a suitable pricing strategy that can facilitate the high volume of consumers, targeting mainly the lower and middle class. The majority of the Indian population falls into this category. McDonalds has over 250 outlets in more than 40 cities in India.

ANALYSIS I
McDonald's primarily sells hamburgers, cheeseburgers, chicken, breakfast items, soft

drinks, milkshakes, desserts and French fries. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies, and fruit.

1.
as 4Ps.

Marketing Mix

A planned mix of the controllable elements of a product's marketing plan commonly termed

These four elements are adjusted until the right combination is found that serves the needs of the product's customers, while generating optimum income. The 4Ps are:

i.

Product

ii.

Price

iii.

Place

iv.

Promotion

a.

Product

McDonalds places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers requirements change over time. In order to meet these changes, McDonalds has introduced new products and phased out old ones, and will continue to do so. Care is taken not to adversely affect the sales of one choice by introducing a new choice, which will cannibalize sales from the existing one (trade off). McDonalds knows that items on its menu will vary in popularity. Their ability to generate profits will vary at different points in their cycle. In India McDonalds has a diversified product range focusing more on the vegetarian products as most consumers in India are primarily vegetarian. The happy meal for the children is a great seller among others. b. Price The customers perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than 8

a physical item; it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrity. In India McDonalds classifies its products into two categories namely the branded affordability (BA) and branded core value products (BCV). The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and McSpicy chicken and paneer costing around Rs. 120 and the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs25-35. This has been done to satisfy consumers which different price perceptions.

Value Pricing McDonalds came with the concept of value pricing for Indian consumers where in it came out with various combos in form of Happy Meals comprising of small burgers, fries, coke + toy. Medium meal combo that consisted of burger, fries and Coke with the price of Rs 75 Maharaja Mac Meal Rs 94 Family Dines under Rs 300

The prices for the meals were economical as compared to the offerings in Pakistan and Srilanka and are 50% less than United States. Product line Pricing McDonalds has a unique price strategy which falls solely on many of their product lines. Their Value Meals fall into the category of Product Line Pricing. Where there is a range of product or services the pricing reflect the benefits of parts of the range. For example, you can order a Two Cheeseburger Value meal that comes with a medium drink and fries for around Rs 75. You can Super Size this meal to get a large drink and large fries for a little more money or you can go with another value meal that might include different items for different price.

c.

Place

Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes 9

involved in bringing products to the end consumer. McDonalds outlets are very evenly spread throughout the cities making them very accessible. Drive in and drive through options make McDonalds products further convenient to the consumers. The place mainly consists of the distribution channels. It is important so that the product is available to the customer at the right place, at the right time and in the right quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonalds outlet. There is a certain degree of fun and happiness that a customer feels each time he dines at McDonalds. There are certain value propositions that McDonalds offer to its customers based on their needs. McDonalds offers hygienic environment, good ambience and great service. Now McDonalds have also started giving internet facility at their centres and they have been playing music through radio instead of the normal music. There are certain dedicated areas for children where they can play while their parents can have some quality time together. McDoanlds has more than 250+ outlets in India of which more than 50 are in Mumbai itself.

d.

Promotion

The promotions aspect of the marketing mix covers all types of marketing communications One of the methods employed is advertising, Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and magazines. Other promotional methods include sales promotions, point of sale display, merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item. At McDonalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos. The various promotion channels being used by McDonalds to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. 10

There are three main objectives of advertising for McDonalds are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonalds does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Some of the most famous marketing campaigns of McDonalds are: You Deserve a break today, so get up and get away- To McDonalds Aap ke zamane mein, baap ke zamane ke daam. Food, Folks, and Fun Im lovin it.

2.

Additional marketing mix

The additional Ps have been added because today marketing is far more customer oriented than ever before, and because the service sector of the economy has come to dominate economic activity in this country. These 3 extra Ps are particularly relevant to this new extended mix. The additional 3Ps of marketing mix are:i. ii. iii. People Processes Physical Evidence

a.

People

A new McDonalds opens somewhere in the world every eight hours. Two thirds of the 1,200 to 1,500 new restaurants which the company opens annually are outside the USA. The firm has more than a million employees, and estimates that the figure will double in the next few years. The company is strongly committed to staffing locally and promoting from within. This means that McDonalds has managers who understand both the corporate and the local cultures. The emphasis when recruiting is that the applicants are customer-focused; the right attitude is seen as more important than technical ability. The company believes that the best way to stand out from the crowd is to satisfy all of the customers, all of the time. This is

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emphasised in recruitment advertising and continues in preliminary screening; this is standard the world over and another clear example of a globalisation strategy.

b.

Process

There are 25,000 McDonalds restaurants in over 100 countries. The procedure for making the food is identical everywhere. This epitomizes globalization; McDonalds standards have to be met the world over. For example, one out of two fries must measure 75mm, meat for Big Macs weighs 45g and is 20 per cent fat, and buns are 9.5-9.8cm in diameter and 6cm high. Suppliers have to meet all the specifications and demands that McDonalds sets them; if they cannot do this, McDonalds vertically integrates. For example, in Russia, the beef available did not meet standards so it set up its own source of supply for the restaurant. The procedures for making the food in the restaurants are identical globally; each restaurant has the same kitchen layout. Local adaptation is again apparent as different international McDonalds have slightly different menus; therefore new food preparation techniques are used. The point of purchase at McDonalds is again standardized globally. Many companies operating globally discover language translation problems and therefore cannot use systems globally. McDonalds overcame this problem by using pictographs; employees world-wide ring up sales on machines that display symbols of Big Macs, french fries, or colas instead of words or numerals. Software links price and total items. One key to McDonalds success is the constant push to speed up production without sacrificing consistency. Corporate goals include the filling of walk-in orders within 90 seconds and a guarantee that customers will never have to wait more than three-and-a-half minutes at drive-through windows. Company representatives monitor performance by making surprise visits to McDonalds outlets every quarter.

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c.

Physical Evidence

To focus on consistent delivery of quality, service and cleanliness through excellence in our restaurants. This is the McDonalds message in every franchise throughout the world. The customer knows that, whatever McDonalds they enter, the message of a family environment will still be conveyed. It just depends on where you are in the world as to how that message is broadcast. The traditional US value of service with a smile is embodied in the staff at McDonalds restaurants throughout the world and is now characterised as an expectation of the McDonalds consumer. It is these expectations that McDonalds has to try to continue to meet to keep their competitive advantage in the fast food sector. McDonalds India follows these same set of rules and guidance.

3.

Market Segmentation

Market segmentation is about understanding who your target customers are within a market. In India, food is a family affair and most people prefer to eat in groups at home, therefore attracting India towards American-pattern of consumption was a daunting task. Therefore McDonalds have rightly created multiple segments in the market to cater the Indian customers. McDonalds have segmented its market according to age. It offers different products like Happy Meal which includes free toys for kids. Selected stores also have playing space for the kids. The spicy range of McDonald's offerings was specifically for the young adult target group. They are continuously trying to keep food affordable to target youth and reimaging restaurants to connect the brand with the youth segment. Geographically they are mainly targeting the urban and the semi-urban cities with the tier-I and the tier-II cities. To meet the psychographic needs McDonalds have developed a menu especially for India with vegetarian selections to suit Indian tastes and culture which included McAloo tikki and McPuff and also discontinued the usage of beef and pork in their products. To attract the culture-oriented customers, McDonalds 13 will be setting up its first only-

vegetarian restaurants in the sacred cities of Amritsar and Katra which will be operational from this year. They have also targeted the customers on the basis of special occasions whereby they arrange birthday parties for the kids and the youth. McDonalds have created benefits for the customers whereby they are providing hygienic food, economical menu (combo meals, happy price menu burgers) and speedy delivery through their drive through and the takeaways.

4.

Targeting

McDonalds has succeeded in projecting itself as an economic, family-friendly and kidoriented fast food point. They have mainly targeted the family with children as they are providing the children a fun place. The kids are their targets through which they also target the adults, as kids will always be accompanied their parents. They also provide them with free gifts, happy meals and a fun place. McDonalds has always created that craze among the kids. They also target the adults by positioning themselves as a fun hangout place with healthy food serving.

Their attempt to be the burger king and the choice of youth is evident in their marketing campaigns. Also, they have shown immense concern to the sensitive vegetarians by Thinking global, acting local i.e. offering special McVeg meals, eggless soft serves and McShakes. Interesting to note, all the targeting and promotion activities are done through Ronald McDonald, the clown character of McDonalds. It is present at the supported-social events and in kids birthday parties. Ronald interacts with kids in their everyday lives and is projected as everybodys friend.

5.

Positioning

When McDonalds came to India in October 1996 it had a challenge to attract customers who preferred family dining. It had to adapt to the customers taste, value systems, lifestyle, language and perception. Indians liked eating with friends and family. McDonalds incorporated this in the USP of the company, and McDonalds launched series of television commercials McDonalds Mein Hai Kuch Baat were some advertisements which had a 14

mystical feel to the brand and invited the people to come and try their products. As the brand familiarity and popularity grew, it was now time for McDonalds to expand on its base. While introducing its Happy Price Menu the company promoted the value proposition for its new range of products. Campaigns like What your bahaana is? , Bees mein full dhamaal are said to be based on the insight that while people, especially youngsters are always short of money, there's always a way to make the most of it. It was launched to attract pricesensitive middle-class individuals and students to the restaurant. For its core menu however, it used various campaigns including Toh aaj McDonalds ho jaaye which talked about the everyday-experience, encouraging its customers to visit often with friends and family and enjoy their time out. The Prices of the Yesteryears advertisement was launched to attract teenagers as well as adults. This was followed by the Im lovin it campaign which was a global campaign employed in 118 countries. This use of a single campaign around the world reiterated the consistency and service quality offered by McDonalds. Now, McDonalds has started targeting the up market segments with its McSpicy range of offerings while continuing with its Happy Price Menu with the Har chhoti khushi ka celebration campaign. Thus, McDonalds has realized that its brand, with the growth it has achieved in the past 15 years in India, can be taken forward by communicating to the right segments. Although there has been a gradual shift in McDonalds positioning from affordability to convenience as they introduced the breakfast menu and McDelivery service, yet they still seem to position as a low-price service.

6.
a.

Business Strategy
Franchise Model: - As per franchise model of McDonald, only 15% of the total

number of restaurants is owned by the company. The remaining 85% is operated by franchisees. The company follows all the framework of training and monitoring of its franchises to ensure that they achieve good quality service, cleanliness and value for the money offered by the company to its customers. b. Product Consistency:- By developing a sophisticated supplier networked operation

and distribution system, the company has been able to achieve consistent product taste and quality across the nations of the world.

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c.

Act Like A Retailer, Think Like A Brand.:- McDonalds focuses not only on

delivering sales for the immediate present, but also protecting its long term brand reputation.

7.

Advertising

McDonald's maintains an extensive advertising campaign. In addition to the usual media including television, radio, and newspaper ads, 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.[4] However, television ads remain the primary form of advertisement. McDonald's has used 23 different slogans to advertise in the United States, as well as a few other slogans for select countries and regions There have been many McDonald's advertising campaigns and slogans over the years. The company is one of the most prevalent fast food advertisers, in the world, where it spends the most advertising money of any fast-food restaurant and the fourth-most of any advertiser in the United States. McDonald's corporate website states that the commercial campaigns have always focused on the "overall McDonald's experience", rather than just product. The purpose of the image has always been "portraying warmth and a real slice of every day life." Its TV ads, showing various people engaging in popular activities, usually reflect the season and time period. Finally, rarely in their advertising history have they used negative or comparison ads pertaining to any of their competitors; the ads have always focused on McDonald's alone. i'm lovin' it is an international branding campaign by McDonald's Corporation. It was created by Heye & Partner, McDonald's agency based in Unterhaching, Germany, near Munich, and a member of the DDB Worldwide Communications Group, Inc. It was the company's first global advertising campaign and was launched in Munich, Germany on September 2, 2003, under the German title ich liebe es. This is only used in Germany, in Austria, Switzerland and Liechtenstein the english slogan is used. The English part of the campaign was launched in Australia on September 21, 2003, the UK on September 17, 2003, and in the USA on September 29, 2003 with the music of Tom Batoy and Franco Tortora (Mona Davis Music) and vocals by Justin Timberlake, in which the slogan appears. The motion logo at the time (featuring the "M" zooming out and shining and the "i'm lovin' it" (in different languages, usually in English) zooming to the "M", leaving a trail) was produced by using Adobe After Effects and Adobe InDesign. Also, by September 3, 2003, McDonald's 16

selected more than 30 people to appear in new packaging for McDonald's products, starting with a photoshoot taking place from September 3, 2003 until November 2003. They unveiled new "i'm lovin' it"-themed packaging on December 8, 2003 and rolled it out worldwide throughout 2004 with the final delivery date being November 20, 2004. In January 2007, after a public casting call which received 15,000 submissions, McDonald's selected 24 people to appear as part of the campaign. Images of those chosen, taken from September to December 2006, who had submitted a story and digital photograph which "captured ... themes of inspiration, passion and fun," appeared on McDonald's paper bags and cups worldwide. Slogans used as a part of their advertisement are:

The closest thing to home (19671969) McDonald's is your kind of place (19671971) You deserve a break today (19711975) Enjoy the best food at McDonald's (1973, concurrent with 1971 slogan) We do it all for you (also known as You, you're the one) (19751979) Nobody can do it like McDonald's can (19791980) You deserve a break today (19801983) Nobody makes your day like McDonald's can (19801983) That's My McDonald's (1981, concurrent with 1980 slogans) Never Nasty, Your Dog Will Be Happy (19811982) Nummy For Your Tummy (1982) We cook it all for you at McDonald's (1982, concurrent with 1980 slogans) McDonald's and you (19831984) It's a good time for the great taste of McDonald's (19841988) It's Mac Tonight (1985, Mac Tonight advertising) McDonald's is your place to be (1986) The good time, great taste of McDonald's (19881990) There's nothing quite like a McDonald's (19881990) You Deserve A Break Today (19891990, concurrent with 1988 slogan) Food, folks and fun (19901991) McDonald's Today (19911992) What you want is what you get (19921997)

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Do you believe in magic? (19931997, Happy Meal advertising) Have you had your break today? (19951997) My McDonald's (1997) Did somebody say McDonald's? (19972000) We love to see you smile (20002003) Put a Smile On (20002003) Smile (20012003) There's a little McDonald's in everyone (20022003) I'm lovin' it (2003present) It's what I eat and what I do (2005) What we're made of (2008present) " Good things come in 3's" (2011) " The celebrities eat it" (2012)

McDonalds spends more than $1.5 billion each year on marketing. Their brand ambassador Ronald McDonald is more than a character on television, he entertains, and yet he educates, and does it with warmth, humour and compassion and of course, fun and magic. There are a variety of programs and activities available for almost any venue including visits to elementary schools, libraries, parades, fairs, fundraisers/charity events, hospital, community events, summer camps, recreation centres, and sporting events. And best of all his appearances are free of charge!

Ronald is an accessible celebrity to all audiences. Ronald is the most fun teacher around. Ronald gets moving! He enjoys leading a healthy and active lifestyle. Ronald creates magical experiences.

Hes one the most recognizable ambassador of any company and it really attracts one of their main target audience which are children to McDonalds.

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8.

Competition

As we know fast food industry proved to be very competitive industry. McDonalds from its day first has always tried to have strong competitive advantage over its rival. This is the only way for McDonalds to survive in globalised environment. McDonalds strong rivals KFC, Dominos, Pizza Hut and Subway are also operating in India as well as USA. In the fast food most important thing for some customers is how quickly you take order and ready the meal for customer.KFC and Jumbo King are offering very quick service to customers and in this way taking customers from McDonalds. McDonalds has tried very well to overcome this advantage by making and readying its food as quick as possible. McDonalds is trying to improve its graph for customer satisfaction and they are investing heavily throughout the world including India. McDonalds uses Wi-Fi and they are trying to emphasise on demographic characteristic of its customers in the area. Each month McDonalds add something special in its menu. To check McDonalds quality and reliability administration has developed a very unique idea of Gapbuster visiting McDonalds as mystery customer. They are expertise who comes in the form of a customer and after serving give credits scoring to the store. McDonald has introduced McBreakfast from 6 am to 11 am. McDonalds in its competitive strategies is emphasising to target customers in the new urban areas. McDonalds Indian menu offers very competitive strategy for McDonalds. Vegetarian products, Halal and non vegetarian foods for its customer is a unique and successful idea in India. Kids like McDonalds in India as they are giving free toys to customers who buy happy meal deals. Mcdonalds has actively invested in Discount vouchers given as a leaflets, newspapers, Magazines certainly is a good business strategy and it has boosted McDonalds customer number, Business and sales.

9.

Consumer

McDonalds has something for everyone and though it seems like the main customers of McDonalds are children and young adults, its loved by all. The price range makes it affordable for most of the people living in India.

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10.

Segmenting Factors

a.

Demographic Factors

This is a very important of McDonalds marketing strategy. All strategies and advertisement usually revolves around this demographic factor. i. Age: The target audience of McDonalds involves all age group. As stated earlier that theres something for everyone. The very important age group which is McDonalds target are children. The happy meal is one such meal designed for children which contains a toy. McDonalds is the largest distributor of toys in the world.\ ii. Sex: McDonalds does not have any particular gender to target. The customer base includes almost equal number of men and woman. iii. Household Sizes: McDonalds caters to all types of household. It believes in more the

merrier. They have larger meals which families can buy which also turns up to be cheaper. iv. Occupation: A customer can be doing any kind of work and it will not be a problem at any McDonalds.

b.

Geographic Factor

Geographical situation of McDonalds requires individual attention and specialized reasons and services offered to the customers since each country or part of a country have different tastes and beliefs. McDonalds has both domestic and oversea markets. Whether in domestic market or oversea market, there is specific eating habit and cultural background. McDonald makes market segmentation by geography. It mainly analyzes the difference among various regions. At the beginning when McDonalds entered into Chinas market, it popularized American culture and philosophy of life and use American-styled beef hamburger to conquer Chinese people. However, as Chinese people like chicken, chicken products cater to Chinese peoples taste more, thus much easier to be accepted by Chinese people. Give such a situation, McDonalds changed its previous strategy and launched its chicken product. Then McDonalds who only sells beef hamburger began to sell chicken hamburger. This change was made due to the geographical difference and it also helped McDonalds accelerate its development pace in China market. McDonald in Middle East offer any kind of chicken and beef. McDonalds in the Northern countries provide dehumidifiers and air conditioning units . McDonald in Indonesia McDonald offered McRice, PAKET PANAS (in Indonesian 20

language), fried chicken, & McSoup. McDonald realized that Indonesian basic food is rice which is served with egg and fried chicken. McDonald in New Zealand McDonald offered kiwiburger. The Indian McDonalds has taken special care of this while preparing for the menu for the Indians. There are many burgers and other products introduced every year. The different products offered by McDonalds India are:i. ii. iii. iv. McGrill Masala McSpicy paneer burger McSpicy Paneer Wrap Maharaja Mac McDonalds is openening pure vegetarian restaurants for the first time in the world in two Indian cities Ahmedabad and Katra.

c.

Behavioral Factors

Behavioral segmentation focuses on dividing consumer based on their knowledge, attitudes, uses, benefits sought, or responses to companys product. One of the best forms of segmentation is to divided buyers according to the different benefits that they want to get by purchasing the product. Usually, people who look for in their product class or look for each benefit. For example, McDonald provide McDelivery for 24 hour, this the only one delivery service that not stop even once in a while a day by just call it and order, after that within a minute it comes to your place with the food that still hot and fresh. Fast food industry basically has two potential segment markets according to peoples way of living: Convenient-oriented and relaxing-oriented. Convenient-oriented people buy McDonalds products for the convenience of purchase and eating. Relaxing-oriented people buy McDonalds products in order to relax and kill time. For the convenient-oriented market, McDonalds put forward 59 seconds rapid service, namely the standard time from ordering the food by the customers to leaving the counter with food is 59 seconds. It cant be over 1 minute. For the relaxing-oriented market, McDonalds pays great attention to the decoration of the restaurants, make customers feel comfortable and relaxing as much as it can and make its great efforts to let the customers regard McDonalds as a good place for relaxation with unique culture.

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11.

PEST Analysis

PEST analysis will give us details about Political, Economical, Socio-cultural and Technological analysis and effects of these analysis on McDonalds.

a.

Political Factors

These are some influences a company doesnt have any control of.USA politically is well suited for business of McDonalds. McDonald is very popular in USA but government is trying to control marketing of fast food because of health concern such as cholesterol, cardiovascular and obesity issues. Good relations in terms of creating jobs and tax revenue for government are a must, to succeed in any market. India is very rich country in terms of politics. The world largest democracy is present in India but being nationalist country they create some difficulties for foreign entries. Bhatiya Janata party is one of the leading Hindu national party and they are against fast food chains as they want to see only vegetarian restaurants in their country. Their party members always protest against fast food using meat in their menu. Big risk for Mcdonalds is BJP. Good news is that trends in India are changing and young people like to eat fast food. Second good news is that India is changing slowly from nationalistic society to liberal mind set up and Congress party in power is the main proof of liberal society. McDonalds expanded very fast in the last decade.

b.

Economic Factors

Economical variables such as currency exchange, employment, Interest rate, tax ratio and need of international supply. Most of the organizations depend on foreign supply of raw materials for their products making. Currency exchange also have a great impact on any organistion.USA has a High tax ratio, Low unemployment developed country, dealing in international currency (Dollars).Business for McDonalds in USA is already established and low risked but for India, high unemployment rate, dealing in Rupees as currency and millions of people living below poverty line is a concern for McDonalds but India is having a booming economy, low tax rate and availability of labour in abundance and development of middle class society in India is a positive sign for McDonalds future.

c.

Socio-Cultural Factors

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Culture and society has a big impact on any organization sales. McDonalds in USA is serving a liberal society. religion has not much effect on McDonalds. Culture is very much simple but in India society is very versatile. Though India is heavily populated but still Hindus dont eat meat, Muslim only eat Halal and they dont eat pork. In India religion has a very big impact on society. For McDonalds it is a big concern but in India life style is changing, earning power is increasing, middle class is getting bigger in its size and people like to eat outside in restaurants this has a very good impact on society.

d.

Technological Factors

One positive benefit of globalization was technological advancement. Although McDonalds doesnt use too many complicated machines in their food production but still they need highly competitive technology. technology is needed for example in supply chain management, order taking, Inventory control, easy and quick payment procedures .Use of technology can make management more reliable, effective and cost saving in short term as well as long term. Customers happiness after getting what they are looking for on time and in a disciplinary way make them come over and over again. in USA McDonalds use very effective and expensive technology to be in a very competitive position to their rivals. In India as franchises, they use high technology. They use very sophisticated systems for disciplined order taking and well managed staff who knows the proper use of technologies inside the store.

12.

Micro Environment

Competitive intensity of McDonalds can be determined with Porters five forces. Porter five forces is business strategy formed by Michael E. Porter of Havard business school in 1979. He determined five forces which actually determine attractiveness of the market and competitiveness. These five forces are: a. b. c. d. e. Threats of new entrants Threats of substitute Bargaining power of customer Bargaining power of supplier Competitive rivalry with in organisation.

a.

Threats of New Entrance:

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Entry to a restaurant Business is very difficult. It is hard to make a prominent brand name. There is high research and development costs and high cost of entry. Strong brands already in competition make it more difficult such as Mcdonalds, Pizza Hut, Dominos etc. New entrants face a very high competition in the start of the business. In USA and India both Entrance of new organisation is very difficult as explained above.

b.

Threats of Substitute:

The substitutes in this industry are very high. People can choose variety of products they can either choose Burger King, KFC, Indian Cuisine, Indian local shops, Indian Vegetarian restaurants. The same situation is faced by McDonalds in USA and all over the world.

c.

Bargaining power of customers:

Bargaining power of customers refers to pressure a customer can exert on a business to get good quality of food, good customer service and low price. Bargaining power of customer in this industry is low. As McDonalds provide a standard service, one price strategy and quality of food. Customers have low bargaining power throughout the world in food industry.

d.

Bargaining power of supplier :

Bargaining power of buyer in this industry is low. Situation can change if the main ingredients are not available but with McDonalds simple menu and working with many supplier, they are not facing a big threat, so the bargaining power is relatively low.

e.

Rivalry within the industry:

Fast food restaurant industry is very competitive. the competition is so high as all the organisations want to get hold of customer base. Food industry all over the world has the same criteria because there are many small businesses operating in abundance and also top brands. McDonalds knows about the customers taste and preferences all over the world, so they started McCafe (morning breakfast). So McDonalds is providing quality food from early morning till late night in order to get competitive edge In the market.

13.

Locations

McDonalds opened its first stores in New Delhi and Mumbai, the largest metropolitan cities in India and then slowly spread throughout India. McDonalds has very strategically opened

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its stores in locations situated near colleges, markets, malls, stations and any other places where footfall is high. This has worked very well since their target audiences are the general people from children to adults. There are more than 250 outlets in India already and they plan to double this in the next 10 years. Out of these more than 50 outlets in Mumbai itself which shows that they are first targeting the urban population and are slowly moving towards urban counterparts.

14.

Push/Pull Advertising

McDonald's is a good will "push" and "pull" used in conjunction with the company. McDonald's advertising directed primarily at those who taste not stable, like the pursuit of fashionable and easy acceptance of new products, new things to the younger generation of consumers, through a lot of humor and lively media advertising to attract young consumers all over the city McDonald's Monopoly points every corner of the consumer. At the same time within the flexible use of store promotion in the form to guide and promote the consumption of specific products consumers.

15.

Channel

McDonald's distribution channel and the way in which this fast-food restaurant chain gets its products to the market. In the theory of the Marketing Mix, place (distribution) determines where the product will be sold and how it will get there. In fact, as noted on www.mcdonalds.com, McDonald's is the leading global foodservice retailer, with more than 30,000 local restaurants serving nearly 67 million people each day in more than 120 different countries. Approximately 80 percent of all McDonald's restaurants company wants to be the first in the market and establish the brand as rapidly as possible by advertising very heavily. This effective distribution strategy (place) has helped McDonald's develop a strong market share in the fast-food market around the world. Moreover, according to Kotler stores must have a planned atmosphere that suits the target market and moves customers to buy. In addition, McDonald's has pre-determined the locations for many of its stores to help reach a variety and diverse population. In conclusion, McDonald's has an intensive distribution process which is a credit to their Marketing department. As businesses and other organizations move forward, the challenge of making their products. The McDonalds executive claimed that it was about being part of Disney and their theme parks, their movies and their characters because now you can buy a Happy Meal at the Happiest Place on Earth. There are multiple places in Disney World to buy a Happy Meal or 25

more so to buy McDonalds products. A McDonalds kiosk can be found in between Frontierland and Adventureland and restaurants in Downtown Disney and next to the Disney All-Star Resorts. Not only can you find these restaurants, they are also a few of the best McDonalds. The kiosk in the Magic Kingdom is decorated as a Conestoga wagon depicting the theme of Frontierland. The McDonalds in Downtown Disney is huge and offers children a great place to play as does the one next to the All-Star Resort. Although Disney offers a wide range of restaurants and food, visitors flock to the McDonalds because they know their children love the food, the price is right, the quality of food is good and it gives their children a place to play during the meal. This delivery channel was ingenious on McDonalds part; they recognized all they had to gain by joining in a partnership with the Disney Corporation. They try to increase revenue through the following internal strategies: Training Incentive based targets Recognition for good work Performance based bonus Employee benefits to keep them motivated Promotions and compensation increments.

16.

McDelivery

McDonald's India is one of the few restaurants that provide home delivery service. In Western & Southern India, this service is currently available in select cities. Call us on 66 000 666 and place your order. There is no restriction on the minimum order for home delivery. However, there is a fee of Rs.25/- per order as delivery charges, irrespective of the size of the order. Since the packaging is very convenient, one can eat food from McDonalds at home without littering around. There are many offers as well for using McDelivery.

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Analysis II

1.

Branding

McDonalds participates in many different branding campaigns. One of the most noticeable things about McDonalds is their double arch logo. This logo is a yellow M on a red background. This logo began its life in 1968, and since then has become a way that you can obviously spot any McDonalds. In addition, McDonalds began using a mascot known as Ronald McDonald in 1967. Ronald is a clown with red hair and clown face paint. He is featured in many of their stores, and is included in many of their commercials geared toward children. This mascot has helped them appeal to parents as a family friendly place to take their children to play. Many McDonalds locations even include a PlayPlace, which is a playground that children can play on while their parents eat. Ronald McDonald is frequently shown all over these PlayPlaces. McDonalds has done an excellent job of making sure that you know how to recognize one of their restaurants or products when you see them. They recently began using the slogan Im loving it in their advertising campaigns. Many of their commercials that use this slogan are targeted to young adults, and frequently display the people in the commercial having fun while eating and drinking McDonalds merchandise. McDonalds is the largest fast food chain on the planet. Due to this fact, they have not felt the need to go through alternative marketing channels such as Facebook, MySpace, and YouTube. However, the company does maintain a Twitter page where people can find out some neat facts about McDonalds, as well as learn about events that are going on in the company. They could stand to expand upon their online marketing campaigns, just as many other companies could. However, they have done an excellent job of making their brand recognizable. In addition, they have done a good job of making subtle changes to their marketing strategies in order to stay relevant with each passing generation. There is no denying that they are extremely easy to recognize.

2.

Packaging
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In the late 1980s, public concern over solid waste disposal was high and disposable food packaging was a highly visible component of the problem. And the visible waste was only part of the story -- almost 80 percent of McDonalds waste stream was generated behind the counter, in food prep and supply systems. McDonald's faced rising public pressure about the amount of packaging and waste its restaurants produced. The best solutions from both an environmental and a business perspective were in reduction, reuse, recycling and composting. On August 1, 1990, McDonald's and Environmental Defence Fund joined forces in a groundbreaking partnership to find ways to reduce McDonald's solid waste. The project team examined McDonald's materials use and solid waste issues in its U.S. operations, including restaurants, distribution centres and suppliers. The goals of the partnership focused on the following:

Source reduction: Using less material Reuse: Introducing reusable throughout the supply chain Recycling: Return materials to productive use Composting: Recycling organic materials when possible

As a result of the partnership, in April 1991 McDonalds announced that it had made many changes to their packaging and waste management systems, including:

Switched from polystyrene foam "clamshells" to paper-based wraps for its sandwich

packaging, providing a 70-90% reduction in sandwich packaging volume, reducing landfill space consumed, energy used and pollutant releases over the lifecycle of the package

Converted to unbleached paper carry-out bags, coffee filters and Big Mac wraps Reduced paper use by 21 percent in napkins, and incorporated 30 percent

postconsumer recycled content

Asked suppliers to incorporate 35 percent postconsumer recycled content into all

corrugated shipping boxes

The company saves an estimated $6 million per year as a result of these packaging

changes and in the decade following the partnership, McDonald's eliminated over 300 million pounds of packaging, recycled 1 million tons of corrugated boxes, and reduced restaurant waste by 30 percent. 28

3.

Pricing Strategies

McDonalds has realized that, despite the cost savings inherent in standardization, success can often be attributed to being able to adapt to a specific environment. This is indeed the case with its implementation of its pricing strategy, which is one of localization rather than globalization. McDonalds has had to come up with different pricing strategies for different countries. More importantly, rather than just having a different pricing policy for the Big Mac, McDonalds has had to select the right price for the right market. a. Value Pricing

McDonalds came with the concept of value pricing for Indian consumers where in it came out with various combos in form of Happy Meals comprising of small burgers, fries, coke + toy. Medium meal combo that consisted of burger, fries and Coke with the price of Rs 75 Maharaja Mac Meal Rs 94 Family Dines under Rs 300

The prices for the meals were economical as compared to the offerings in Pakistan and Srilanka and are 50% less than United States. b. Product line Pricing

McDonalds has a unique price strategy which falls solely on many of their product lines. Their Value Meals fall into the category of Product Line Pricing. Where there is a range of product or services the pricing reflect the benefits of parts of the range. For example, you can order a Two Cheeseburger Value meal that comes with a medium drink and fries for around Rs 75 (prices may vary). You can Super Size this meal to get a large drink and large fries for a little more money or you can go with another value meal that might include different items for different price. c. Promotional Pricing

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If you have driven past a McDonalds, you will notice that somewhere on their property, whether it is a banner on their building or spelled out on their sign, they are always offering some sort of promotional pricing. This promotion can be seen as a large banner draped across the building on many restaurants. This promotion changes weekly and may consist of different menu items packaged together.

d.

Penetration Pricing

McDonalds pricing is lower than most of its competitors and much lower than its closest competitors. Not only were the prices low when McDonalds entered India but its still low comparatively.When McDonalds first began to break into the coffee market, they ran a large marketing campaign in order to gain some market share in the industry. For a limited time frame, you could get a free small coffee every morning from 7am-9am. This was to promote their new coffee partnership with Green Mountain Coffee and helped spread the word that McDonalds was now offering coffee.

4.
a.

Advertising
Strategic Advertising

Strategic Advertising builds brand image. It concerns about the long-term positioning of the brand, building a share mind and market with the public. It also invites consumers to enjoy a relationship with the brand, reminding their users that the brand is always there for them. Usually this kind of advertising is doing by communicating the brand value and the product benefits and more often, strategic advertising are more emotional, using soft sell skills to implement a message into the consumers mind as to build a better relationship with them.

b.

Tactical Advertising

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Tactical Advertising spurs consumers into a same-day response. It is designed to drive a more urgent purpose and have a desire to bring the consumer into contact with the brand quickly. Comparing to other advertisements, tactical advertising is more short-term, more focusing and targeted to a specific event or promotion.

c.

3. Retail Advertising

Retail Advertising attracts consumers by alluring price. Department stores, supermarkets, car dealers contains lots of special offers and lots of merchandise. Mostly the store would get some stock prepared to let go for little profit or nonprofit making while the rest of the merchandise remains at normal prices. Most retailers believer that the busier and messier the ads are, the more attractive and exciting they will look to consumers. However, some retailers believe that their ads should remain strategic in order to build a long-term brand image for their business.

d.

Corporate Advertising

Corporate Advertising does not necessarily sell a product. In other words, it focuses on the companys own resource. For example, It concerns how the company make effort on providing the crew with a better working environment, the careful quality control of their products, etc. In fact, it is another form of strategic advertising as they both aim to build up the image of company.

e.

B2B (Business to Business) Advertising

Business to Business Advertising utters conversation between companies. B2B ads usually appear in pages of business magazines like Forbes, the Economist and Fortune. B2B ads are like channels of companies to share their new expansion plans, introduction of new structures and services. These kind of ads are often more hard to understand than common ads which are designed for the public, as the audiences of these ads are more highly educated.

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6. Public Service Advertising B2B ads usually appear in pages of business magazines like Forbes, the Economist and Fortune. B2B ads are like channels of companies to share their new expansion plans, introduction of new structures and services. These kind of ads are often more hard to understand than common ads which are designed for the public, as the audiences of these ads are more highly educated.

Example: McDonald chooses Andy Lau as the spokesperson because of his healthy image to urge people to donate money to the charity.

5.

Sales Promotion

McDonalds have used various sales promotion strategies in the past and present. Some of the more popular ones are issuing coupons for slow-moving combos, packaging overpriced toys with their Happy Meals, and introducing seasonal products like the Twister fries. Once in a while, they will also promote collaborations with various enterprises, like the Coca-Cola collectible glasses. McDonald uses sales promotion to increase product use. Sale promotion is a way to keep loyal customers and gain new ones. McDonald's does this by giving coupons, premiums, and sweepstakes. Coupons - is a price reductions certification when a customer buys a product.

McDonald's every few months sends out a little coupon book to promote its food. Sometimes you can find them in newspapers, other stores that are partners with them, go in to a store and 32

ask if they are handing out coupon books, or even now just recently they have been giving coupons out on the back of receipts. Premium s- is a extra item offered when a product is purchased or can be two of the

same products sold for the price of one. A premium they do is with their happy meals. You buy it and get a toy as a little something extra. Another way is they offer the Big Mac or filet o fish 2 for $4. Sweepstakes - Depend on chance and participation is free. It also attracts more

customers. McDonalds does the monopoly sweepstakes. The sweepstakes allows the customers to collect tokens which are given on certain items in the menu. In order to win a customers has to collect all the tokens of a certain property of that color and they win the prize.

6.

Public Relations

The world is changing and so is McDonald's. The main question facing McDonald's is whether they can continue their world dominance in the fast food industry when their mainstay products continue to be linked to obesity and related health problems. Although McDonald's operates 2x more restaurants in the USA than in Europe, the revenue reports a higher market growth in Europe. The report shows earnings of $8.8 billion compared to USA's revenue only being $7.9 billion, resulting in an elicit contrast between the European and American McDonald's Experience, Culture, and Opinion.

Objectives:a. To increase, within the next 6 months, the awareness of overweight and obesity as a

major public and lifelong health threat in 50% of all families with young children.

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b.

To increase, within the next 6 months, the positive perception of McDonalds in the

communities of the USA that have been negatively affected by numbers and cases of obesity by 50% by following Europes lead in reimaging the brand. c. To increase, within the next year, the early recognition of overweight, excessive

weight gain and nutritional knowledge among children by 65%. d. To increase, within the next year, the proportion of children and parents aware of

current physical activity guidelines and recommendations by 50%. e. To decrease, within the next year, the percentage of obesity among children in the USA by 33% and establish McDonalds as the pioneer for a good and healthy lifestyle option by implementing strategies successfully used in European restaurants.

7.

Customer Perception and Customer Expectation

Customer perception is a key factor affecting a products success. Many potentially revolutionary products have failed simply because of their inability to build a healthy perception about themselves in the customers minds. McDonalds being an internationally renowned brand brings with it certain expectations for the customers.

Target Segment A Family with children

What is McDonalds for me? A treat to children, a fun place to be for the children.

Urban customer on the move Great taste, quick service without affecting the work schedule. Teenager Hangout with friends, but keep it affordable.

Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their values. The customers expect the brand to enhance their self-image. Customer responses obtained at the Vile Parle, Mumbai outlet confirmed the fact that they connect strongly with the brand. However, fulfilling some of the customer expectations like a broader product variety provide McDonalds a great scope for improvement.

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8.

The McDonalds Experience

Marketing in a services industry is becoming an increasingly complex challenge. The paradigms of service marketing demand a passionate understanding of customer expectations and perceptions, and linking them to product design & delivery as well as operational planning. This is where McDonalds has excelled due to its ability to successfully integrate the customers perspective in its products and operations in a comprehensive manner. The revamped menu in India is an example of McDonalds strategy of integrating the customers perspective in its products. And, the operational integration is evident from McDonalds emphasis on its suppliers as its customers as well as its treatment of its consumers as coproducers of services. The ultimate aim of Service Marketing is not just to become a Service Leader but to create a Service Brand. The Service Delivery Process is the key to achieving this aim of Service Marketing.

9.

Importance of PLC in McDonalds

The requirements of customers change over time and thus the product offering has to be changed accordingly. What is the fashion today may be out of market within few weeks. Thus continuous innovation is required.

To counter these changes McDonalds has continuously introduced new products and has phased out the old ones which were at the decline stage of their PLC. The introduction is timed such that the new product does not cannibalize the product already in the maturity or 35

growth stage. Thus the secret lies in getting profits with different products in the different stages of the PLC.

A perfect example of revitalising a product in decline phase

The French Fries have been an important part of the McDonalds menu worldwide. But now it was in the stage of decline and was actually not generating proper return. In an attempt to revitalize it, a new variant was introduced namely Shake Shake Fries. This is being served with chatpata spice mix which has resulted in increase in the sales of French Fries and has elevated it from to the decline stage. This is used to delay the decline of a well established product which has the potential of generating further revenue.

10.

McDonalds in India

We need to see how McDonalds is operating in India, country being so much different, in terms of culture, from the United States of America, and how it had to adjust to fit in the likes of the people. We will see how the company had to adjust not only in terms of culture but also in terms social life of the citizens of India. The McDonalds corporation may be treated as an exemplar showing how other American fast food restaurant chains are functioning in such an exotic country, and what they had to do to earn peoples trust. The first arrival of this American company can be considered to be a pretty late one. It is worth mentioning that until 1990s American fast food companies had had no interest in investing in this country. At the very beginning of the 1990s, though, there could be observed the coming of certain American food companies like: TCI Fridays, Baskin Robins, Pizza 36

Hut, Domino Pizza or Kentucky Fried Chicken (KFC). Before, however, McDonalds entered the Indian market, some research on the taste of the consumers had to be done and the entry itself took a few years. The first McDonalds in India appeared in October, 1996 in a rich residential area in New Dehli. In November 2001, there were already 58 McDonalds restaurants in this country, and according to plans in the next three years there is supposed be built 90 new ones. Indias market seems to be enticing as well as offputting for food corporations. The culture can be characterized be diverse population sticking to its strict food traditions. It is worth pointing out that Indians are used to home-prepared food that is considered to be healthier and, first of all, cheaper. On the other hand, though, India is an extremely large market containing as many as 300 million consumers (it is almost as big as Chinas). This feature of the market is pretty an incentive for various corporations. In her radio interview, dr. Vandana Shiva points out to the fact that this is one of the major reasons for McDonalds presence in India. According to Vikram Bakshi and Amit Jatia, who are responsible for running McDonalds in India, there are two most important challenges for McDonalds to tackle: the first is not to hurt religious feelings of the citizens and the second is not to get oneself involved in political confrontations with some political activists. What is important here is that 80% of the population of India is Hindus (according to this religion, cows, being the main ingredient of Mc menu, are sacred and not to be consumed) and, what is more, 150 million of the population are Muslims, and they cannot eat pork. In order to suit the situation, McDonalds had to introduce some special meals that cannot be found anywhere in the world in restaurants of this kind. The introduction of new products in various countries is not something rare at all, as Bakshi points out but he as well adds: but what is unique in the context of India is the companys willingness to replace its core product, beef-based Big Mac. Some examples are as follow: Maharaja Mac that serves as a substitution for Big Mac that can be found everywhere except for India. Another example is McAloo Tikki Burger, which is made of pea pattie and breaded potato. As a result of all those adjustments, 75% of the menu is suited, or, in other words, Indianized. Maharaja Mac is meant for those 83% of Indians who do not eat beef or pork whereas another cultural fit, McDonalds has thought of, is Veggie Burger for 20% of complete vegetarians. All the food is very carefully segregated into that consisting of vegetarian and nonvegetarian ingredients because, otherwise, some religious feelings might be offended. Kishore Dash indicates in the paper 37

issued by The Garvin School of International Management that such situations can go to the extreme because even French fries in India cannot be flavoured with beef tallow or the ice cream and mayonnaise have no egg in them. It is worthy of attention that such information concerning the content of the meals is always displayed in Mc leaflets. No product launched by the company enters the market accidentally. As it is pointed out by Sagiv Mediratta, quality assurance and product development manager for McDonalds India, she: test-marketed this veggie burger in 1994 in McDonalds outlets located in three Asian population-dominated towns of London-Southall, Ilford, and Hounslow-before launching this product in India in 1996. This indicates that a careful and thorough examination of the market is necessary before any steps are taken, and this strategy was extensively used by McDonalds company in India. There are also some advantages of the presence of McDonalds in that area. First of all, it is a great job provider. On average in a single restaurant 100 people are needed to work on various positions, and, what is more, there is also more employment in Indias agriculture. This is surel y a great plus speaking in support for the company. There are, however, some attacks and criticism from the side of the green activists accusing the corporation of creating bad eating habits (fat, unhealthy food) as well as serving only the chosen (the wealthy) in the society. In the radio interview on McDonalds exploitation and the global economy Vandana Shiva, the director of The Research Foundation for Science, Technology and Natural Resource Policy, criticizes the corporation for providing people with junk food, as she calls it. Being the main organizer of protests against junk food chain restaurants, she accuses big corporations of having detrimental impact on life of the people around the world, not only in India stating that: I think that corporations, like McDonalds, who are on one hand destroying entire food cultures of the world and on the other hand not giving healthy food to people, there is going to be an inevitable outcry against their operations and they know it. As peoples consciousness of the importance of healthy eating habits rises, such fast food companies may encounter increasing problems. Being aware of this fact, McDonalds launched certain initiatives to turn the oncoming stalemate into a situation that would be more advantageous for it. Shiva also directs our attention to the fact that such junk food may be the cause of various diseases. She provides examples of other countries by saying that Japan has had a 70% increase in food-related illnesses because of the kind of fast food chains like McDonalds are bringing. To support her statement, she mentions Mad Cow Disease or Bird 38 Flu that can endanger human lives.

In response, McDonalds started to support various green movements and sponsor different community-related activities to promote environmental consciousness. One of the initiatives was the Olympic Day Run, organized in June, 2005. The other may be the companys attempts to keep public parks in Greater Kailash and Basant Lok cooperating with New Delhis Municipality. The fact that even high, governmental organizations involve themselves in such actions is the obvious indicator that the corporations initiatives are really treated seriously. McDonalds found also a way of how its environmental concerns could be combined with the religion and, what is more, was able to turn it into an advantage. The company is the leader in the campaign whose aim is to detoxify the Yamuna River. Grease Traps were installed in all the restaurants where oil is separated from water before it is pumped into the river as sewage. It must be noted here that the river itself is considered to be sacred by the majority of Indias population. There is a large number of various campaigns, led by McDonalds, to preserve the natural environment like replacing the polythene bags with recyclable paper bags (the Mc corporation was the first one in India to introduce this idea).

Vandana Shiva, in her interview, also points out to another very important feature of big corpotations in general-the exploitation of the labor force which occurs there. She especially focuses on the fact that, first of all, children are being exploited in the McDonalds company and it has a very negative effect on the kids education. She states that the corporation uses the fact of the Indias population being poor and hires children to work for minimum wages. This can really be an acutely damaging argument against the restaurants trials to gain public support and trust and its response had to be quick, and it was. Being aware of the fact that children in India are the centre of family, McDonalds is also the major organizer of special events devoted for kids. Right now, children make the main clientele of the company in India, that is why they are treated as serious clients and many attractions are created there for them. One of those is the McDonalds Spotlight which is an acting competition. The number of schools participating in the occasion is still on the increase and in 2003 it reached 120 schools. Whereas the Childrens Day is celebrated on November 14 world widely, in India McDonalds celebrates World Childrens Week, November 14-20, throughout all the restaurants all over the country. The aim of the activity is simple-to raise funds for 39

educational programs for kids. Some of the other attractions for kids, prepared by the restaurant, include Happy Meals with Lego toys, and special Fun Zones- where birthday parties can be organized and children are able to play, not disturbing the adults. There are also special Cold Kiosks where kids can eat different desserts like ice creams and other sweets. In India McDonalds are called family restaurants, not, as it is in other parts of the world, simply McDonalds. Going to the restaurant may be treated as a family holiday or a family celebration. Another successful program initiated by McDonalds in India is Pulse Polio. In this case the company cooperates with different health organizations and the aim is to make this country polio free. Outside the restaurants special inoculation booths are placed where polio vaccine is distributed for free to kids up to the age of 5. This is a large-scale operation being carried out all over the country with a clear goal-to eliminate polio from public life by the year 2005. McDonalds is not the only active participant in the project as it is supported by Mumbai Municipal Corporation. Here, we have another example where local authorities are involved in the activities initiated by the company. It must be noted that such initiatives are popular among the people and it adds to the overall popularity of the corporation. McDonalds has as well taken steps to attract the youth as it is common knowledge that American culture and lifestyle is popular among them. Among the young of India, America is associated with success and good life. Through that, going to the restaurant is seen as trendy. The companys specialists also observed the fact that during various festivals Indian people like eating out. Using this information, McDonalds launches new products- fourth flavour -Veg Surprise (a vegetable burger with Indian spices). This is another cultural fit during festival season, lasting from September till November, when even non-vegetarian Hindus do not eat meat and turn vegetarian. The company even thought of something for those who hardly ever eat out-delivery service. Being conscious of the fact that some people may have transport problems, this is a great opportunity for them to have access to it and for the company to reach broader audience. There is, however, another example of delivery in Indias McDonalds restaurants, as it is pointed out by Rob H. He writes about his tourist experience in a Mc restaurant in an Indian town-Connaught Place. He describes his feeling of shock when, after paying for the meal, he was asked to sit down by one of the tables and await his order, that was supposed to be handdelivered to his table. 40

To conclude, I must admit that this topic is an interesting one, there was, however, too little space in the paper to have a closer and more detailed insight into the context of the operations of McDonalds in India. It is extremely hard to decide whether the corporation succeeded or flopped. To some extent it may have succeeded as the gimmicks it used attracted peoples attention and their role was carried out. The restaurant cannot complain as far as the number of customers is concerned. It is probably due to the fact that most of those adjustments it had to apply were successful. I notice, however, some dangers to the company as all those campaigns and movements against it are getting stronger and reaching greater audience. They do their task which is to raise peoples awareness and if, on the other hand, they prove to be successful, all of those big corporations will inevitably lose in India as well as in other countries. Even right now we can see on the news that a number of McDonalds outlets is being closed down in some parts of the world whereas in some other parts the demand for such companies is still huge. Why is that so? I think it depends on how much a given country is ready or willing to adopt this Westernized, or to be more specific Americanized, way of life. This is, I suppose, the cause of the success of the fast food restaurants-that American lifestyle is in vogue and that people want to imitate it for a period of time, before they become jaded with it as, with time, happens in most countries.

11.

All Vegetarian

McDonalds India has announced its plans to go completely vegetarian. The fast food giant will open its first vegetarian-only location next year near the Golden Temple, a pilgrimage site sacred to Sikhs located in Amritsar in northern India. According to the Food and Agriculture Organization, 20 to 42 percent or more of the population (depending on how you count) avoid eating meat, mostly for religious reasons cows are sacred to Hindus, and pork is not eatable for Muslims. Thats why you wont find a classic Big Mac in the countrys McDonalds, only a chicken alternative called Maharaja Mac is possible. The restaurants menu in India is 50 percent vegetarian and the top selling burger is not the above-mentioned Maharaja but McAloo Tikki burgera spicy, fried potato-based patty priced at 28 rupees, or 50 cents. 41

At the moment, India is still a very small market we just have 271 restaurants in India, and across the world, we have nearly 33, 000, a spokesman for McDonalds in northern India, Rajesh Kumar Maini told AFP. However, the chain plans to grow in the country. It ahs announced another vegetarian location near the Vaishno Devi cave shrine in Kashmir, a Hindu pilgrimage site planned for the next year. Going all-vegetarian may help attract thousands of Indians that didnt visit McDonalds before because of a small meal choice. During the last year, McDonalds has been revamping its venues and shifting to a healthier menu worldwide.

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Summary
The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 69 million customers daily in 122 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. The McDonalds corporation may be treated as an exemplar showing how other Ame rican fast food restaurant chains are functioning in such an exotic country, and what they had to do to earn peoples trust. The first McDonalds in India appeared in October, 1996 in a rich residential area in New Dehli. In November 2001, there were already 58 McDonalds restaurants in this country, and according to plans in the next three years there is supposed be built 90 new ones. Indias market seems to be enticing as well as offputting for food corporations According to Vikram Bakshi and Amit Jatia, who are responsible for running McDonalds in India, there are two most important challenges for McDonalds to tackle: the first is not to hurt religious feelings of the citizens and the second is not to get oneself involved in political confrontations with some political activists. In order to suit the situation, McDonalds had to introduce some special meals that cannot be found anywhere in the world in restaurants of this kind. The introduction of new products in various countries is not something rare at all, as Bakshi points out but he as well adds: but what is unique in the context of India is the companys willingness to replace its core product, beef-based Big Mac. Some examples are as follow: Maharaja Mac that serves as a substitution for Big Mac that can be found everywhere except for India. No product launched by the company enters the market accidentally. McDonalds India has announced its plans to go completely vegetarian. The fast food giant will open its first vegetarian-only location next year near the Golden Temple, a pilgrimage site sacred to Sikhs located in Amritsar in northern India. Going all-vegetarian may help attract thousands of Indians that didnt visit McDonalds before because of a small meal choice.

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During the last year, McDonalds has been revamping its venues and shifting to a healthier menu worldwide.

Conclusion
McDonalds India has carved a niche for itself in an increasingly competitive Indian fast food market by adapting itself in ways uncommon for the company in other parts of the globe. Through the companys focus on teenagers and young adults as well as a highly specialized menu, McDonalds has found success in India when many people said it could not be done. When most of us think of McDonalds, we think of cheap fast food and little children racing around the restaurant with their happy meal toys. While this is much the same wherever you go in the world, upon closer inspection, McDonalds India retains some major differences. The most noticeable difference is the menu. McDonalds is known worldwide for its Big Mac. However more than 80% of Indias population of 1.17 billion does not eat beef. So to have any chance of success in the country, McDonalds recognized that the company would have to spend a lot of time and effort developing a menu that catered to Indias enormous Hindu and Muslim communities. Elsewhere in the world, McDonalds maintains a strict 70% original 30% local menu. In India however, McDonalds inverted those numbers maintaining a 30% original 70% local menu. Stricken from the menu were the Big Mac and Quarter Pounder, the hamburgers that made McDonalds famous. Gone also was the McRib. After all, Muslims do not eat pork. In their places, McDonalds unveiled its potato, lamb, and chicken based menu featuring such delectable treats as the Mc Aloo Tikki Burger and Maharaja Mac. But not to worry McDonalds fans, you can still get your French fries and Chicken McNuggets. McDonalds also represents something different to the youth of India. The company has been accused of cultural imperialism by numerous sources but this is not really true. McDonalds has had to Indianize itself in order to be accepted by the population. Even so, McDonalds has retained many of its key western elements and this has made the restaurant that much more popular. Thinking of our own experiences at McDonalds, few of us would remember all the great times we had with our friends at that cool American style restaurant. Yet this is exactly the memory that Indian youth associate with McDonalds. They see the 44

restaurant as something different, unique, and fun. They see it as a great place where they can get out of the house and away from their parents. This is where Indias youths go to hang out with their friends and treat themselves to some great tasting reasonably priced food. McDonalds has cultivated this image and built brand loyalty with young Indians through advertisements specifically targeted towards young adults. The restaurant recognizes that this age bracket, more so than in the US, influences the purchases of the entire family. And as such, by capturing the youth market, McDonalds can capture the rest of the family as well. Additionally, due to the recent increases in FDI and the abundance of call centers, Indias youth have more money than previous generations did. And without the families and other obligations that drain the wallets of their elders, these nouveau wealthy youth are free to exercise more discretionary spending than previous generations. Through the companys operating model of targeting the teen and young adult populations of India, the company has enjoyed great success, capturing 39% of fast food sales in the country (Fast Food India), this despite the fact that McDonalds does not even have the most restaurants. That honor lies with Baskin-Robbins. Meanwhile the market is expected to grow nearly 50% by the year 2014 (Fast Food in India). All of which makes McDonalds and its competitors salivate. In total, McDonalds has more than 160 restaurants concentrated primarily in the northern and western districts of the country. In addition to their traditional restaurants, the company also operates many ice cream kiosks. These are small stores located primarily in shopping districts where customers can take a break from their day to sit and enjoy an ice cream cone. The company has also chosen to forgo its usual franchising model. Instead choosing to start two joint ventures and establish two master franchisees that are responsible for managing every restaurant in the country. This joint venture model helps the company exercise stronger control over the individual restaurants and ensures that each one meets the companys strict QSCV (Quality, Service, Cleanliness, and Value) motto.

Recommendation
McDonalds India should try to target the rich urban counterparts as well. They shall try opening 24 hour Mcdonalds in India as well. A wider vegetarian menu since it will not only attract vegetarians but the part of the group who is non-vegetarian as well. 45

 They shall have monthly food festivals where they introduce they products which they serve in different parts of the World. Introduce a healthy menu since urban Indian population has too been focusing on that issue. Open Drive-in in Mumbai as well since people are always in a hurry. They should advertise more since their global competitors have started entering the Indian market and likely to take away the market share.

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