About McDonalds

The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants,
serving around 68 million customers daily in 119 countries across 35,000 outlets. 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 by a franchisee, an affiliate, or the corporation itself.

McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees,
as well as sales in company-operated restaurants. In 2012, McDonald's Corporation had annual
revenues of $27.5 billion, and profits of $5.5 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, fruit, and seasoned fries.

The business began in 1940, with a restaurant opened by brothers Richard and Maurice
McDonald at 1398 North E Street at West 14th Street in San Bernardino, California. Their
introduction of the "Speedee Service System" in 1948 furthered the principles of the modern fastfood restaurant that the White Castle hamburger chain had already put into practice more than two
decades earlier. 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. The overlapping double arched "M" symbol logo
was temporarily disfavored[clarification needed] by September 6, 1962, when a trademark was
filed for a single arch, shaped over many of the early McDonald's restaurants in the early years.

Although the "Golden Arches" appeared in various forms, the present form as a letter "M" did not
appear until November 18, 1968, when the company applied for a U.S. trademark.
The present corporation dates its founding to the opening of a franchised restaurant by Czech
American businessman Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth McDonald's
restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its
worldwide expansion, and the company became listed on the public stock markets in 1965. Kroc
was also noted for aggressive business practices, compelling the McDonald brothers to leave the
fast food industry.
The McDonald brothers and Kroc feuded over control of the business, as documented in both
Kroc's autobiography and in the McDonald brothers' autobiography. The San Bernardino store was
demolished in 1976 (or 1971, according to Juan Pollo) and the site was sold to the Juan Pollo
restaurant chain. It now serves as headquarters for the Juan Pollo chain, as well as a McDonald's
and Route 66 museum. With the expansion of McDonald's into many international markets, the
company has become a symbol of globalization and the spread of the American way of life. Its
prominence has also made it a frequent topic of public debates about obesity, corporate ethics and
consumer responsibility.

Products of McDonalds
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. On a seasonal basis, McDonald's offers the
McRib sandwich. Some speculate the seasonality of the McRib adds to its appeal. Various
countries, especially in Asia, are currently 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, or Ebi (prawn) Burger in Singapore). In Germany and other Western
European countries, McDonald's sells beer. In New Zealand, McDonald's sells meat pies, after the
local affiliate partially relaunched the Georgie Pie fast food chain it bought out in 1996.
Indian McDonald's restaurants do not serve beef and pork products, in deference to Hindu and
Muslim beliefs. The only animal products available are chicken and fish.
McAloo Tikki, Veg McPuff, McEgg, Chicken McGrill, Masala Grill Veg, Masala Grill Chicken,
McAloo Wrap with Chipotle Sauce, French Fries, McVeggie, McChicken, Filet-O-Fish, Chicken
Maharaja Mac, McSpicy Paneer are demanding products of McDonalds in India.

Vision for India:

To be India best quick service restaurant experience- supported by principles and core values.

McDonalds in India:

Wholly owned subsidiary-MIPL

Incorporated in 1993.
McDonalds opened its door in India in Vasant Vihar, New Delhi in 1996.
Entered into 50:50 JVs with Connaught plaza restaurant-Vikram Bakshi-North & hardcastel

restaurant- Amit Jatia- West.

Market entry strategy was Joint Venture.

Global Strategy:

 Customer driven, goal oriented.

Achieving sustainable, profitable growth.
Designed to increase restaurant visits and grow brand loyalty among new & existing
customers.
Further build financial strength.
After joint venture they adopt their global business strategy and spread their business
through franchise driven business model.
Franchise driven model
-15% owned stores; remaining 85% are operated by franchisees.

Why Joint Venture in India?

For gaining experience in the new area of activity.

Tax advantages were a significant factor in McDonalds joint ventures.
Market access and knowledge.
Need of framework for assessing Industry/Market attractiveness.
Government policies.

What is Marketing Strategy?

Marketing strategy is defined by David Aaker as a process that can allow an organization to
concentrate its resources on the optimal opportunities with the goals of increasing sales and
achieving a sustainable competitive advantage. Marketing strategy includes all basic and longterm activities in the field of marketing that deal with the analysis of the strategic initial situation of
a company and the formulation, evaluation and selection of market-oriented strategies and
therefore contributes to the goals of the company and its marketing objectives.
McDonald's launched in India and its evolved marketing in India

When McDonald's India launched in 1996, urban Indians in Mumbai and Delhi typically ate out
three to fives times a month, according to AT Kearney, the management consultancy. In the 12
years since then, that average frequency has doubled and analysts forecast that by 2011 the
Indian quick service restaurant market will be worth 30,000 crore (about $6.3bn at October 2008
exchange rates).
But from their earliest investments in India, multinational company (MNC) owners of restaurant
chains have struggled to adapt to the needs of India's many markets. Some pulled out of the
country after failed ventures. At the time, consolidation of the hugely fragmented Indian retail
sector had also barely begun, and there was scepticism that Indians would prefer burgers and fast
food to local food offerings.
However, in the intervening decade, McDonald's has continued to open new outlets in the country,
evolving its marketing strategy through several phases.
Amit Jatia, Managing Director, McDonalds India, said: "The past decade has witnessed a marked
change in Indian consumption patterns, especially in terms of food. Households in middle, upper,
and high-income categories now have higher disposable income per member and a propensity to
spend more."
Phase I: Launching the brand
The starting point for McDonald's India was to change Indian consumers' perceptions, which
associated it with being 'foreign', 'American', 'not knowing what to expect' and 'discomfort with the
new or different'.
McDonald's wanted to position itself as 'Indian' and a promoter of 'family values and culture',
as well as being 'comfortable and easy'. Simultaneously, the brand wanted to communicate that,
operationally, it was committed to maintaining a quality service, cleanliness and offering value for
money.
Says Arvind Singhal, Head of Marketing at McDonald's India: "From a marketing communications
standpoint, we chose to focus on familiarizing the customer with the brand. The brand was built on
establishing functional benefits as well as experiential marketing."
Until 2000, McDonald's India did not have enough reach to use mass media such as television
advertising. Instead, most of its marketing effort focused on outlet design, new store openings and
PR about its attempts to tailor a menu to Indian tastes.

Amit Jatia said: "Products like McAloo Tikki burger, Veg Pizza McPuff and Chicken McGrill burger
were formulated and introduced using spices favored by Indians. The menu development team

has been responsible for special sauces which use local spices do not contain beef and pork.
Other products do not contain eggs and are 100% vegetarian. The Indianized products have been
so well received that we even export McAloo Tikki burger and Veg. Pizza McPuff to the Middle
East."
However the company did not escape food criticism in the country. For instance, it hurt the
religious sentiments of Indians by using beef flavouring for its "Vegetarian" French Fries.

Says Sridhar, National Creative Director, Leo Burnett: "When McDonald's launched we took a
conscious call of not introducing any beef or pork in our products. Thus, when controversies
around McDonald's products started during the early and growth stages of the Indian business, we
reacted quickly.
"We educated our customers about the build of our products and did extensive kitchen tours for
our customers. We showed them how we use separate vegetarian and non-vegetarian platforms
for cooking a first in any market for McDonald's."

Phase II: Brand Advertising

By 2000, McDonald's India was ready to begin TV advertising. Arvind Singhal said: "The first
Indian TV commercial, Stage Fright, attempted to establish an emotional connection between the
(Indian) family and the brand. Over the years advertising has reinforced this positioning, supported
by promotions."
The Stage Fright campaign aimed to establish McDonald's as a familiar, comfortable place. It
featured a child who suffers stage fright and is unable to recite a poem. On entering McDonald's,
he easily recites it in the store's familiar environment. A second campaign featured a child and his

family moving into a new place. He misses his previous surroundings until McDonald's provides
something familiar.

A still from the Leo Burnett/McDonald's campaign featuring a family moving home
These storylines were supported by other initiatives. The company's one-minute service guarantee
attempted to reinforce its reputation for fast, friendly and accurate service and it also ran in-store
events for mothers and children.
Mr Singhal says: "To kids sitting on the Ronald McDonald bench, pumping sauce from the sauce
machine became brand rituals."
K.V. Sridhar, National Creative Director, Leo Burnett, the company's agency in India, adds: "In the
launch phase the communication focused solely on building brand and product relevance. The
brand's scores on relevance to families and kids were very high."
Later, McDonald's realized there was untapped potential in the youth audience who considered
McDonald's expensive and mainly for children.
Sridhar says: "In 2004, we launched the Happy Price Menu with a value message for a younger
audience. For the first time McDonald's India saw a surge of younger consumers and people from
socio-economic class B walk into our stores.
"We had realized that the Indian consumer was price sensitive and even though the organization
managed to establish a sense of familiarity, Indian consumers continued to perceive McDonald's
as an expensive eating out option."

McDonald's "Happy Price" campaign

Phase III: Appealing to both ends of the age spectrum
In 2008, the latest campaign from the McDonalds-Leo Burnett stable uses father-son duos from
the Indian film industry to reiterate the theme of "Yesteryear's Prices". It features Bollywood stars
from past decades together with their sons and a message that prices have not risen in line with
the passage of time.

The Happy Price campaign has also been promoted via virals. Outdoor has also promoted a home
delivery option in a country where home delivery is common in urban areas.
McDonald's has also been exploring strategic tie-ups with Indian sports properties such as the IPL
cricket tournament, where it was one of the event's food providers.

McDonalds takes an aim at the needs of its segment market

Look back of the development history of McDonalds Corporation, we found that McDonald has
always pay great attention to market segmentation. It made market segmentation accurately
according to the geography, population and the psychological elements and carried out
corresponding strategies so as to reach the marketing aim of the corporation. It is this that made
McDonalds had such great success which surprised the world.

1. McDonalds made market segmentation by the element of geography

McDonalds has both domestic and overseas markets. Whether in domestic market or overseas
market, there is specific eating habit and cultural background. McDonald makes market
segmentation by geography. It mainly analyses 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 people 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.

.
2. McDonalds made market segmentation by the element of population
In the area of population; McDonalds made market segmentation mainly according to age and life
stage. McDonalds takes children as its centre-its main consumers, paying great attention to
developing their loyalty. The children who eat in the restaurants often get a balloon with
McDonalds mark on it and some small gifts like paper folding.
In China, there is also Uncle McDonalds Club, where children aged 3 to 12 can attend. The club
holds activities regularly to win the favour of the children to McDonalds. This is successful market
segmentation which grasps the characteristics and positioning of the segment market.

3. McDonalds made market segmentation by the element of psychology

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.

The Marketing Mix

The marketing mix of McDonalds consists of the various elements in the marketing mix which
forms the core of a companys marketing system and hence helps to achieve marketing
objectives. The marketing mix of McDonalds discusses the 4ps of the leading burger chain across
India offering the tastiest burgers and French fries.
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 cannibalise 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.

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 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 2 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 the BA products include McAloo tikki and Chicken
McGrill burgers which cost Rs20-3 This has been done to satisfy consumers which different price
perceptions.
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.
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 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.
Issues faced by McDonalds:
Sharing profit with joint ventures.
Different cultures and management styles result in poor integration and co-operation.

 Decision making problems between joint ventures and McDonalds.

Much higher degree of adaptability.
40% Vegetarians- Vegetarian selections to suit Indian taste.
Respect for local culture- Special Indian menu, No beef or pork items in India.

Findings

Best quick service restaurant in India.

Varieties of products are available in Vegetarian and Non-Vegetarian menu.
Different product design as per different culture in India. (i.e. McAloo tiki)
Best recyclable packaging.
Strategic pricing methods.
Different sales promotion offers to attract customers.
Purely customers based and services based restaurant.

Conclusion:
McDonalds in India & how it applies their strategies to interact with external environment. As a fast
food company, the rivals that it has faced in the Indian economy during the implementation & the
strategies they applied, and the strategy changes according to different situations reports from this
document. Analysis of McDonalds is mainly on its unique characteristic applied in India,
companys commitment & dedication driven to reach the success in the Indian market. It shows
how McDonalds Business strategies and service serves as an International company. McDonalds
understands the demand of customers and implements the new products according to it. Mainly
its famous for quick serves and quality.