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Table of Content
1.0 Introduction...pg.1
2.0 Phase 1: Formative Researchpg.2
2.1 Analyzing the Situation.pg.2
2.2 Analyzing the Organization..pg.3
2.3 Analyzing the Public.pg.5
3.0 Phase 2: Strategy...pg.7
3.1 Establishing Goals and Objectivespg.8
3.2 Formulating Actions and Response Strategies.pg.8
3.3 Using Effective Communication.pg.11
4.0 Phase 3: Tactics...pg.12
4.1 Choosing Communication Tactics..pg.12
4.2 Implementing the Strategic Plan.pg.13
5.0 Phase 4: Evaluative Research.pg.14
5.1 Evaluating the Strategic Plan..pg.14
6.0 Conclusion and Recommendations.pg.15
7.0 References...pg.15
1.0 Introduction
Culture is the most important issue that needs to be taken concern by international
company. Different countries possess their own culture and lifestyle. This means that the
thinking, behavior and attitudes of people are different from places to places. Moreover,
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the dissimilar rules and legislation in different countries will definitely affect
international business like McDonalds.
McDonalds is one of the world leading restaurant chains. It operates more than 30,000
restaurants in more than 100 countries on six continents today (Advameg, Inc, 2012).
McDonalds was founded in 1940 by two brothers, Dick and Mac. Since the first
franchise open in 1953, the company continues to expand its business from US to UK,
Moscow and China (iloveindia.com, n.d.). McDonalds opened its first restaurant in
Delhi, India in 1996 and second restaurant in the financial capital of India, Mumbai. To
operate in India that possess exact different culture from US, a creative and effective
strategic public relations planning is essential for McDonalds.
According to Ronald D. Smiths strategic planning for public relations (PR), effective and
creative planning is the heart of any PR and related activities. Organization PR plan
should be developed according to four phases: Formative research, strategy, tactics and
evaluative research. Careful planning allows company to monitor, test and adjust the
strategies according to the situation, which will then increase the percentage of success
and reduce the cost. Thus, the purpose of this paper is to analyze McDonalds public
relations plan in India using Smiths The Nine Steps of Strategic Public Relations
model listed below:
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local culture and habits better than McDonald do. The variety of food with acceptable
price range has strengthened local restaurants competitive level too. Therefore, the
acceptance for American fast-food and to change Indians perception had become a
challenge to McDonalds.
2.2 Analyzing the Organization
The second step is to analyze the internal environment, public perception, and external
environment of the organization. McDonalds must be honest to itself in order to clarify
the strengths and weaknesses of the company. In addition, to what extent McDonalds is
known in India and how the public perceived the organization is essential for the
company. Analysis of Indias political, economic, and social and technology factors as
well as the nature of any rivalry that may exist must be done too.
2.2.1 Internal Environment
McDonalds is known for selling consistent, simple, low-priced American food with fast
service (Hassan, 2011). The franchise strategy had led the company to grow extremely
fast while the introduction of Ronald McDonalds had turn its burger into most famous
burger. With its strong background, McDonalds is able to make huge investment to
support any of its plans include necessary researches. Moreover, the company is willing
to adapt glocalization through changing their strategy according to the culture
differences. The implementation of McDonalds system also allows the company to
control at every stage from procurement to serving. This is to ensure the McDonalds
philosophy of Quality, Service, Cleanliness and Value (QSCV) is being achieved.
Training is provided to all staffs and food safety is taken seriously by the organization.
2.2.2 Public Perception
The famous of Golden Arches is not working in India. During 1996, when Indians was
awakening to the global call, the Indians perceived western products and services as
higher quality and expensive. Most of the citizens who considered McDonalds as a
symbol of American culture had recognize McDonalds as another example of the
everlasting spread of Western companies into different countries or communities, which
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is creating a global system that wealth will flowed out from local economies into very
few and rich aristocracies hands (Kulkarni & Lassar, 2009).
2.2.3 External Environment
India is known to be a country that treats women as inferior to men. Female infants used
to being buried right after they were born and women are living with a very low status in
India. They dont have the rights to study like men do. Thus, the government was trying
to implement equal rights policy to all citizens regardless the gender, race, and religious.
The government wanted to provide a minimum standard of living to the citizens;
however, these promises have not been fulfilled up to date (Baxi, 1985).
Economy factors in India are growing continuously from 419.352 US dollars gross
domestic product based on purchasing-power-parity (PPP) per capita GDP in 1980 to
1236.838 US dollars in 1996 (Index Mundi, 2011). This had indicated that Indians
purchase power are increasing rapidly from year to year plus the open market for global
companies in 1996 had become an opportunity for McDonalds to enter this potential
market. Nonetheless, entrance of other global companies will become competition for
McDonalds.
India has the second highest population in the world today. Its population grows from
846.3 million in 1991 to 952, 107, 694 million in 1996, which is divided into 34% below
15years old, 62% for 15-64 years old, and 4% of 65 years old and above (CIA, 1996). 3942% of the total population is vegetarians, an alternative to fish, lamb and chicken. Cow
is taboo and cannot be served. Meanwhile, the unemployment rate in India stays in an
average of 7% since its independence (Jha R., 2000). If McDonalds is able to help the
government to overcome the negative circumstances while increase Indias economy
mentioned above, government will definitely become a huge supporter for McDonalds
The demand for fast food is increasing corresponsive to dual-income families in India.
Some of the popular snacks in India (Bhelpuri, Vada Pav, Samosas and Pani Puri) had
revealed that Indians are more concern of the food taste especially spicy taste instead of
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the nutrition due to these snacks has low nutrition. As a result, burger, which had been
perceived as snack in India, can stand a chance to grab consumers attention if the taste is
suitable for the Indians.
The information technology in India is basically based on the radio, which has the highest
rate of audience, television (which is fully under government control), and telephones
(CIA, 1996). Its an urge for the country to further develop their technologies to meet
global quality and standard. In this case, entrance of McDonalds has played a role in
bringing new technologies to India as well as increase Indians living quality and
standard.
2.3 Analyzing the Public
The third step is to identify and then analyze who McDonalds public are under the four
categories of public customers, producers, enablers, and limiters. The publics key
characteristics and their influences on the company should be come under consideration
too. Customer is the one who consume McDonalds products or services; no matter it is a
primary or secondary customer. Those who provide input to McDonalds are categorized
under producers while enablers are those who set norms or standard to the organization.
Finally, limiters are those who might reduce or undermine McDonalds success.
2.3.1 Customers
Price sensitivity is still critical in India although the purchase power in India had risen; as
a result, McDonalds need to select specific markets to target. Researches indicated that
children have the power to influence parents buying process (Mangleburg & Tech,
1990). McDonalds had noticed on this new phenomenon and decided to set children in
dual-income family as its key public. McDonalds may introduce childrens menus or
offer free toys to target on the children. If the company is able to attract the children
attention, parents will automatically be influence and then become McDonalds
customers.
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Furthermore, the influences of American culture brought to Indian youngsters had created
another target market for McDonalds. Parents who need to relax after working for a day
is one of McDonalds consumers markets. Automobile driving consumers, cinema and
shopping mall lovers, and middle-class Indians are McDonalds potential consumers.
McDonalds can offer Mc Delivery services to those tired parents and open its outlet in
shopping complex and petrol stations.
2.3.2 Producers
McDonalds employees in India itself are one of the producers who will bring benefits to
the company due to their engagement and performance will directly influence consumers
perception on the company. McDonalds should provide high class training to the
employees so that they have the appropriate qualification to perform better in operation
and in service quality.
Alternatively, the relationships with suppliers and distributors of McDonalds in India,
which include Trikaya Ariculture (supplier of Iceberg Lettuce), Vista Process Foods Pvt
Ltd (supplier of chicken and vegetable products), Dynamix Diary (supplier of cheese),
Amrit Food (supplier of long life UHT Milk and milk products for frozen desserts),
Radhakrishna Foodland (distribution center) and Lamb Weston (potato farming), will
determine whether McDonalds could achieve its philosophy of QSCV and its objective
to minimize the production costs. Through giving exclusive products supplier authorities
that bring huge profits to these suppliers and distributors might enhance their loyalty to
McDonalds.
2.3.3 Enablers
Indias government who set the rules and regulations become one of the public that need
to be taken concern by McDonalds. Any changes of the government policies can affect
McDonalds operations. Therefore, McDonalds should pay more attention on its
relationships with Indias government. In addition to that, the benefits of the joint-venture
partnership with two Indian businessmen, Amit Jatia and Vikram Bakshi need to be taken
into consideration by McDonalds in order to get win-win situation. Other partnerships
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consumers health, unlike what the activists said. McDonalds also engage in donations
and fund raising campaign to help local children and raise women status in India to build
their reputation and image.
To implement McDonalds QSCV philosophy, McDonalds in India spent few years and
money in setting up a successful supply chain by bringing McDonalds system from US.
Indians suppliers supply more than 96% products and materials to McDonalds. Then, to
maintain freshness and nutrition value of foods, cold chain had been established. Process
from cold chain system until reach the customers is under examination of McDonalds
Quality Inspection Program (QIP) to ensure that all products are in perfect condition.
McDonalds defend itself by telling the Indian public that McDonalds is different from
other western companies. McDonalds contribute their profits into local community
through the CSR and CSV programs. Employing local citizens and purchase from local
suppliers help stimulate local economy and provide opportunity for them to grow. Other
CSR programs such as raising funds for children, running campaign to raise women
status in India, and sponsor quite a large amount of money to the schools are used to
create newsworthy information.
To enter the small cities in India, McDonalds decided to decrease their selling price, this
had successfully increase 25% of customers. Later, partnership with BPCL (Bharat
Petroleum Corporation Limited) and HPCL (Hindustan Petroleum Corporation Limited)
targeting on automobile driving consumers and partnership with railway stations and bus
stations to target potential middle-class Indians had become a strategy used by
McDonalds to expand its business. To target cinema and shopping complex lovers,
outlets had been set up.
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The sixth step is to analyze how the organization is able to stand out from other
organizations messages whether using information, persuasion or dialogue as
communication approach.
In choosing the communication approach, McDonalds is focus on persuasive
communication, which includes ethos, logos and pathos message appeals, using family
which has children as spokesperson. When McDonalds first enter the India market, it
positioned itself as a family restaurant with as slogan of McDonald's mein hain kuch
baat, which mean theres definitely something about McDonalds to motivate and
encourage people to visit McDonalds for the first time. McDonalds advertisements were
showed in story-lines which focus on emotions to portray itself as a place that provides
full satisfaction and excitement experience to families which have kids and youngsters.
Families had been used as spokesperson in the advertisements.
Nonverbal communications such as play areas and Happy Meals with toys are provided
to the children so that parents could relax and enjoy their eating time in McDonalds. The
children friendly environment with lower counters, rounded table (to avoid children
getting hurt) and children menus were so attractive to the children. Different flavors of
ice-cream were established to fulfill on the youngsters curiosity.
Meanwhile, birthday parties and latest pop-music hits were available to tackle Indias
new generation of jean-clad Americanized teenagers. After the public get to know what
McDonalds is, McDonalds changed it slogan to Toh aaj McDonald's ho jaye" (Let it
be McDonalds for today), which support everyday experience to continue positioning
McDonalds as a families comfort zone. McDonalds believe that advertising and WOM
will help in promoting McDonalds.
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& Lassar, 2009). Furthermore, to continuously increase McDonalds reputation and brand
image, the company is celebrating Childrens week every year from November 14 to 20.
McDonalds also organized interschool arts competition annually and daily fund raising
for charities.
5.0 Phase Four: Evaluative Research
The final phase of Smiths strategic planning for PR comes back to research again. A well
doing evaluative research is important to an organization in order to increase the
effectiveness of public relations and marketing communications while prestige the role of
public relations in an organization.
5.1 Evaluating the Strategic Plan
The last step of Smiths strategic planning for PR is to evaluate the performance of the
strategic plan. The purpose for this evaluation is to know whether the goals and
objectives set in the very beginning being achieved or not. It is also to know if the
company is starting on the right foot.
By lower down the selling price when McDonalds tried to enter India small cities, it has
successfully increase 25% of customers. Additionally, with the establishment of local
supply chain and local farming, McDonalds announced that its operations had come into
break even and had expanded its business to 80 outlets in December 2003 even though
McDonalds had slowed down in its worldwide expansion.
In 2006, McDonalds India has effectively expanded its business around 100 restaurants.
At the same time, India had been identified as McDonalds top 10 markets. Each
McDonalds outlet employed an average of 50 employees over a total of 5000 employees.
Nowadays, McDonalds India has the largest sales volume and highest brand recognition
among other restaurants (includes KFC) in India (Thorn, 2011).
6.0 Conclusion and Recommendations
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According to Smiths strategic planning for public relations, to success in public relations
plan, organization must follow the Smiths model and each phase and steps should be
taken seriously due to they are correlated. After analyzing McDonalds PR plan in India, I
would like to conclude that McDonalds did follow the four phases and nine steps of
Smiths PR strategic planning. Each phase and step had been analyzed clearly. The
adequate strategic communication and public relations strategies implemented
McDonalds had finally lead McDonalds to become the largest and most recognizable
brand in India.
Nevertheless, McDonalds should set goals and objectives to guide them where to go
and how to go. It is believed that through setting clear and inspires goals and
objectives; McDonalds is able to go further. Furthermore, the defensive strategy in
denying the treatment to chickens is not McDonalds fault is not a good strategy for me.
Public will continue to perceive McDonalds as irresponsible to this issue. Hence,
McDonalds should
turn
this
obstacle
into
opportunity
through
transparent
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Jha Raghbendra (2000). Reducing Poverty and Inequality in India: Has Liberalization
Helped?, WIDER Working Paper, 204, UNU/WIDER: Helsinki.
Kaimal Sreejit (2009). A study of the Marketing Strategies of McDonalds with special
reference
to
Indore.
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Kulkarni Smita and Lassar Walfried (2009). McDonalds Ongoing Marketing Challenge:
Social Perception in India. Online Journal of International Case Analysis, 1(2).
Lin Doris (2012). McDonalds and Animal Rights. Retrieved March 20, 2012, from
http://animalrights.about.com/od/companies/a/McDonaldsAnimal.htm
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