Beruflich Dokumente
Kultur Dokumente
FACULTY:
PROF. A.K.BISWAS
PROF. PANKAJ PRIYA
Roll #:
Arpita Panda
Anvita Kumar
Garima Arora
Gaurav Chandwani
Gauraw Prasad
Harsimranjit Kaur Chahal
32
29
54
57
60
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ACNOWLEDGEMENT
We would like to express our sincere gratitude towards Professor A.K.
Biswas and Professor Pankaj Priya for their extended and unwavering
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support in helping us understand the intricacies of marketing
management. We are indebted for their guidance without which this
project would never have been possible.
Table of Contents
BACKGROUND........................................................................................................ 1
OBJECTIVE.............................................................................................................. 1
COMPANY ANALYSIS............................................................................................... 2
MCDONALDS VISION.......................................................................................... 2
MCDONALDS MISSIONS...................................................................................... 2
CAPABILITIES AND CORE COMPETENCIES...........................................................2
SWOT ANALYSIS OF MCDONALDS......................................................................3
STRENGTHS...................................................................................................... 3
WEAKNESSES................................................................................................... 3
OPPORTUNITIES................................................................................................ 4
THREATS.......................................................................................................... 4
FINANCIAL ANALYSIS........................................................................................... 4
SUSTAINABLE COMPETITIVE ADVANTAGE (SCA)..................................................5
KEY SUCCESS FACTORS...................................................................................... 6
MARKET GROWTH RATE................................................................................... 6
COMPETITOR ANALYSIS.......................................................................................... 8
PIZZA HUT........................................................................................................... 8
WHY PIZZA HUT IS SO FAMOUS IN INDIA?........................................................8
DOMINOS............................................................................................................ 9
FACTORS FOR THE RISE OF DOMINOS IN INDIA................................................9
KENTUCKY FRIED CHICKEN (KFC)......................................................................10
FACTORS OF GROWTH OF KFC IN INDIA.........................................................11
MCDONALDS.................................................................................................... 11
WHY MCDONALDS IS POPULAR IN INDIA?.....................................................12
Marketing Mix...................................................................................................... 14
Product mix.......................................................................................................... 14
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Process................................................................................................................ 32
Promotion Mix...................................................................................................... 33
Launching The Brand McDonalds..................................................................34
Brand Advertising............................................................................................. 34
Repositioning of Brand...................................................................................... 35
Im Lovin It....................................................................................................... 36
The 'Lost Ring' Campaign.................................................................................37
The Monopoly Game......................................................................................... 37
The Finger Food Fun Festival.............................................................................38
Outdoor Campaigns.......................................................................................... 38
HappyMeal.com................................................................................................ 39
Movies and McDonalds..................................................................................... 39
McDonalds Shrek Forever After watches...........................................................39
McDonalds and The Last Airbender Happy Meal Toys.......................................39
McDonalds and ICE AGE 3................................................................................ 40
Portraying Brand Affordability...........................................................................40
Individual communication................................................................................. 40
Party Time......................................................................................................... 40
Indirect Marketing............................................................................................. 40
Associating with Events.................................................................................... 40
Farmville and McDonalds.................................................................................. 41
Other Unconventional Routes...........................................................................41
Advertising Costs (As Per Annual Report...........................................................41
CUSTOMER QUESTIONNAIRE................................................................................43
FRANCHISEE QUESTIONNAIRE / responses..........................................................45
Survey Results and Inferences.............................................................................46
Percentage of RESPONDENTS:..........................................................................46
Observation and Suggestions..............................................................................55
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WORKS CITED...................................................................................................... 56
BACKGROUND
McDonald's is the leading global foodservice retailer with more than
32,000 local restaurants serving more than 60 million people in 117
countries each day. More than 75% of McDonald's restaurants worldwide
are owned and operated by independent local men and women.
McDonalds origins lie in small restaurant opened in 1940 by brothers
Richard and Maurice McDonald in San Bernardino, California. They
introduced the concept of the "Speedee Service System" in 1948 which
forms the foundation of the principles of the modern fast-food restaurant.
In India, McDonald's is a joint-venture managed by Amit Jatias Hardcastle
Restaurants Private Limited and Vikram Bakshis Connaught Plaza
Restaurants Private Limited. The former owns and heads McDonalds in
west & south India, whereas McDonalds restaurants in North & East India
are owned and managed by the latter.
Celebrating over 14 years of leadership in food service retailing in India,
McDonalds now has a network of over 160 restaurants across the
country, with its first restaurant launch way back in 1996. Prior to its
launch, the company invested four years to develop its unique cold chain,
which has brought about a veritable revolution in food handling,
immensely benefiting the farmers at one end and enabling customers to
get the highest quality food products, absolutely fresh and at a great
value.
OBJECTIVE
The eating out market in India is on an upswing. A rise in the number of
working women and nuclear families and an overall increase in general
affluence levels also contribute to higher discretionary spending on dining
out. According to the Food Franchising Report 2009, 30 per cent of
working singles eat out at least once a month, with a majority spending at
least Rs 101-150 per outing. Urban Indians now eat out six times a month
compared to 2.7 times in 2003. Studies suggest that the expenditure on
eating out at 11 per cent is second only to groceries for Indian
households.
In 2009, McDonalds India won the CNBC Awaaz Consumer Award for the
third time in the category of the Most Preferred Multi Brand Fast Food
outlets. In 2010, McDonalds India plans to open 40 more outlets. The
company has also earmarked a budget of Rs 50-60 crore to market its new
products and initiatives for consumers. Its new marketing campaign is
titled celebration in other words celebrate little joys
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COMPANY ANALYSIS
In addition to external threats and opportunities, strategy development
must be based on the objectives, strengths and capabilities of a business.
Understanding a business in depth is important before proceeding towards
the next step that is formation of strategy. Strategies must be evaluated
against the companys objectives not versus alternate target markets or
alternate marketing mixes.
While a company is continually adapting to it competitive environment
certain core ideals remain relatively steady and guide its strategic
decision making process. These unchanging ideals form the Business
Vision and are expressed in the company Mission statement.
MCDONALDS VISION
"McDonald's vision is to be the world's best quick service restaurant
experience. Being the best means providing outstanding quality, service,
cleanliness, and value, so that we make every customer in every
restaurant smile."
MCDONALDS MISSIONS
McDonald's brand mission is to "be our customers' favorite place and way
to eat." Our worldwide operations have been aligned around a global
strategy called the Plan to Win centering on the five basics of an
exceptional customer experience People, Products, Place, Price and
Promotion. We are committed to improving our operations and enhancing
our customers' experience.
Company objectives guide managers in searching and evaluating
opportunities and later planning marketing strategies.
WEAKNESSES
High staff turnover including top management
Customer losses due to fierce competition
Legal actions related to health issues ;use of trans fat and beef oil
Uses HCFC -22 to make polystyrene that is contributing to ozone
depletion
OPPORTUNITIES
Diversification and acquisition of other quick-service restaurants
Low-cost menu to attract different customers
Initial public offerings in other countries could raise revenues
Retail merchandise potentially used to raise revenues
THREATS
Increased competition among rival sellers, including price wars,
product innovation, and growth
Health conscious consumers demanding better quality, healthier menu
items
All fast-food chains expected to struggle to meet new consumer health
expectations
FINANCIAL ANALYSIS
With over 32,000 locations in over 110 countries, McDonalds (NYSE: MCD)
is the world's largest fast food restaurant chain. The company experienced
a dramatic turnaround in 2003, driven by a two-pronged strategy. In the
U.S., McDonald's focused on increasing sales at existing locations by
renovating stores, expanding menu options and extending store hours.
Internationally, McDonald's expanded aggressively, opting to franchise
rather than operate its new locations, providing new income with little
overhead. Both strategies have paid dividends - despite its size, sales
have grown by a third since 2003. In the U.S., McDonald's focused on
4
2009
2008
2007
$15,458.
5
$16,560.
9
$16,611.
0
7,286.2
6,961.5
6,175.6
Total Revenues
22,744.7
23,522.4
22,786.6
Table 1
SUSTAINABLE COMPETITIVE ADVANTAGE (SCA)
SCA is the advantage a company has which is difficult or impossible for
other companies to possess or break through. It can either be the brand,
dynamic customer care, cost structure or its patent. Whatever the
advantage in order to be considered as sustainable it should either be
proprietary or distinctive. Other than this three different aspects that help
in SCA are,
The managerial and organizational process should share a good
integration and coordination. The much needed value is created thereby
as everyone strives to work for a common goal. The organization should
learn and bring about changes according to the need of the hour and
should always be flexible to changes in the environment such as customer
trends, legal or government restriction and developments in the
technology. McDonalds is presently concentrating on this advantage by
concentrating on organizational behavior and managerial expertise.
Previously this advantage was ignored as the organization was more into
expansion of its outlets over the globe than strengthening its core
advantage. As the result the revenue did not see much of a change while
newer outlets were open. The company suffered a massive loss first time
since their inceptions which further lead to the change in the managerial
heads.
Technological, structural and financial assets of a company are excellent
market position which helps in the SCA. McDonalds no doubt is abundant
with such aspects like structure, technology and finance. To identify and
implement these assets in the proper direction towards the improvement
of the company is all that is needed. After 2003 the company has really
started to concentrate on its greatest advantages.
Most of all the greatest advantage is the vision or the dream with which
the company was started. Sustaining this dream over the years is any
companies greatest advantage. A brand usually revolves around this
vision sustaining this vision and working in lieu with it is a great SCA.
McDonalds was started out to help people who had very little time to cook
or was too busy to get into a proper restaurant. The vision was to provide
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quick service, cheap products and quality satisfaction. Keeping this vision
in mind the company which slackened a bit because of incompetent
franchise holders is being weeded and new and better people are put in
this place as the torch bearers of the company sustaining and living the
vision.
KEY SUCCESS FACTORS
The key success factors are those elements that are necessary in order for
the firm to achieve its marketing objectives.
McDonalds key success factors are its low priced items and customer
friendly services.
McDonalds understands the value of both its employees and its
customers. It understands the fact that a happy employee can serve
well and result in a happy customer. The Slogan Im Lovin It means
that I as an employee is loving the experience of working at
McDonalds and serving the customers and also means that the
customers are happy coming to McDonalds.
McDonald is continuously involved in Internal Marketing. This is
important as it must precede external marketing. This includes hiring,
training and motivating able employees. This way they serve
customers well and the final result is a happy customer
McDonald's has been a trendsetter in advertising. It has focused on
different ethnic groups as well as the physically disabled.
McJobs is a program that employs both mentally challenged adults and
senior citizens.
McDonald's has evolved successfully with the health food revolution,
launching new products and being a part of the Go Green movement
by using environmentally-safe packaging and recyclable goods.
According to a survey done people visit McDonalds due to its variety,
cheap prices and the clean toilets.
COMPETITOR ANALYSIS
For a business to be successful it is critical to continue gathering
competitor information and keep an eye out for their strategy and ways of
approaching the market. This not only helps in protecting the market
share of the business but also provides opportunities if gaining more
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They are slowly expanding from Metros to tier I and tier II cities of
India targeting semi-urban areas.
DOMINOS
Jubilant Food Works Limited, holds the master franchisee rights for
Domino's Pizza for India. Domino's Pizza opened its first store in India in
January 1996, at New Delhi. Today Domino's Pizza India has grown into a
countrywide network of 320 stores with a team of over 9,000 people.
According to the India Retail Report 2009, they are the largest Pizza chain
in India and the fastest growing multinational fast food chain between
2006-2007 and 2008-2009 in terms of number of stores. It has 65%
market share in the home delivery segment.
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There are total of 320 stores which are operational. Net Sales for the
quarter ended June 30 2010, stood at Rs 1,356 million with a growth of
60% yearonyear. Net Profit for the quarter under review was Rs. 153
million as compared to Rs. 34 million compared to the first quarter in
2010. In the overall organized pizza segment it has a market share of
around 47%.
snacker that costs just Rs 25 to make people try out the brand.
Knowing where its consumer is, the brand has homed in on states
with over 90 per cent of non-vegetarian population such as West
Bengal, Tamil Nadu, Punjab and Andhra Pradesh besides the cities it
is already present in for further expansion.
Most of the product range targets youngsters, who make up for their
core audience, and has seen tremendous repeat purchases. With the
median age in India just 25 years, versus about 37 years in the U.S.,
KFC hopes to get teens and young adults hooked on its tasty and
not-so-expensive food.
KFCs are decorated in bright colors, offer big, flat-panel televisions,
and seating areas where groups can freely mix.
MCDONALDS
As we know that McDonald's is one of the world's leading fast food service
companies which serves around 50 million customers on a daily basis.
From its initial days the company was so much committed to provide
quality products to its customer that prior to its launch, the company
invested four years to develop its unique cold chain, which has brought
about a veritable revolution in food handling, immensely benefiting the
farmers at one end and enabling customers to get the highest quality food
products, absolutely fresh and at a great value.
There is no single business that McDonald's views as a chief rival.
However, it would be fair to say that all other restaurants and eateries,
especially those that are described as operating within the 'quick service'
or 'fast food' sector, could be considered as competitors.
One good thing about McDonalds is that they are quick in adapting
changing market and customers preferences to ensure profitability. They
keep a close eye on their competitors and not only design their product to
counter the competitors strategy but also come up with their unique
strategy to insure profitability and customer satisfaction.
WHY MCDONALDS IS POPULAR IN INDIA?
After going through the competitors of McDonalds and their strategies, we
can easily say that it is not easy for McDonalds to stay at top in such a
competitive market. While Dominos has strong home delivery system in
place, Pizza Hut offers wide range of products and support Dine-in concept
and KFC is famous for its chicken meals and large spaces and other local
outlets provide their products at cheaper rates. So McDonalds came up
with solutions like starting home delivery services in major cities with
online facility to tackle Dominos, included 30 new items to its menu and
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The variety they offer in their menu be it a vegetarian item or nonvegetarian item, cold coffee or hot serves, frozen desserts or floats.
Keeping the religious sentiments of people in mind they dont serve
Beef or Pork. Even they keep separate utensils and freezer for
vegetarian and non-vegetarian meals and are prepared in separate
areas of the restaurant.
Keeping the customers demand in mind they have introduced
breakfast menu in selected outlets. The menu includes vegetarian
items like Veggie McMuffin, hash browns, cuppa corn and McMuffin,
chicken Salami McMuffin and Sausage McMuffin etc.
A mixture of Indian and global menu is being served as they have
reengineered the menu for the Indian customers and have
successfully introduced McVeggie Burger, Paneer Salsa Wrap,
Chicken Mexican Wrap.
For health conscious customers they have introduced Salad
Sandwich. McDonald's introduced new whole grain wraps made of
multigrain bread consisting of five different kinds of cereals (barley,
oatmeal, ragi, wheat flour and maida) and a salad mix of five
different kinds of vegetables. For non-vegetarians they offer Chicken
McNuggets which are made from quality white meat chicken
containing zero gram of trans-fat per serving.
Price is the thing of concern for most Indian households, youngsters
and specially students. Keeping this in view McDonalds tried to keep
the cost of all products low. They offer combo meals at reasonable
price to give the customer value for their money.
Most of the outlets are in prime time high traffic locations so that
customer can easily reach to the outlets.
From petrol pumps to kiosk to drive through to home delivery, they
are serving everywhere.
For the convenience of customers they have launched Web ordering
for selected outlets only.
Supply Chain Management is one of the decisive factors for the
normal functioning of any business as it ensures the timely delivery
of raw materials, but it also gives an opportunity to reduce costs
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McDonalds not only delivers value to its customers but also experience. It
targets everyone from children, youth, and family to middleclass and
earning class. Keeping the price low they attract the Indian customer who
is very price conscious. They have countered every strategy of their
competitors well and have developed their own strategies to beat others
in this business. But there are few things that McDonalds have to keep in
mind like Inflation which is high these days which forces restaurants to
increase the price of their products by 2-2.5% every six months. They
have high employee turnover, slow service at drive through windows and
poor order accuracy which are not at all helpful in retaining their
customers.
MARKETING MIX
Marketers have four tools to use to develop an offering to meet the needs
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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
16
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.
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McDonalds Successes: Fries, Happy Meal, Big Mac, Paneer wrap , Pizza
McPuff
McDonalds Failures: Fajita, Carrot Sticks, McLean, and the Arch Deluxe
THE VEGETARIAN PRODUCTS AT MCDONALDS INDIA:
McVeggie:
The McVeggie sandwich starts with the oh-so-familiar sesame seed bun. In
between the bread, you'll find a vegetarian patty that is made from peas,
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carrots, green beans, red bell pepper, potatoes, onions, rice, and
seasoning. This vegetarian burger is garnished with lettuce, and has
mayonnaise made without eggs spread thickly on the bread
McAloo Tikki
Potatoes are a popular filling food item in India. McDonald's in India's
McAloo Tikki sandwich includes a patty made out of potatoes, peas, and
spices. It also includes tomato slices, onions, and vegetarian mayonnaise.
Paneer Salsa Wrap:
Paneer is referred to as cottage cheese in India. McDonald's Paneer Salsa
Wrap starts with a small slab of paneer that has been dredged in a coating
that is a cross between Mexican and Cajun in flavor. It is fried and the
paneer patty is wrapped in flatbread and topped with a salad mixture that
includes lettuce, red cabbage and celery and then is finished off with
vegetarian mayonnaise, salsa and cheddar cheese.
Crispy Chinese:
McDonald's in India's Crispy Chinese sandwich is crispy, but very China.
It's more an Indianized Chinese. Nevertheless, this vegetarian patty is
topped with a creamy Schezwan sauce and lettuce which makes it a nice
addition to the Indian vegetarian menu.
Veg McCurry Pan:
If you are in the mood for something similar to pizza, but don't want a
tomato-based sauce, McDonald's Veg McCurry Pan is a good choice. It
starts with a rectangular shaped crust that is topped with a creamy sauce
(made without eggs), and vegetables including broccoli, baby corn,
mushrooms and red bell pepper. It is then baked until the crust is crisp
and the toppings are hot and bubbly.
Pizza McPuff:
The vegetarian Pizza McPuff also starts with a rectangular shaped crust,
but instead of a creamy sauce is flavored with a tomato-based sauce and
then is topped with carrots, beans, bell peppers, onions, peas and
mozzarella cheese.
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Product
Decision
Brandi
ng
Featur
es
Quality
McDonalds has also Major tie ups with various companies such as Coca
Cola, Barbie, Cadbury, Hot Wheels etc as their co branding strategies.
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PRODUCT QUALITY
Finally coming to the quality part, McDonalds is very much committed for
giving customers wholesome, healthy and delicious food. Quality
Assurance teams are responsible for monitoring the quality of McDonalds
food products both in restaurants and at suppliers at every stages of
production and transfer. This involves continuous inspection, visits and
audits announced and unannounced to all production facilities, distribution
centres and restaurants. Every supplier is exposed to tight specifications
with every details like exact quantity and quality of raw materials and
the dimension of the finished product and to conform these specifications
McDonalds regularly takes samples from the stock at various distribution
centre.
The quality control continues when food arrives at the restaurant as well
for example no delivery is accepted until a series of quality and safety
checks are completed. All restaurant staff receive comprehensive training
in food safety and hygiene and food preparation procedures. This is a
global practice and is one of the most important features of McDonalds as
fast food restaurants.
Hence McDonalds bring with it a globally reputed brand, world class food
quality and excellent customer specific product features.
PACKAGING
Everyday its all the small joys of life which give us the maximum
pleasure. McDonalds India has beautifully captured this thought in its
Har Chhoti Khushi Ka Celebration campaign which promotes the Happy
Price Menu at Rs. 20 and positions McDonalds as the ideal venue to
celebrate lifes small pleasures.
The Happy Price Menu platform has worked very well for McDonalds in
the past, especially with India being a value driven market. The central
idea revolves around the thought You dont need to think twice when
McDonalds has burgers at only Rs. 20
PLACE MIX
Place in 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.
Distribution (Place) decisions concerning McDonalds include the following:
1.
2.
3.
4.
5.
Distribution Channel
Market Coverage
Specific Channel members
Inventory Management
Distribution Centres
Any company can cover the market through mainly three ways namely:
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INVENTORY MANAGEMENT
deliveries to
the restaurants and data collection,
recording and
reporting. Value-added services like shredding of lettuce, re-packing of
promotional items continued since then at the centres playing a vital role
in maintaining the integrity of the products throughout the entire 'cold
chain'. The operations and accounting is totally transparent and is subject
to regular audits.
Over the last 10 years, the company has gained experience and
adopted procedures that helped in maintaining a continuous supply of
food products irrespective of the climatic conditions. Their logistics and
warehousing system is robust that prepares us to deliver products at the
same temperature throughout, without a single break in the cold chain.
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PRICE MIX
Pricing is the only mix that generates turnover for an organization. The
remaining 3 Ps are the variable cost for an organization. It includes list
price, the discount functions available, the financing option available, etc.
Various costs are incurred to design and produce a product. Moreover cost
is also incurred in distribution and promotion of a product. So it is
important for a company to decide its pricing strategy keeping in to
account these cost incurred. Price also affects the demand of the product
by the consumer, so price is the most important element of marketing
mix.
Global pricing is one of the most critical and complex issues that
McDonalds faces while operating in different countries. For each country,
it uses rigorous pricing process to determine the price for a particular
market. For each market following factors are taken in to account:
There are main drivers affecting the McDonalds global pricing such as the
company goals, the company costs, the customer demand, the
competition, and lastly the government policies. As for the company
goals, McDonalds have determined which goals that they want to achieve
which are to gain a satisfactory Return on Investment (ROI), to maintain
market share and to meet a specified profit goal by putting priority for
each goals. The McDonalds pricing strategies also been influenced by the
company cost. Before setting up the price, McDonalds considered all the
relevant costs of manufacturing, marketing and product distribution. As
for the factor of consumer demand, it involves the buying power of
consumer which is the key consideration in McDonalds pricing decision.
The countries with low income per capita pose a dilemma because
consumers in such countries are far more price-sensitive as compared to
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Value pricing means setting selling prices on the basis of perceived value
to the customer, rather than on the actual cost of the product, the market
price, competitors prices , or the historical price. This approach is used
where external factors such as recession or increased competition force
companies to provide value products and services so as to retain sales.
McDonalds came with the concept of value pricing for Indian consumers
where in it came
Out with various combos in form of :
The prices for the meals were economical as compared to the offerings in
Pakistan and
Sri Lanka and are 50% less than United States.
PRODUCT LINE PRICING
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
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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 4-7am. . This was to promote their new coffee partnership
with Green Mountain Coffee and helped spread the word that McDonalds
was now offering coffee.
As a part of its business strategy to penetrate deeper into the new and
existing markets, the forever young brand McDonalds introduced Happy
Price Menu at Rs.20/- in the year 2004 in India. This value for money
proposition has been well accepted by the discerning customers. The
communication towards this proposition has graduated over the years, but
the Happy Price Menu platform has been consistent.
MCDONALDS PRICING VS COMPETITION
McDonalds
30
Nirulas
Dominos
KFC
Success of McDonalds has been mainly due to its value for money offering
to the Indian consumers. The price offered are in the range of lower middle
section of the society.
Moreover its customization in accordance with the taste of Indian
consumers has also worked in its favour .
McDonalds Indias forte has been product, service and price innovation.
From day one it has had a menu adapted to local tastes. 70% of the
current Indian menu doesnt exist anywhere else in the world.
It entered with a low introductory price of Rs. 20 for a veg. burger (still
available for some products). Among all the brands, McDonalds has had
the most aggressive pricing. For less than Rs. 50 all inclusive, one can
have a meal on two McAloo Tikkis or 2 Chicken McGrills. A filling meal at
any of the other four brands profiled here will set one back by a minimum
of Rs. 75-100. Not many other multinationals who have entered India have
got their strategies right as seamlessly as has McDonalds.
BRAND POSITIONING AND PRICE
31
globally. The Happy Price Menu, has been a huge success with consumers
which is quintessentially the youth. HPM is not a one-off initative, but an
on-going strategy for McDonalds, it highlights the everyday affordability
platform.
McDonalds manages to keep its price down Fast-food chains face a
tough time balancing between margin pressures and hiking prices which
can hurt volumes. Consequently, the chains have to increase rates or
rework their strategies. Affordability has been the cornerstone of
McDonalds global strategy. Some of its measures to achieve this include
Bulk buying
Long-term vendor contracts
Manufacturing efficiencies
PHYSICAL EVIDENCE
McDonalds understands the value of both its employees and its customers. It understands the
fact that a happy employee can serve well and result in a happy customer. Hence
employees in McDonalds focuses on friendly and prompt service to its
customers besides for ensuring this Intensive training is a mandate for
every McDonalds Employee
McDonald continuously does Internal Marketing. This is important as it must precede
external marketing. This includes hiring, training and motivating able employees. This way
they serve customers well and the final result is a happy customer. In order to motivate its
employees they give them stars as per their performance. In addition to McDonald's
competitive wage and promotion programs, hard work, dedication,
motivation and results are recognized and rewarded at McDonald's.
33
Appreciation comes in many forms - from a simple thank you for a job well
done, to restaurant-wide recognition through programs such as the
'Employee of the Month.' McDonald's also offers great incentive programs
with access to gift certificates, merchandise, free food, etc.
Once in a Lifetime Opportunities' are also offered to restaurant employees
who truly excel. In 2008, a select group of Canadian restaurant employees
traveled to Beijing, China to work alongside McDonald's crew from around
the world at the Olympic Games.
The company is strongly committed to staffing locally and promoting from
within. Hence McDonalds has managers who understand both the local
and corporate cultures. The emphasis while recruiting is that applicants
are customer focused and right attitude is considered as more important
than technical ability. The company believes that the best way to stand
out from the competitors is to satisfy the customers all the time. This is
emphasized in recruitment advertising and continues in preliminary
screening .This is followed worldwide and is one of the part of their
globalization strategy.
The Hamburger University in Illinois, USA is one of a kind. The major
course offered is in operations and is designed for Managers, Assistant
Managers and prospective franchisees. The training is provided in 22
languages and teaches the standard practices to be used in restaurants
worldwide an more importantly teaching is adapted to suit the needs of
overseas students. There are additional training centers in Munich, Tokyo,
Sydney, London and Mainland china. The centers teach Managers details
such as temperatures at which burgers should be cooked and how to
inspect restaurant facilities to ensure that quality standards are met.
Besides Managers are also taught how to give performance reviews, how
to listen and what to do if a person becomes defensive. Managers in turn
pass the details on to their staff.
PROCESS
34
Ready to
cook
frozen
food
material
Delivery
to
customer
Universal
holding
cabinet
Initiator
Assemble
r
PROMOTION MIX
Marketing utilizes many techniques to promote a new product or service.
Utilizing all possible outlets for spreading the word on a product is known
as its promotion mix. Using a combination of the major promotional tools,
ranging from advertising to direct marketing, is the usual method for
rolling out a product. How these tools are utilized varies greatly from
company to company and product to product.
Advertising easily is the most popular element of the promotion mix. This
represents paid promotional placement of a product. Advertising is an
important element of the marketing communications mix. Put simply,
advertising directs a message at large numbers of people with a single
communication. It is a mass medium.
Advertising has a number of benefits for the advertiser. The advertiser has
control over the message. The advertisement and its message, to an
extent, would be designed to the specifications of the advertiser. So the
advertiser can focus its message at a huge number of potential
consumers in a single hit, at a relatively low cost per head. Advertising is
quick relative to other elements of the marketing communications mix (for
example personal selling, where an entire sales force would need to be
briefed - or even recruited). Therefore an advertiser has the opportunity to
communicate with all (or many of) its target audience simultaneously.
So for example, talking about McDonalds:
The promotion mix story of McDonalds starts with its launch in India in the
year 1996. Initially they tried to familiarize the customer with the brand.
They wanted to position themselves as Indian. So they focused on Indian
families and the kids. But later on they realized the untapped potential of
Indian Youth too and hence started aggressive campaigns to attract them.
The promotional strategy of McDonalds helped them in not only position
the brand but also in strengthening it and thus generating profits. From its
launch till today it continues to play an important part.
LAUNCHING THE BRAND MCDONALDS
It is said that every success story starts with first step. The starting point
for McDonald's India was to change Indian consumers' perceptions. Earlier
customers associated McDonald with being 'foreign', 'American', 'not
knowing what to expect' and 'discomfort with the new or different'. So
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. The main focus was on familiarizing the customer with
the brand. The brand was built on establishing functional benefits as well
as experiential marketing.
In earlier days, when cable channel boom was not there and Doordarshan
was the most popular media, 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.
Then came the controversy about using beef in its products. Actually
when McDonald's was launched the management 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, they reacted quickly.
They tried to educate customers about the build of their products and did
extensive kitchen tours for our customers. They were showed how
separate vegetarian and non-vegetarian platforms were used for cooking
37
a first in any market for McDonald's. The menu development team tried to
develop special sauces which use local spices and did not contain beef
and pork. Vegetarian items were designed and various attempts were
made to increase the awareness about those products.
BRAND ADVERTISING
By the year 2000, McDonald started feeling the need of using promotion
more aggressively and for that they found Television advertisements
suitable vehicle for that. The first Indian TV commercial, Stage Fright,
attempted to establish an emotional connection between the Indian family
and the brand. 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. Over the years advertisements has reinforced
McDonalds positioning by trying to establish an emotional connection
between the Indian family and the brand, supported by promotions.
depicted how the consumers were totally involved with McDonalds and
the food. New product stories delivered in a memorable and engaging
approach.
REPOSITIONING OF BRAND
Now a time came when McDonalds realized that it has bonded well with
Indian families and kids. Most of the customers were from higher income
group. The general brand perception of McDonalds in India was that of a
place for kids. While the campaigns had worked in the past, targeting kids,
McDonalds recognized the fact that it could not always depend on the
kids niche.
Consequently, the next series of campaigns were targeted to drive in
adult traffic
to break away from the perception. The ad depicted a father being invited
to a birthday party at McDonalds. He is not at ease with the idea of
visiting McDonalds since he perceives it as a kids place. His child reminds
him of the McCurry Pan, Filet-oFish that he would be able to relish at
the birthday party. The food boosts the father to go to the party, where to
his astonishment is his boss party.
In 2004, it launched the Happy Price Menu with a value message for a
younger audience. They came up with advertisements to promote Happy
Price menu with the sole purpose of attracting younger generation and
people from lower income group.
For the first time McDonald's India saw a surge of younger consumers and
also people from socio-economic class B walk into stores.
Since then they keep coming up with one or the other campaign to attract
youth. In 2008, in one of the campaigns, it uses father-son duos from the
Indian film industry to reiterate the theme of "Yesteryear's Prices". It
features Bollywood stars (not real but duplicates) from past decades
together with their sons and a message that prices have not risen in line
with the passage of time.
39
IM LOVIN IT
McDonald's could have benefited from its involvement in the whole event.
Some of analysts termed it as 'Dark Marketing,' as the presence of
McDonald's was barely felt through the entire event.
Over three million people from 100 countries across the world participated
actively in solving the mysteries. The associated websites received
millions of blog and media impressions. This gave McDonalds a path to
make people of those countries aware of its brand where they are not yet
tapped the market or they are planning to enter. In short they made their
presence felt in new untapped markets.
THE MONOPOLY GAME
McDonald's Monopoly game has turned into an annual tradition. The game
usually starts around the beginning of October and ends in Early
November. The McDonald's Monopoly game is much like the board game.
You need to collect properties in order win. To get properties you need to
visit McDonald's and order up some food. Game pieces can be found on
food items like the Big Mac, Filet-O-Fish, McGriddles, Hash Browns, and
other great menu items. Pieces can be found on various beverage and fry
items as well.
The promotion mimics the game Monopoly. Originally, customers received
a set of two tokens with every purchase, but now tokens come only with
certain menu items. Tokens correspond to a property space on the
Monopoly board. When combined into color-matched properties, the
tokens may be redeemed for money.
Much like the board game, the McDonald's Monopoly game gives the
greatest reward for players who own Boardwalk and Park Place. Players
who own these two properties will win one million dollars. While the
giveaway is essentially identical in each country where it is available,
game pieces collected in one country cannot be used in another country.
THE FINGER FOOD FUN FESTIVAL
41
Finger licking just got a whole lot more exciting with McDonalds, kicking
off a celebration of finger food. The 45 day festival, titled Finger Food Fun,
will present McDonalds popular and much loved sides with a range of 7
lip-smacking dips.
The barbeque dip, Mustard dip and the newly launched Schezwan dip are
available at Rs. 15 each only, while the Veg Sauce, Mexican Salsa, Tom
Mayo and Mint Mayo would be offered at Rs. 10 each only.
The intent behind this festival is to celebrate the success for McDonalds
much loved finger food and to increase customer engagement, be it
chicken Mc Nuggets, French fries or Wedges.
They have also created a fun campaign around the festival which includes
a new television commercial, outdoor ads as well as in- store promotions
The Finger Food Fun festival is on at all McDonalds outlets in all metros
and other major cities of india till December 31st 2010 and is also
available with the Extra Value Meals and Happy Meals.
OUTDOOR CAMPAIGNS
After a gap of seven-eight years, the fast food chain launched a hi-blitz
outdoor campaign in India. The new campaign focused on the 'value-formoney' proposition and for now had advertised in Mumbai and Bengaluru.
The creatives were simple, highlighting single product and the respective
price on a bright red background on large hoardings and other formats.
42
In Mumbai, about 47 billboards and 27 backlit bus shelters were taken up,
while 25 touch points in Bengaluru created the required buzz. The aim
was to create impact and buzz by announcing the value for money
offering to the consumers through main arterial routes.The other cities are
being targeted with television, coupled with other local media such as
radio.
HAPPYMEAL.COM
McDonalds associated itself with movies like Shrek and Ice Age 3 which
had audiences from every age group. But the major focus was on the kids
again. Watches and character toys were given on the purchase of different
products to attract more and more kids to their stores.
43
As part of this promotion, kids received one of the eight toys from The
ICE AGE 3 with the purchase of every Happy Meal. The eight toys
includes 4 colour changing drinking glasses with Ice Age 3animals
embossed on it and 4 lolly ice makers that are easy to use and a fun
kitchen accessory for Kids to make mutli colored lollies.
PORTRAYING BRAND AFFORDABILITY
McDonalds targeted kids by offering toys with the meal. By doing this
McDonalds also attracted families as parents always accompany their
children wherever they go. Thus company also created their impression in
the minds of several families. This is indirect marketing and they have
excelled in it.
ASSOCIATING WITH EVENTS
44
McDonalds associate itself with various events life stage shows for
promotion.
It 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.
Its Fresh Salads, Breakfast Giant Egg and interactive LED campaigns
and installations are just some of the ones that have created much
buzz for the brand.
McDonalds alliances in India by inking with petroleum giants BPCL
and HPCL. Two such alliances with BPCL outlets are in Mathura
(2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu
and Kiosks with a variety of dessert offerings.
McDelivery on bicycle at Chandni Chowk.
In addition, facilities like Wi-Fi are also provided to attract students
to the outlets like the one at Vile Parle in Mumbai.
ADVERTISING COSTS (AS PER ANNUAL REPORT
Production costs for radio and television advertising are expensed when
the commercials are initially aired. These production costs, primarily in the
U.S., as well as other marketing-related expenses included in selling,
general & administrative expenses were (in millions):
46
CUSTOMER QUESTIONNAIRE
1) How often do you eat at McDonalds in a month?
* 0-2 times
* 2-5 times
* 5-10 times
* >10 times
* 100-500
* 500-1000
* 1000+
* Pizza Hut
* Dominos
* Haldiram
* KFC
* Bikanerwala
* Other:
* convenient
* Other:
5) Rate McDonalds' value for money on a scale of 1-5 (1 is the lowest, 5 being the
highest)
*1
*2
*3
*4
*5
6) Rate McDonalds speed of service on a scale of 1-5 (1 is the lowest, 5 being the
highest)
*1
*2
*3
*4
*5
7) Rate McDonalds quality of service on a scale of 1-5 (1 is the lowest, 5 being the
highest)
*1
*2
*3
*4
*5
* 2-5 years
* 5-10 years
* >10 years
* Friends
* Colleagues
* Other:
* 16-22
* 23-30
* 30-50
* >50
* 0-300,000
* 300,001-500,000
* 500,001-800,000
* >800,000
12) What is/are your favourite item(s) from the Mcdonald's menu?
13) How do you find the quality of Happy Price Menu?
*1
*2
*3
*4
*5
14) Which Promotional activity influences your decision to buy Happy Price Menu?
* TV Commercials
47
*Promotional event
15) Are you satisfied with the price of Happy Price menu?
* Yes
* No
49
1 week
1 week
1 week
1 weeks
Have you ever faced a short supply in any material / ingredient due to
the centralised distribution system?
No
No
No
No
5
5
McChicken Burger
McVeggie Burger
Aloo Tikki Burger
KFC
KFC
KFC
KFC
53
The following data has been collated based on the feedback by 127
respondents. The questionnaire used a 5 point Likert Scale to record the
responses.
PERCENTAGE OF RESPONDENTS:
35%
Salaried-45
Student-82
65%
Percentage of Salaried
18%
22%
0-300,000
300,001-500,000
500,001-800,000
24%
>800,000
36%
55
70
65
60
50
46
40
Count
30
20
10
0
0-2 times
2-5 times
5-10 times
Visit Frequency
57
>10 times
80
696969
70
60
50
Count
40
30
29
28
28
24
22
24
20
10
3
44
2
0
1
Rating
59
70
2
4
60
4
5
50
26
40
19
>10 times
Visit Count
5-10 times
2-5 times
30
0-2 times
20
34
29
10
0
<15
16-22
23-30
Age Group
61
1
2
30-50
>50
3.94 1.57
19.69
42.52
6.3
7.87
18.11
63
6.3
7.87
42.52
18.11
65
17.32
52.76
29.92
67
1.57
16.54
22.05
Tastes Good
Value for money
convenient
Other:
59.84
69
2.36 3.15
22.83
17.32
1
2
3
4
5
54.33
73
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75
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77