One world, One Burger - McDonalds

CERTIFICATE

AKNOWLEDGEMENT

I HAVE GREAT PLEASURE IN PRESENTING MY PROJECT ENTITLED MC DONALD I TAKE THIS AN OPPORTUNITY TO EXPRESS MY DEEPEST GRATITUDE & INEPTNESS TO ALL THOSE WHO CONTRIBUTED INDIRECTLY THEIR VALUABLE TIME & ASSISTED ME IN MY PROJECT. I WOULD LIKE TO THANK MY PROJECT GUIDES, ALL THE FACULTY MEMBERS. FOR THIS APPROVAL & ALSO FOR HER VALUABLE GUIDANCE & SUPPORT IN COMPLETING MY PROJECT OF MC DONALD. LAST BUT NOT THE LEAST I WOULD LIKE TO EXPRESS MY SINCERE THANKS TO THOSE WHO DIRECTLY & INDIRECTLY HELPED IN THIS PROJECT.

SUBMITTED BY,
AJAY AVHAD PARAG AWATE SNEHA VINEKAR

DECLARATTION

WE STUDENTS OF BIRLA COLLEGE, STUDENT OF SY. B.M.S (SEMESTER 4) HEREBY DECLARES THAT WE HAVE ACCORDINGLY COMPLETED MY PROJECT ON MC DONALDS IN THE YEAR 2008- 2009. THE INFORMATION SUBMITTED IS TRUE &ORIGINAL TO THE BEST OF MY KNOWLEDGE.

SR NO.
1.

PARTICULARS
INTRODUCTION
CHAPTER 1

PAGE NO.
7-9

2.

10-18

COMPANY PROFILE
3. CHAPTER 2 19-24

ANALIYSIS ON MCDONALDS AS A SMALL SCALE CORPORATION IN THE BEGINNING

CHAPTER 3 4. 25-30

ANALIYSIS ON MCDONALDS CORPORATION AT INTERNATIONAL LEVEL.

CHAPTER 4

5.

ANALIYSIS ON MCDONALDS ON PRODUTIVITY & QUALITY.

31-35

CHAPTER 5 6.

ANALIYSIS ON MCDONALDS ADVERTISEMENT AND PUBILE RELATIONS.

CHAPTER 6

36-41

7.

ANALIYSIS ON VALUATION OF TAX OF MCDONALDS CORPORATION.

CHAPTER 7

42-47

48-51

8.

ANALIYSIS ON MCDONALDS IMPORTEXPORT.

INTRODUCTION
Although the realm of accounting and finance has often been viewed as dull bean counting, in todays modern and competitive business environment, the finance department should be at the heart of any company, encompassing a variety of functions that go beyond its traditional financial reporting role. While it is still a priority for accountants to ensure a companys financial statutory accounts meet legal requirements, dynamic companies such as McDonalds have shifted the focus of their accounting and finance function to additionally include the evaluation of past performance and appraisal of future opportunities, helping to ensure the Company maximises its strategic capabilities. McDonalds Restaurants UK Limited, a wholly owned subsidiary of the U.S. parent company, opened its first UK restaurant in Woolwich in 1974. There are now 1,200 restaurants operating in the UK which, despite representing only 4% of the total number of McDonalds restaurants worldwide, contribute 7% of global profits, making the UK a very important financial market for McDonalds shareholders.
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McDonalds understands the value of an integrated accounting and finance function, extending from the restaurant floor up to the board of directors. Each individual McDonalds restaurant is structured as an independent business, with restaurant management responsible for its financial performance, supported by the centralised Accounting & Finance department.

DEPARTMENT STRUCTURE & FUNCTION

McDonalds Finance Department has two key areas of responsibility: financial reporting and management accounting. Although each of these functions has different priorities, working together ensures the best financial position for the company now and for the future.

HOW DOES MCDONALDS MAKE A PROFIT?

McDonalds has two sources of profit: Sales made by company-owned restaurants Rental and royalty income from franchised restaurants.

RESTAURANT SALES
McDonalds retains all of the profit earned by company-owned restaurants. An example Profit & Loss Statement for a restaurant is shown left and highlights how food and labour constitute a restaurants largest costs. In addition to variable costs, which increase or decrease depending on the level of sales, McDonalds also incurs costs that are largely fixed, for example utilities and advertising, which need to be paid for even before the restaurant makes any sales. Increasing sales and controlling costs are fundamental to ensuring the profit of each restaurant is either maintained or increased.

CHAPTER:-1

COMPANY PROFILE

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McDonalds is a leader in convenient foods and beverages, with revenues of about $23 billion and over i.6 million employees serving the customers world wide. The company consists of the snack business of Beverages and Foods. PepsiCo brands are available in nearly 115 countries having more than 24,500 restaurants in the world providing 24 hour service. Having about 1 billon customers to be served all over the world. McDonaldss success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people. McDonalds is continuing to expand and introduce new alternative beverages in the market. Approximately 85% of McDonalds restaurant businesses worldwide are owned and operated by franchisees .All franchisees are independent, full-time operators. McDonalds was named Entrepreneurs Number-one franchise for 1997 Our mission is to be the world's premier consumer Products Company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity you could now join our team. Greater
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variety and quality choices surprise and delight customers with the food and beverage they desire. McDonalds corp. is currently one of the most successful consumer products company in the world with annual revenues exceeding $23 million and has more than 1.6 million employees. McDonalds products are recognized and are most respected all around the globe. Currently, its divisions operate in all over the world in beverages, snack foods, and restaurants. The corporations increasing success has been based on high standards of performance, marketing strategies, competitiveness, determination, commitment, and the personal and professional integrity of their people, products and business practices. McDonalds believes their success depends upon the quality and value of their products by providing a safe, whole some, economically efficient and a healthy environment for their customers; and by providing a fair return to their investors while maintaining the highest standards of integrity.

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HISTORY OF McDONALDS.

13

The McDonald's History - 1954 to 1955

Raymond Albert Kroc 1902-1984, A Salesman Ray Kroc mortgaged his home and invested his entire life savings to become the exclusive distributor of a five-spindled milk shake maker called the Multimixer. Hearing about the McDonald's hamburger stand in California running eight Multimixers at a time, he packed up his car and headed West. It was 1954. He was 52 years old. Dick and Mac McDonald's Restaurant, San Bernardino, California Ray Kroc had never seen so many people served so quickly when he pulled up to take a look. Seizing the day, he pitched the idea of opening up several restaurants to the brothers Dick and Mac McDonald, convinced that he could sell eight of his Multimixers to each and every one. "Who could we get to open them for us?" Dick McDonald said. "Well," Kroc answered, "what about me?"

Where it all began, Des Plaines, Illinois

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Ray Kroc opened the Des Plaines restaurant in 1955. First day's revenues-$366.12! No longer a functioning restaurant, the Des Plaines building is now a museum containing McDonald's memorabilia and artifacts, including the Multimixer!

The McDonald's History - 1956 to 1963

Ray Kroc At Work "If you've got time to lean, you've got time to clean," Ray Kroc preached to his troops. Heeding his own words, here the Chairman of the Board cleans the parking lot of the first McDonald's franchise in Des Plaines, Illinois.

Ronald McDonald, In Any Language He Means "Fun!" "The smile known around the world," In his first TV appearance in 1963 the happy clown was portrayed by none other than Willard Scott.

Fred Turner And Ray Kroc, Architects Of A Dream

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Here Ray Kroc (right) and Fred Turner study the design which would replace the red and white tile buildings that had become landmarks throughout the U.S. Called Kroc's first "grill man extraordinaire," Turner is today Senior Chairman of the Board.

The McDonald's History - 1965 to 1973

McDonald's Comes To Wall Street In 1965 McDonald's went public with the company's first offering on the stock exchange. A hundred shares of stock costing $2,250 dollars that day would have multiplied into 74,360 shares today, worth approximately $3.3 million on December 31, 2006. In 1985 McDonald's was added to the 30-company Dow Jones Industrial Average.

A Big Idea Called "Big Mac" "Introduced systemwide in 1968, the Big Mac was the brainchild of Jim Delligatti, one of Ray Kroc's earliest franchisees, who by the late 1960s operated a dozen stores in Pittsburgh." The Egg McMuffin Introduced in 1973, the Egg McMuffin was developed by owner operator Herb Peterson.

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The First Ronald McDonald House in Philadelphia, PA In 1974 Fred Hill of the Philadelphia Eagles teamed up with McDonald's to create Ronald McDonald House. Here the families of critically ill children have a place to call home while they're away from home as the young patients undergo treatment for their conditions.

The Happy Meal Since 1979 the Happy Meal has been making kids visits that much more special. Clubs the world over collect Happy Meals toys and boxes.

The Future Begins Now McDonald's Express for a world that can't slow down!. McDonald's is popping up in more nontraditional locations like Amoco and Chevron stations, with full menu offerings and dining room seating, just like you'll find in a traditional McDonald's.

FACTS & FIGURES

1.6million
Restaurant employees System wide dedicated to serving our customers

540million
17

Snack Wraps were sold in 2007

24,500
Restaurants around the world offer extended or 24-hour service

1billion
More customers were served in 2007 than in 2006

115
Countries participated in one of McDonalds most successful promotions ever Our tie-in with DreamWorks Shriek the Third

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CHAPTER:-2

ANALIYSIS ON MCDONALDS AS A SMALL SCALE CORPORATION IN THE BEGINNING.

McDonalds is one of the leading restaurant chains in the world, touching the lives of people everyday. The long journey of the burger brand started in 1940, when two brothers, Dick and Mac McDonald opened the first McDonalds restaurant in San Bernardino, California. Initially, they owned a hotdog stand, but after establishing the restaurant they served around 25
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items, which were mostly barbequed. It became a popular and profitable teen hangout. In 1948, the brothers closed and reopened the restaurant to sell only hamburgers, milkshakes and French fries. As per the information of the McDonalds history, the major revenue came from hamburgers, which were sold at a nominal price of 15 cents. The restaurant gradually became famous and the McDonald brothers begin franchising their restaurant in the year 1953. The first franchise was taken by Neil Fox and under it; the second Mc Donalds restaurant was opened in Fresno, California. It was the first to introduce the Golden Arch design. The third and fourth restaurants were opened in Saginaw, Michigan and Downey, California, respectively.

The business began in 1940, with a restaurant opened by siblings Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant. 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 in 1963.
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The present corporation dates its founding to the opening of a franchised restaurant by 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's brothers to leave the fast food industry. The McDonald's brothers and Kroc feuded over control of the business, as documented in both Kroc's autobiography and in the McDonald brothers autobiography. The site of the McDonald brothers' original restaurant is now a monument. 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. MCDONALD'S India Pvt Ltd (MIPL), the wholly-owned subsidiary of the US-based fast-food giant, McDonald's Corporation, is likely to put on hold its earlier declared expansion plan of opening 80 restaurants in India by 2003.

21

McDonalds has 132 restaurants in India of which 79 are in North & East India and 53 in West & South India.

79 restaurants in North & East India: with

33 in Delhi

22 in Uttar Pradesh Noida (5), Ghaziabad (4), Mathura (1) (Highway and Drive Thru), Kanpur (2), Meerut (2), Lucknow (4), Agra (1), Allahabad (1), Varanasi (2) 11 in Haryana - Faridabad (3), Manesar (1) (Highway and Drive Thru), Gurgaon (5), Karnal (1) (Highway and Drive - Thru), Panipat (1) 7 in Punjab - Chandigarh (2), Ludhiana (2), Doraha (1) (Highway and Drive - Thru), Jalandhar (1), Patarsi (1) (Highway and Drive Thru) 3 in Rajasthan - Jaipur (3) 1 in Uttaranchal - Dehradun (1) 1 in West Bengal Kolkata (1) 1 in Himachal Pradesh- Jabli (1).

53 Restaurants in West & South India: 32 in Maharashtra Mumbai (23), Pune (8), Nasik (1)

7 in Gujarat Ahmedabad (4), Vadodara (2), Surat (1) 7 in Karnataka Bangalore(7)

22

4 in Andhra Pradesh Hyderabad (4), 3 in Madhya Pradesh Indore (3)

23

1996

The first McDonald's restaurant opened on Oct. 13, at Basant Lok, Vasant Vihar, New Delhi. It was also the first McDonald's restaurant in the world not serving beef on its menu The first Drive - Thru restaurant at Noida (UP) The first disabled friendly store at Noida (UP)

1997

1999 2000 2001 2002

The first Mall location restaurant at Ansal Plaza (New Delhi) The first highway restaurant at Mathura (UP) The first thematic restaurant at Connaught Place (New Delhi) The first restaurant in a food court at 3C's, Lajpat Nagar (New Delhi) The first restaurant at the Delhi Metro Station at Inter State Bus Terminus The first annual fundraiser in association with ORBIS and Dr. Shroff's Charity Eye Hospital.(Delhi)

2003 200304 2004 2006

The first Dessert Kiosk - Faridabad (Haryana) Indigenous products like McAloo Tikki, McVeggie and Pizza McPuff exported to Middle East countries McDonald's Delivery Service (McDeliveryTM ) introduced in New Delhi McDelivery on Bicycles flagged off at Chandni Chowk (Delhi)another first initiative by McDonald's India 100th McDonald's Restaurant in India 10 Year Anniversary

2007

The first Restaurant opened in the Eastern Region at Park Street, Kolkata (West Bengal) The first Restaurant opened at Airport.(Domestic Airport, New Delhi)

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25

CHAPTER:-3

ANALIYSIS ON MCDONALDS CORPORATION AT INTERNATIONAL LEVEL.

26

McDonald's International through its wholly owned subsidiary McDonald's India entered into two JVs, one with Connaught Plaza Restaurants Pvt. Ltd. in the Northern & Eastern region and another with Hard Castle Restaurants Pvt. Ltd. in the Western & Southern region McDonald's restaurants are found in 119 countries and territories around the world and serve nearly 47 million customers each day. McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people. The company also operates other restaurant brands, such as Piles Caf, and has a minority stake in Pret a Manger. The company owned a majority stake in Chipotle Mexican Grill until completing its divestment in October 2006. Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and
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Drive, or McDrive as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the latter two steps are frequently combined; it was first introduced in Arizona in 1975, following the lead of other fastfood chains. In some countries "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high-density city neighborhoods often omit drivethrough service. There are also a few locations, located mostly in downtown districts, that offer Walk-Thru service in place of Drive-Thru. Especially themed restaurants also exist, such as the "Solid Gold McDonald's," a 1950s rock-and-roll themed restaurant. In Victoria, British Columbia, there is also a McDonald's with a 24 carat (100%) gold chandelier and similar light fixtures. Each McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion. Full year 2008 highlights included:

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Global comparable sales increase of 6.9%, including U.S. 4.0%, Europe 8.5%, and Asia/Pacific, Middle East and Africa 9.0% Growth in McDonalds combined operating margin of 320 basis points to 27.4%, after adjusting for the impact of the 2007 Latin America transaction Operating income increases in the U.S. 8%, Europe 23% (17% in constant currencies) and Asia/Pacific, Middle East and Africa 33% (28% in constant currencies) Earnings per share from continuing operations of $3.76, an increase of 16% (14% in constant currencies), after adjusting for the impact of the 2007 Latin America transaction

Return of $5.8 billion to shareholders through shares repurchased and dividends paid, including a 33% increase in the quarterly cash dividend to $0.50 per share for the fourth quarter bringing our current annual dividend rate to $2.00 per share Individual franchise arrangements generally include a lease and a license and provide for payment of initial fees, as well as continuing rent and royalties to the Company based upon a percent of sales with minimum rent payments that parallel the Companys underlying leases and escalations (on properties that are leased). McDonalds franchisees are granted the right to operate a restaurant using the McDonalds System and, in most
29

cases, the use of a restaurant facility, generally for a period of 20 years. Franchisees pay related occupancy costs including property taxes, insurance and maintenance. In addition, in certain markets outside the U.S., franchisees pay a refundable, non interestbearing security deposit. Foreign affiliates and developmental licensees pay a royalty to the Company based upon a percent of sales, as well as initial fees. The results of operations of restaurant businesses purchased and sold in transactions with franchisees, affiliates and others were not material to the consolidated financial statements for periods prior to purchase and sale.

McDonald's India Culturally Sensitive

McDonald's worldwide is well known for the high degree of respect for the local customs and culture. McDonalds has developed a menu especially for India with vegetarian selections to suit Indian tastes and preferences. Keeping in line with this, McDonald's does not offer any beef or pork items in India. In the last decade it has introduced some vegetarian and nonvegetarian products with local flavours that have appealed to the
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Indian palate. There have been continuous efforts to enhance variety in the menu by developing more such products. McDonald's has also re-engineered its operations repeatedly in its 11 years in India to address the special requirements of a vegetarian menu. Vegetable products are 100% vegetarian, i.e.

They are prepared separately, using dedicated equipment and utensils. Only pure vegetarian oil is used as a cooking medium. Cheese and sauces are completely vegetarian and egg less. Separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving.

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CHAPTER:-4

ANALIYSIS ON MCDONALDS ON PRODUTIVITY & QUALITY.

32

The site of the first McDonald's to be franchised by Ray Kroc is now a museum in Des Plaines, Illinois. The building is a reproduction of the original, which was the ninth McDonald's restaurant. To accommodate the current trend for high quality coffee and the popularity of coffee shops in general, McDonald's introduced McCafs. The McCaf concept is a caf-style accompaniment to McDonald's restaurants. McCaf is a concept of McDonald's Australia, starting with Melbourne in 1993. Today, most McDonald's in Australia have McCafs located within the existing McDonald's restaurant. In Tasmania there are McCafs in every store, with the rest of the states quickly following suit. After upgrading to the new McCaf look and feel, some Australian stores have noticed up to a 60% increase in sales. As of the end of 2003 there were over 600 McCafs worldwide. Some locations are connected to gas stations/convenience stores, while others called McDonald's Express have limited seating and/or menu or may be located in a shopping mall. Other McDonald's are located in Wal-Mart stores. McStop is a location targeted at truckers and travelers which may have services found at truck stops. McDonald's announced on May 22, 2008 that, in the U.S. and Canada, it will be introducing cooking oil for its French fries that contain no trans fats. The company will use
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canola-based oil with corn and soy oils by year's end for its baked items, pies and cookies. In a bid to tap into growing consumer interest in the provenance of food, the fast-food chain recently switched its supplier of both coffee beans and milk. UK chief executive Steve Easterbrook said: "British consumers are increasingly interested in the quality, sourcing and ethics of the food and drink they buy". McDonald's coffee is now brewed from beans taken from stocks that have been certified by the Rainforest Alliance, a conservation group. Similarly, milk supplies used for its hot drinks and milkshakes have been switched to organic sources which could account for 5% of the UK's organic milk output. The company has also expanded the McDonald's menu in recent decades to include alternative meal options, such as salads and snack wraps, in order to capitalize on growing consumer interest in health and wellness. McDonald's 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. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to continue by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market
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is more familiar (such as the sale of Mc Rice in Indonesia). There have been continuous efforts to enhance variety in the menu by

Most Respected Company' for four consecutive years, 2003-2007 in the Food Services sector, by Businessworld Most Wanted Brand of the Year' Award 2003 & 2004 by Franchising Holdings India Ltd. Retailer of the Year' Award for catering services, 2004-2006 at the Images Retail Awards.

The 'Most Preferred Fast Food Outlet' 2006 & 2007 by Awaaz Consumer Award, hosted by CNBC. Star Retailer - The Consumer Way, Food Services Retailer' of the Year 2006 & 2007, by Franchise India

Amity Corporate Excellence Award'-in 2007 & 2008

developing more such products. McDonald's has also re-engineered its operations repeatedly in its 11 years in India to address the special requirements of a vegetarian menu. Vegetable products are 100% vegetarian, They are prepared separately, using dedicated equipment and utensils. Only pure vegetarian oil is used as a cooking medium. Cheese and sauces are completely vegetarian and egg less. Separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving.

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McDonald's India - A decade of quality service For its unparalleled benchmarks established in the QSR sector McDonalds India has been bestowed with many prestigious awards. To name a few:

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CHAPTER:-5

ANALIYSIS ON MCDONALDS ADVERTISEMENT AND PUBILE RELATIONS.

37

Over the years, McDonald's has developed TV advertising campaigns that have become, like McDonald's, a part of our lives and culture. McDonald's commercials have focused not only on product, but rather on the overall McDonald's experience, portraying warmth and a real slice of every day life. This "image" or "reputation" advertising has become a trademark of the company and created many memorable television moments and themes, including:McDonald's is Your Kind of Place (1967) You Deserve a Break Today (1971) We Do it All for You (1975) Twoallbeefpattiesspecialsaucelettucecheesepicklesonionsonasesa meseedbun (1975) You, You're The One (1976) Nobody Can Do It Like McDonald's Can (1979) Renewed: You Deserve a Break Today (1980 & 1981) Nobody Makes Your Day Like McDonald's Can (1981) McDonald's and You (1983) It's a Good Time for the Great Taste of McDonald's (1984) Good Time, Great Taste, That's Why This is My Place (1988) Food, Folks and Fun (1990) McDonald's Today (1991) What You Want is What You Get (1992)
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Have you Had your Break Today? (1995) My McDonald's (1997) Did Somebody Say McDonald's (1997) We Love to See You Smile (2000) There's a little McDonald's in Everyone (2001) - Canada Only Im lovin' it (2003) McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards(outdoors, on which large advertisements or notices are posted.) and signage, sponsors sporting events from ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy.

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EMPLOYEE BENEFIT PLANS

The Companys Profit Sharing and Savings Plan for U.S.based employees includes a 401(k) feature, a leveraged employee stock ownership (ESOP) feature, and a discretionary employer profit sharing match. The 401(k) feature allows participants to make pre-tax contributions that are partly matched from shares released under the ESOP. The Profit Sharing and Savings Plan also provides for a discretionary employer profit sharing match at the end of the year for those eligible participants who have contributed to the 401(k) feature. All contributions and related earnings can be invested in several investment alternatives as well as McDonalds common stock in accordance with each participants elections. Participants contributions to the 401(k) feature and the discretionary employer match are limited to 20% investment in McDonalds common stock. The Company also maintains certain supplemental benefit t plans that allow participants to (i) make tax-deferred contributions and (ii) receive Company-provided allocations that cannot be made under the Profit Sharing and Savings Plan because of Internal Revenue Service limitations. The investment alternatives and returns are based on certain market-rate investment alternatives under the Profit Sharing and Savings Plan. Total liabilities were $415.3 million at December 31, 2007 and $378.6
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million at December 31, 2006 and were included in other longterm liabilities in the Consolidated balance sheet. The Company has entered into derivative contracts to hedge market-driven changes in certain of the liabilities. At December 31, 2007, derivatives with a fair value of $100.8 million indexed to the Companys stock as well as an investment totalling $82.0 million indexed to certain market indices were included in miscellaneous other assets in the Consolidated balance sheet. All changes in liabilities for these nonqualified plans and in the fair value of the derivatives are recorded in selling, general & administrative expenses. Changes in fair value of the derivatives indexed to the Companys stock are recorded in the income statement because the contracts provide the counterparty with a choice to settle in cash or shares. Total U.S. costs for the Profit Sharing and Savings Plan, including nonqualified benefits and related hedging activities, were (in millions): 2007$57.6; 2006$60.1; 2005$58.0. Certain subsidiaries outside the U.S. also offer profit sharing, stock purchase or other similar benefit plans. Total plan costs outside the U.S. were (in millions): 2007$62.7; 2006$69.8; 2005 $54.1. The total combined liabilities for international retirement plans were $129.4 million and $197.6 million at December 31, 2007 and 2006, respectively, primarily in Canada and the U.K.
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Other postretirement benefits and post-employment benefits were immaterial.

REASON TO WORK WITH MCDONALDS

Fast-track Career Progression Young , Energetic & Flexible Environment Excellent learning Potential Dignity of Labour World class Training Systems Global Exposure Good Benefits

CHAPTER:-6

42

ANALIYSIS ON VALUATION OF TAX OF MCDONALDS CORPORATION.

The Company records a valuation allowance to reduce its deferred tax assets if it is more likely than not that some portion or all of the deferred assets will not be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax strategies, including the sale of appreciated assets, in assessing the need for the valuation allowance, if these estimates and assumptions change in the future, the Company may be required to adjust its valuation allowance. This could result in a charge to, or an increase in, income in the period such determination is made. In addition, the
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Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. The Company records accruals for the estimated outcomes of these audits, and the accruals may change in the future due to new developments in each matter. During 2007, the Company recorded a $316 million benefit as a result of the completion of an IRS examination of the Companys 2003-2004 U.S. tax returns. During 2005, the Company recorded a $179 million benefit due to the completion of an IRS examination of the Companys 2000-2002 U.S. tax returns. The Companys 2005-2006 U.S. tax returns are under audit and the completion is expected in late 2008 or early 2009. Deferred U.S. income taxes have not been recorded for temporary differences totalling $6.7 billion related to investments in certain foreign subsidiaries and corporate joint ventures. The temporary differences consist primarily of undistributed earnings that are considered permanently invested in operations outside the U.S. If managements intentions change in the future, deferred taxes may need to be provided.

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BALANCE SHEET OF MCDONALDS 2007-08

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PERIOD 30-Jun-07 ENDING Assets Current Assets Cash And Cash 2,142,100 Equivalents Short Term Investments Net 784,600 Receivables Inventory 1,055,500 Other Current 379,200 Assets Total Current 4,361,400 Assets Long Term 1,060,100 Investments Property Plant and 20,106,600 Equipment Goodwill 2,198,300 Intangible Assets Accumulated Amortization Other Assets 1,268,500 Deferred Long Term Asset Charges Total Assets 28,994,900

31-Mar-07

31-Dec-06

30-Sep-06

2,438,400 848,000 143,700 449,300 3,879,400 1,064,400

2,136,400 904,200 149,000 435,700 3,625,300 1,036,200

4,282,700 812,500 144,500 596,000 5,835,700 1,032,300

20,975,200 20,845,700 20,526,200 2,254,300 1,300,200 2,209,200 1,307,400 2,156,100 1,278,900 -

29,473,500 29,023,800 30,829,200

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Liabilities Current Liabilities Accounts 2,120,900 Payable Short/Current Long Term 288,200 Debt Other Current 1,020,500 Liabilities Total Current 3,429,600 Liabilities Long Term 7,885,500 Debt Other 1,652,500 Liabilities Deferred Long Term Liability 941,600 Charges Minority Interest Negative Goodwill Total 13,909,200 Liabilities Stockholders' Equity Misc Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common 16,600 Stock Retained 25,881,200 Earnings Treasury (14,832,700) Stock Capital 3,957,000 Surplus Other Stockholder 63,600 Equity Total

2,451,000 613,500 3,064,500 8,199,900 1,471,000 971,100 13,706,500

2,739,000 17,700 251,400 3,008,100 8,416,500 1,074,900 1,066,000 13,565,500

4,122,100 454,200 4,576,300 8,569,400 1,154,300 1,002,900 15,302,900

16,600 26,592,500

16,600 25,845,600

16,600 24,585,700

(14,371,900) (13,552,200) (11,858,500) 3,731,300 (201,500)

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3,445,000 (296,700)

3,228,200 (445,700)

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CHAPTER:-7

ANALIYSIS ON MCDONALDS IMPORT- EXPORT.

The business is managed as distinct geographic segments. Significant reportable segments include the United States (U.S.), Europe, and Asia/Pacific, Middle East and Africa (APMEA). In addition, throughout this report we present Other Countries & Corporate that includes operations in Canada and Latin America, as well as Corporate activities and certain investments. The U.S.,
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Europe and APMEA segments account for 35%, 39% and 16% of total revenues, respectively. France, Germany and the United Kingdom (U.K.), collectively, account for approximately 60% of Europes revenues; and Australia, China and Japan a 50%-owned affiliate accounted for under the equity method), collectively, account for over 50% of APMEAs revenues. These six markets along with the U.S. and Canada are referred to as major markets throughout this report and comprise over 70% of total revenues. The Company continues to focus its management and financial resources on the McDonalds restaurant business as we believe the opportunities for long-term growth remain signifi cant. Accordingly, during the third quarter 2007, the Company sold its investment in Boston Market. In 2006, the Company disposed of its investment in Chipotle Mexican Grill (Chipotle) via public stock offerings and a tax-free exchange for McDonalds common stock. As a result of the disposals during 2007 and 2006, both Boston Markets and Chipotles results of operations and transaction gains have been reflected as discontinued operations for all periods presented. In analyzing business trends, management considers a variety of performance and financial measures including comparable sales growth, System wide sales growth, restaurant margins and returns.

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 Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates. Management reviews and analyzes business results in constant currencies and bases certain compensation plans on these results because we believe they better represent the underlying business trends. Comparable sales are a key performance indicator used within the retail industry and are indicative of acceptance of the Companys initiatives as well as local economic and consumer trends. Increases or decreases in comparable sales represent the percent change in constant currency sales from the same period in the prior year for all restaurants in operation at least thirteen months, including those temporarily closed. Some of the reasons restaurants may be temporarily closed include road construction, reimaging or remodelling, rebuilding, and natural disasters. McDonalds reports on a calendar basis and therefore the comparability of the same month, quarter and year with the corresponding period of the prior year will be impacted by the mix of days. The number of weekdays, weekend days and timing of holidays in a given timeframe can have a positive or negative impact on comparable sales. The Company refers to this impact as the calendar shift/trading day adjustment. This impact varies
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geographically due to consumer spending patterns and has the greatest impact on monthly comparable sales. Typically, the annual impact is minimal, with the exception of leap years. System wide sales include sales at all restaurants, whether operated by the Company, by franchisees or by affiliates. While sales by franchisees and affiliates are not recorded as revenues by the Company, management believes the information is important in understanding the Companys financial performance because it is the basis on which the Company calculates and records franchised and affiliated revenues and is indicative of the financial health of our franchisee base.

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METHDOLOGY

This project is prepared with the help of theoretical knowledge as well as practical knowledge & a crumb of advises & suggestions from the concerned professors. The theoretical pert taken from the various books & magazines available on this subject. And other recent happing in marketing is taken from magazines & news paper. As far as practical is concerned, all the information about the companies information available on net. Overall this mission has been completed with the combination of al those things & it had been with the best of my facts & information.

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BIBLOGRAPHY

BOOKS: BRAND PRACTICES.

MAZINES: BUSINESS WORLD. 100 TOP BRANDS. THE VALUABLE BRANDS OF INDIA.

WEB SITES:

www.mcdonaldsindia.com www.mcdonalds.com

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CONCLUSION

TODAY, MCDONALDS HAS GROWN TO 25,000 RESTAURANTS IN ABOUT 120 COUNTRIES SERVING 50 MILLION CUSTOMERS DAILY. BECOMING THE LARGEST FAST FOOD CHAIN IN ALL OVER THE WORLD

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B
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SYNOPSIS sS
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Can you guess the name of the company which: Is the ninth most valuable brand in the world? Has replaced the US army as the Nations largest job training organization? Controls the market share of more than 3 food chains taken together in America? Its none other than McDonalds Corporation USA. Looking at the above statistics makes one wonder that what is the driving force behind all these achievements? How is it that the chicken burger available in San Francisco is same as the one available in Delhi? Many of these questions have been answered in the book McDonalds: Behind the Golden Arches written by John Love. But are these standards being carried out in India as well? The golden arches of McDonalds are slowly becoming an integral part of the Indian landscapes. Everyone knows McDonalds is big, but very few know just how significant its impact on Indian business really is. The inside of McDonalds remains a mystery. McDonald's India is a joint venture of McDonalds Corporation with Amit Jatia and Vikram Bakshi. Amit Jatia handles the operations in western region whereas Vikram Bakshi in the northern region. McDonald's India is an employer of opportunity, providing quality employment and long-term careers to the Indian people. The average McDonald's restaurant employs more than 100 people in 25 different positions from cashier to restaurant manager. McDonald's world class-training inputs to its employees can be seen in the present close to 2000 employees currently in Mumbai and Delhi.

But the most overlooked fact of McDonalds India is its contribution to the food processing industry. Six years prior to the opening of the first McDonald's restaurant in India, McDonald's and its international supplier partners worked together with local Indian Companies to develop products that meet McDonald's rigorous quality standards. Part of this development involves the transfer of state-of-the-art food processing technology, which has enabled Indian businesses to grow by improving their ability to compete in todays international markets. McDonalds dedication to its suppliers has lead to their growth, beyond the boundaries of the India.

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These aspects of McDonalds do not get covered and highlighted by the news hungry press. But when the false news of using beef tallow in the French fries hit the market, the press did not leave a chance to exaggerate it. Despite the fact that right form the beginning; no beef ingredients have been used in any of the products in India. The marketing agency of McDonalds, Mudra comes to its rescue in such times. The advertisements created by Mudra are a rage all over the nation, especially amongst the children. Who can forget the little kid who gets nervous in the school competition, but becomes happy again when his father takes him to McDonalds? McDonalds India has tried not to leave any stone un-turned in its objective to satisfy the Indian customer. But in Amit Jatias words, Customers are generally not forgiving. According to the survey conducted, customers demand low prices, more seating space, more variety, home delivery, and the list is endless. The fundamental secret to McDonalds success is the way it achieves uniformity and allegiance to an operating regimen. McDonalds India has to adhere to many rules and regulations laid down by the parent company, and it still has to cater to the Indian customer and his needs. McDonalds India is a case study on how to mix conformity with creativity.

HISTORY OF MCDONALDS

In 1954, a

fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San Bernardino, California, and envisioned a massive new industry: fast food. In what should have been his golden years, Raymond Kroc, the founder and builder of McDonald's Corporation, proved himself an industrial pioneer no less capable than Henry Ford. He revolutionized the American restaurant industry by imposing discipline on the production of hamburgers, French fries, and milk shakes. By developing a sophisticated operating and delivery system, he insured that the French fries customers bought in Topeka would be the same as the ones purchased in New York City. Such consistency made McDonald's the brand name that defined American fast food.

Worlds Oldest McDonalds

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1.2 Worlds Oldest McDonalds

This 44 year-old site is the oldest in the worldwide 20,000 restaurants and the last one with red-and-white tile exterior. After opening in 1953, it immediately the standard for the fast food franchises across the The building and its 60-foot high neon sign with the Chef" are eligible for listing on the National of Historic Places. Employees wear 50's style uniforms of paper hats, shirts and bolo ties. The restaurant serves the original hamburgers, cheeseburgers, fries and old-fashioned

chain striped became country.

of

"Speedee Register

white menu of

milkshakes. Also available are more recent McDonald's items such as Big Macs and Happy Meals. McDonald's reopened the facility as it was with walkup windows and outdoor seating. They also constructed and addition housing a museum, gift shop, restrooms and more outdoor seating.
1955
Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonald's Corporation is created.

1983
Chicken McNuggets is introduced. New Hamburger University campus opens in Oak Brook, Illinois. Set in 80 wooded acres. Training is provided for every level of McDonald's management worldwide.

1957
Quality, Service, Cleanliness and Value (QSC& V) becomes the company motto.

1959
The 100th McDonald's opens in Chicago.

1984
50 billionth hamburger sold. Ronald McDonald Children's Charities is founded in Ray Krocs memory to raise funds in support of child welfare.

1961
Hamburger University opens in Elk Grove, near Chicago.

1989
McDonald's is listed on the Frankfurt, Munich, Paris and Tokyo stock exchanges.

1963
One billion hamburgers sold. Ronald McDonald makes his debut.

1990
McDonald's opens in Pushkin Square and Gorky Street, Moscow.

1964
Filet-O-Fish sandwich is introduced.

1993
The first McDonald's at sea opens aboard the Silja Europe, the world's largest ferry sailing between Stockholm and Helsinki.

1965
McDonald's Corporation goes public.

1967
The first restaurants outside of the USA open in Canada and Puerto Rico.

1994
Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad and United Arab Emirates, bringing the total to over 15,000 in 79 countries on 6 continents.

1968
The Big Mac is introduced.

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The 1,000th restaurant opens in Des Plaines, Illinois.

1996
McDonald's opens in India the 95th country.

1972
A new McDonald's restaurant opens every day. The Quarter Pounder is introduced.

1973
Egg McMuffin is introduced.

1974
The first Ronald McDonald House opens in Philadelphia. The Happy Meal is launched.

MCDONALDS IN INDIA
McDonald's subsidiary India of is a joint-venture India, a venture and has a 50 venture manages USA, has

company managed by Indians. McDonalds McDonalds expanded its presence in India via 2 joint companies Connaught Plaza restaurants Hard castle restaurants. McDonalds (India) per cent equity stake each in both joint companies. Connaught Plaza restaurants

operations and expansions across North India (Delhi, Jaipur and Punjab) led by Vikram Bakshi and Hardcastle restaurants, which is headed by Amit Jatia, manages operations and expansions across Western India (Mumbai, Pune, and Gujarat). Around the world, McDonald's traditionally operates with local partners or local management. In India too, McDonald's purchases form local suppliers. McDonald's constructs its restaurants using local architects, contractors, labour and - where possible local materials. McDonald's hires local personnel for all positions within the restaurants and contributes a portion of its success to communities in the form of municipal taxes and reinvestment. Six years prior to the opening of the first McDonald's restaurant in India, McDonald's and its international supplier partners worked together with local Indian Companies to develop products that meet McDonald's rigorous quality standards. Part of this development involves the transfer of 62

state-of-the-art food processing technology, which has enabled Indian businesses to grow by improving their ability to compete in todays international markets.

Mr. Jatia and Mr. Bakshi

McDonalds worldwide is well known for the high degree of respect to the local culture. McDonald's has developed a menu especially for India with vegetarian selections to suit Indian tasted and culture. Keeping in line with this McDonald's does not offer any beef and pork items in India. McDonald's has also re-engineered its operations to address the special requirements of a vegetarian menu. The cheese and cold sauces used in India is 100% vegetarian. Vegetable products are prepared separately, using dedicated equipment and utensils. Also in India, only vegetable oil is used as a cooking medium. This separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. The McDonald's philosophy of Quality, Service, Cleanliness and Value (QSC&V) is the guiding force behind its service to the customers. McDonalds India serves only the highest quality products. All McDonalds suppliers adhere to Indian Government regulations on food, health and hygiene while continuously maintaining their own recognized standards. All McDonalds products are prepared using the most current state-of-the-art cooking equipment to ensure quality and safety. At McDonalds, the customer always comes first. McDonalds India provides fast friendly service- the hallmark of McDonalds that sets its restaurants apart from others. McDonalds restaurants provide a clean, comfortable environment especially suited for families. This is achieved through McDonalds stringent cleaning standards, carefully adhered to. McDonalds menu is priced at a value that the largest segment of the Indian consumers can afford. McDonalds does not sacrifice quality for value rather McDonalds leverages economies to minimize costs while maximizing value to customers.

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The company has invested Rs 450 crore so far in its India operations out of its total planned investment of Rs 850 crore till 2007. McDonalds India Pvt. Ltd. has moved an application to the government seeking permission for payment and remittance of the initial franchise fee and royalty to Mc Donalds Corporation. The permission has been sought on two grounds: McDonalds India would pay an initial franchise fee of $45,000 on each of the McDonalds restaurants already franchised or to be franchised, in the future, in India; and a royalty equal to 5 per cent of the gross sales from the operations of all its Indian restaurants on a monthly basis to McDonalds International. The company hopes to break even in 2008. They currently serve around 5 million customers a day and hope to grow at the rate of 50% to 70% a year.

MCDONALDS Products
In order to satisfy the palate of the local population in a country, McDonald's offers a regionalized version of its menu. The result is McDonald's foods and meals not seen in other countries.

Asia

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Bahrain In addition to the McArabia, McDonald's restaurants in Bahrain, beginning in March 2008, sell the McCrispy, a meal consisting of 1, 2, or 3 chicken strips served in a wrapper for a single strip or in a box for 2 or 3, with a choice of barbecue, sweet & sour, or garlic sauce. Like all Middle Eastern McDonald's restaurants, all food served in Bahraini outlets is halal.

China

McDonald's Chinese New Year meal, grilled chicken sandwich and twisted French fries. Tray liner has an image of the Chinese zodiac.

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In China, the Chicken McNuggets come with the traditional BBQ, Sweet & Sour, and Honey Mustard sauces, but there's also a chili garlic sauce (very popular in China). In China there are specific McDonald's restaurants and counters for ice cream, beverages, and desserts (otherwise rare in China). They also include crispy chicken wings on their menu which comes in 2, 4, and 6 pieces. There is also a seasonal Chinese New Year meal available, including Grilled Chicken Burger, curly fries, with a horoscope of the twelve zodiac animals of Chinese astrology and traditional "red" packets, or gift bags, for monetary gift giving as good luck. Note that all chicken burgers offered in Chinese McDonald's use thigh fillet (eg Premium Grilled Thigh Fillet Burger, Hot and Spicy Grilled Thigh Fillet Burger), rather than breast meat as per usual in occidental countries.

Hong Kong

During the Bun Festival on Cheung Chau, a special item called McVeggie Burgers were sold.

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McDonald's sells beef, chicken and pork burgers. Fried chicken wings and nuggets are also popular. In some restaurants, a separate counter sells ice cream and desserts to pedestrians. Soft Serve Ice Cream can be ordered with either red beans or green beans. Some restaurants have a section for the McCaf. Apart from the general menu, it also promotes some other foods seasonally or longer, like spicy french fries, the Shogun Burger (a Teriyaki pork patty with lettuce, served in a sesame seed bun), Grilled Chicken Burger, twisted macaroni breakfasts, salads, soups, pineapple or red bean sundae, pineapple pies, taco flatbreads with pork, beef or chicken, rice fan-tastic (a burger-like entree with rice patties in place of buns) and many others. Hong Kong hosts some of the world's busiest McDonald's with many operating round the clock. It also sells many toys or dolls, like Hello Kitty, Snoopy, and Disney figures in addition to set meals, which are very popular. In Chinese New Year, red packets (lai see) are included in set meals. During the local Bun Festival, McDonald's restaurant on the island of Cheung Chau sells mushroom burgers instead of hamburgers and any other items which contains meat. In Kowloon Park, there is also a small counter named Snack Station selling ice cream, as well as a counter that sells McDonald's drinks in the swimming pool.

India

The McCurry Pan is a very popular dish across India. It is an original creation of McDonald's India. Beef and pork products are not served to cater to Indian religious sensitivities. Chicken (only Halal) along with fish are the only meat products used.

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In India, meat and vegetarian meals are prepared in separate areas of the restaurant because of religious laws about preparation of food for vegetarians and meat-eaters. Cooks preparing vegetarian dishes wear distinctive green aprons. The Big Mac is replaced by the Maharaja Mac, which was originally made with lamb but is now made with chicken. Mexican-style wraps for both vegetarians and non-vegetarians, such as the Paneer-Salsa wrap and the Chicken-Mexican wrap, and Curry pans in Shahi-Paneer and Chicken-Tikka variations are also offered. Other items on the Indian Menu include chicken products such as the McChicken Burger and Chicken McGrill (a burger with a thin chicken patty, thin slices of both onions and tomatoes, filled with green chutney replacing the usual layer of mayonnaise). The vegetarian burger menu consists of the McAloo Tikki Burger. It is a vegetable burger with potato, peas, and spices, tomato, onion, and a vegetable-tomato mayonnaise.

McVeggie is another Vegetarian burger on the menu. It looks similar to the above McAloo Tikki Burger, but is made from mixed vegetables, peas, and spices, lettuce and veg mayonnaise (referred to as Veg Sauce in India). Another new Menu Item added is the McSurprise burger. It contains a patty, onion, Italian mayonnaise.There is also a Pizza McPuff, consisting of a puff pastry stuffed with peas, sliced cheese etc.

Indonesia
McDonald's sells fried chicken, which is by far more popular than the hamburgers. McRice is also offered, a small mound of steamed, plain rice. McSoup is a chicken flavored soup with bits of reconstituted croutons and vegetables. A bun containing a beef patty covered with satay sauce (spicy ground peanut sauce) is sold as Mc Sate.

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Malaysia
There is a special menu named Prosperity Burger only for the Chinese New year festive season. There is also the Ayam Goreng McD which literally translated means McD's Fried Chicken, a crispy two piece fried chicken meal. The McSpicy available in Singapore is also available in Malaysia, marketed under the name Chicken McDeluxe. During the 2006 football season, spicy McNuggets were also introduced for a short period of time along with spicy Ayam Goreng McD. Another long time favourite is Bubur Ayam McD which literally translates to "chicken porridge" or congee. Bubur Ikan McD which is fish porridge/congee was also served for a short time. Fried chicken is also offered in Malaysia but it is not more popular than hamburgers as in neighbouring Indonesia, perhaps because of competition from Kentucky Fried Chicken and local fried chicken outlets. For a limited time only, a burger consisting of four beef patties, called the Mega Mac, was introduced in Malaysia.

Pakistan
There is a Spicy McChicken burger that has chutney in it. There is also a McChutney Burger, a meatball sandwich called the McKofta, and strawberry custard pie. Also, McArabia was recently introduced, with a chicken patty rolled up in Pita bread.

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Marketing Mix
Logic: Marketers have four tools to use to develop an offering to meet the needs of their targeted customers. Collectively they are called the marketing mix.

You may have heard of the "four Ps" of marketing: product, price, place, and promotion. Collectively these are called the marketing mix. More comprehensively they are viewed as: product, service, or program - something of value you are offering the customer, client, or park visitor price - what the customer, client, or park visitor pays (direct costs are financial, indirect or alternative costs are such things as time it takes and the things people give up if they choose your offering) place, distribution, location, or accessibility - where the transaction takes place, perhaps in a park promotion or communication - this is how you inform the target market the benefits in your marketing mix. Collectively these are the tools organizations uses to develop offerings to satisfy their target market(s) ... the only tools at their disposal. Remember: If your marketing mix doesn't meet their needs they will not be satisfied - and if they aren't satisfied you are unlikely to meet your objectives. The marketing mix should be viewed as an integrated and coordinated package of benefits that reflect the characteristics of customers and various targeted publics and satisfy their needs, wants, and expectations. Note that the elements of the marketing mix should be integrated because each element of the mix usually has some impact, direct or indirect, on the other three. For example, if you improve the product or service you probably have to change the price because it costs more to produce. Although you may not have to change where the product is delivered to the customer, you will almost certainly have to change the promotion or communication with the customer because you need to tell the customer about the changes you have made in the product and how the changes will make it more desirable and satisfying.

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One problem in many organizations is that different divisions may be responsible for different elements of the marketing mix. This happens even in well managed organizations. The result is that the offering is confusing to the target market. Lack of communication among divisions makes this problem worse. And if they don't share the same view of organizational objectives, the problem is worse still. These variables are known as the marketing mix or the 4 P's of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The firm attempts to generate a positive response in the target market by blending these five marketing mix variables in an optimal manner.

Product
The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc.

Price
Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing.

Promotion
Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in proportion to the product price, a break-even analysis should be performed when making promotion decisions. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them. Promotion decisions involve advertising, public relations, media types, etc.

Place
Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics, and levels of service.

Product: The product, service, or program includes both tangible and intangible elements. The tangible, of course, are those things that the customer can see, touch, feel, taste, or smell. The 71

intangible include such things as the image of the offering ... which includes the image of the organization making the offering, the psychological aspects of pricing (high price to many customers is equated with high quality - and vice versa). Price: The price is what the customer pays. It includes direct and indirect costs as well as opportunity costs. The benefits of the product have to be great enough to warrant the price. Price includes all costs associated with the product, service, or program. Place: The place is where the customer receives the product, service, or program. The place of delivery, including all of its resources, is part of what the consumer buys. A place that meets his or her needs better may be worth more. The place may be a park, a visitor center in the park, or an interpretive exhibit along a trail. In setting its strategy, the organization must determine how much the target market is willing to pay for atmosphere and physical resources of place. Promotion: Promotion includes all forms of communication you use to communicate the benefits of your offering to the target market(s). The objective is to persuade the customer in such a way that he or she recognizes that your offering is uniquely qualified to meet his or her needs. The term promotion mix is commonly used to refer to the types of communication that are available: advertising, public relations, personal selling, publicity, and sales promotion. Some authors include direct marketing. Word of mouth, though seldom discussed, is powerful promotion.

The marketing mix principles (also known as the 4 ps.) are used by business as tools to assist them in pursuing their objectives. The marketing mix principles are controllable variables, which have to be carefully managed and must meet the needs of the defined target group. The marketing mix is apart of the organizations planning process and consists of analyzing the defined: How will you design, package and add value to the product? Product strategies. What pricing strategy is appropriate to use? Price strategies. Where will the firm locate? Place strategies. How will the firm promote its product Promotion strategies. 72

Product Product Decision

Branding

Quality

Features

Benefits offered
We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer. The vegetarian burger menu consists of the McAloo Tikki Burger. It is a vegetable burger with potato, peas, and spices, tomato, onion, and a vegetable-tomato mayonnaise. McVeggie is another Vegetarian burger on the menu. It looks similar to the above McAloo Tikki Burger, but is made from mixed vegetables, peas, and spices, lettuce and veg mayonnaise (referred to as Veg Sauce in India).

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Another new Menu Item added is the McSurprise burger. It contains a patty, onion, Italian mayonnaise.There is also a Pizza McPuff, consisting of a puff pastry stuffed with peas, sliced cheese etc. McDonalds concentrated on studying the Indian culture, its value-systems and its influence in food consumption decision making. It found that although a substantial proportion of the populations were non-vegetarians, they stuck to mostly fish, mutton and chicken. Muslim took beef but though pig meat to be dirty; Hindus preferred neither beef nor pork; Christian took both beef and pork. McDonalds decided, for the first time in their business history, to drop ham and beef burger from their menu. Two years back, they even excluded mutton burgers from their offerings. McDonalds developed a menu especially for Indian with vegetarian selection to suite Indian taste. It introduced products like McTikki Aloo for the Punjabi taste buds. McDonalds has also reengineered its operation to address the special requirements of a vegetarian menu. The cheese and cold sauces used in India is 100 % vegetarian. McDonalds are committed for giving customers wholesome, healthy, and delicious food. They ensure that the cooking area as well as cooking equipment for vegetarian products is visibly segregated from the non Vegetarian sections. Whats more- their crew members cooking vegetarian food items are identifiable by their green aprons.

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Pricing
Pricing is the only mix which generates a turnover for the organization. The remaining 3ps are the variable cost for the organization. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship.

Penetration Skimming Competition Pricing Strategies Product Line Bundle Psychological

The customer's 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. A further consequence of price reduction is that competitors match prices resulting in no extra demand. This means the profit margin has been reduced without increasing sales. 75

PHYSICAL EVIDENCE: The physical evidence factor of all the McDonalds centers are the signboards, golden arches, buildings, interiors, colours combination of yellow and red, clean facilities, visible food preparation section etc. the site shown in the picture is 52 years-old and is the oldest in the worldwide chain of 20000 restaurants and the last one with red-and-white stripped tile exterior. After opening in 1953, it immediately became the standard for the fast food franchises across the country. The building and its 60-foot high neon sign with Speede the Chef are eligible for listing on the national register of historic.

A very popular punch line of Mcdonals-Aap ke zamane mein, baap ke zamane ka daam. The main reason of this price strategy was too attract the middle class & the lower class of people in India. After this not only the upper class prefers going there but all class of people go there. Value Pricing Happy meal small burger ,fries ,coke+toy Medium Meal Combo- burger ,fries,coke-veg Rs:75 ,Maharaja Mac Meal Rs: 95 Family Dines under Rs: 300 Price lower than Pak ,Srilanka ,50% lower than U.S.

Promotion
A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional mix can consist of: 76

Advertising Public Relation Sales Promotion Promotional Mix Personal Selling Direct Mail Internet/ E-Commerce The promotions aspect of the marketing mix covers all types of marketing communications. The methods include advertising, sometimes known as 'above the line' activity. Advertising is conducted on TV, radio, cinema, online, poster sites and in the press (newspapers, magazines). Key objectives of advertising are to make people aware of an item, feel positive about it and remember it. The more McDonald's knows about the people it is serving the more it is able to communicate messages which appeal to them Messages should gain customers' attention and keep their interest. The next stage is to get them to want what is offered. Showing the benefits which they will obtain by taking action, is usually sufficient. The right messages must be targeted at the right audience, using the right media. The Media Magic You Deserve a break today, so get up and get awayTo McDonalds

The above break commercial was one of the initial commercial themes adopted by McDonalds United State which became the best known commercial song on television and, in fact, the most identifiable advertising themes of all time.

Needham was one of the first advertising agencies of McDonalds which made many revolutionary advertisements for the company. Needhams advertising formula became know in McDonalds as Food, Folks, and Fun and it remains the backbone of all the chains advertising campaigns.

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McDonalds is now, one of the worlds mightiest consumer marketers. Its brand valuation is $25 billion, making the ninth most valuable brand in the world. Why Mudra in India?

DDB Needham and Leo Burnett are the advertising agencies of McDonalds are worldwide. Hence, when they came to India, The subsidiary of both the companies pitched for the account and Mudra the Indian partner of DDB Needham got the account. Since the very beginning Mudra has been the advertising agency of McDonalds India.

The Mudra team meets up with McDonalds marketing team on a regular basis and they have a debate and discussion on the new strategies to be adopted.

McDonalds uses various Medias like television, hoardings and bus shelters. They are almost out of print ads. McDonalds also sponsor many Television Programmers like kaun Banega Crorepati, Children shows etc.

Even the paper Mats on the trays at the McDonalds are designed as per the ongoing Marketing Strategy of McDonalds. For e.g.: During the French fries issues, all their Paper mats had description of the burgers, how the vegetarian products are made etc, to regain the confidence of the customers. The placing of the pamphlets, banners in and around the outlets is decided upon by the area sales manager and the operations manager, in co-ordination with the restaurant manager. For e.g. : currently they have the Bugs Life Theme going on wherein they give free Bugs Life toys with the happy meal. All the outlets are decorated with the pictures of the toys and even the paper mats have pictures of the toys on them. The hoardings around the outlets carry the same theme. The 80-20 Menu Boards

Even the menu counters in the outlet are a marketing tool for the company. They have to be designed such that they catch the attention of the customer and tempt him to order the product. So McDonalds have menu boards that are descriptive as well as visual. They call it the 80-20 menu board eighty percent visual and twenty percent descriptive.

Under the recent research conduct by McDonalds they found that the consumers would have a clear remembrance of the 80-20 Board. This board also helps give a feel of the product before it is purchased. 78

Reconnecting with customers throcontemporary global marketing direction Im loving it. I am loving it refers an attitude we want your employees to embrace & reflect in their services.

Their other lucky Promotion strategies were like : Collaboration with coke, M Tv, Hungama .com, Sony Music, etc. Scratch cards on large jumbo meals. Prices- caps, T-shrit, internet card, CDs, Free tickets to Lucky Alis contest. Purchase of 2nd meal in a month qualified for Opel Corsa/ NZ trip.

Place
Refers to how an organisation will distribute the product or service they are offering to the end user. The organisation must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organisation is to meet its overall marketing objectives. If organisation underestimate demand and customers cannot purchase products because of it profitability will be affected.

Direct Distribution

Indirect Distribution

Manufacture r

Manufacturer

Consum er

Retailer

Consumer
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The following table summarizes the marketing mix decisions, including a list of some of the aspects of each of the 4Ps.

Product
Functionality Appearance Quality Packaging Brand Warranty Service/Support

Price
List price Discounts Allowances Financing Leasing options

Promotion
Advertising Personal selling Public relations Message Media Budget

Place
Channel members Channel motivation Market coverage Locations Logistics Service levels

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Mc families.

Positioning

Donalds mein hai kuch baat a place for entire family to enjoy. Mc Donalds positioned for youth

Positioning is about communicating your unique selling advantage or proposition to your target audience in everything you do. Marketing, sales, customer service. The consistency helps your customer remember. Can't articulate your unique selling proposition in less than 10 words? Maybe you lack clarity about positioning.

Our marketplaces have lots of choices. Too many, perhaps, for the average consumer to evaluate logically. With hundreds of choices in any given locale, many people simply look for a referral to a product or with professional services: a company that their friends trust. Those who shop around, consider two or three options and take the best of the three.

With hundreds of choices, and with products and services that most consumers find hard to differentiate, how do you set yourself, apart from the crowd?

Positioning allows a marketer to think about why a customer would want to do business with them. What do you offer that the other producers don't? What does a potential client get by doing business with you, that will serve their needs well?

Positioning has three components:

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What are your strengths? Your distinctive competencies? What about your offerings provide value to your customers?

Who is your target customer? What about them, makes them an ideal fit for the value you offer? How are you different from your competitors in ways that your customers and potential customers will value? In other words, what is your unique selling proposition? Your competitive advantage?

When all three are put together, you have a positioning statement. Positioning statements are the basis for all marketing messaging, sales scripts, and at a corporate level: branding. So here are the things you need to know to be able to develop your own market positioning:

Who are you? As a company? As a sales rep? What is your firm or known for? (Ask people what they think. It may not be what your internal talk says it is. Is it prompt claims? Or telling it like it is? Or it might just be everyone knows you.)

What do your customers appreciate about your products or services? (Ask your colleagues and your customers. Again, it might not be what you think. Maybe you are known for high quality. Or perhaps for returning calls promptly or your problem solving ability. Maybe it is just that you are convenient. )

What are you particularly strong at? (These are your core competencies.) What are you better at, than anyone else in your business? As a company? As a professional? As a sales rep? (Quality? Innovation? Cost effective choices?)

Who are your most satisfied customers? What is it that they value most about what you have to offer?

Based upon your sales goals and annual plan, who is your target market? The key here is the fit between what you do well and who or what type of business needs what you are good at.

What value can you bring your customers that they will value the most, based upon your unique strengths?

At a company level, can you articulate this competitive value for your target, best customers? Does your branding reflect this? Do your communications use this messaging as its foundation?
o o o

Are your web, collateral, and sales force attuned to this value? Do your services focus on this value? Does your customer service reflect this value? 82

Does your customer service reflect the promise of the brand? Or are customers continually shocked that the customer service is not like the brand image at all?

Your customers are bombarded with hundreds - perhaps thousands - of commercial messages each day. Believe it or not buying your product or service is probably not their most important priority. So, in the end, it comes down to relationships. Does your vendor understand your needs? Thus, positioning is EVERYTHING, because, positioning is that unique value you offer, to that target market you seek, in ways that are better, more effective, more amazingly meeting your needs than any of your competitors. And, the customer service, and employee relationships need to MATCH or be INTEGRATED with the market positioning.

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Impotance Of Positioning
Marketing strategy that aims to make a brand occupy a distinct 'position,' relative to the competing brands, in the mind of the customer. Firms apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. Develops Brand Image Creates Demand Creates Demand Creates Value In The Mind Of Customer Commands Premium Price

Marketing Research
If I will Launch Pizza hut in Market I will try keeping the following things in the mind: 1. Target Customer:

Young Families: They are the people who prefer outing with their
families.These people believe in working hard and partying harder.

Senior citizens: Generally these fast food restaurants have targeted kids or
younger generations. So I would like target them.

2. Price: The burgers I think is rightly priced here but the beverages are little bit high priced which most people cant afford it. It shouldnt happen that people come here only to eat burgers but also have these beverages. So the beverages would be priced accordingly that everyone could afford it. 3. Product: I think the product here are little bit westernized .The senior citizens would not find it familiar it with them. The burgers and eatables to more Indianized so that senior citizens find it familiar. And to introduce more milky beverages so that it would attract more senior citizens and kids. 4. Place: I would try opening these restaurants in residential areas so that senior citizens would not find any problem in going out. And open these in malls and multiplexes so that the young generations which likes to hang out in these places would find it easier to go there. 84

Marketing Research of McDonalds

There are approximately 22,000 registered restaurants in India, which have sales of over $15,000 per month. In addition, there are more than 100,000 roadside restaurants (dhabas) selling their prepared foods in small stalls in cities and on highways. There are 1,568 registered hotels in India.

The opportunity for U.S. food companies in India's food service market is small but growing. Sales by Indian food service companies totaled approximately $6 billion in fiscal year 1998. Restaurants account for approximately 55 percent of Indian food service sales. The institutional sector consists of hospitals, prisons, defense establishments, schools, company canteens, railways and airlines.

3.1 Indian Food Service Sub-Sector Sales FY 1998 100 percent = $6 billion
Hotels 5%
Restaurants

Institutes 40%

Restaurants 55%

Institutes Hotels

* Excludes roadside restaurants Source: Literature search, Interviews, PSi analysis

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Factors driving increased food service sales:

Growth in Personal Income: The increase in buying power of Indian consumers is driving growth in the food service sector. India's per capita income has increased by over 20 percent from 1992 to 1996. Shrinking Household Size: The total number of households in India has increased by less than 3 percent per year from 1990 to 1998; however, the number of households in middle, upper and high-income categories has grown by more than 12 percent annually. These households have higher disposable income per member and have a greater propensity to spend on food. Urbanization: Approximately 50 percent of high, upper and middle-income group Indian consumer households reside in urban areas. Growing Number of Women in the Workforce: Over 16 percent of the population of Indian women work full-time and spend most of their time away from home. Due to these changes many Indian consumers are opting for meals away from home. Menu Diversification: High-income Indian consumers are seeking variety in their choice of food. Urban Indian consumers are aware of various international cuisine (e.g. Continental, Chinese, Mexican, Italian, Thai, and Japanese) and an increasing number are willing to try new foods A growing number of specialty restaurants, fast food outlets, home delivery and take-away restaurants have opened in the last few years. A number of foreign restaurant chains (e.g. Domino's, Pizza Hut, Pizza Express,TGIF, KFC and Baskin Robbins) have started operations in India and have achieved success.

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Promotional Techniques Which We Would Have Used

Before adopting any promotional techniques we would have conducted a survey.

Ratio of Vegetarians and Non-Vegetarians visiting McDonalds

Non-Veg 46%

Veg 54%

Favorite Product

Others 27%

McChicken Burger 19%

McVeggie Burger 12%

French Fries 42%

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Do you find the product line satisfactory?

39% 32%
40% 30% 20% 10% 0%

29%

Yes

No

Its okay

Favorite Advertisement

35% 30% 25% 20% 15% 10% 5% 0%

31% 26% 21%

7%

7%

8%

Stage Fright

Shifting Sleeping Traffic Others House Couple Policemen

None

Do you find McDonalds value for money?

No 72%

Yes 28%

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Problems faced in the visits to McDonalds

43%
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

24% 9% 3%

21%

Long Queues

Wrong Order

Bad Music

Other No Problems Problems

Suggestions to improve McDonalds

No Suggestions Better Music More Space Home Delivery More Variety Low Prices
0% 5%

22% 7% 13% 15% 19% 24%

10% 15% 20% 25%

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Unique Selling Proposition of McDonalds

30% 25% 20% 15% 10% 5% 0%

26%

24%

19%

17% 6% 8%
Others

Food

Hygiene

Ambience

Quick Service

Location

Based on this survey we arrive at our promotional techniques which should be appropriate to be used for increasing the sales:
1. Increase its product line. 2. To have more variety to choose from, to include more deserts and more items like Pizza McPuff. 3. To provide better and quick service. 4. Lower the supply chain cost so that it helps in cost reducing. 5. To expand their Happy Meal choices to attract and retain customers. 6. To educate about healthy lifestyle. 7. Introduction of McCafees serving premium and specialty coffees and other beverages and other products such as cakes, pastries etc in the existing McDonalds. 8. Provide with better ambience. 9. Focus on gifts for all generations i.e. youth, kids especially senior citizen which is a completely new concept. 10. Special promotions during festivals. 11. Increasing the space for provision of birthday party areas. 12. Try to sponsor college festivals. 13. Work for social welfare of the society. 90

After analyzing the marketing mix of McDonalds, it is clear that the company can be said to be `global, i.e. combining elements of globalization and internationalization. McDonalds have achieved this through applying the maxim, `think global, act local.Which is one of the most important reasons for their success in India.

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