ENTREPRENEURSHIP
PROJECT
PROJECT REPORT AND MARKET
SURVEY OF MCDONALD’S
Name of the school :
NAME OF THE STUDENT :
CLASS :...
TEACHER IN CHARGE : MR. JAMES THOMAS
INDEX
SL.
NO.
TITLE SOURCE OF THE
PROJECT
PAGE
NO.
SIGN OF
THE
TEACHER
1 ACKNOWLEDGEM...
9 CONSOLIDATED
BALANCE SHEET OF
MCDONALD’S
www.aboutmacdonalds.com
10 QUESTIONNAIRE www.slideshare.net
www.scribd.com
11 S...
ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been
possible without the kind support an...
My thanks and appreciations also go to my classmates in developing the
project and to the people who have willingly helped...
Catering trucks often park just outside worksites and are popular with
factory workers.
Some trace the modern history of f...
systems allow orders placed at drive through speakers to be taken by
cashiers and cooks. Drive through and walk through co...
McDonald's primarily sells hamburgers, cheese burgers,
chicken, French fries, breakfast items, soft drinks, milkshakes
and...
The McDonald brothers created Speedee to symbolize the quick and
efficient service system that they had devised. Downey's ...
1969 McDonald's sold its five billionth hamburger. Two years later,
McDonald's restaurants had reached all 50 states.
In 1...
than a break in the routine, and McDonald's relentless marketing
continued to improve sales.
McDonald's growth in the Unit...
numbers showed a reduction from about 60 percent derived from the
United States in 1992 to 42.5 percent in 1997.
The compa...
McDonald's also had to increasingly battle its public image as a
purveyor of fatty, unhealthy food. McDonald's responded b...
Big Mac: Along with the Quarter Pounder with cheese, this is one of
the two McDonald's signature menu items, introduced in...
McFeast: A hamburger with lettuce, tomato, and mayonnaise, the
McFeast contains a quarter pounder patty, lettuce, and modi...
and Chipotle barbecue dipping sauces; sauce selections in the UK are
Smokey barbecue, sour cream and sweet chilli sauce.
F...
CORPORATE OVERVIEW
Facts and figures
McDonald's restaurants are found in 119 countries and territories
around the world an...
have McCafés located within the existing McDonald's restaurant.
In Tasmania, there are McCafés in every store, with the re...
The company stated it will open vegetarian-only restaurants in India
by mid-2013.
Redesign
In 2006, McDonald's introduced ...
The United Kingdom and Ireland business model is different than the
U.S, in that fewer than 30% of restaurants are franchi...
MARKETING MIX
The marketing mix of a company consists of the various elements as
follows which form the core of a company’...
advertising, Advertising is conducted on TV, radio, in cinema, online,
using poster sites and in the press for example in ...
Physical evidence: - McDonalds focuses on clean and hygienic interiors
of is outlets and at the same time the interiors ar...
They also face quality issue at times. This affects the business as
they are running the outlet worldwide, if one franchis...
Recession in any country would definitely affect the whole outlet
worldwide.
People facing heart problems and obesity accu...
Dividend pS (DPS) 2.53 ¢
Dividend Yield 3.5 %
Dividend Payout Ratio 48 %
Revenue per Employee 64,300 $
Effective Tax Rate ...
PRICE/VOLUME High Low Close % Price Chg % Price Chg vs. Mkt. Avg. Daily Vol Total Vol
1 Week - - - 0.0 101 54,041 66,217
4...
LT Debt/Capital Invested 56.9
LT Debt/Total Liabilities 65.2
Interest Cover 17.3
Interest/Capital Invested 1.67
Attn: Repl...
QUESTIONNAIRE (Attn: Attach minimum 5 copies)
Name: ____________________ age: ________
Gender: _________ occupation: _____...
2. Which of the following fast food chain do you visit the most?
Subway McDonald’s KFC PizzaHut BurgerKing
3. Are you sati...
Frequency of visits made to fast food
centers
Everyday
Alternate days
Weekends
Once in a month
Fast food chain visited the...
Time of the day prefered to eat at
Macdonald’s
Morning
Noon
Evening
Night
Main problem faced at McDonald’s
Long queues
Wro...
THE TOP FIVE REASONS WHY MCDONALD’S
IS SO POPULAR
1. The System
This is the first thing that makes McDonald's so successfu...
3. Likability and Familiarity The
Golden Arches, the Big M. Ronald McDonald, happiness and fun; all these are the
associat...
Through the marketing mix, we saw how they make use of their
product, price, place, promotion mixes. SWOT analysis showed ...
www.infobarrel.com
www.aboutmacdonalds.com
answers.yahoo.com
talkfinanceonline.com
~~~~~~~~~~~~
Attn: Pictures on the next...
Logo of McDonald’s
McDonald's world headquarters, Oakbrook, United States
Ray Kroc- The franchiser of McDonald's
The first McDonald’s restaurant opened by Patrick McDonald, in 1937
McDonald’s Speedee mascot
Downey’s restaurant; the oldest operating McDonald's in the world.
World-famous Golden Arches logo
The legendary Big Mac
The Chicken McNuggets
The Maharaja Mac which is offered in India
An exterior view of the world's largest McDonald's restaurant built on 2012 London Olympics site
The Big Mac
The Big n Tasty
The premium chicken sandwich
The McDonald's Chicken Fajita
McArabia
McDonald’s Salads McDonald’s French fries
A map showing every continent with at least one McDonald's restaurant
A modern McDonald’s restaurant in London
Mc-Donald Vs Domino’s - Comparative Analysis
Determinant Of Choosing Fast Food Restaurant And Their Service Quality
BY:- A...
SERVICE QUALITY
Parasuraman et al. (1988) introduced a 22-item scale, called SERVQUAL, for
measuring service quality, the ...
1. Industry Profile
2. Literature review
3. Need for study
4. Research methodology
5. Analysis of study
6. Finding and sug...
Summary:-
In this comparative analysis of two fast food restaurants regarding their
service quality.
In this, there are pa...
Innovation Timeline:-
1872 Walter Scott of Providence, RI outfitted a horse-drawn lunch wagon with a
simple kitchen, bring...
Indian Fast food Industry
With rapidly growing middle class population and changing lifestyle, India is blessed with one o...
the food retail space, with a presence of more than
250 restaurants serving more than 6.5 lakh
customers daily in India.
M...
same time ensuring that quality is not sacrificed for value - rather, McDonald's
leverages economies to minimize costs whi...
Quick Facts About McDonald’s
1. McDonald's was started as a drive-in restaurant by two brothers,
Richard and Maurice McDon...
Domino's serves Coca-Cola products, and as of January 2012 is the only "Big
Four" pizza chain to do so. Rivals Papa John's...
Delivery
From the early days of the company, Domino's has had a delivery-focused
business model. This approach helped the ...
service was poor. Direct service providers, such as waitresses, also note that at
times the best service efforts are criti...
Children with neglectful parents (parenting style with lack of caring, lack of control, and
few punishments) spent more ti...
purchase. Environmental dimensions of the servicescape shapes the way customers and service
providers interact and behave ...
Accessibility is a term often used in transport and land-use studies and the main aim of this
report is to survey the rang...
consistency, ambience of the facilities, and convenience (Sulek and Hensley 2004; Iglesias
and Yague 2004; Andaleeb and Co...
The aim of this study is to examine how the respondent’s perception will be influenced by
factors of customer loyalty towa...
accounted for 25 percent of total food spending. That amount increased to 47 percent by 1999
(Clauson, 2000). Fast-food ac...
Restaurants fall into the category of a service industry. As such, researchers analyze the
efficiency of restaurant servic...
NEED FOR STUDY:-
Determinant of Service quality in response to fast food restaurants.
RESEARCH METHODOLOGY:-
Research Meth...
go for those advertisement and collect more information about it. Though each
research study has its own specific purpose....
research design is to ensure that the evidence obtained enables us to answer the
initial question as unambiguously as poss...
GROWTH OF FAST FOOD CHAINS IN INDIA
KFC, Pizza Hut and Domino’s are just three examples of the many fast food chains opera...
“We found that the vegetarians in such groups were always finicky and as a result had the veto
power to decide where they ...
INTRODUCTION
Tom Monaghan and his Brother James by “DomiNick's”, a pizza home delivery store located in
Ypsilanti, Michiga...
The 200th Domino’s Pizza store opens.
Domino’s Pizza sets out to conquer the world.
Domino's opens its 5,000th store.
Domi...
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
Comparativeanalysisonmac danddominos- raj kushwah
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PROJECT TITLE : - Comparative study between Pizza Hut and Domino’s Pizza

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Comparativeanalysisonmac danddominos- raj kushwah

  1. 1. ENTREPRENEURSHIP PROJECT PROJECT REPORT AND MARKET SURVEY OF MCDONALD’S Name of the school : NAME OF THE STUDENT : CLASS : CBSE ROLL NO. : ACADEMIC YEAR :
  2. 2. TEACHER IN CHARGE : MR. JAMES THOMAS INDEX SL. NO. TITLE SOURCE OF THE PROJECT PAGE NO. SIGN OF THE TEACHER 1 ACKNOWLEDGEMENT - 2 FAST FOOD RESTAURANT AN INTRODUCTION www.wikipedia.org 3 MCDONALD’S AN INTRODUCTION www.wikipedia.org 4 HISTORY OF MCDONALD’S www.wikipedia.org www.macdonalds.com 5 LIST OF PRODUCTS www.wikipedia.org 6 CORPORATE OVERVIEW www.wikipedia.org 7 MARKETING MIX www.marketing91.com 8 SWOT ANALYSIS www.slideshare.net www.scribd.com talkfinanceonline.com
  3. 3. 9 CONSOLIDATED BALANCE SHEET OF MCDONALD’S www.aboutmacdonalds.com 10 QUESTIONNAIRE www.slideshare.net www.scribd.com 11 SURVEY RESULT ANALYSIS - 12 THE TOP FIVE REASONS WHY MCDONALD’S IS SO POPULAR www.infobarrel.com 13 CONCLUSION - 14 BIBLIOGRAPHY -
  4. 4. ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I thank my God for providing me with everything that I required in completing this project. I am highly indebted to the Teacher in Charge Mr. James Thomas for his guidance and constant supervision as well as for providing necessary information regarding the project & also for his support in completing the project. I would like to express my gratitude towards my parents for their kind co- operation and encouragement which helped me in the completion of this project. I would like to express my special gratitude and thanks to industry persons for giving me such attention and time.
  5. 5. My thanks and appreciations also go to my classmates in developing the project and to the people who have willingly helped me out with their abilities. FAST FOOD RESTAURANT An INTRODUCTION A fast food restaurant, also known as a quick service restaurant (QSR) within the industry itself, is a specific type of restaurant characterized both by its fast food cuisine and by minimal table service. Food served in fast food restaurants typically caters to a "meat-sweet diet" and is offered from a limited menu; is cooked in bulk in advance and kept hot; is finished and packaged to order; and is usually available ready to take away, though seating may be provided. Fast food restaurants are usually part of a restaurant chain or franchise operation, which provisions standardized ingredients and/or partially prepared foods and supplies to each restaurant through controlled supply channels. Arguably the first fast food restaurants originated in the United States with A&W in 1916 and White Castle in 1921. Today, American- founded fast food chains such as McDonald's and KFC are multinational corporations with outlets across the globe. Variations on the fast food restaurant concept include fast casual restaurants and catering trucks. Fast casual restaurants have higher sit- in ratios, and customers can sit and have their orders brought to them.
  6. 6. Catering trucks often park just outside worksites and are popular with factory workers. Some trace the modern history of fast food in America to July 7, 1912, with the opening of a fast food restaurant called the Automat in New York. The Automat was a cafeteria with its prepared foods behind small glass windows and coin-operated slots. Joseph Horn and Frank Hardart had already opened the first Horn & Hardart Automat in Philadelphia in 1902, but their “Automat” at Broadway and 13th Street, in New York City, created a sensation. Numerous Automat restaurants were built around the country to deal with the demand. Automats remained extremely popular throughout the 1920s and 1930s. The company also popularized the notion of “take-out” food, with their slogan “Less work for Mother”. Modern commercial fast food is highly processed and prepared on a large scale from bulk ingredients using standardized cooking and production methods and equipment. It is usually rapidly served in cartons or bags or in a plastic wrapping, in a fashion which reduces operating costs by allowing rapid product identification and counting, promoting longer holding time, avoiding transfer of bacteria, and facilitating order fulfilment. In most fast food operations, menu items are generally made from processed ingredients prepared at a central supply facilities and then shipped to individual outlets where they are cooked (usually by grill, microwave, or deep-frying) or assembled in a short amount of time either in anticipation of upcoming orders (i.e., "to stock") or in response to actual orders (i.e., "to order"). Following standard operating procedures, pre-cooked products are monitored for freshness and disposed of if holding times become excessive. This process ensures a consistent level of product quality, and is key to delivering the order quickly to the customer and avoiding labour and equipment costs in the individual stores. To make quick service possible and to ensure accuracy and security, many fast food restaurants have incorporated hospitality point of sale systems. This makes it possible for kitchen crew people to view orders placed at the front counter or drive through in real time. Wireless
  7. 7. systems allow orders placed at drive through speakers to be taken by cashiers and cooks. Drive through and walk through configurations will allow orders to be taken at one register and paid at another. Modern point of sale systems can operate on computer networks using a variety of software programs. Sales records can be generated and remote access to computer reports can be given to corporate offices, managers, trouble-shooters, and other authorized personnel. The aim of this project is to conduct a market study on a thriving fast food restaurant, going deep into its formation, history and growth; then to analyse the reason that make it so popular. In this project we will be conducting a market study on the global fast food giant McDonald’s. MCDONALD’S AN INTRODUCTION McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. Ray Kroc subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated either by a franchisee, or an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion.
  8. 8. McDonald's primarily sells hamburgers, cheese burgers, chicken, French fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruits. In July 2011, McDonald's announced that their largest restaurant in the world will be built on the 2012 London Olympics site. The restaurant will contain over 1,500 seats and is half the length of an American Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current largest McDonald's in the world in Moscow, Russia. In January 2012, the company announced revenue for 2011 reached an all-time high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones opened worldwide. HISTORY OF MCDONALD’S The McDonald's restaurant concept was introduced in San Bernardino, California by Dick and Mac McDonald of Manchester, New Hampshire. It was modified and expanded by their business partner, Ray Kroc, of Oak Park, Illinois, who later bought out the business interests of the McDonald brothers in the concept and went on to found McDonald's Corporation. Early history In 1937, Patrick McDonald opened "The Airdrome", an octagonal food stand, on Huntington Drive in Monrovia, California. In 1940, his two sons, Maurice and Richard ("Mac" and " Dick"), moved the entire building to 1398 North E Streets in San Bernardino, California. The restaurant was renamed "McDonald's Famous Barbeque" and served over forty barbequed items. In 1953, the McDonald brothers began to franchise their successful restaurant, starting in Phoenix, Arizona and Downey and California.
  9. 9. The McDonald brothers created Speedee to symbolize the quick and efficient service system that they had devised. Downey's Speedee is one of only a few remaining and Downey’s restaurant is the oldest operating McDonald's in the world. Recognizing the historic and nostalgic value of the intact 1953 structure, the McDonald's Corporation acquired the store in 1990 and rehabilitated it to a modern but nearly original condition. In 1954, Ray Kroc, suggested that they franchise their restaurants throughout the country. He got the rights to set up McDonald's restaurants throughout the country, except in a handful of territories in California and Arizona already licensed by the McDonald brothers. Kroc's first McDonald's restaurant opened in Des Plaines, Illinois, near Chicago, on April 15, 1955, the same day that Kroc incorporated his company as McDonald's Systems, Inc. (which he would later rename McDonald's Corporation). By 1958, there were 34 restaurants. In 1959, however, Kroc opened 68 new restaurants, bringing the total to 102 locations. Phenomenal growth in the 1960s and 1970s In 1960, the McDonald's advertising campaign "Look for the Golden Arches" gave sales a big boost In 1962, McDonald's introduced its now world-famous Golden Arches logo. A year later, the company sold its billionth hamburger and introduced Ronald McDonald, a red- haired clown with particular appeal to children. In the early 1960s, McDonald's really began to take off. In 1961 Kroc bought out the McDonald brothers for $2.7 million, aiming at making McDonald's the number one fast-food chain in the country. In 1965, McDonald's Corporation went public. In 1985, McDonald's Corporation became one of the 30 companies that make up the Dow Jones Industrial Average. McDonald's success in the 1960s was in large part due to the company's skilful marketing and flexible response to customer demand. In 1968 the now legendary Big Mac made its debut, and in
  10. 10. 1969 McDonald's sold its five billionth hamburger. Two years later, McDonald's restaurants had reached all 50 states. In 1968, McDonald's opened its 1,000th restaurant; Kroc became chairman and remained CEO until 1973. By the late 1960s, many of the candy-striped Golden Arches stores had been modified with enclosed walk-up order areas and limited indoor seating. By June 1969, "mansard roof" building design featuring indoor seating became the standard for McDonald's restaurants. The company pioneered breakfast fast food with the introduction of the Egg McMuffin in 1972 and five years later McDonald's added a full breakfast line to the menu. In 1975, McDonald's opened its first drive-thru window in Sierra Vista, Arizona. This service gave Americans a fast, convenient way to procure a quick meal. Drive-thru sales eventually accounted for more than half of McDonald's systemwide sales. Surviving the 1980s "Burger Wars" In the late 1970s, competition from other hamburger chains such as Burger King and Wendy's began to intensify. A period of aggressive advertising campaigns and price slashing in the early 1980s became known as the "burger wars." Burger King suggested to customers: "have it your way"; Wendy's offered itself as the "fresh alternative". But McDonald's sales and market share continued to grow. During the 1980s, McDonald's further diversified its menu to suit changing consumer tastes. The company introduced the McChicken in 1980. It proved to be a sales disappointment and was replaced with series of different chicken sandwiches a year later. Chicken McNuggets were invented in 1979. By the end of 1983, McDonald's was the second largest retailer of chicken in the world. In 1985, ready- to-eat salads were introduced to lure more health-conscious consumers. The 1980s were the fastest-paced decade yet. Efficiency, combined with an expanded menu, continued to draw customers. McDonald's, already entrenched in the suburbs, began to focus on urban centres and introduced new architectural styles. Despite experts' claims that the fast-food industry was saturated, McDonald's continued to expand. The first generation raised on restaurant food had grown up. Eating out had become a habit rather
  11. 11. than a break in the routine, and McDonald's relentless marketing continued to improve sales. McDonald's growth in the United States was mirrored by its stunning growth abroad. By 1991, 37 percent of system wide sales came from restaurants outside the United States. McDonald's opened its first foreign restaurant in British Columbia, Canada, in 1967. By the early 1990s the company had established itself in 58 foreign countries and operated more than 3,600 restaurants outside the United States, through wholly owned subsidiaries, joint ventures, and franchise agreements. Its strongest foreign markets were Japan, Canada, Germany, Great Britain, Australia, and France. Braille menus were introduced in 1979, and picture menus in 1988. Experiments were conducted to find new technology and to research new markets to keep McDonald's in front of its competition. New locations such as hospitals and military bases were tapped as sites for new restaurants. 1990s: Growing pains The 10,000th unit was opened in April 1988.It took McDonald's 33 years to open its first 10,000 restaurants. Incredibly, the company reached the 20,000-restaurant mark in only eight more years, in mid- 1996. By the end of 1997 the total had surpassed 23,000, and by that time McDonald's was opening 2,000 new restaurants each year, an average of one every five hours. In 1993, a new region was added to the empire when the first McDonald's in the Middle opened in Tel Aviv, Israel. As the company entered new markets, it showed increasing flexibility with respect to local food preferences and customs. In Israel, for example, the first kosher McDonald's opened in a Jerusalem suburb in 1995. In Arab countries, the restaurant chain used "Halal" menus. McDonald's entered India for the first time in 1996, where it offered a Big Mac made with lamb called the Maharaja Mac. Overall, the company derived increasing percentages of its revenue and income from outside the United States. In 1992 about two-thirds of systemwide sales came from U.S. McDonald's, but by 1997 that figure was down to about 51 percent. Similarly, the operating income
  12. 12. numbers showed a reduction from about 60 percent derived from the United States in 1992 to 42.5 percent in 1997. The company made several notable blunders in the United States in the 1990s. A seemingly weakened McDonald's was the object of a Burger King offensive when the rival fast-food maker launched the Big King sandwich, a Big Mac clone. Meanwhile, internal taste tests revealed that customers preferred the fare at Wendy's and Burger King. In response to these difficulties, McDonald's drastically cut back on its U.S. expansion. Plans to open hundreds of smaller restaurants in Wal-Mart and gasoline stations were abandoned because test sites did not meet targeted goals. Failed turnaround: late 1990s Following the difficulties of the early and mid-1990s, several moves in 1998 seemed to indicate a reinvigorated McDonald's. Announcements were made that McDonald's would improve the taste of several sandwiches and introduce several new menu items. McDonald's also said that it would overhaul its food preparation system in every U.S. restaurant. The new just-in-time system, dubbed "Made for You," was in development for a number of years and aimed to deliver to customers "fresher, hotter food"; enable patrons to receive special-order sandwiches (a perk long offered by rivals Burger King and Wendy's); and allow new menu items to be more easily introduced thanks to the system's enhanced flexibility. Refurbishing and creating a healthier image: Early 2000s McDonald's was sued in 2001 after it was revealed that for flavoring purposes a small amount of beef extract was being added to the vegetable oil used to cook the french fries. McDonald's soon apologized for any "confusion" that had been caused by its use of the beef flavouring, and in mid-2002 it reached a settlement in the litigation, agreeing to donate $10 million to Hindus, vegetarians, and other affected groups.
  13. 13. McDonald's also had to increasingly battle its public image as a purveyor of fatty, unhealthy food. McDonald's responded by introducing low-calorie menu items and switching to a more healthful cooking oil for its French fries. McDonald's continued to curtail store openings in 2004 and to concentrate on building business at existing restaurants. McDonald's also aimed to pay down debt by $400 million to $700 million and to return approximately $1 billion to shareholders through dividends and share repurchases With the new "Forever Young" design (adopted in 2006), the first major redesign since 1969, McDonald's turned a new page for itself. Most of new and remodelled restaurants feature dining zones with three sections or zones. Free wifi access points were also granted. Also, harsh colours and hard plastics have been replaced with custom earth tones and flexible padded fabric. The McDonald's menu has been tweaked to offer a larger variety of what the corporation refers to as more healthy food. 2010s In July 2011, McDonald's announced that their largest restaurant in the world will be built on the 2012 London Olympics site. The restaurant will contain over 1,500 seats and is half the length of an American Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current largest McDonald's in the world in Moscow, Russia. In January 2012, the company announced revenue for 2011 reached an all-time high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones opened worldwide. LIST OF PRODUCTS Burgers All beef patties are seasoned, consisting primarily of salt and black pepper.
  14. 14. Big Mac: Along with the Quarter Pounder with cheese, this is one of the two McDonald's signature menu items, introduced in 1967 as a response to the flagship burger at Big Boy restaurants. Two 1.6-ounce ground beef patties, special Big Mac sauce, shredded iceberg lettuce, cheese, two gherkin slices, and re-hydrated onions on a toasted sesame seed bun, with an additional middle bun separating both beef patties. Big N' Tasty: The Big N' Tasty consists of a seasoned quarter-pound beef patty with ketchup, mayonnaise, slivered onions, two dill pickle slices, leaf lettuce, and one tomato slice on a sesame seed bun. Quarter Pounder: Along with the Big Mac, this is one of the two McDonald's signature menu items. 4-ounce of ground beef patty with ketchup, mustard, slivered onions, two gherkin slices, and two slices of cheese. Hamburger and cheeseburger: A 45 g ground beef patty, with ketchup, mustard, a single dill pickle, re-hydrated onions, on a toasted bun. Also sold as a double or triple, adding an extra pickle slice for each beef patty added Double Cheeseburger: It has two 45 g ground beef patties, with ketchup, mustard, two slices of dill pickle, re-hydrated onions, and two pieces of cheese on a toasted bun. McDouble: It similar to a Double Cheeseburger, but with just one slice of cheese. It was reintroduced as a permanent dollar-menu item in December 2008. Daily Double: Similar to the double cheeseburger, however the toppings are different. The Daily Double is made with lettuce, tomato, slivered onions, and mayonnaise. It also has only one slice of cheese, rather than the two slices that are on the double cheeseburger. The Big N' Tasty: It was introduced in 1997 and has beef patty with ketchup, cheese, mayonnaise with a grill flavouring, diced onions, two pickles, leaf lettuce, kebab meat and a tomato slice, on a toasted bun. It was devised to resemble Burger King's Whopper sandwich.
  15. 15. McFeast: A hamburger with lettuce, tomato, and mayonnaise, the McFeast contains a quarter pounder patty, lettuce, and modified mayonnaise with lemon juice, ketchup, onion and tomato. Chicken, Fish, Pork McChicken: It is a mildly spicy chicken sandwich. Made from ground white meat chicken, mayonnaise, and shredded lettuce, on a toasted bun. It still remains one of the biggest sellers, just behind the Big Mac. Premium chicken sandwiches: The Classic is a rebranding of the Crispy Chicken and Chicken McGrill sandwiches, with mayonnaise, leaf lettuce, and a tomato slice. All are served on a whole-grain roll, with either a grilled or crispy chicken breast. Southern Style Chicken Sandwich: A southern-style fried chicken breast filet, on a steamed bun, dressed with butter and two pickles. Snack Wrap: McDonald's version of a wrap made with white meat chicken breast, lettuce, shredded Cheddar cheese and Monterey Jack cheese, and a sauce, wrapped in a soft flour tortilla. There is also a Mac Snack Wrap which features the fixings of the Big Mac, but without the bun and wrapped in a tortilla shell, and uses one half of a piece of quarter meat. Chicken Fajita: Chicken, cheese, red and green bell peppers, and diced onions in a flour tortilla. Comes with Picante sauce packets on request, which is available in mild and spicy. Chicken McNuggets: Introduced in 1980 as a replacement for the McChicken, these are small chicken chunks served with dipping sauces of Barbecue, Sweet n' Sour, Honey, and Hot Mustard. In 2011, 4 new dipping sauces were introduced and added to the lineup: Sweet Chili, Honey Mustard, Spicy Buffalo, and Creamy Ranch. Chicken Selects: McDonald's version of chicken strips. They include choices of spicy buffalo, creamy ranch, Honey Mustard,
  16. 16. and Chipotle barbecue dipping sauces; sauce selections in the UK are Smokey barbecue, sour cream and sweet chilli sauce. Filet-O-Fish: It is a whitefish fillet with tartar sauce and a half slice of cheese, on a steamed bun. McRib: It is a sandwich featuring boneless pork with barbecue sauce, slivered onions, and pickles. McArabia: There are two versions of the McArabia: Grilled chicken and grilled kofta (beef with spices). Both are served with lettuce, tomatoes, onions, and garlic mayonnaise in addition to two small patties of grilled chicken or kofta, all wrapped in an Arabic style pita bread. The McArabia has been very well received throughout the Middle East. Chicken McBites: They are Popcorn chicken breast with "home-style seasoning”. Dipping sauces include ranch, Sweet n' Sour, Tangy BBQ, Chipotle BBQ, and Honey Mustard. Fish McBites: Similar to the Chicken McBites, these are small pieces of flaky whitefish dipped in batter and fried until golden brown, and served with tartar sauce for dipping. Salads and side orders McDonald's first introduced salads to its menu in 1985. The Premium Salads all are a mixture of iceberg lettuce and a special lettuce assortment, with cherry tomatoes and different toppings to differentiate them; additionally all salads can be topped with warm grilled or crispy chicken. All of its salads are part of McDonald's move towards creating a healthier image. McDonald's sells French fries as its primary side order. They also sell potato wedges, a type of French fry that is thick cut and wedge shaped, fried onion pieces and onion rings.
  17. 17. CORPORATE OVERVIEW Facts and figures McDonald's restaurants are found in 119 countries and territories around the world and serve 58 million customers each day. McDonald’s operates over 31,000 restaurants worldwide, employing more than 1.5 million people. The companies also operate other restaurant brands, such as Piles Café. Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until October 2006, when McDonald's fully divested from Chipotle through a stock exchange. Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners. Notably, McDonald's has increased shareholder dividends for 25 consecutive years, making it one of the S&P 500 Dividend Aristocrats. Types of restaurants 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 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 fast-food chains. The first such restaurant in Britain opened at Fallowfield, Manchester in 1986. In some countries, "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high-density city neighbourhoods often omit drive-through service. There are also a few locations, located mostly in downtown districts that offer Walk-Thru service in place of Drive-Thru. To accommodate the current trend for high quality coffee and the popularity of coffee shops in general, McDonald's introduced McCafé, a café-style accompaniment to McDonald's restaurants in the style of Starbucks. McCafé is a concept created by McDonald's Australia, starting with Melbourne in 1993. Today, most McDonald's in Australia
  18. 18. have McCafés located within the existing McDonald's restaurant. In Tasmania, there are McCafés in every store, with the rest of the states quickly following suit. After upgrading to the new McCafé 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 McCafés worldwide. Some locations are connected to gas stations/convenience stores, while others called McExpress 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 travellers which may have services found at truck stops. Since 1997, the only Kosher McDonald's in the world that is not in Israel is located in the "Abasto de Buenos Aires", Argentina. Global operations McDonald's has become emblematic of globalization, sometimes referred to as the "McDonaldization" of society. The Economist newspaper uses the "Big Mac Index": the comparison of a Big Mac's cost in various world currencies can be used to informally judge these currencies' purchasing power parity. Norway has the most expensive Big Mac in the world as of July 2011, while the country with the least expensive Big Mac is India . Some observers have suggested that the company should be given credit for increasing the standard of service in markets that it enters. A group of anthropologists in a study entitled Golden Arches East looked at the impact McDonald's had on East Asia, and Hong Kong in particular. When it opened in Hong Kong in 1975, McDonald's was the first restaurant to consistently offer clean restrooms, driving customers to demand the same of other restaurants and institutions. McDonald's has taken to partnering up with Sinopec, the second largest oil company in the People's Republic of China, as it takes advantage of the country's growing use of personal vehicles by opening numerous drive-thru restaurants. McDonald's has opened a McDonald's restaurant and McCafé on the underground premises of the French fine arts museum, the Louvre.
  19. 19. The company stated it will open vegetarian-only restaurants in India by mid-2013. Redesign In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of its restaurants, the first major redesign since the 1970s. McDonald's has invested $1 billion to redesign nearly all of the 14,000 restaurants by 2015. The goal of the redesign is to be more like a coffee shop, similar to Starbucks. The design includes wooden tables, faux-leather chairs, and muted colours; the red is muted to terra cotta, the yellow was turned golden for a more "sunny" look, and olive and sage green were also added. To warm up its look, the restaurants have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. Many restaurants now feature free Wi-Fi and flat screen TVs. Other upgrades include double drive-thrus, flat roofs instead of the angled red roofs, and replacing fibre glass with wood. Also, instead of the familiar golden arches, the restaurants now feature "semi-swooshes" (half of a golden arch), similar to the Nike swoosh. Business model McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are owned and operated by McDonald's Corporation directly. The remainder are operated by others through a variety of franchise agreements and joint ventures. The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract, age, country, and location, the Corporation may own or lease the properties on which McDonald's franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants.
  20. 20. The United Kingdom and Ireland business model is different than the U.S, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois. In other countries, McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments. As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators. According to Fast Food Nation by Eric Schlosser, nearly one in eight workers in the U.S. have at some time been employed by McDonald's. It also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the host country.
  21. 21. MARKETING MIX The marketing mix of a company consists of the various elements as follows which form the core of a company’s marketing system and hence helps to achieve marketing objectives. The marketing mix of McDonald’s is as follows:- Product: - McDonald’s places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers’ requirements change over time. In order to meet these changes, McDonald’s has introduced new products and phased out old ones, and will continue to do so. Care is taken not to adversely affect the sales of one choice by introducing a new choice, which will cannibalise sales from the existing one (trade off). McDonald’s knows that items on its menu will vary in popularity. Their ability to generate profits will vary at different points in their cycle. In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian. The happy meal for the children is a great seller among others. Price: - The 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. In India McDonalds classifies its products into 2 categories namely the branded affordability (BA) and branded core value products (BCV). The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60 and the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-30. This has been done to satisfy consumers which different price perceptions. Promotion :- The promotions aspect of the marketing mix covers all types of marketing communications .One of the methods employed is
  22. 22. advertising, Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and magazines. Other promotional methods include sales promotions, point of sale display, merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item. At McDonalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos. Place: - Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer. McDonald’s outlets are very evenly spread throughout the cities making them very accessible. Drive in and drive through options make McDonald’s products further convenient to the consumers. Other than the main four elements mentioned above there are a few other elements too in the marketing mix, which are as follows:- People:-The employees in McDonald’s have a standard uniform and McDonald’s specially focuses on friendly and prompt service to its customers from their employees. Process:-The food manufacturing process at McDonald’s is completely transparent i.e. the whole process is visible to the customers. In fact, the fast food joint allows its customers to view and judge the hygienic standards at McDonald’s by allowing them to enter the area where the process takes place. The customers are invited to check the ingredients used in food.
  23. 23. Physical evidence: - McDonalds focuses on clean and hygienic interiors of is outlets and at the same time the interiors are attractive and the fast food joint maintains a proper decorum at its joints. SWOT ANALYSIS Strengths McDonald’s holds a very strong brand name worldwide. They have large partnerships with other companies that provide them with their desired products; this increases the goodwill of the company. McDonald’s is one of the most reputed firms who are socially responsible. Loyal employees & management & customer are their biggest strength. McDonald’s makes sure that cultural & regional barriers are kept in mind while providing food to different countries. Clean environment and play areas for children where they can enjoy their time. Weakness The weakness that hits the list of employee turnover rate. Every year many of their employees are fired out of the restaurant. McDonalds mostly advertises products and food items that targets children. Health conscious people often complain that they do not provide us with the organic and healthy food. This becomes their weakness when they get in the complaints.
  24. 24. They also face quality issue at times. This affects the business as they are running the outlet worldwide, if one franchise gets affected others also get a bad name. Opportunities It can open up online services for their customers so that they can easily order their desired meals sitting at home. Discounts given on every food item may help them gain more customers. They can go for a joint venture with the retailers they work with. They can introduce healthy hamburgers and healthy drinks for the people who are health conscious. In order to be environment friendly, they can use packing material which can be recycled later or material that does not create pollution. Threats Emerging competition of similar outlets is becoming a problem for McDonalds. Health issue also becomes a problem when it comes to food. As it is a multinational food outlet, fluctuations in the currency of other countries becomes a problem for such companies.
  25. 25. Recession in any country would definitely affect the whole outlet worldwide. People facing heart problems and obesity accuse McDonalds for not providing them with the healthy food. They have a threat of local food outlets in different countries. McDonalds is operating in a fully fledged economy where competition is increasing day by day therefore they should work effectively to overcome their drawbacks because of the recession. COMPANY’S FINANCIAL INFORMATION Company Name: McDonald's Corporation Ticker Symbol: MCD Web Address: www.mcdonalds.com CEO: Mr. Donald Thompson No. of Employees: 420,000 Common Issue Type: CS Business Description: McDonald's Corporation franchises and operates McDonald's restaurants in the food service industry. The Company and its franchisees purchase food, packaging, equipment and other goods from numerous independent suppliers. Industry Information: LEISURE - Restaurants Price Day Change Bid Ask Open High Low Volume 87.18 -0.02 - - 87.43 87.43 86.76 3658828 Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS P/E Yield 52-Wks-Range 87,526.7 1,004.0 0.39 5.27 2.53 16.4 3.5 102.22 - 83.31 KEY FIGURES (Latest Twelve Months - LTM) Yesterday's Close 87.06 $ PE Ratio - LTM 16.4 Market Capitalisation 87,526.7 mil Latest Shares Outstanding 1,004.0 mil Earnings pS (EPS) 5.27 $ Balance Sheet (at a glance) in Millions
  26. 26. Dividend pS (DPS) 2.53 ¢ Dividend Yield 3.5 % Dividend Payout Ratio 48 % Revenue per Employee 64,300 $ Effective Tax Rate 31.3 % Float 1,015.3 mil Float as % of Shares Outstanding 99.9 % Foreign Sales 18,478 mil Domestic Sales 8,528 mil Selling, General & Adm/tive (SG&A) as % of Revenue 9.10 % Research & Devlopment (R&D) as % of Revenue 0.00 % Gross Profit Margin 44.7 % EBITDA Margin 35.6 % Pre-Tax Profit Margin 29.1 % Assets Turnover 0.8 % Return on Assets (ROA) 16.1 % Return on Equity (ROE) 39.2 % Return on Capital Invested (ROCI) 20.4 % Current Ratio 1.0 Leverage Ratio (Assets/Equity) 2.4 Interest Cover 16.6 Total Debt/Equity (Gearing Ratio) 0.96 LT Debt/Total Capital 48.0 % Working Capital pS 0.06 $ Cash pS 2.17 $ Book-Value pS 13.83 $ Tangible Book-Value pS 11.10 $ Cash Flow pS 6.89 $ Free Cash Flow pS 1.25 $ KEY FIGURES (LTM): Price info Price/Book Ratio 6.30 Price/Tangible Book Ratio 7.85 Price/Cash Flow 12.6 Price/Free Cash Flow 69.9 P/E as % of Industry Group 42.0 % P/E as % of Sector Segment 77.0 % DIVIDEND INFO Dividend Declared Date 09/20/2012 Dividend Ex-Date 11/28/2012 Dividend Record Date 12/02/2012 Dividend Pay Date 12/16/2012 Dividend Amount 770 Type of Payment Cash Payment Dividend Rate 3.08 Current Dividend Yield 3.5 5-Y Average Dividend Yield 3.1 Payout Ratio 48.0 5-Y Average Payout Ratio 53.0 Share price performance previous 3 years Share price performance intraday
  27. 27. PRICE/VOLUME High Low Close % Price Chg % Price Chg vs. Mkt. Avg. Daily Vol Total Vol 1 Week - - - 0.0 101 54,041 66,217 4 Weeks 87.43 83.31 84.74 2.7 101 57,129 856,929 13 Weeks 94.16 83.31 91.02 -4.4 98 61,288 3,554,700 26 Weeks 94.16 83.31 87.75 -0.8 93 59,419 7,189,758 52 Weeks 102.22 83.31 98.03 -11.2 79 59,272 14,521,666 YTD 102.22 83.31 - -13.2 77 59,774 13,807,695 Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth) 86.61 86.31 88.25 89.31 91.74 0.39 0.31 GROWTH RATES 5-Year Growh R² of 5-Year Growth 3-Year Growth Revenue 3.81 77.6 6.66 Income 20.17 81.1 9.78 Dividend 15.36 94.7 10.16 Capital Spending 6.97 NA 10.52 R&D 0.00 NA 0.00 Normalized Inc. 11.58 NA 9.79 CHANGES YTD vs. Last YTD Curr Qtr vs. Qtr 1-Yr ago Annual vs. Last Annual Revenue % 2.1 -0.2 12.2 Earnings % -1.4 -3.5 11.3 EPS % 1.0 -1.4 15.1 EPS $ 0.04 -0.02 0.69 SOLVENCY RATIOS SHORT-TERM SOLVENCY RATIOS (LIQUIDITY) Net Working Capital Ratio 2.71 Current Ratio 1.3 Quick Ratio (Acid Test) 1.0 Liquidity Ratio (Cash) 0.67 Receivables Turnover 21.5 Average Collection Period 17 Working Capital/Equity 6.2 Working Capital pS 0.88 Cash-Flow pS 6.77 Free Cash-Flow pS 2.09 FINANCIAL STRUCTURE RATIOS Altman's Z-Score Ratio 4.85 Financial Leverage Ratio (Assets/Equity) 2.3 Debt Ratio 56.4 Total Debt/Equity (Gearing Ratio) 0.87 LT Debt/Equity 0.84
  28. 28. LT Debt/Capital Invested 56.9 LT Debt/Total Liabilities 65.2 Interest Cover 17.3 Interest/Capital Invested 1.67 Attn: Replace this page with the 30th page (as displayed on the pdf reader and pg no.27 as displayed in the doc) of the Consolidated Balance Sheet of McDonald’s, which you can find on the link below. http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Inv estors/investors-2010-annual-report.pdf
  29. 29. QUESTIONNAIRE (Attn: Attach minimum 5 copies) Name: ____________________ age: ________ Gender: _________ occupation: _______________ Please spare a few minutes of your valuable time to answer this simple Questionnaire. 1. How often do you visit fast food restaurants? Everyday Alternatedays Weekends Onceinamonth Onceeverythreemonths
  30. 30. 2. Which of the following fast food chain do you visit the most? Subway McDonald’s KFC PizzaHut BurgerKing 3. Are you satisfied with the services provided by them Yes Sometimes Notatallsatisfied 4. How often do you eat at McDonald’s? Everyday Alternatedays Weekends Onceinamonth Onceeverythreemonths 5. Which among the following is your favourite product at McDonald’s? BigMacBurger MacVeggie BigMacChickenBurger MaharajMac MacFiletoFish 6. Is the product line of McDonald’s adequate? Yes No Haven’tThoughtAboutThat 7. What time of the day do you prefer to eat at McDonald’s? Morning Noon Evening Night 8. What is the main problem you faced at McDonald’s? Longqueues Wrongorders Hygienicproblems Other problems Noproblems 9. What are the unique selling prepositions of McDonald’s? Productvariety Hygiene Ambience Quickservice Location Other 10.Do you think McDonald’s will be triumphant over all its competitors? Yes Maybe Haven’tThoughtAboutThat Never Thank You!! SURVEY RESPONSE ANALYSIS
  31. 31. Frequency of visits made to fast food centers Everyday Alternate days Weekends Once in a month Fast food chain visited the most Subway MacDonald's KFC Pizza Hut Burger King Favourite product at Macdonald’s Big Mac Burger Mac Veggie Big Mac Chicken Burger Maharaj Mac Mac Fileto Fish
  32. 32. Time of the day prefered to eat at Macdonald’s Morning Noon Evening Night Main problem faced at McDonald’s Long queues Wrong orders Hygienic problems Other problems No problems
  33. 33. THE TOP FIVE REASONS WHY MCDONALD’S IS SO POPULAR 1. The System This is the first thing that makes McDonald's so successful, by having an effective and efficient system in place, which exploits the minimum wage labour available, in the form of young teenagers who are just looking to make some cash or pick up fundamental job skills. 2. Convenience The second reason why McDonald's is so popular is because it's everywhere. There a McDonald's at every corner of the map, at every major shopping centre, district, highway, freeway, every place which attracts even, remotely more than 10 people, will have a McDonald's restaurant not too far from them. McDonald's is having the best Real Estate locations around the world which makes it so popular around the globe. The unique selling prepositions of MacDonald’s Product variety Hygiene Ambience Quick service Location Other
  34. 34. 3. Likability and Familiarity The Golden Arches, the Big M. Ronald McDonald, happiness and fun; all these are the associations with McDonald’s which makes it so familiar by being so familiar to all age groups and to everybody. 4. The Menu McDonald's has one of the most diverse menus, targeting all ages from little kids to old pensioners, and everyone else in between. There's Big Macs for the big kids and junior burgers for the little. The menu's versatility is accentuated when they introduced the "healthy tick" concept, which target those people who wants to watch what they eat (even though it doesn't make sense to go to a fast food restaurant to eat healthy). 5. Consistency The last reason is, McDonald's is so successful because of its consistency. The expectations that we have about everything surroundin g the store are fulfilled in almost every store nationwide, worldwide. So everybody knows what they're getting into before they come to McDonald's, and by being so consistent, it has a solid reputation to uphold. CONCLUSION What started as a simple food stand on Huntington drive, California in 1937, through the ages have become a billion Dollar corporation and the world’s second largest fast-food chain. When analysed, one would understand that McDonald’s had a stable growth in the past years. The credits of building it into one of world’s largest fast food operation can be given to Ray Kroc who took over McDonald’s from its establishers, modernised and expanded it to suit the contemporary trend. Today McDonald’s has a net worth of $15.15 billion. Through this project report and market survey we saw the how McDonald’s was formed, its history and the present position. We also its list of various products offered and the corporate profile.
  35. 35. Through the marketing mix, we saw how they make use of their product, price, place, promotion mixes. SWOT analysis showed us the strengths and weakness of McDonald’s as well as the opportunities and threats they have got. The consolidated financial statement showed us the financial position of the corporation as of 2011. The questionnaire survey provided us with a clear picture of the needs, want and expectations of the consumers of the fast food market in general and McDonald’s in particular. The respondents also rated the services provided by the corporation. At last we also saw the top five reasons that make McDonald’s so popular. I gladly hope that this project has met its aim. Let me conclude by quoting this quote by Ray Kroc "Perfection is very difficult to achieve, and perfection was what I wanted in McDonald's. Everything else was secondary for me." Thank You!! BIBLIOGRAPHY www.google.com www.wikipedia.org www.macdonalds.com www.slideshare.net www.scribd.com www.marketing91.com
  36. 36. www.infobarrel.com www.aboutmacdonalds.com answers.yahoo.com talkfinanceonline.com ~~~~~~~~~~~~ Attn: Pictures on the next page!! Pictures to be attached Attn: Attach these pictures on the backside of the page which is adjacent to the relevant page.
  37. 37. Logo of McDonald’s
  38. 38. McDonald's world headquarters, Oakbrook, United States Ray Kroc- The franchiser of McDonald's
  39. 39. The first McDonald’s restaurant opened by Patrick McDonald, in 1937 McDonald’s Speedee mascot
  40. 40. Downey’s restaurant; the oldest operating McDonald's in the world. World-famous Golden Arches logo The legendary Big Mac
  41. 41. The Chicken McNuggets
  42. 42. The Maharaja Mac which is offered in India
  43. 43. An exterior view of the world's largest McDonald's restaurant built on 2012 London Olympics site
  44. 44. The Big Mac The Big n Tasty
  45. 45. The premium chicken sandwich The McDonald's Chicken Fajita
  46. 46. McArabia
  47. 47. McDonald’s Salads McDonald’s French fries A map showing every continent with at least one McDonald's restaurant
  48. 48. A modern McDonald’s restaurant in London
  49. 49. Mc-Donald Vs Domino’s - Comparative Analysis Determinant Of Choosing Fast Food Restaurant And Their Service Quality BY:- ANUJ CHAUHAN (FINANCE + MARKETING) ITM UNIVERSITY, SITHOLI, GWALIOR ABSTRACT
  50. 50. SERVICE QUALITY Parasuraman et al. (1988) introduced a 22-item scale, called SERVQUAL, for measuring service quality, the model has been widely adopted across industries. The scale was tested in 4 service settings different from those of the original test: a dental school patient clinic, a business school placement center, a tire store, and an acute care hospital. In service industries, customer satisfaction is always influenced by the quality of interactions between customers and the personnel involved in the contact services (1994). In the last decade, the movement towards quality had started to spread from the manufacturing sector to the service sector. The shift of focus to quality is basic for the service business to survive the competition, get acceptance from society, and be able to achieve its missions. In principle, the two main things closely related to services are expected quality and experienced or perceived quality. The first is the customers' expectations of service quality and the latter is the customers' perceptions of service quality. The customers will always assess the services they experienced by comparing them with whatever they expected or wished to receive. Services are behavioral rather than physical entities and have been described as deeds, performances or effort (1966); deeds, acts or performances, (1980); activities or processes (1991). (1988) defined services as "that broad class of products characterized by intangibility, inseparability of production and consumption, difficulty of standardization and perishability". As (1986) notes, there is fairly widespread agreement in the literature concerning the characteristics which tend to differentiate services from goods. These are intangibility, perishability, inseparability of production and consumption, and heterogeneity. TABLE OF CONTENT Synopsis
  51. 51. 1. Industry Profile 2. Literature review 3. Need for study 4. Research methodology 5. Analysis of study 6. Finding and suggestions 7. Conclusion 8. Appendices 9. Bibliography
  52. 52. Summary:- In this comparative analysis of two fast food restaurants regarding their service quality. In this, there are pair of determinant factors of Domino’s pizza and Mc- Donald which identifies the service quality regarding their customers and how they affect customer satisfaction. Both are famous for their services as it explained in the abstract, it includes the service delivered to their customers and what they perceived before getting these services in terms of their service quality. There are two stages are forms, one of them related to their perception and another are totally related to expectations, which is observed by these fast food restaurants after service delivered to their customers, and related too their satisfaction level of customers. INDUSTRY PROFILE:- FAST FOOD RESTAURANT A fast food restaurant, also known as a quick service restaurant (QSR) within the industry itself, is a specific type of restaurant characterized both by its fast food cuisine and by minimal table service. Food served in fast food restaurants typically caters to a "meat-sweet diet" and is offered from a limited menu; is cooked in bulk in advance and kept hot; is finished and packaged to order; and is usually available ready to take away, though seating may be provided. Fast food restaurants are usually part of a restaurant chain or franchise operation, which provisions standardized ingredients and/or partially prepared foods and supplies to each restaurant through controlled supply channels. The term "fast food" was recognized in a dictionary by Merriam–Webster in 1951. Arguably the first fast food restaurants originated in the United States with A&W in 1916 and White Castle in 1921.Today, American-founded fast food chains such as McDonald's and KFC are multinational corporations with outlets across the globe.
  53. 53. Innovation Timeline:- 1872 Walter Scott of Providence, RI outfitted a horse-drawn lunch wagon with a simple kitchen, bringing hot dinners to workers 1902 First Horn & Hardart Automat opened in Philadelphia 1912 Horn & Hardart opens a second Automat in Manhattan 1916 Walter Anderson built the first White Castle in Wichita, KS in 1916, introducing the limited menu, high volume, low cost, high speed hamburger restaurant 1919 A&W Root Beer took its product out of the soda fountain and into a roadside stand 1921 A&W Root Beer began franchising its syrup 1921 White Castle opens its first restaurant 1926 Maid-Rite opened its first restaurant in Muscatine, Iowa. 1930s Howard Johnson's pioneered the concept of franchising restaurants, formally standardizing menus, signage, and advertising 1948 In-N-Out Burger begins drive-through service utilizing call-box technology 1967 McDonald's opens its first restaurants outside the U.S. 1971 McDonald's begins serving breakfast, test-marketing the Egg McMuffin in the U.S. 1971 The first Starbucks store opens in Seattle, Washington in Pike Place Market to sell high-quality coffee beans and equipment 1980 7-Eleven introduces the 32-US-fluid-ounce (950 ml) Big Gulp 1981 Arby's offers nutritional7-Eleven introduces the 32-US-fluid-ounce information 1987 Howard Schultz leads purchase of the Starbucks brand from its founders (who adopted the name Peet's) and begins offering coffee drinks modeled after those sold in Italian coffee bars 1994 McDonald's begins "supersizing" Extra Value Meals 1994 Arctic Circle becomes the first fast food restaurant to sell Angus beef exclusively. 1994 Arby's is first fast food restaurant to implement a no-smoking policy 2002 McDonald's cuts back on the amount of trans fat by 48 percent on French fries 2006 Arby's begins elimination of trans fat oils in French fries
  54. 54. Indian Fast food Industry With rapidly growing middle class population and changing lifestyle, India is blessed with one of the fastest growing fast food markets of the world. The Indian fast food market is growing at the rate of 30-35% per annum. Almost all big fast food brands of the world have succeeded in making their presence felt in the country and most of them are posting appreciable growth. Consequently, all the popular fast food chains have chalked out massive plans for expanding their business and presence throughout the country. Moreover, foreign fast food chains are aggressively increasing their presence in the country. For instance, Domino’s has planned to open 60-65 outlets every year for the next three years (2010-2012) while Yum Brands Inc is also preparing for massive expansion across the country with plans to open 1000 fast food outlets by 2015. According to “Indian Fast Food Market Analysis”, although the market has witnessed a robust growth in the past couple of years, it remains largely underpenetrated and concentrated into metropolitan cities. However, there is large room for growth in tier-II cities and tier-III cities, which are mostly untapped. Therefore, the future of Indian fast food industry lies in masses that live in tier-II and tier-III cities. The report provides extensive research and objective analysis on the fast expanding Indian fast food market. The report analyzes all the vital industry trends and possible growth areas for future expansion. It also analyzes important driving forces in detail, which will help clients to understand the market better. Moreover, we have also identified the important players operating in the sector and have made a separate chapter which talks about their business expansion plans in detail. Most importantly, the report also features forecast on fast food sales in the country. The forecast is based on the correlation between past market growth and growth in base drivers such as growth in middle class, urbanization, cultural shift and lifestyle changes. McDonald's India Profile A Locally Owned Company: McDonald's is the world's leading food service retailer with more than 33,000 restaurants in 118 countries serving more than 67 million customers each day. In India, McDonald's has two Indian entrepreneurs: Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd, which has been awarded a Development Licensee status by McDonald's Corporation, U.S.A, spearheads McDonald's operations in West & South India, while McDonald's restaurants in North & East India is managed by Vikram Bakshi's Connaught Plaza Restaurants Private Limited, which is still a Joint Venture with McDonald's Corporation. For Hardcastle Restaurants Pvt. Ltd ('HRPL'), the transition to a Development Licensee implies a higher level of commitment by McDonald's Corporation as it enhances its trust in the Local partner. McDonald's ensures that the evolution to a Development Licensee takes place only after the financial strength, viability, profitability and long - term sustainability of the business is assured. Celebrating over 15 years of leadership in food service retailing in India, McDonald's India now has a network of over 250 restaurants across the country. McDonald's India is a leader in
  55. 55. the food retail space, with a presence of more than 250 restaurants serving more than 6.5 lakh customers daily in India. McDonald's India and HRPL in particular has an aggressive expansion plan - including market expansion, new customer outreach formats and menu expansion. With HRPL becoming a Development Licensee in the year 2010, there are strong and robust commitments to investments, expansion and growth. By 2014, HRPL plans to double the number of restaurants it currently has. HRPL is expanding its reach by expanding the portfolio and access points with formats like from kiosks, drive thrus, web-delivery and petrol pumps in addition to the restaurants. In 2012, HRPL plans to open another 35-40 McDonald's restaurants in West and South India. An Employer of Opportunity: McDonald's India is an employer of opportunity, providing quality employment and long-term careers to professionals across the country. The average McDonald's restaurant employs 40-60 people from crew to restaurant manager. McDonald's invests in its employees, leveraging world class-training inputs to create ambassadors of the brand and creating food service professionals with global outlook. The brand currently has over 10,000 employees in India. Respect for Indian Customs and Culture: McDonald's worldwide is well known for the high degree of respect for the local culture of each market it operates in. In line with this respect for local culture, India is the first country in the world where McDonald's does not offer any beef or pork items. McDonald's has developed a menu especially for India with vegetarian selections to suit the Indian palate, and has also re- engineered its operations to address the special requirements of vegetarians. Special care is taken to ensure that all vegetable products are prepared separately, using dedicated equipment and utensils. This separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. So much so that the mayonnaise and soft serves are also 100% vegetarian, and McDonald's uses only vegetable oil as a cooking medium in India. Quality, Service, Cleanliness & Value (QSC & V): McDonald's is driven by the philosophy of Quality, Service, and Cleanliness & Value for Money. This translates into a commitment to provide customers high quality products, served quickly with a smile, in a clean and pleasant environment at an affordable price. This effectively means that the McDonald's menu is priced at a value that the largest segment of the Indian consumers can afford, while at the
  56. 56. same time ensuring that quality is not sacrificed for value - rather, McDonald's leverages economies to minimize costs while maximizing value to customers. McDonald's a Global Phenomenon Formed in 1954, McDonald's brand is the leading global foodservice retailer with more than 30,000 local restaurants serving nearly 50 million people in more than 120 countries each day. Our rich history began with the founder Ray Kroc's vision and his commitment, transformed in our talented executives, and will keep the shine on McDonald's arches for years to come. McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken, french fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruit.
  57. 57. Quick Facts About McDonald’s 1. McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in California, US in the year 1937. 2. By mid-1950s, the restaurant's revenues had reached $350,000. 3. Ray Kroc, distributor for milkshake machines, expressed interest in the business, and he finalized a deal for franchising with the McDonald brothers in 1954. 4. He established a franchising company, the McDonald System Inc. and appointed franchisees. 5. In 1961, he bought out the McDonald brothers' share for $2.7 million and changed the name of the company to McDonald's Corporation. In 1965, McDonald's went public. McDonald’s is a global foodservice retailer with more than 32,000 local restaurants in 117 countries, serving more than 58 million customers each day. In simpler terms, we’re a global brand of local restaurants. At the heart of McDonald’s operations is a unique business model comprised of the Company, our suppliers and franchisees (also called owner/operators). Often referred to as a three-legged stool, all three parts of this business model are essential to McDonald’s success around the world. Domino's Pizza is an international pizza delivery corporation headquartered in Ann Arbor Township, Michigan, United States, near Ann Arbor.[ Founded in 1960, Domino's is the second-largest pizza chain in the United States (after Pizza Hut) and has more than 10,000 corporate and franchised stores in 70 countries and all 50 U.S. states. Domino's Pizza was sold to Bain Capital in 1998 and went public in 2004.
  58. 58. Domino's serves Coca-Cola products, and as of January 2012 is the only "Big Four" pizza chain to do so. Rivals Papa John's Pizza and Little Caesars sold Coca- Cola in the past (Pizza Hut, due to its previous ownership by PepsiCo, has a lifetime contract to sell Pepsi products.), but both switched to Pepsi in 2012 and 2007, respectively. Domino's Pizza in Mexico switched to Pepsi in November 2012. The Beginning The Domino's franchise started out as just one tiny store. It was purchased and started by brothers Tom and James Monaghan in 1960. At that time, the restaurant was known, not as "Domino's," but as "Dominick's Pizza" and was located in Ypsilanti, MI. The two brothers only worked as a team until 1961, when James traded his half of the business to his brother for the price of a Volkswagen Beetle. In 1965, the name "Dominick's" was traded for "Domino's." Growth The second Domino's pizza store was opened in Ypsilanti in 1967, officially starting the Domino's franchise. Since that time, the chain has experienced record- breaking growth: By 1978, 200 Domino's restaurants had been opened, and by 1983, the chain boasted 1,000 openings as well as restaurants in Australia and Canada. By 1985, Domino's was the fastest-growing chain in the United States, with additional locations in England and Japan. Obstacles As hugely successful as the Domino's pizza franchise has been, the chain's history has been riddled with obstacles and troubles. In 1968, the company's headquarters were destroyed in a fire. In 1975, Domino's entered, and eventually won, a 5-year legal battle over trademark infringement claims posed by Domino Sugar. In 1989, a man named Kenneth Noid created a hostage situation at an Atlanta restaurant, angrily believing that the company's "Avoid the Noid" ad campaign (featuring a pizza-stealing, stop-motion animation character known as "The Noid") to be a personal insult. Luckily, Noid surrendered to police without harming his hostages, though he did force them to make pizza for him.
  59. 59. Delivery From the early days of the company, Domino's has had a delivery-focused business model. This approach helped the business gain a serious leg up during the late 1960s when the store's East Lansing location gained massive popularity with Michigan State University students wanting convenient food options without having to have their own cars. The delivery-heavy model prompted the restaurant's famous "30 minutes or it's free" guarantee. However, this guarantee was rescinded in 1993 as a result of complaints about reckless driving and accidents caused by delivery drivers in a rush to meet the requirements. Today Nowadays, Domino's pizza continues to grow, with over 8,000 store locations worldwide. The company has continued to develop its business model by featuring many non-pizza menu items and incorporating new customer service options such as online order. Domino's has also been listed in Entrepreneur magazine's list of the top 10 best franchise opportunities. IN 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 country wide network of more than 300 stores with a team of 9000 people. According to India retail report 2009, domino’s is the largest Pizza chain in India. LITERATURE REVIEW:- According to (1982), service quality is generally viewed as the output of the service delivery system, especially in the case of pure service systems. Moreover, service quality is linked to consumer satisfaction. Although there is no consensus in the research community about the direction of causality relating quality and satisfaction, the common assumption is that service quality leads to satisfied customers (1994; 1990, 1989). For example, customers leaving a restaurant or hotel are asked if they were satisfied with the service they received. If they answer "no," we tend to assume
  60. 60. service was poor. Direct service providers, such as waitresses, also note that at times the best service efforts are criticized because the customer's perceptions of the service are clouded by being in a bad mood or having a disagreement with someone just before arriving at the restaurant. These service providers recognize that in practice the influence of service quality on customer satisfaction is affected by other factors, one of which is the customers themselves. In addition, (1989) and (1983) defined both service quality and customer satisfaction as matching the expectation of the service with that which is actually experienced by the customer. Therefore, when customers' experiences meet or exceed their expectations, the service is viewed as a quality service and the recipients are typically satisfied customers. On the other hand, when the service experienced by consumers is less than their expectations, the perception of service quality is diminished and customers are generally not satisfied. Almost half of our food expenditure today is on food prepared away from home. And we all know that food prepared away from home is far too often high in calories, unhealthy fat, and sodium. So why are we eating out so much? The top three reasons for choosing fast foods are: 1. Rapid service 2. Convenient location 3. Good-tasting food Researchers from Texas A&M University recently investigated whether additional explanations for eating away from home exist. In particular, they looked at factors like: parental work (whether one or both parents were working), family meal rituals (like who eats dinner together and whether family members believe it is important to eat together), parenting style, and mothers' worries and concerns regarding their children's weight3 . Researchers spoke with 312 families (parents and children ages 9-11 or 13-15), asking them about the factors above as well as all of the foods they ate over a two-day period. Some interesting findings included: When both parents have a standard work schedule (8-5), father has a flexible schedule or he feels that he has control at work, children use full service restaurants more. Children whose mothers rank their job role as more important than their other roles, including that of a parent, reported spending more time in fast food restaurants. Time spent by children traveling in the car was directly related to use of fast food restaurants and time spent in both fast food and full service restaurants. Fathers who reported that the family dinner was a family ritual had children who frequented fast food restaurants less. Children with authoritative mothers (parenting style that consists of caring, clear behavioral expectations and punishment by privilege withdrawal) used fast food restaurants less.
  61. 61. Children with neglectful parents (parenting style with lack of caring, lack of control, and few punishments) spent more time in fast food restaurants. Researchers concluded that eating away from home and the healthfulness of children's diets are linked with the manner in which parents interact with their children (parenting style), time available for family meals, and the role restaurants play in their lives. Physical evidence Services are different from physical goods on some key dimensions or characteristics such as intangibility, heterogeneity, inseparability and perishability (Lovelock and Wirtz, 2004). The delivery and measurement of the high-quality service are difficult tasks for a service provider because of the intangible nature of the services. Research has revealed that the consumers may respond to more than just the tangible part of the product or service rendered when making a purchase decision (Kotler, 1973; Milliman, 1986). A proper combination of tangible and intangible aspects should result in a customer’s perception of high service quality (Ryu, 2005). Physical evidence is one such instrument, which is widely used to visualize the intangible aspects of the service delivery. It relates to the style and appearance of the physical surroundings and other experiential elements encountered by customers at service delivery sites (Lovelock and Wirtz, 2004). It is one of the additional Ps of services marketing mix and considered as a powerful tool for those services in which customers and service providers have high degree of involvement (high-contact) while delivering and receiving the service. LITERATURE REVIEW Considerable research has been conducted in the area of physical evidence as it is one of the determinants of service quality. Most of the previous studies related to physical evidence tried to relate it with the perceived performances of the services and expectations of the service customers, which in turn produces service quality perceptions. Such studies on the effect of physical evidence on the perceived service quality and on store or outlet selection covered wide range of service categories. Baker (1987) classified three fundamental factors that affect the tangible portion of service quality dimensions: design, social, and ambient factors. Ambience includes background factors such as lighting, aroma, and temperature. Design factor represents the components of the environment that are more visual and tangible in nature. It includes color, furnishings, and spatial layout. The design elements contain both the aesthetic aspects (e.g., beauty, décor) and the functional aspects (e.g., layout, ease of transaction, and waiting room design) that facilitate high quality service. The social factors relate to an organization’s concern for the people in the environment, including customers and employees. Berman and Evans (1995) classified tangible quality clues into four categories: external, general interior, layout, and point of purchase factors. External variables or factors include exterior, signs, building size and color, location, and parking. General interior variables include music, scent, lighting, temperature, and color scheme. The layout and design factors pertain to the workstation placement, waiting facilities, and traffic flow. Finally, the point of purchase and decoration variables relate to the displays, pictures, artwork, and product displays at point of
  62. 62. purchase. Environmental dimensions of the servicescape shapes the way customers and service providers interact and behave (Zeithaml, et.al., 2006). Such environmental dimensions are the basic constituents of the framework for understanding environment-user relationships in service organizations. Ambient conditions (temperature, air quality, noise, music, odor), space (layout, equipment, furnishings), signs, symbols and artifacts are included in these environmental dimensions. A multiple item scale has been developed by Raajpoot to determine tangible quality of foodservice industry. The scale captures factors such as music and temperature; design factors such as location and seating arrangement and service factors such as food presentation and food variety (Raajpoot, 2002). In another study among the elderly citizens, Knutson and Patton (1993) found that about one fourth of older diners named service quality as a strong motivator for choosing a restaurant. According to this research, seniors want to eat in a welcoming, pleasant, comfortable atmosphere. Determinant factors are:- Accessibility:- according to Litman, 2003a Accessibility refers to the ability to reach desired goods, services, activities and destinations (together called opportunities). Accessibility depends on mobility, mobility substitutes and opportunities as follows: • Mobility - provided by walking, cycling, public transport, car sharing, taxi, cars, and other modes. All else being equal, an increase in the speed, service quality or affordability of a mode will improve access by that mode. • Mobility substitutes - telecommunications and delivery services. These can provide access to some types of goods and activities, particularly those involving information. • Land uses - the geographic distribution of activities and destinations. The dispersion of common destinations increases the amount of mobility needed to access goods, services and activities, reducing accessibility. When real estate experts say “location, location, location” they mean “accessibility, accessibility, accessibility”. • Other factors - information availability, affordability, convenience and comfort, security and prestige. Key responsibility for accessibility:- “ All else being equal” – Responses to mobility changes can mean that things are usually not “equal” and often complex behavioural responses need to be considered. The need to consider information, availability, comfort, security, prestige, speed, modes available, telecommunications, land uses and all potential activities emphasises that it is important not to confuse detailed components of accessibility with the definition “the ability to reach goods services, activities and destinations”.
  63. 63. Accessibility is a term often used in transport and land-use studies and the main aim of this report is to survey the range of measures of accessibility that have been proposed. Accessibility is seen as being concerned with the opportunity available to an individual or type of person at a given location to take part in a particular activity or set of activities. However various other interpretations of the term accessibility have been made and in order to survey the range of indices to which the term accessibility measure has been applied it is necessary to consider also the range of definitions that have been given to the term accessibility. The advantages and disadvantages of the various measures are discussed. No single "best" measure is identified; rather the choice depends on the type of problem being studied and the resources available. Some consideration is given also to the areas of study in which accessibility may be a useful concept. 1. Price:- Pricing actually plays a vital role in the branding and image of your product. Determining your price can be difficult, especially if you product is in a widely-variable industry. You must determine pricing strategy, retail and wholesale pricing, possible bundling, and any type of discounts. 2. Ambiance:- Eating takes place in a context of environmental stimuli known as ambience. Various external factors such as social and physical surroundings, including the presence of other people and sound, temperature, smell, color, time, and distraction affect food intake and food choice. Food variables such as the temperature, smell, and color of the food also influence food intake and choice differently. However, the influence of ambience on nutritional health is not fully understood. This review summarizes the research on ambient influences on food intake and food choice. The literature suggests that there are major influences of ambience on eating behavior and that the magnitude of the effect of ambience may be underestimated. Changes in intake can be detected with different levels of the number of people present, food accessibility, eating locations, food color, ambient temperatures and lighting, and temperature of foods, smell of food, time of consumption, and ambient sounds. It is suggested that the manipulation of these ambient factors as a whole or individually may be used therapeutically to alter food intake and that more attention needs to be paid to ambience in nutrition-related research. LITERATURE REVIEW:- Researchers have recently addressed the links between customer satisfaction (CS) and restaurant performance, emphasizing the way that satisfaction affects a customer’s repeat purchase practices (Sulek and Hensley 2004; Söderlund and Öhman 2005; Cheng 2005). Several studies have identified some of the factors that influence customer’s satisfaction of dining experience, including wait time, quality of service, responsiveness of front-line employees, menu variety, food prices, food quality, food
  64. 64. consistency, ambience of the facilities, and convenience (Sulek and Hensley 2004; Iglesias and Yague 2004; Andaleeb and Conway 2006). In reality, the success of restaurant managers/owners depends on understanding their customers’ needs and expectations, and then meeting these needs better than the competition. While estimates vary, a National Restaurant Association report indicated that 60% of all new restaurants fail within the first three years in business, and roughly half of those fail in the first year (Parsa, Self, King, and Njite 2005). This high percentage of failure shows the importance of ensuring customer satisfaction by providing excellent service, listening to customers’ needs and complaints, and caring about the customer. An additional benefit of customer satisfaction is the increased likelihood that diners will repatronize the establishment. The majority of previous research has addressed the nonlinear effects of antecedents on CS (Anderson and Mittal 2000; Mittal, Ross, and Baldasare 1998; Oliver 1995). For example, Mittal et al. examined the nonlinear effects of attribute performance on CS, and found support for an S-shaped function (which is steep in the middle and flat at the extremes). These results question the commonly held belief of linear (positive and direct) relationships between product attributes and consumer satisfaction. Only a few studies have presented empirical evidence for nonlinear effects in the satisfaction-outcome link (with dependent variables such as customer loyalty and complaining behavior), and no examination of the functional structure for specific relationships have yet been undertaken. 3. Choice:- Currently healthy food choices are difficult. The food environment around us is not conducive to healthy eating. In restaurants, people are offered large portion sizes, value meals include French fries and soda, and there are limited healthy choices on menus. That is, the default options are primarily unhealthy. Studies consistently show that the default exerts a powerful influence on choice, and the default option is more likely to be chosen. Behavioral economic interventions that make default options healthy make the healthy choice the easy choice and mean that individuals must actively work to engage in less desirable behaviors. The use of healthy default items as part of restaurant meals is supported by studies in retail food chains and cafeterias, as well as from studies in the areas of health insurance, 401(k) savings plans, and organ donation. Providing healthier default items on menus could lead to healthier food choices and positive health benefits. Customer loyality:- The fast food industry is on in an upward trend. The demand for fast food product is now growing as it is convenience which suits the lifestyle of customers. With the changing lifestyle of Malaysian consumers, more educated people and affluent, people tend to eating-out especially in fast food restaurants. Along with the heavily promote through media and information technology exposure, customers has variety choice of fast food pattern and restaurants. Therefore, local fast foods restaurants have to be sensitive to these changing trends and to be innovative and get prepare to change accordingly to avoid from losing their existing and future potential customers.
  65. 65. The aim of this study is to examine how the respondent’s perception will be influenced by factors of customer loyalty towards preferred fast food restaurants. Malaysia is a multiracial and multicultural country that made up by several dominant groups such as Malay, Chinese and Indians. Malaysia is a rapidly developing country in Asia and economic growth is projected to moderate to 5.2% in 2011. According to the World Bank Group, Malaysia GDP per capita is US dollars 14, 215, which adjusted by purchasing power parity. This shows that the purchasing power and standard of living of the population in Malaysia is growing adequately. Consequently, Malaysians allocated largest amount of household expenditures to their food budgets. Owing to the changing lifestyle of Malaysian households, the trend towards greater consumption of take- away food outside the home is increasing. This gave birth to fast food sector. According to Bender and Bender (2001), fast food is a general term used for a limited menu of foods that lend themselves to production line techniques and that are typically hamburgers, pizzas, chicken or sandwiches. According to ACNielsen (2005), there is 59% of adult population that eats at take- away restaurants at least once a week. This is due to convenience concept of fast food restaurant match the busy lifestyles and ease of access to a wide variety of fast food restaurants in the Markets. Analysis of the global fast-food industry is enhanced by segmenting it into Quick Service Restaurants (QSR, 65.5%), Takeaways (17.7%), Leisure Locations (13%), and Mobile and Street Vendors (3.9%) (Datamonitor, 2005a). Global consumers generally perceive fast food as characteristically similar to McDonald’s, Burger King, or Taco Bell. As noted earlier, the present study was designed to examine consumer perceptions of fast food in the United States, Japan, and China due to the continued growth rates of fast-food consumption in each of these three areas. The average American dines out four times weekly, with nearly half of adults consuming at least one meal outside the home daily (Rubin, 2004). In 1970, away-from-home foods
  66. 66. accounted for 25 percent of total food spending. That amount increased to 47 percent by 1999 (Clauson, 2000). Fast-food accounts for 32 percent of America’s away from- home meals (Economist, 2002). Fast-food consumption among Chinese children appears to be increasing (Cheng, 2003). Consistent with this, Chinese generally perceive McDonald’s as representing youth, perhaps due to the brand’s self-promotion as a children’s birthday party venue and “Uncle Ronald” as an icon for Chinese children (Eckhardt and Houston, 2002). Elder Chinese are commonly observed acquiescing to their children and grandchildren’s requests to be escorted to McDonald’s, although they generally find the food’s taste and affordability to be lacking (Yan, 1997). Waiting time:- People are willing to queue and pay to get food. Knowing peoples’ opinions on queuing is of interest to restaurant stakeholders since it and related actions have a direct effect on revenue. While most previous studies focused on dine-in restaurants, we observed queuing for fast food restaurants. Specifically, we observed the actual waiting time of customers for a number of fast food restaurants, and compared the metrics with waiting times that customers expected. During lunch time peak hours, customers spent on average 5.4 minutes waiting before they could get their orders. The 5.4 minutes consisted of 2.42 minutes of queuing time and 2.98 minutes of service time. This total waiting time is only slightly below the actual expected waiting time of 5.42 minutes. How the fast food restaurants try to manage the perceived waiting time of customers was also discussed. Literature Review In general, restaurants can be divided into five categories; quick service, family dining, casual dining, dinner house and fine dining (Walker, 2011, p. 34-40). Quick service restaurants are restaurants where the food and drink are paid for before being served. The critical points for this type of restaurant are to have staff and food ready to serve the maximum number of customers in the least amount of time. The menus offered are usually limited and include burgers, sandwiches, hot dogs, tacos, burritos, fried chicken and so on. Family restaurants developed from coffee shop-style restaurants, offering simple menus and providing service for the family market segment. Due to their market type, most family restaurants do not serve alcoholic drinks. Casual restaurants or casual dining offers a relaxing lifestyle, signature food items, wine service, bar and comfortable décor. Fine dining is a type of restaurant that offers expensive cuisine and beverages such as wine, elegant service and luxurious ambiance. The table turnover is usually only once an evening. Other sources (Jackson, 2011; Walker, 2011; Knutson, 2000) mention that the fast food restaurant is often categorized under quick-service restaurant, even though not all quick-service restaurants serve fast food. The main characteristics of quick-service restaurants are speedy service, inexpensive food items, simple décor, limited menu normally displayed on a wall, and convenience. This type of restaurant may also provide drive-thru, delivery, and take-out services. Simplicity and limitation in a menu are important in a quick-service operation due to speed of service and high turnover rates to achieve high sales volumes. To realize speed, several factors are required: minimum food handling by food production staff, minimum handling by the service staff, and the ability to withstand a holding temperature since most of the food items are precooked (Drysdale and Galipeau, 2009, p. 207-208).
  67. 67. Restaurants fall into the category of a service industry. As such, researchers analyze the efficiency of restaurant services. Hummel and Murphy (2011) mapped out an entire service system to depict the impact of efficiency management on a restaurant and its industry. This technique was termed service blueprinting. One of their findings was that optimizing the time to serve the customers paying their bills would earn the restaurant three additional dining tables in a peak hour. Hummel and Murphy highlighted that the difficulties in producing a conclusion were due to service blueprinting requiring extensive research that observes larger samples than had previously been utilized. Restaurants balance efficiency-for-profitability with customer satisfaction. As defined by Carbone and Haeckel (2002), customer satisfaction includes functional, mechanical, and humanic clues. Kimes (2004) discussed that efficiency and profitability could be represented in numbers, whereas customer satisfaction measurement was subjective. Sulek and Hensley (2004) showed that choice of foods, restaurant atmosphere and the fairness of the seating contributed a large part to a customer satisfaction model. Wall and Berry (2007) added performance, appearance, and behavior of the employees to the above dimensions. External Environment:- Literature shows that the entry decision to any market is significantly affected by the Political (P), Economical (E) and Social (S) conditions (Whitelock & Jobber, 2004). The growth rate of fast food industry is directly proportional to employment and consumer income. The consumer spending at fast food outlets reflects the better life patterns of people according to economics (Deane, 1987). According to Deane, these factors affect the growth of fast food industry and with a better understanding of these factors managers can increase the profits and remain up to date with time. A positive correlation was found between income of consumers and visit of customers to some types of restaurants. Consumers with higher income visit restaurants more frequently as compared to lower income consumers. Fast food has the negative effect on the social habits of the people, as the gain in the mass (weight) is found to be directly proportional to the fast food especially in Women (Jeffery & French, 1998). It is supposed that both the technical and the legislative parties should sit together and find some solution to the problems that are being faced in the environment to improve the quality of the fast food so that the technical issues may be made the part of the policy (Tester, Stephanie A. Stevens et al., 2010). Hazard analysis and critical control point (HACCP) is found to be the very good technology to improve the speed of the safety implementation and the quality of the food in the industry especially fast food industry (Sweet, Balakrishnan et al. 2010). The use of the technology has increased the growth of the fast food industry, as the Burger King and the Macdonald’ s has increased their budget for the TV advertisements, and as a result led to increase in the sale (Harris, Schwartz et al. 2010). Poultry meat (One of the key ingredients used in the fast food industry) quality insurance is the very key and primary issue for the fast food industry, so for that purpose the PRP are introduced to manage the meat requirement and supply efficiently (Manning & Chadd, 2006).
  68. 68. NEED FOR STUDY:- Determinant of Service quality in response to fast food restaurants. RESEARCH METHODOLOGY:- Research Methodology deals with, the procedure adopted to carry out the study. According to GREEN AND TULL:“A research design is the specification of methods and procedures acquiring the information needed. It is the overall operational pattern or framework of the project that stipulates which information is to be collected from which sources by what procedures’’. For conducting the study, as a researcher I adopted both primary as well as secondary method of data collection. Objectives:- The purpose of research is to discover answer to questions through the application of scientific procedures. The main aim of research is to find out how much people an individual get aware and
  69. 69. go for those advertisement and collect more information about it. Though each research study has its own specific purpose. The objective of study “To know the impact of determinant factors on service quality and satisfaction of customer”. 1. To know an individual awareness about fast food industry. 2. To know how these determinant factors can affect one’s fast food industry. Hypothesis:- 1. There is null hypothesis of different determinant on service quality and satisfaction level of customer. 2. There is positive hypothesis of different determinant on service quality and satisfaction level of customer. TYPES OF RESEARCH:- Research refers to the search for knowledge. It can be defined as scientific and systematic search for pertinent information on a specific topic. It is careful investigation or enquiry especially through search for new facts of any branch of knowledge. In this study I used Exploratory research, which provides insights into and comprehension of an issue or situation. It helped me to draw some definitive conclusions. Exploratory research is a type of research Conducted when the problem has not been clearly defined. It helps in determine the best research design, data collection method and selection of subjects. Given its fundamental nature, exploratory research often concludes that a perceived problem does not actually exist. RESEARCH DESIGN A research design or a structure is the process done before data collection or analysis can commence. A research design is not just a work plan. A work plan details what has to be done to complete the project but the function of a
  70. 70. research design is to ensure that the evidence obtained enables us to answer the initial question as unambiguously as possible. Primary data: The primary data was collected with the help of questionnaire filled using Interview method. As per the need of the study I formulated the questionnaire with the help of the mentor’s guidance. This helped me to frame the required level of questionnaire needed for the study of the service quality. Secondary data: The secondary data was collected from the database, publications and the websites of the company through Internet.
  71. 71. GROWTH OF FAST FOOD CHAINS IN INDIA KFC, Pizza Hut and Domino’s are just three examples of the many fast food chains operating in India. In the past few years, the food sector has taken a huge leap as far as the growth of the food sector is concerned and especially in the fast food segment. Every corner of the street today has stalls or shops, small or big, operating and growing. As far as the huge food chains are concerned, they basically operate in malls in big cities or metropolitan cities whereas in smaller cities like Lucknow, Jaipur, etc. they not only operate in malls but they have actually opened up as dine in restaurants. “It wouldn’t make sense if we positioned ourselves merely as a convenience, delivery brand,” explains Ajay Kaul, MD, Domino’s India. Taking a cue from McDonald’s runaway success of Rs 20 burgers and Rs 7 ice- cream cones, Pizza Hut too introduced a heavily Indian zed menu with prices starting as low as Rs 75. Home delivery is another system which has started spreading branches in India with the facility being made available at the speed of order delivery in half an hour. Nearly 65% of Domino’s revenues come from home deliveries and the segments dominance is expected to continue. “As our urban life continues to get busier, home deliveries will become more popular. But in smaller markets dine-in will drive growth,” adds Ajay Kaul. All the major MNC fast food chains such as McDonald’s, Yum! (which owns the KFC and Pizza Hut brands), and Domino’s are fast changing their stripes and business models in India. Such chains are targeting not only the non-vegetarians but also the vegetarians; earlier there was nothing to allure them at places like KFC. But things changed accordingly.
  72. 72. “We found that the vegetarians in such groups were always finicky and as a result had the veto power to decide where they should eat. We want KFC to appeal to everybody. Vegetarians and non-vegetarians,” says Arvind Mediratta, chief marketing officer, Yum Brands India. Although KFC still gets just about 15% of its revenues selling vegetarian items, it has significantly increased the number of veg offerings on its menu. Thus, the tremendous growth of such sectors do make one wonder whether there will be a point when pizzas and burgers take over the rest of the Indian cuisines (including quick snacks) or is it just that we are too busy to ape our western counterparts and satisfy ourselves with the feeling that even we have an international taste that makes us at par with the rest of the crowd. There is actually nothing wrong with having “International taste” but as wise people always say “One should never forget one’s roots and should always go for a reality check time and again”. Above we had taken into considered the fast food industry growth rate in India Let us further take a look at the career opportunities in this industry and how in one of the company training and development of crew members are conducted.
  73. 73. INTRODUCTION Tom Monaghan and his Brother James by “DomiNick's”, a pizza home delivery store located in Ypsilanti, Michigan, in the north of the United States. Tom Monaghan renames his company “Domino’s Pizza, Inc.”.
  74. 74. The 200th Domino’s Pizza store opens. Domino’s Pizza sets out to conquer the world. Domino's opens its 5,000th store. Domino's Pizza establishes its presence on the Belgian market. Domino's launches its Web site (www.dominos.com).

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