INTRODUCTION•McDonald’s is the worlds leading foodservice retailer with more than 30,000restaurants in 119 countries serving 47million customers each day. It is one of theworlds most well-known and valuablebrands and holds a leading share in theglobally branded quick service restaurantsegment of the informal eating-out market invirtually every country in which they dobusiness.
HISTORY• Richard and Maurice McDonald were pioneers of McDonald’s and the quick service restaurant industry. Ray Kroc was the founder of McDonald’s Corporation. McDonald’s success today is rooted in the work of all three.• In the late 1940s, Dick and Mac McDonald’s pioneers of McDonald’s were searching for a way to improve their little drive-in restaurant in San Bernardino, California, U.S.A.; they invented an entirely new concept based upon speed service, low prices, and big volumes. Word of its success spread quickly, in 1952 they had more than 300 franchising inquiries a month from all over the country. Joining of Ray Kroc in 1954, and foundation of the company that evolved into McDonald’s Corporation was the major turning point in the history of McDonald’s. McDonald’s is now the largest and best-known foodservice retailer.
MCDONALD’S INDIA• McDonald’s opened its doors in India in October 1996. They have restaurants in Mumbai, Delhi, Pune, Ahmedabad, Vadodara, Ludhiana, Jaipur, Noida Faridabad, Doraha, Manesar and Gurgaon.• McDonald’s in India is a 50-50 joint venture partnership between McDonald’s Corporation [USA] and two Indian businessmen. Amit Jatia’s company Hardcastle Restaurants Pvt. Ltd. owns and operates McDonald’s restaurants in Western India. While Connaught Plaza Restaurants Pvt. Ltd headed by Vikram Bakshi owns and operates the Northern operations.
BRANDING McDonalds is an example of brand franchising.Being their own boss in return, the franchisee agrees to operate the restaurant in accordance with McDonalds standards of quality, service, cleanliness and value. The cooking processes in McDonalds restaurants are broken down into small, repetitive tasks, enabling the staff to become highly efficient and adept in all tasks. There is no need to develop the product or do expensive market research.
It begins with working in a restaurant, wearing the staff uniform and learning everything from cooking and preparing food to serving customers and cleaning. It recognises that the success and profitability of McDonalds is inextricably linked to the success of the franchises. Benefit from national marketing carried out by McDonalds A brand is a name, term, sign, symbol or design, (or a combination of these) which identifies one organisations products from those of its competitors.
CONSUMER BEHAVIOUR ASPECT• Marketers need in-depth knowledge about the various dimensions which link consumer behavior. There is research required to find out the eating habits of people in a competitive context. McDonald’s found that a major chunk of its consumers decide to eat a few minutes before they make the purchase decisions and hence it is building small outlets in large supermarkets such as Wal-Mart and Home Depot. It is providing play areas to ensure a number of families visit its outlets with children.
INDIAN MARKET- OVERVIEW• “You can never penetrate the Indian market without making an effort to understand the country’s culture and mindset”,• Although ‘fast food’ is ingrained in the culinary culture of India, the passage of time has not really resulted in any sort of evolution in the manner in which our traditional fast-foods are prepared or served. It’s still very much a ’cottage industry’ with street vendors accounting for almost all the sales. One cannot imagine a day when the street-side ‘vada pav’, ‘chaat’ or ‘sendvitch’ stall in our cities will disappear. It’s such an integral part of who we are as Indians. .•
TARGET MARKETSEGMENT• Segmentation strategy: The segmentation strategy of McDonald’s can be discussed under the following heads.• • Geography: Geographically McDonald’s seem to have categorized the entire Indian market as urban and rural markets. As a strategy for entering the Indian market McDonald’s appear to have adopted the segmentation at the micro level, by directing the entire focus towards only urban market. McDonald’s India as of today caters only to the urban population in India. There could be several reasons for this, like the rural eating habits, their affordability and traditional approach towards food.• Demography: Demographically the McDonald’s appears to have segmented its market on the following parameters.
• Income level:• in a market like India where a significant proportion of India’s population lies in the lower income bracket, the price of the products becomes very critical. Now the challenge was to provide quality products at prices affordable to urban masses.• The pricing of the products is done keeping in mind the wants of the middle class and the upper middle class, the income category which has grown at a very significant pace over the past few years. For example, the chain has a product called Mc Aloo tikki costing Rs:20/, which caters mainly to the student community whose pockets are not broad enough• Age:• The earlier strategy of the McDonald’s was to segment the market on the basis of the age, by catering mainly to the kids and youth. However, now they are trying to blur this segmentation and focus on the all age groups.• Family:• McDonald’s is now targeting the entire family by offering various incentives packed product schemes like “family meals” at a very competitive price
Psychographical A parent with two children Visits McDonald’s to give thechildren a treat. Children Want to visit McDonald’s as it is a fun place to eat. A business customer Visits McDonald’s during the day as service is quick, the food tastes great and can be eaten in the car without affecting a busy work schedule. Teenagers Are attracted by the Saver
BEHAVIOURAL• Occasions: Under this segmentation the McDonald’s has classified customers on the basis of the frequency of their visits, into regular and occasional customers. Now, to maximise the cluster of regular customers they are coming up with ad lines like “BAHAANA KYA HAI” so that the customers don’t look for a special occasion to visit the outlet.• Current position in the Indian market:• However in spite of adopting all of the above segmentation and marketing strategies hard realities do exists.Nine years after the big mac first set up in India, the burger gaint has yet to make a rupee as net profit. It hopes to break even in a year or two. In India a Mac store typically takes between 5 to 7 years to break even. Part of the reason for its long break even period has to do with the investments required per store in terms of equipment and infrastructure. Much of the process control equipment that allows Mac to dish out burgers and other orders within its super fast time has to be imported.
ESSENCE OF MARKETING Functional Product
POSITIONING Positioning In adapting the General Market positioning of “America’s favorite fries” for the Hispanic customer, it was determined to stress not only the irresistibility and superiority of McDonald’s fries (“They are the best anywhere, you can’t resist them”), but to add an element of family inclusivity; to stress that they are everyone’s favorite: “Favored by ‘big ones’ (adults) and ‘little ones’ (kids)”. McDonald’s wanted to revitalize the perceived superiority of their world famous fries while simultaneously blunting aggressive com-petitive efforts by Burger King. [Burger King had just begun market testing “new and improved” French fries.] To help accomplish this, McDonald’s decided to use their partnership with the NBA as the strategic “platform” for a special fries advertising effort. As such, the positioning in the General Market evolved to “America’s favorite Guys enjoy America’s favorite fries!”
PRICING STRATEGY A look at McDonald’s menu indicates that Co. has targeted mass market in India .All or most of the products have been priced in such a way that average Indian consumer can afford to enjoy fast food with family .This strategy has been dictated by the
• McShakes 28/39/50.50• Condiment/Topping 5.50• Economy Treat (Burger & Fries)• For 2 109.00• For 4 199.00• Family Value Meal• Burgers, Fries, Happy Meal and Small Coke 199.00••
• McDonald’s pricing strategy can be further analyzed under following heads:•• Product Line Pricing:• McDonald’s offers a range of products and pricing reflects the benefits of the range. So one can order just a Coke or a Coke with a Burger at additional price.• • Product Bundle Pricing:• McDonald’s combines several products in the same package .For example one can buy a McAloo Tikki alone or one can exercise various other options which give the customer a range of products in a single basket.• • Promotional Pricing:• Discounting a combination of products as one product is also a strategy which McDonald’s follows. McDonald’s clubs three or four products together as one and price of this new one will be lesser than the sum total of individual product.• • Value Pricing:• McDonald’s has realized that Indian market is a price conscious market and this has forced McDonald’s to provide value products. Examples are economy meal and value meal served by McDonald’s in India.
PROMOTION AND COMMUNICATION STRATEGIES• Promotion is a key ingredient in marketing campaigns, consisting of diverse collection of incentive tools, mostly short term, design to stimulate quicker or greater purchase of particular product or services by consumer.• Communication is a means to convey the message to the consumers. The consumer tends to remember just one thing from any communication about the product -- one strong claim, or one strong concept. Unique communications that are simple enough to make a connection with the consumers create excitement about your brand. Strong communication concepts are the foundation for success of a product. In an environment of ever increasing clutter, the message cant afford to go unnoticed. "A strong product concept along with a commitment to establish your brand through good communication" generates positive attention and thats crucial to succeed in the marketplace.