•McDonald’s is the world's leading food service
retailer with more than 30,000 restaurants in 119
countries serving 47 million customers each day. It
is one of the world's most well-known and valuable
brands and holds a leading share in the globally
branded quick service restaurant segment of the
informal eating-out market in virtually every
country in which they do business.
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
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
McDonald's is an example of brand franchising. Being
their own boss in return, the franchisee agrees to
operate the restaurant in accordance with McDonald's
standards of quality, service, cleanliness and value.
The cooking processes in McDonald's restaurants are
broken down into small, repetitive tasks, enabling the
staff to become highly efficient and adapt in all tasks.
There is no need to develop the product or do expensive
It begins with working in a restaurant,
wearing the staff uniform and learning everything
from cooking and preparing food to serving customers
It recognises that the success and profitability of
McDonald's is inextricably linked to the success of the
Benefit from national marketing carried out by
McDonald's A brand is a name, term, sign, symbol or
design, (or a combination of these) which identifies one
organisation's products from those of its competitors.
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
“You can never penetrate the Indian market without
making an effort to understand the country’s culture
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 ‘sandwich’ stall in our cities will disappear. It’s such
an integral part of who we are as Indians. .
The segmentation strategy of McDonald’s can be discussed under
the following heads.
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.
Demographically the McDonald’s appears to have segmented its
market on the following parameters.
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
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
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.
McDonald’s is now targeting the entire family by offering various incentives
packed product schemes like “family meals” at a very competitive price
> A parent with two children Visits McDonald’s to give their children 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
> Teenagers Are attracted by the Saver
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 Mc 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 Mc to dish out burgers and
other orders within its super fast time has to be imported.
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
“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 competitive 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!”
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 .
McAloo Tikki 20.00
Paneer Salsa Wrap
Chicken McGrill 20.00
Chicken Maharaja Mac
Veg Pizza McPuff
Economy Treat (Burger & Fries)
For 2 109.00
For 4 199.00
Family Value Meal
Burgers, Fries, Happy Meal and Small Coke
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
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.
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
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 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 can't afford to go
unnoticed. "A strong product concept along with a commitment to establish
your brand through good communication" generates positive attention and
that's crucial to succeed in the marketplace.
McDonald's India-West is starting a "Customer Relationship Manager Programme"
("the programme"). The programme is specially designed for McDelivery customers
who place orders through McDelivery on the McDelivery Number i.e. 66 000 666
("McDelivery Number") at McDelivery restaurants operated by Hardcastle
Restaurants Private Limited ("HRPL"). McDonald's is the world's number 1 fastfood company by sales, with about 32,000 restaurants serving burgers and fries in
about 120 countries. (There are nearly 14,000 Golden Arches locations in the US.)
The popular chain is well-known for its Big Macs, Quarter Pounders, and Chicken
McNuggets. Most of its outlets are free-standing units, but McDonald's also has many
units located in airports and retail areas.
A unique sense of dedication and commitment characterizes McDonald's India - a commitment to be driven by the leadership of local
owners. Commitment to provide quality products and fast friendly service at a real value to support other Indian businesses through
local sourcing and imparting new skills and to generate local employment by being a part of the local culture. This commitment has
translated into enduring benefits to the businesses at the grass root level, in the areas of introduction of new crops, new agricultural
practices and food processing methods and procedures.
McDonald's unique 'cold chain', on which the QSR major has spent more than six years setting up in India, has brought about a
veritable revolution, immensely benefiting the farmers at one end and enabling customers at retail counters to get the highest quality
food products, absolutely fresh and at great value.
McDonald's, through its unique cold chain, has been able to, both cut down on its operational wastage, as well as maintain the
freshness and nutritional value of raw and processed food products. This has involved procurement, warehousing, transportation and
retailing of perishable food products, all under controlled temperatures.
A McDonald's burger is not just a burger but an outcome of dedicated efforts by farmers, its suppliers, distribution centre and a firm
promise by McDonald's. McDonald's contributes a great back end process which enables you to enjoy your favorite burger fresh &
hot, and for that, the supply chain truly acts as a backbone of the business.
The supply chain begins at the grass root level, with the suppliers receving the crop from the farmers. The crop is then processed and
dispatched to the Distribution centres in special temperature controlled trucks, which ensures that the quality of the items is not
compromised. These items are stored in rooms with different temperature zones and are finally dispatched to the McDonald's
restaurants on the basis of their requirements. McDonald's expectation of 'Cold, Clean, and On-Time Delivery' plays a very vital role
in maintaining the integrity of the products throughout the entire 'cold chain'.