Marketing Strategy of McDonald's in Indian Market

1. Marketing Strategy of McDonald’s in India
Directed by
Prof. N.K Sharma
Presented by
Akshay Sharma (2013IPG-008)
Ankit Kumar (2013IPG-021)
Anni Gupta (2013IPG-022)
Deepak Kumar (2013IPG-037)
Keshav Singhal (2013IPG-059)

2. • McDonald's is the world's largest chain of hamburger fast food restaurants.
• Founded in the United States in 1940.
• 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.
• McDonald's primarily sells hamburgers, cheeseburgers, chicken, French
fries, breakfast items, soft drinks, milkshakes, and desserts.
Introduction

3. Vision
“The world’s best quick service restaurant experience.”
To achieve their vision they are focused on three world wide strategies:
• Be the best employer for people in each community around the world.
• Deliver optional excellence to customers in each restaurant.
• Achieve enduring profitable growth by expanding the brand and leveraging the strengths of
McDonald’s system through innovation and technology.

4. McDonald's In India
• Entered India in 1996.
• McDonald's India is a 50-50 JV partnership between McDonald’s Corporation (U.S.A) and
two Indian businessman Amit Jatia and Vikram Bakshi.
• Trained extensively with their Indian management team in Indonesia and US before
launch.
• The entire menu was changed.

5. Consumer Analysis
• India is the second most populated country in the world.
• Though per capita income is very low in India but still people like to spend on costly products and
eating out.
• Consumers in India are highly family oriented.
• Indian consumer are getting brand awareness through internet, TV, Newspapers, Radio, Magazine etc.
• Middle income group is getting bigger in size day by day.

6. Consumer Analysis
• Indian consumers are becoming very open
minded which is a positive sign for McDonalds.
• For McDonalds to succeed they should expand in
urban areas as well as rural areas.
• McDonald has introduced many products which
are spicy and tastes according to the preference
of Indians.
Low Income
49%
Lower
Middle
Income
30%
Middle
Income
12%
Upper
Middle
Income
5%
High Income
4%
Income Distribution
Low Income Lower Middle Income
Middle Income Upper Middle Income
High Income

7. Marketing Mix
Other Factors which
affects are :
• People
• Process
• Physical evidence
Product
In India McDonalds has a
diversified product range
focusing more on the
vegetarian products as
most consumers in India
are primarily vegetarian.
Price
In India McDonalds
classifies its products
into 2 categories namely
the branded affordability
(BA) and branded core
value products (BCV).
Place
McDonald’s outlets are
very evenly spread
throughout the cities
making them very
accessible.
.
Promotion
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.

8. Marketing Mix : Product
• McDonald's commitment to its Indian customers is evident even in development of special sauces that
use local spices and chilies.
• The mayonnaise and all other sauces are egg-less.
• Wide range of products.
• McDonald's had further reinforced the branded affordability mantra via the introduction of the Happy
Price Menu which starts at Rs 25 only.

9. Marketing Mix : Price
• Pricing strategy was developed in order to attract middle and lower class
individual and the result can clearly be seen the customer base which McDonalds has at present.
• McDonald’s focused on bundling strategy like combo meal, family meal and happy price menu in order
to improve total sales.
• In India McDonalds classifies its products into 2 categories namely the branded affordability
(BA) and branded core value products (BCV).

10. Marketing Mix : Promotion
• The promotions aspect of the marketing mix covers all types of marketing communications.
• One of the methods employed is advertising, Advertising is conducted on TV, radio, in cinema, online,
using poster sites and in the press for example in newspapers and magazines.
• 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.

11. Marketing Mix : 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.
• Place plays very important role in launching a product and making it successful. McDonald's has
expanded through out in India Urban areas.
• McDonald is currently targeting urban areas as we know that big part of population is living in urban
areas.
• McDonalds in India chooses a particular place after long research and checking local area’s
demographic characteristics, income level etc. This is the reason McDonalds is very successful in India.

12. Marketing Mix : Other Factors
• People :The employees in McDonalds have a standard uniform and McDonalds specially
focuses on friendly and prompt service to its customers from their employees.
• Process :The food manufacturing process at McDonalds 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 McDonalds by allowing them to enter the area
where the process takes place. The customers are invited to check the ingredients used in
food.
• 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.

13. Porter`s Five Forces Model
Threats of Substitute
• The substitutes in this
industry are very high.
• People can choose variety
of products they can either
choose Burger King, KFC,
Indian Cuisine, Indian local
shops, Indian Vegetarian
restaurants etc.
• Entry to a restaurant
Business is very
difficult. It is hard to
make a prominent
brand name.
• There is high research
and development costs
and high cost of entry.
• Strong brands already
in competition make it
more difficult such as
McDonald's, Pizza Hut,
Domino’s etc.
Threats of New Entrance Rivalry
• Fast food restaurant industry
is very competitive.
• The competition is so high as
all the organizations want to
get hold of customer.
• McDonald's knows about the
customers taste and
preferences all over the
world.
• McDonald's is providing
quality food from early
morning till late night in
order to get competitive edge
In the market.

14. Porter`s Five Forces Model
Bargaining power of customers
• Bargaining power of customers refers to
pressure a customer can exert on a
business to get good quality of food, good
customer service and low price.
• Bargaining power of customer in this
industry is low. As McDonalds provide a
standard service, one price strategy and
quality of food.
• Customers have low bargaining power
through out the food industry
Bargaining power of supplier
• Bargaining power of buyer in this
industry is low. Situation can
change if the main ingredients
are not available.
• But with McDonald's simple
menu and working with many
supplier ,they are not facing a big
threat.so the bargaining power is
relatively low.

15. • India is quite rich as far as the political structure and policies are concerned that is the reason why
international organizations face difficulties when they are entering in India.
• Political parties are against fast food chains as they want to see only vegetarian restaurants in their
country.
• Good news is that India is changing slowly from nationalistic society to liberal mind set up and
McDonalds expanded very fast in the last decade.
Political Influences

16. • Economical variables such as currency exchange,employment,Interest rate, tax ratio and need of
international supply.
• Most of the organization's depend on foreign supply of raw materials for their products making.
• Currency exchange also have a great impact on any organization.
• Business for McDonalds for India with high unemployment rate, dealing in Rupees as currency and
millions of people living below poverty line is a concern for McDonalds. But India is having a booming
economy, low tax rate and availability of labor in abundance and development of middle class society
in India is a positive sign for McDonald's future.
Economical Influence

17. Sociocultural influences
• India religion has a very big impact on society. For McDonalds it is a big concern.
• But in India life style is changing, earning power is increasing, middle class is getting bigger in
its size and people like to eat outside in restaurants this has a very good impact on society.
• However, the favorable element for McDonalds is that people of India will get employment
through this organization and this would be favorable for both McDonald and the local citizens
of India.

18. Technological influence
• One positive benefit of globalization was technological advancement.
• Although McDonald's doesn’t use too many complicated machines in their food production but still
they need highly competitive technology.
• Technology is needed for example in supply chain management, order taking, Inventory control, easy
and quick payment procedures .Use of technology can make management more reliable, effective and
cost saving in short term as well as long term.
• Customers happiness after getting what they are looking for on time and in a disciplinary way make
them come again.

19. Strategies of McDonald :An Overview
Entrance Strategies
• In order to capitalize on the highly price sensitive economy, and the Indian mentality of liking
anything that is foreign, McDonald’s strategy was market penetration and the three circles
strategy. This led to localization & branding of the company.
• They had to suit their burgers to Indian taste and Indian market which was a hyper price sensitive
market.
Training Strategies
• Induction training was conducted at the time of an employee’s joining the organization.
• This was done through interactions as well as through exposure with the customer through
operation training within the restaurants for a fixed period of time.
• The organization also provided numerous opportunities of overseas training to those displaying
potential.

20. Supply Chain Strategies
• In the process, McDonald’s actually encouraged entrepreneurship, by introducing the local
suppliers to its global suppliers. This association involved transfer of state-of-the-art food
processing technology, thereby leading to an improvement in quality standards and helping create
world class manufacturing facilities in India.
• In the five-and-a-half years until start-up, McDonald’s spent as much as Rs 500 million (US$12.8
million) to set up a supply network, distribution centres and logistics support. By mid-2000, some
estimates placed the total investment in the supply chain at almost Rs 3 billion.

21. Major Reasons for McDonalds Success
1. The System
2. Convenience
3. Likability and Familiarity
4. The Menu

22. Conclusion
• McDonald’s recognized the unique problems and opportunities of the Indian market. The
company then took its time, adapting its products and just as importantly its corporate strategy,
and has been hugely successful since.
• In order to sustain in a very competitive market McDonald’s has to continuously think of bringing
in new concepts into all its operations especially in marketing.
• The success of McDonalds in India could be measured by its continuous growth in Indian fast-
food market with 210 branches across India.