McDonald's has successfully entered and adapted to the Indian market through a variety of strategies, including forming joint ventures, creating a separate vegetarian menu, and focusing on demographic segmentation to target families and young urban consumers. The company aims to expand its presence by opening new restaurants and enhancing customer engagement through home delivery and community initiatives. Despite challenges like cultural diversity and environmental concerns, McDonald's maintains a significant market share in India's fast food industry by leveraging local sourcing and innovative marketing strategies.

1. MCDONALD’S IN
INDIA

2. INTRODUCTION
• McDonald's fast food restaurant is one of the largest franchises in the
United States as well as aboard.
• There are more than 32,000 McDonald's restaurants serving in 119
countries. More than 75% of McDonald's restaurants worldwide are
owned and operated by independent owners serving almost 47
million customers each day.

3. MISSION STATEMENT
• "McDonald's vision is to be the world's best quick service restaurant
experience. Being the best means providing outstanding quality,
service, cleanliness, and value, so that we make every customer in
every restaurant smile."

4. .
• McDonald’s core competency is providing convenience when
people need and want to eat fast food at prices that are competitive
and provide best value for the customer's money.
• It focus on consistency of quality, production of food and use of raw
materials all around the world.
CORE COMPETENCY AND SUSTAINABLE COMPETITIVE ADVANTAGE

5. MCDONALD’S IN INDIA
The India strategy was divided into four phases-
• entry
• building the supply chain
• aggressive growth
• penetration.
• In 1993 McDonald’s entered India through a 100% subsidiary MIPL (McDonald’s India
Private Limited) which formed two 50:50 joint ventures (JV) with Vikram Bakshi of
Connaught Plaza Restaurants to manage North and East India; and Amit Jatia of
Hardcastle Restaurants for West and South India. The staff was trained in India, US and
Indonesia to understand the intricacies of business

7. CHALLENGES IN ENTERING INDIAN MARKETS
• Surveys commissioned by McDonald’s, showed a large eating
out market in India with an increasing propensity to spend by
customers.
• Indians wanted to taste American fast food, but it could not
be a substitute for Indian food. Hence adapting McDonald’s
menu to Indian tastes was critical if they were to succeed in
India.
• One aspect unique to India was that half its population was
vegetarian for whom a separate menu had to be created.

8. THE VEGETARIAN CUSTOMER
• India has a huge population of vegetarians. To cater to this customer
segment, the company came up with a completely new line of
vegetarian items like McVeggie burger and McAloo Tikki. The
separation of vegetarian and non-vegetarian sections is maintained
throughout the various stages.

9. • A Restaurant Management System (RMS) was created for efficient
management of the operations.
• Separate food lines were maintained throughout the various
stages of procurement, cooking and serving.
• Separate kitchens for vegetarian and non-vegetarian food were
created in the restaurants with different uniforms for the kitchen
staff.
• Separate areas for preparation and wrapping were created.
• The vegetarian menu was printed in green and the non-
vegetarian menu in purple to clearly distinguish the menus.
• Customers were given RMS brochures to assure them of clear
segregation of vegetarian and non-vegetarian food, and taken on
kitchen tours to build their confidence, since the hard core
vegetarians usually did not prefer to enter places where non-
vegetarian food was served.

10. SEGMENTATION, TARGETING AND POSITIONING
• McDonald’s uses demographic segmentation strategy with
age as the parameter. The main target segments are
children, youth and the young urban family

11. According to BCG Matrix McDonald’s is a star. The reason for this is its high market growth
and high market share in the Indian market. On the other hand KFC and Pizza Hut are the
cash cows because of their low growth rate and high market share. During past some
years KFC and Pizza Hut have lost their market growth because of the fact that they lost
their standard war to their competitor i-e McDonald’s. Another direct competitor of
McDonald’s is Subway. According to BCG Matrix it is a dog. Some of the reasons that are
responsible for its low market share and low market growth are the less expansion
strategies being followed by the company.

12. CUSTOMER PERCEPTION AND CUSTOMER EXPECTATION
• Customer perception is a key factor affecting a product’s success.
Many potentially revolutionary products have failed simply
because of their inability to build a healthy perception about
themselves in the customers’ minds. McDonalds being an
internationally renowned brand brings with it certain expectations
for the customers.
Target customer What is McDonalds for me?
A family with children
Urban customers on the move
Teenager
A treat to children, a fun place to be for the
children.
Great taste, quick service without affecting
the work schedule
Hangout with friends, but keep it affordable.

13. INDIAN FACTS – BIGOPPORTUNITIES
• India added 181 million people between 1990 and 2001.
• India is the only country where the population will continue growing
for the next fifty years.
• Most high-income Indians prefer to live in the urban areas.
• Over the 70% of wealthy urban Indian consumers live in the most
populated and cosmopolitan cities in India
• India is part of the BRIC (annual average growth of more than 5%, and
by 2032 its GDP will be bigger than Japan’s).
• High income residents are seeking variety in their choice of foods and
are willing to spend more in international cuisine including fast foods.

14. PROBLEMS
• Indian diversity.
• Religion/Cultural constraints.
• Environmental and animal activists opposed the entry of
fast food (like KFC and McDonald’s).
• The Idea than this type of junk food destroy the ecological
balance and cause several behavioral disorders because of
the fatty and unhealthy foods.
• Perception that McDonald’s was a food for rich people.
• Poor transportation and storage infrastructure.
• Lower-quality agricultural products.

15. INDIAN FOOD PREFERENCES

16. COMPETITIVE ADVANTAGES IN INDIA
• All-vegetarian restaurants in various pilgrimage sites: McDonald’s plans to
open all-vegetarian restaurants (by middle of 2013) at various pilgrimage sites
across India. To begin with, the company plans to target pilgrims at sites like
Vaishno Devi in Katra, Jammu and Kashmir and at the Golden Temple in
Amritsar. It already has one outlet in Katra.
• Cluster wise expansion strategy: McDonald’s adopts a cluster wise expansion
strategy in India. Accordingly, McDonald’s concentrates and consolidates
stores in one region before moving to another. The company plans to begin
with East Indian region (Kolkata) and then move to cities in other regions like
Chandigarh and Ludhiana

17. • Local Sourcing: By 2014, McDonald’s India estimates that it would source 50,000
Metric Tonnes (as compared to the current 30,000 MT) of potatoes from McCain
Foods Pvt Ltd. in India. McCain has been working with more than 800 farmers on
approx. 4000 acres of land across Gujarat (West India) under contract farming of
potatoes.
• Spending on food: According to Euromonitor International and Credit Suisse
Emerging Consumer Survey, Indian people spend less ($11) compared to the Chinese
($60) on fast food. Indians spend approx 23% of their earnings and the Chinese
approx 20% of their earnings on food. The U.S. spends less than 15% on food.
• McDonald’s India’s total investment in India would touch 1500 crores by 2014. In
June 2012, McDonald’s announced that it would open around 250 new restaurants in
the next 3 to 5 years with an investment of 750 crore rupees.

18. • OOH Branding: According to Rameet Arora, senior director – marketing, McDonald’s India (West
and South), McDonald’s India may be the largest out-of-home branding (OOH) in the country.
McDonald’s India has restarted OOH (out-of-home branding) after a 7 to 8 year break to reach to
their target group.
• Employees and Customers: In India, McDonald’s employs 5,000 people and serves half a million
customers a day via its 169 family restaurants. (Update) – McDonald’s India employees number
12,000 approximately (most of them students). McDonald’s has 85,000 employees and serves 2.5
million customers a day in the UK.
• New Business Channels – To boost sales, McDonald’s is looking at new business channels instead
of rapid expansion. New business channels include home delivery, kiosks, breakfast, extended hours
and drive-throughs. As per estimates, home delivery can increase store sales about 15% and drive
through by 50%

19. • Local Vegetarian Menu: In India, McDonald’s does not offer pork or beef-based products.
It’s menu is more than 50 per cent vegetarian. The fast food retail chain has separate
production lines and processes for its vegetarian and non-vegetarian offerings.
• High Real-Estate costs in India: In many countries, in a Quick Service Restaurant (QSR) a
customer comes in, buys and then leaves. This is known as a revolving door concept. But an
Indian customer believes in a dine-in culture. This adds to the real estate costs which goes as
high as 20-25 per cent as compared to 10-15 per cent globally. The cost of opening a new
McDonald’s restaurant in India costs about 3 crore rupees.

20. • The most important meal for QSRs- Morning Meals (Breakfast):According to market
research company, the NPD Group, breakfast accounted for nearly 60 per cent of the
restaurant industry’s traffic growth over the past five years in the U.S. Quick service
restaurants sold 80 per cent of the over 12 billion morning meals served at US restaurants
for the year ending in March 2010.
• Taco Bell in India – In March 2010, Taco Bell, the Mexican specialty chain owned by US-
based fast food brands operator Yum! Restaurants launched its first outlet in Bangalore,
India. The company which also operates brands like Pizza Hut and KFC plans for contract
farming to open up to 100 outlets by 2015 and also expand into Tier-II and -III Indian
cities eventually

21. Most Preferred Multi Brand Fast Food outlets: In 2009, McDonald’s India won the
CNBC Awaaz Consumer Awards for the third time in the category of the Most
Preferred Multi Brand Fast Food outlets.
McDonald’s India in 2010 – In 2010, McDonald’s India plans to open 40 more
outlets. The company has also earmarked a budget of Rs 50-60 crore to market its
new products and initiatives for consumers. Its new marketing campaign is titled –
‘Har Chotti Khushi Ka Celebration’ – in other words ‘celebrate little joys of life’
where it positions McDonald’s as a venue for enriching life of consumers. In South
India, McDonald’s has 29 outlets and plans to add 10 more by end of 2010.

22. McDelivery Online – In India, McDonald’s first launched home delivery of meals in
Mumbai in 2004. McDonald’s now has plans to launch web-based delivery service in India
(across 75 McDelivery cities) in 2010, a pilot for which has already been tested by it in
Hyderabad. The company hopes to add 5 per cent to sales via Web delivery. McDonald’s
web-based delivery model will be based on serving the customer quickly wherein the drive
time does not exceed seven minutes because its food has to be eaten within ten minutes of
preparation. The footfalls in India are amongst the highest in the world, but the average bill
is amongst the lowest. At present (March 2010), Domino’s Pizza (operated by Bhartia
Group-promoted Jubilant Foodworks under a master franchise agreement) has a 65%
market share in the home delivery segment.

23. MFY (Made for You) food preparation platform – MFY is a unique concept (cooking
method) where the food is prepared as the customer places its order. All new upcoming
McDonald’s restaurants are based on MFY. This cooking method has helped McDonald’s
further strengthen its food safety, hygiene and quality standards. McDonald’s has around
10 MFY restaurants in its portfolio.
How McDonald’s manages to keep its prices down? – Fast-food chains face a tough
time balancing between margin pressures and hiking prices which can hurt volumes.
Consequently, the chains have to increase rates or rework their strategies. Affordability
has been the cornerstone of McDonald’s global strategy. Some of its measures to achieve
this include – Bulk buying, long-term vendor contracts, and manufacturing efficiencies.

24. Quick service restaurants in India – By October 2009, McDonald’s India had
more than 170 quick service restaurants in India. Domino’s Pizza, which began
operations in India in January 1996, has over 275 stores across 55 cities in the
country. KFC has 46 restaurants across 11 cities in India. (KFC is one of the 5 brands
owned by Yum!. KFC is a $12 billion global brand and a leading quick-service
restaurant (QSR) in many countries.) Nirula’s, one of India’s oldest food chains
(completed 75 years in service in March 2009), has a network of around 62 outlets in
five states across Northern India. Nirula’s, established in 1934 has interests in hotels,
restaurants, ice cream parlours, pastry shops and food processing plants. Nirula’s
was the first to introduce burgers in India.
Food Industry in India – In India, food industry and particularly informal eating
out market is very small. In India, over quarter of a million customers visit
McDonald’s family restaurants every day. The Indian fast food market is valued at
$1-billion (Rs 4,547 crore) aprrox.

25. LOCATION
McDonald’s opened its first outlets in Mumbai and Delhi
due to:
• These 2 cities have metropolitan culture and wide
Western exposure.
• There live the most of the Indian’s rich and upper
middle class inhabitants who were aware of
McDonald’s food.
• There were the 2 distribution centers of McDonalds.
Due to logistics play a critical role in McDonald’s location
strategy, the first outlets were opened only within a
500Km radius of its main distribution centers.
McDonald’s also made some partnerships in order to
opened outlets besides the petroleum stations, railway
stations and drive-through in Delhi and along national
highways.

26. “POLITICALLY CORRECT” STRATEGY
How to avoid hurting religious sensibilities of Indian
consumers?
(80% Indians revere cows as sacred and
150 million of Indian Muslims do not eat
pork and beef.)
Adaptation
McDonald’s adapted itself to the Indian market
introducing a mutton-based “Maharaja Mac” in India
as opposed to its flagship beef-based Big Mac.

27. GREEN SENSITIVITY
A vocal group of environmentalists, raised campaigns against junk food,
saying that McDonald’s and KFC destroy ecological balance and cause
behavioral disorders because of their fatty and unhealthy foods, which have
excessive levels of monosodium glutamate. Also they said this food is anti
poor.
To face up this campaigns McDonald’s:
• Instituted a special fund to support Green movements.
• Has sponsored various community-related activities, such as “keep your
city clean” to promote environmental consciousness.
• Adopted the slogan “We love Green”.
• Has sponsored and promoted several sports activities in order to attempt a
healthy lifestyle like the “Olympic Day Run”.
• Is focusing on fine tuning its fast food image adding health food options to
its product.

28. CORPORATE CITIZENSHIP
McDonald’s has:
• Understood than “giving back” to society gain benefits and
reputation. (like community projects for the children, for example:
McDonald’s Spotlight a interschool performing art competition).
• Sponsored children programs as the Millennium Pune Festival
(search talents for children between 8 to 15 years) in collaboration
with UNESCO and Disney World Resort.
• Sponsored the Pulse Polio program that aims to make India polio-
free country until 2005.
• Participated in celebrating days like World Children’s Day and in
their own initiative known as the “Blue Dot” that supports
educational programs for the girl child.

29. PRICING – UP SELLING
McDonald’s strategy has been to increase sales volume of its products
by making it products available at an affordable price. They started
cutting off some prices and offering value meals in a range of prices:
Rs29, Rs39, Rs49, Rs59, Rs79 and Rs89.

30. PRICING – CROSS SELLING
McDonald’s offers different Add-Ons and Bundles:

31. EMPLOYMENT OPPORTUNITY
McDonald’s typically employs local
people:
• Each restaurant in India employs
more than 100 people:
 Cashiers
 Cooks
 Managers
 Attendants
• Also every expansion brings
additional employment
opportunities to India’s
agricultural work force.

32. SUPPLY CHANGE MANAGEMENT
Objectives:
1) To operationalize its globally
practiced QSCV (quality,
service, cleanliness and
value).
2) To enjoy flexibility in pricing.
3) To launch a new product
when necessary.

34. FAMILY AND CHILD CENTRIC STRATEGY
To attract families, McDonald’s Offer:
• A clean, comfortable and stress free
environment
• For young busy working parents: A
safe place for Children to play while
parents can eat and relax.
• For children: Birthday celebrations,
cakes, candle, toys.
• A meeting place for teenagers
• Lounges for Senior Citizens

35. PROMOTIONS TO ENGAGE CUSTOMERS
• “Lucky Itch”, instant
scratch-win prizes
• "Music Meal“, created to
attract young adults.

36. RECOMMENDATIONS
• Expand to other Cities to increment profits:
• Development of new distribution centers.
• Additional Adaptation Cost/New product development (due to different regional preferences)
• Reinforce the family engagement
• Due to the “American Dream” is important in India, maybe they can open some outlets
near to the most important universities.
• Use Social Media Marketing to be in touch with Loyal Customers/Fans.
• Create contests to create to get consumers feedback, something similar than Peruvian
Fast Food Chain called Bembos, which created a contest called “Create your Bembos
(Burger)”. So, each consumer is able to submit his own recipe and he can won a Prize if his
recipe is the one selected by the jury.
• Due to there is a growing fitness culture in the world, maybe, some vegetarian products
could be adapted to other markets.
• Due to there are some places as New York, California and Florida with a high population
of Indian immigrants , maybe, some of the product developed for India could be offered
there.

37. CONCLUSION
• McDonald’s continues product innovation and customer satisfaction through greater
customer reach.
• 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 result of a spontaneous thought led to the introduction of breakfast outlets and a
chance encounter with a technology specialist ended up with online booking orders and
birthday parties and signature outlets.
• These are signature products of McDonald’s and this will in the long run help McDonald’s
to improve it already ace services with better customer service and great shopping
experience.
• The success of McDonalds in India could be measured by its continuous growth in Indian
fast-food market with 210 branches across India (Nation’s Restaurant News, 2011)