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V.Chaitanya Lakshmi

2.Business model
3.McDonald‟s in India
History of McDonald’s
McDonald's expansion worldwide was mind boggling. It operated over 31,000 restaurants worldwide
and ...
3) Target Marketing
4) Pricing
5) Eating Habits
8)Nutrition and Health
11) ...
comprised of roadside food vendors, dhabas (the eateries on the highways) and on the
outskirts of the cities and a plethor...
Food pricing was a sensitive issue in India. An ideal strategy was to focus on customer‟s
ability to pay and tap t...
a vast scale. This mass production process was primarily to benefit the food companies' drive
for greater profits, backed ...
Food menus and portion sizes contribute to obesity, diabetes and heart disease and a variety
of other diet related problem...
sales and build customer loyalty. Advertising was the backbone of McDonald‟s marketing
strategy in India. The positioning ...
McDonald‟s also partnered with local health organizations to make India Polio-free by
helping to set up Pulse-Polio progra...
reasoning that as McDonald's expanded in India, suppliers would continue to get the
opportunity to expand their businesses...
Place: Where should be the product be available and the role of distribution channels?
The place mainly consists of the di...
External marketing. This includes hiring, training and motivating able
employees.This way they serve customers well and th...
Product life cycle in McDonalds
The requirements of customers change over time and thus the product offering has to be
introduced Piri-piri spice mix. This is being served with chatpata spice mix which has
resulted in increase in the sales o...
1.“McDonalds – Behind the Arches” – John S Love
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The Marketing strategies of McDonald's


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This paper potrays the history and evolution of Mc Donald’s into India and the challenges faced by the firm and its marketing strategies in India and how it had overcome the challenges and been able to triumph over its last great frontier by providing the country-specific products by 70% indianistation of its products

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The Marketing strategies of McDonald's

  1. 1. MARKETING STRATEGIES OF McDONALD’S V.Chaitanya Lakshmi Contents: 1.History 2.Business model 3.McDonald‟s in India 3.1Challenges in Indian market 4.McDonalds Marketing Mix (5 P‟s) 5. The McDonald‟s Experience 6. Product life cycle in McDonalds 7. SWOT ANALYSIS 8.Conclusion
  2. 2. History of McDonald’s McDonald's expansion worldwide was mind boggling. It operated over 31,000 restaurants worldwide and employed more than 1.5 million people. With their presence in more than 119 countries in six continents a global traveler saw them everywhere. This perception was the result of the most extensive, expensive and systematic mass marketing strategy of recent times. The first store opened near Chicago on April 15, 1955. McDonald‟s since then has expanded phenomenally. McDonald's real influence had been in establishing organizational systems of complete control at every stage from raw product to factory, from worker to consumer - backed by incessant media hype. McDonald's had been a successful global food corporation at refining, co-coordinating, standardizing and developing such processes into a total system. It had set up these practices in every country it had moved into, and many other companies followed their suit. What Ford Motor Company did for cars, travel and the urban environment; McDonald's had done for food and eating habits. McDonald's expansion was criticized and resisted by trade unionists, local residents, nutritionists and many others in almost every town and country where they planned a new store - despite their highly developed and expensive marketing effort about being a benefit for the community. They were resisted for what they represented, and remained a focus of controversy. McDonald’s Business Model Franchise Model: Only 15% of the total number of restaurants is owned by the Company. The remaining 85% is operated by franchises. The company follows a comprehensive framework of training and monitoring of its franchises to ensure that they adhere to the Quality, Service, Cleanliness and Value propositions offered by the company to its customers. Product Consistency: “ By developing a sophisticated supplier networked operation and distribution system, the company has been able to achieve consistent product taste and quality across geographies. Act like a retailer and think like a brand : McDonald‟s focuses not only on delivering sales for the immediate present, but also protecting its long term brand reputation McDonald’s in India: McDonald‟s entered India in 1996. McDonald‟s India has a joint venture with ConnaughtPlaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants man ages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India. Apart from opening outlets in the major metros, the company is expanded to Tier 2 cities. What are the challenges and how did it overcome them in India? 1) Vegetarianism -Regiocentricism: Re-engineering the menu 2) Competition from Local Food Retailers
  3. 3. 3) Target Marketing 4) Pricing 5) Eating Habits 6)Issues 7)Animals 8)Nutrition and Health 9)Environment 10)Employment 11) Advertising and Marketing Initiatives at McDonald‟s 12) Ethics and Social Responsibility Vegetarianism The major issue was beef. Cow being sacred and worshipped, beef could not be served. Muslims did not eat pork. The challenge was to change the form of the worldwide popular Hamburger to make an entry into India. With 25-30% of the population being lacto vegetarian and a large majority eating meat, an alternative to beef and pork was necessary. The population of a billion was undoubtedly a promising opportunity for an international company. McDonald‟s accepted the challenge and created the Aloo – Tikki Burger known as McAloo TikkiTM especially for the Indian vegetarian customers. Aloo- Tikki was a potato patty with spices. It also made a chicken and fish option available for the non vegetarians.McDonald‟s even separated the non vegetarian cooking process and the vegetarian cooking process to convince the customers of the “Shudh Shakahari Experience‟ which means pure vegetarian experience. In addition, the crew cooking vegetarian food were asked to wear green aprons. McDonald‟s in India was one of its kinds as it did not offer beef at all. In order to convince and change the perception of the customers about the burgers they offered, McDonald‟s made attempts to clarify their stand about beef in India. Regiocentricism: Re-engineering the menu McDonald‟s has continually adapted to the customer‟s tastes,value systems, lifestyle, language and perception.GloballyMcDonald‟s was known for its hamburgers, beef and pork burgers. As Most Indians are barred by religion not to consume beef or pork.To survive, the company had to beresponsive to the Indian sensitivities. So McDonald‟s came up with chicken, lamb andfish burgers to suite the Indian palate. Competition from Local Food Retailers: The competition from the local food retailers was intense. The food retailers had been doing business for years. Their familiarity with the market and the understanding of the local taste gave them a competitive edge. There were numerous eating joints which offered snacks and meals with affordable price tags. Organized food retailing was dominated by the north Indian style and the south Indian style restaurant chains. The metropolitan cities and some developed urban areas offered superior dining experience through the existence of some fine, classic restaurants. But the price was expensive and only a select group of customers could afford to make visits there. On the other hand, the size of the unorganized food retailing was larger and
  4. 4. comprised of roadside food vendors, dhabas (the eateries on the highways) and on the outskirts of the cities and a plethora of small eateries. Local food in a large assortment was widely available within acceptable price ranges. It was observed that food choices made by consumers were impulsive. Aroma, taste, habits and visibility worked on the subconscious level and played a major role in affective decision making. The local food business exactly understood the psychology of the customers and operated accordingly. The mass markets in India had their own set of preferences. Target marketing: Value propositions had to be directed to the right target market to establish a new product. An interesting question was who would eat at McDonald‟s? In order to develop the marketing strategy, it was important for any company to understand the consumer market.The more one knew and understood about consumers, the more effectively one could communicate and market to them.Four aspects of consumer behaviour which needed to be examined to understand a consumer market were the ability of the people to buy, consumer needs, buying motives and the buying processvi. The initial attempt of McDonald‟s was to induce trials and get the customers into the restaurants. Word of mouth and advertising was expected to reveal the experience of eating at McDonald‟s.McDonalds Value Meal addressed the price sensitivity of the Indian consumer market. However, irrespective of this effort, McDonalds was affordable to select customers only. These were the ambitious middle, upper middle and affluent classes who were keen to combine eating with fun. Children were the major influencers. McDonald‟s advertisement put forth an attractive proposition to the children segment that played a major role in the decision making as regards the choice of a restaurant. Happy MealTM was used to reflect the fun element of the experience at McDonald‟s. Happy MealsTM were all about the simple pleasures of childhood, a time of excitement, joy, and being treated special. Each Happy Mealwas themed and had on offer, a set of collectible toys from that particular theme. One theme typically was used for duration of 4 – 6 weeks. In this deal the customer got a choice of a burger, a drink and a toy. Happy MealsTM were a huge success. The rising income levels in India increased the disposable income. Fun and entertainment. Target segmentation Target segment What is Mc Donald‟s for me? A family with children A treat to children, a fun place to be for children Urban customer on the move Great taste, Quick service without affecting the work schedule Teenager Hang out with friends but keep it affordable
  5. 5. Pricing Food pricing was a sensitive issue in India. An ideal strategy was to focus on customer‟s ability to pay and tap the rich and upper middleclass population in India. Although McDonald‟s strategy was to increase sales volumes by making products available at affordable price, its products were perceived to be expensive. The company outlets in Delhi and Mumbai initially were opened due to the increased affordability of people with western exposure and brand recognition factors in metros. Additionally, people in the metros were open to experiment with variety of foods. Absorption of newer cultures was faster in the Metros than other areas. The mass markets in India were price sensitive. The positive factors were the growth in consumer markets with rapid growth in disposable incomes, development of modern urban lifestyles and the demand for value. Eating Habits Eating out was a special occasion to many Indian families. Meals had been an essential medium for social sharing and relationship. Whenever families decided to eat out, the choices available were abundant. The trend in metropolitan cities was however changing. With more nuclear families and dual income households, the demand for fast and readymade food was growing. The needs of the growing working population stimulated the need for new products and services. Indian culture was relatively new to the use of technology and streamlined process in food service. McDonald‟s needed to find ways and methods to motivate the customers opt for initial trials and acceptance. The conventional eating pattern of Indians involved breakfast, lunch and dinner. Lunch and dinner menus were complete meals providing the right balance in terms of nutrition. Breakfast was conventional as per the family culture and upbringing. Burgers were likely to be slotted in the category of snacks. But globally burgers and beverage brands were linked with poor eating habits. The market situation called for focus on the environment within the restaurant and western association. Issues McDonald‟s had been accused of destruction of vast areas of the rainforest for the production of cattle to produce beef, promoting unhealthy food with a risk of cancer and heart disease, taking advantage of children with its advertising and marketing, and cruelty to animals. There had been complaints as regards the nutrition, hygiene etc. Animals Vegetarians and animal welfare campaigners were not too wholehearted about McDonald's for obvious reasons. As the world's largest user of beef, they were responsible for the slaughter of countless cows every year. In Europe alone they used half a million chickens every week, all from windowless factory farms. This meant that these animals suffered great cruelty during their unnatural, painful and short lives, many being kept inside with no access to fresh air and sunshine, and no freedom of movement. A major consideration for the fast food industry was whether it was acceptable for the food industry to exploit animals at all. McDonald's argued that it stuck to the letter of the law and if there were any problems, it would be a matter concerned with the government. Although meat eating had a long history, it was only in recent decades that factory farming and intensive methods had been applied on
  6. 6. a vast scale. This mass production process was primarily to benefit the food companies' drive for greater profits, backed by their promotional campaigns. McDonald‟s corporation was the world's largest promoter of meat-based products, the largest user of beef and the second largest user of chicken. Environment Conservationists had often focused on McDonald's as an industry leader promoting business practices detrimental to the environment. But the company spent a fortune promoting itself as environmentally friendly. They annually produced over a million ton of packaging, used for just a few minutes before being discarded. The environmental effect of the production and disposal of all this needed to be taken into account. Multinational companies operating on such a scale contributed to global warming, ozone destruction, depletion of mineral resources and the destruction of natural habitats. The modern industrial system, with transnational corporations in particular, had callously taken advantage of the natural resources globally, damaging forests and other eco- systems, reducing biodiversity, adding to land, and sea and air pollution while adversely affecting the global climate. McDonald's contribution to these were mainly through the effects of cattle ranching (as the world's foremost promoter of a beef-based diet), through the growing and transportation of cash crops, and through the production and disposal of thousands of tons of packaging material. Nutrition and Health One of the most fundamental and enjoyable aspects of the day-to-day lives of people had been eating food of their choice and the circumstances in which it was eaten. For most people this generally meant eating the healthiest possible food (bearing in mind constraints of time and poverty), usually cooked on site and then eaten communally - either in a family or home setting, or with others while at work or in school. But there were rapid changes as the pace and nature of society had shifted. An industrial or service infrastructure increasingly dominated the local neighborhoods and people's lives, undermining existing patterns of human interaction, whether among families, friends, neighbors or in the community in general. Mass-produced, processed food gradually and increasingly replaced fresh and healthy foods in people's diets over the course of the twentieth century. In recent decades, McDonald‟s capitalized on this situation by promoting quick meals to be eaten outside the home. This change in eating habits brought serious consequences to human relations and health. These consequences sparked a debate about healthy food. They also brought out a whole range of new campaigns and movements dedicated to encouraging healthy eating and healthy lifestyles. Macro environmental factors affected McDonald‟s, forced it to become defensive, and they had to resort to lip service to try and deflect public criticism. In the health debate, food industry was heavily criticized for creating products that are high in fat, sugar and salt. Health consciousness was rising amongst people with the obesity crisis hitting the world. The concern was serious as it was children who were the most affected. Nutrition and exercise issues which were important and needed to be reviewed earlier, now were considered, discussed, and debated only after witnessing the frightening consequences. Many critics blamed McDonalds like businesses for public health concerns, contending that fast
  7. 7. Food menus and portion sizes contribute to obesity, diabetes and heart disease and a variety of other diet related problems. But at the same time, it was worthwhile to note that the type of demand exhibited by the market initiated the processes within the companies. As long as the demand for fast food continued, nutritional issues would continue to be argued and deliberated upon. India also had its own set of so called nutritious and non-nutritious food. People in India appeared to prefer food for its taste. BhelPuri, Samosas and Potato Wada which were some of the very popular Indian snacks were weak in terms of nutrition. However, a large level of population savored them for the spicy taste ignoring the hygiene and the value in terms of nutrition. Trans- fats and their use in food also had been a major controversial issue. It had been established scientifically that artificial trans- fats were bad for human health. In United States, New York City was the first city to announce a ban on all restaurants from using artificial Trans-fats with the deadline on July 1, 2007. When the legal system imposed bans and developed a regulatory framework, the food industry was compelled to respond. In January 2007, McDonald‟s picked new Trans fat free oil for cooking its famous French fries after years of testing. In view of the health risks and dangers, it was important that food service did not just confine to respond to the basic need of hunger. Food industry was required to innovate and work on introducing healthy eating options and making them available. This would create a situation where the final choice would then be made by the consumers. A healthy lifestyle only would help overcome the health problems gripping the society. Awareness about health needed to be built up and somewhere the responsibility definitely lay with companies which were into the food business. Health concern was a global call and responding to this was the need of the hour. Employment McDonald's Corporation created a global, highly standardized and fast production-line system, geared to maximum turnover of products and profits. McDonald's employed more than a million mostly young people around the world and provided them with work opportunities. The fast food giant helped pioneer employment that was low-pay, non-union, temporary or part-time with few guaranteed rights and conditions. McDonald's worldwide employed over one and a half million workers, over half of them under 21 years old. It had been calculated that a staggering 10% of all workers in the USA got their first job at McDonald's! Outlets like McDonald‟s provided job opportunities to youngsters in India pursuing their education. The franchisee model of McDonald‟s was a significant source of employment for many people in India. Sources at McDonald‟s reported that they were an equal opportunity employer, providing not just employment but long-term careers as well. The average McDonald‟s restaurant employed as many as 50 people- from crew to restaurant manager. The chain planned to invest in the improvement of supply chain management and new outlets in the country which in turn would generate employment. Advertising and Marketing Initiatives at McDonald’s Advertising was known to have an impact on the minds and the hearts of the consumers. But product and the value offered needed to be attractive and powerful to maintain consistency in
  8. 8. sales and build customer loyalty. Advertising was the backbone of McDonald‟s marketing strategy in India. The positioning had been directed towards establishing McDonald‟s as a family restaurant. Special efforts were made to not allow it to get converted into a typical teenage hangout. Advertisements were created using storylines with focus on emotions. Through a variety of advertisements, the visit to McDonald was portrayed as a special occasion providing excitement and satisfaction to the customers who comprised of families with kids and the youngsters. Advertising helped in building brand recall, but advertising alone was not able to sustain the brand. Despite the fact that McDonald's was a fast food chain of restaurants, in India it was positioned as the family restaurant and outlets were called “McDonalds Family Restaurant”. Extra care was taken to make the restaurants child friendly, by providing play areas wherever possible so that the parents could relax and have a good time while visiting McDonald's. The counters were low, tables were rounded so that children did not hurt themselves in the restaurant and the menus are pictorially depicted so that a child could order a meal without bothering parents. The entire restaurant was attractive and child friendly. The strength of McDonald's as a brand in India was that it was the most recognizable brand world over amongst all age groups. It was the „Indianization‟ of the brand that helped McDonald‟s establish in a new market successfully. The brand‟s success was attributed to its promise of a great fun filled experience delivered at its outlets. McDonald's executed promotional campaigns involving children. McDonald‟s used kids as an entry strategy to the family. World over McDonalds was a family restaurant and children were an integral part of a family. During the last few decades, kids had become the target audience for most categories including consumer durables. In the 1990's, India saw a major shift to nuclear families. When joint-extended families existed, the head of the family made most decisions. In smaller-nuclear families, individual opinions had become more dominant, whether it was buying a refrigerator or a TV or whether it was about eating out. Children were an integral part of the decision making process for buying things and played an influential role. Word of mouth and peer pressure worked effectively for this age group. Children influenced the decisions of parents, and McDonald‟s realized that this group could no longer be ignored. Ethics and Social Responsibility In India, Mrs. Maneka Gandhi, a popular environmental activist and her supporters launched an aggressive campaign against fast food chains which contributed in the destruction of the ecological balance and promoted unhealthy food. To respond to such campaigns, McDonald‟s launched several pro-green advertisements such as “We love Green” and funded community related activities including “Keep our city clean”. McDonalds sponsored “Olympic Day Run” in 2005 and offered baked potatoes and McCurry Pan instead of fries. As a part of its Corporate-Citizenship strategy and to help its own brand and reputation in India, McDonald‟s participated in community-related projects targeting children. McDonald‟s in India hosted interschool arts competition and raised funds for charity on World Children‟s Day. The restaurant celebrated Children‟s week every year from November 14-20 and tactfully supported educational programs for girl-child to promote goodwill among community organizations who worked towards improving status of women in India.
  9. 9. McDonald‟s also partnered with local health organizations to make India Polio-free by helping to set up Pulse-Polio program to provide free vaccine to children. In November 2006, McDonald's India announced the completion of its annual fundraiser, McDonald‟s World Children's Week 2006 `Each One Contribute One'. The month-long campaign garnered proceeds for vision correction of the visually and economically challenged children. As part of `Each One Contribute One' programme, Re 1 was contributed on the sales of all meals sold from October 13 - November 20, towards the corrective eye surgeries of the needy children. Over 390 children were treated at the pediatric centre at Dr Shroff's Charity Eye Hospital with the support of NGO ORBIS.McDonald's did not offer any beef or pork items in India, and even created egg less products for their vegetarian customers. French Fries in India were not beef flavored as in the US. During popular religious festivals in India, McDonald‟s introduced more vegetarian selections. Supply Chain McDonald‟s stated that Rs. 50,000 crore (about U.S. $12.5 billion) worth of food produce was “wasted” in India, mainly because of the lack of proper infrastructure for storage and transportation under controlled conditions. In it‟s commitment to providing quality products while supporting Indian businesses, McDonald‟s spent a few years setting up a unique supply chain, even before opening it‟s first restaurant in India. McDonald‟s stated that it was critical to go beyond one‟s immediate suppliers and customers to encompass the entire chain, since hidden value often emerged once the entire chain was visualized. Understanding the value to the downstream customer was a part of the supply chain management process. The supply chain connected McDonald‟s throughout India and made McDonald‟s „Indian.‟. McDonalds in India focused on making a successful supply chain strategy to implement its QSCV principle (Quality, Service, Cleanliness and Value), pricing flexibility and new product launches from time to time The perceived value of the customers about McDonalds was high as the evidence of cleanliness, quality and sophistication of service made a lasting impression on their minds. They were Indian customers who considered McDonald‟s as a symbol of the American culture. Availability of McDonald‟s in their country reflected the beginning of globalization which had brought in western brand influences into the Indian markets. The impressive aspect was that the intangibles of the fast food service had made the maximum impact on the customers. The Indian customers had always seen the kitchen doors of the other restaurants with a sign „Restricted Area‟ or „For Employees‟ only. Now in McDonald‟s, they were able to see the operations and hence the conviction in the QSC –Quality, Service and Cleanliness was quick and lasting. Local Sourcing McDonald's sourced its requirements from local suppliers and farmers, and maintained its adherence to Indian Government regulations on food, health and hygiene. McDonald's India purchased more than 96% of its products and supplies from Indian suppliers, even constructing restaurants using local architects, contractors, local material (wherever possible), and hired local personnel for all positions within the restaurants and contributed a portion of its success to communities in the form of municipal taxes and reinvestment. McDonald‟s described the relationships between itself and its Indian suppliers as mutually beneficial,
  10. 10. reasoning that as McDonald's expanded in India, suppliers would continue to get the opportunity to expand their businesses, access to the latest in food technology, exposure to advanced agricultural practices and the ability to grow or to export. Cold Chain The Cold Chain was necessary to maintain the integrity of food products and retain their freshness and nutritional value. The Cold Chain was an integral part of the Supply Chain. Setting up the Cold Chain involved the transfer of food processing technology by McDonald's and its international suppliers to Indian entrepreneurs, who had become an integral part of the Cold Chain. The term Cold Chain described the network for the procurement, warehousing, transportation and retailing of food products under controlled temperatures. McDonald‟s restaurants stored products to be used on a daily basis, within a temperature range of –18ºC to 4ºC. About 52% of its food products needed to be stored under these conditions before they were used. As the ingredients moved from farms to processing plants to the restaurant, McDonald's Quality Inspection Program (QIP) carried out quality checks at over 36 different points in the Cold Chain system till it reached the customer. Setting up of the Cold Chain enabled McDonald‟s to cut down on operational wastage. McDonalds Marketing Mix (5 P’s) After segmenting the market, finding the target segment and positioning itself, each company needs to come up with an offer. The 5 P‟s used by McDonalds are: 1)Product 2)Place 3)Price 4)Promotion 5)People Product: How should the company design, manufacture the product so that it enhances the customer experience? Product is the physical product or service offered to the consumer. Product includes certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the non-tangible aspects of the product and service. McDonalds has intentionally kept its product depth and product width limited. McDonalds studied the behavior of the Indian customer and provided a totally different menu as compared to its International offering. It dropped ham, beef and mutton burgers from the menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent examples are the introduction of the Chicken Maharaja Mac, Veg and Non-veg Grill masala.McDonalds bring with it a globally reputed brand, world class food quality and excellent customer specific product features.
  11. 11. Place: Where should be the product be available and the role of distribution channels? The place mainly consists of the distribution channels. It is important so that the product is available to the customer at the right place, at the right time and in the right quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonald‟s outlet. There is a certain degree of fun and happiness that a customer feels each time he dines at McDonalds. There are certain value propositions that McDonalds offer to its customers based on their needs. McDonalds offers hygienic environment, good ambience and great service. Now McDonalds have also started giving internet facility at their centers and they have been playing music through radio instead of the normal music. There are certain dedicated areas for children where they can play while their parents can have some quality time together. Price: What should be the pricing strategy? Pricing includes the list price, the discount functions available, the financing options available etc. It should also take into the consideration the probable reaction from the competitor to the pricing strategy. This is the most important part of the marketing mix as this is the only part which generates revenue. All the other three are expenses incurred. The price must take into consideration the appropriate demand-supply equation. McDonald‟s came up with a very catchy punch line “Aap ke zamane mein ,baap ke zamane ke daam”. This was to attract the middle and lower class consumers and the effect can clearly be seen in the consumer base McDonalds has now. McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal, family meal etc to increase overall sales volumes. Promotion: What is the suitable strategy and channels for promotion of the product? The various promotion channels being used by McDonald‟s to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. There are three main objectives of advertising for McDonald‟s are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonald‟s does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Some of the most famous marketing campaigns of McDonald‟s are: •“You Deserve a break today, so get up and get away- To McDonald‟s” •“Aap ke zamane mein ,baap ke zamane ke daam”. •“Food, Folks, and Fun” •“I‟m loving it” People: How to converge the benefits of internal and external marketing? McDonald‟s understands the value of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer. McDonald continuously does Internal Marketing. T h i s i s i m p o r t a n t a s i t m u s t p r e c e d e
  12. 12. External marketing. This includes hiring, training and motivating able employees.This way they serve customers well and the final result is a happy customer. Customers Front line employees Middle level managers Front line managers The punch line “I’m loving it” is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers. The McDonald’s Experience Marketing in a services industry is becoming an increasingly complex challenge. The paradigms of service marketing demand a passionate understanding of customer expectations and perceptions, and linking them to product design & delivery as well as operational planning. This is where McDonald‟s has excelled due to its ability to successfully integrate the customer‟s perspective in its products and operations in a comprehensive manner. The revamped menu in India is an example of McDonald‟s strategy of integrating the customer‟s perspective in its products. And, the operational integration is evident from McDonald‟s emphasis on its suppliers as its customers as well as its treatment of its consumers as co-producers of services. During the Service Delivery Process, each moment of interaction between the firm and the customer, called Moments of the truth•, helps understand the opportunities that a firm has to win or lose the customer. For example, these moments of truth are created for McDonalds every time the guard at the McDonalds outlet meets the customer, every time an attendant takes down the order from the customer waiting in the queue, every time the cashier interacts with the customer, every time the attendant helps the customer guided the customer towards the table, every time the attendant cleans the table, etc. Managing these moments of truth is a great challenge in Service Marketing especially due to McDonald‟s involvement as a co-producer of services (e.g. McDonald‟s self-service concept wherein the customer not only collects the order but also cleans the table after consuming the food). However, McDonald‟s has been able to create a great experience for its customers by understanding the nature of the entire Service Delivery Process and the various stages in the process that are exposed to the customers. Transparency in the processes at its outlet has helped McDonald‟s bring the back office in its outlet at the front so that the customer is able to know the operations and provide feedback on service design improvements. Internal Customer Focus is equally important as External Customer Orientation in order to win these moments of truth  McDonald‟s focus on its People and their service delivery methods therefore plays a very important role in creating a successful Service Brand. The quality and the consistency of the service delivered by McDonald‟s s have been greatly enhanced by the combination of the factors mentioned above. This has helped McDonald‟s become Service Leader and a successful Service Brand. This is evident from the fact that very few of its customers opt for take-home parcels or home deliveries while most of them prefer to eat at the outlet and enjoy the McDonald‟s experience.
  13. 13. Product life cycle in McDonalds The requirements of customers change over time and thus the product offering has to be changed accordingly. What is the fashion today may be out of market within few weeks. Thus continuous innovation is required. To counter these changes McDonalds has continuously introduced new products and has phased out the old ones which were at the decline stage of their PLC. The introduction is timed such that the new product does not cannibalize the product already in the maturity or growth stage. Thus the secret lies in getting profits with different products in the different stages of the PLC. A perfect example of revitalising a product in decline phase The French Fries have been an important part of the McDonalds menu worldwide. But now it was in the stage of decline and was actually not generating proper return. In an attempt to revitalize it, a new variant was introduced namely Shake Shake Fries and It has also
  14. 14. introduced Piri-piri spice mix. This is being served with chatpata spice mix which has resulted in increase in the sales of French Fries and has elevated it from to the decline stage. This is used to delay the decline of a well established product which has the potential of generating further revenue. It has also introduced many offers, discounts and promotions to sustain the fierce competition outpace its competitors like Pizza Hut, Subway , KFC, Wendy's and Burger King etc.Few of the promotions & offers and activities of McDonald‟s which gained customer‟s attraction and attention and lead it to live long in the race are:Mc value lunch whish offers lunch at reasonable price, Quick delivery of Online services,McDonalds Coupon Codes, Providing Nutrition Information in the menu, Offer of the month (Toy of the month) ,it‟s go green campaign and it‟s contribution to sustainable development and partnered with the Environmental Defense Fund (EDF) and began phasing out its polystyrene “clamshell” food containers and increasing the recycled content of the other food containers& boxes it uses. EDF and the fast food giant developed a waste reduction plan that eliminated 300 million pounds of packaging, recycled a million tons of corrugated boxes and reduced waste by 30 percent in the decade that followed. SWOT ANALAYSIS: Based on the information below are the elements of swot analysis at McDonald‟s. Conclusion: From this paper I‟ve learned the history and evolution of Mc Donald‟s into India and the challenges faced by the firm and its marketing strategies in India and how it had overcome the challenges and been able to triumph over its last great frontier by providing the countryspecific products by 70% indianistation of its products.
  15. 15. References: 1.“McDonalds – Behind the Arches” – John S Love