Final report on mcdonalds


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• Project Scope: To evaluate the various aspects of Integrated Marketing Communication (IMC).
• Description: The project involved an official McDonald’s restaurant tour and a deep understanding of advertising, public relations, direct marketing, sales promotion and personal selling.

Published in: Business, News & Politics

Final report on mcdonalds

  2. 2. ACKNOWLEDGEMENTThe project is a golden opportunity for learning and self development. We considerourselves very lucky and honored to have so many wonderful people lead us throughin completion of this project.We are highly indebted to our Faculty Mr.Angshuman Paul for his guidance andconstant supervision. We would like to thank Ms.Neha Gupta for making all thearrangements for this visit. They both monitored our progress and arranged all thefacilities. We choose this moment to acknowledge their contribution gratefully.We are grateful to Mr. Mohd Anwar , restaurant manager and Miss Manisha chettrifrom PR pundit agency,who in spite of being extraordinary busy with their duties ,took time out to hear, guide and keep us on the correct path.Last but not the least there were so many who shared valuable information that helpedin the successful completion of the project. 2
  3. 3. Contents…...Topic Page No.1. Executive Summary 42. Objectives & Scope 53. How Marketing Evolved in India 64. McDonald’s Marketing Mix 95. Communication Tactics 126. Integrated Marketing Communication (IMC) Programs 13  Advertising 13  Sales Promotion 14  Public Relations 15  Direct Marketing 17  Personal Selling 177. Conclusion 188. Recommendations 18 3
  4. 4. EXECUTIVE SUMMARYThe hypothesis of this project is based on the Integrated Marketing Communication Strategiesfollowed by McDonald’s.All the findings in this report has been based on primary data collected by us. We went forMcDonald’s visit in Ambience Mall of Gurgaon. We are ably guided by a team of experts.All the information, which we gain from this visit was vital to us in preparing this report. 4
  5. 5. OBJECTIVE AND SCOPEThe objective is to study the promotional aspect of the marketing mix which covers all types ofmarketing communication. One of the methods employed is advertising, sometimes known as‘above the line’ activity. Advertising is conducted on TV, radio, in cinemas, online and usingposter sites. What distinguishes advertising from other marketing communications is that mediaowners are paid before the advertiser can take space in the medium. Other promotional methodsinclude sales promotion, point of sale display, merchandising, direct mail, telemarketing,exhibitions, seminars, loyality schemes, door drops, demonstrations, etc. The skill in marketingcommunication is to develop a campaign which uses several of these methods in a way thatprovides the most effective results. For example, TV advertising makes people aware of a fooditem and press advertising provides more detail. This may be supported by in-store promotionsto get people to try the product and a collectable promotional device to encourage them to keepon buying the item. It is imperative that the messages communicated support each other and donot confuse customers. A thorough understanding of what the brand represents is the key to aconsistent message. 5
  6. 6. How McDonalds evolved its marketing in IndiaWhen McDonalds India launched in 1996, urban Indians in Mumbai and Delhi typically ate outthree to fives times a month. In the 15 years since then, that average frequency has doubled andanalysts forecast that by the end of 2011 the Indian quick service restaurant market will beworth 30,000 crore.But from their earliest investments in India, multinational company (MNC) owners of restaurantchains have struggled to adapt to the needs of Indias many markets. Some pulled out of thecountry after failed ventures. At the time, consolidation of the hugely fragmented Indian retailsector had also barely begun, and there was scepticism that Indians would prefer burgers andfast food to local food offerings.However, in the intervening decade, McDonalds has continued to open new outlets in thecountry, evolving its marketing strategy through several phases. Fifteen years of McDonalds IndiaMcDonalds India was set up as a 50:50 joint-venture between McDonalds at a global level andregional Indian partners such as Hardcastle Restaurants Private Limited in western India, andConnaught Plaza Restaurants Private Limited in northern India.The first Indian McDonalds outlet opened in Mumbai in 1996. Since then, outlets have beguntrading in metropolitan and Tier II towns across the country. The past decade has witnessed amarked change in Indian consumption patterns, especially in terms of food. Households inmiddle, upper, and high-income categories now have higher disposable income per member anda propensity to spend more."Phase I: Launching the brandThe starting point for McDonalds India was to change Indian consumers perceptions, whichassociated it with being foreign, American, not knowing what to expect and discomfort withthe new or different. McDonalds wanted to position itself as Indian and a promoter of familyvalues and culture, as well as being comfortable and easy. Simultaneously, the brand wanted tocommunicate that, operationally, it was committed to maintaining a quality service, cleanlinessand offering value for money. From a marketing communications standpoint, they chose tofocus on familiarizing the customer with the brand. The brand was built on establishingfunctional benefits as well as experiential marketing.Until 2000, McDonalds India did not have enough reach to use mass media such as televisionadvertising. Instead, most of its marketing effort focused on outlet design, new store openingsand PR about its attempts to tailor a menu to Indian tastes.Products like McAloo Tikki burger, Veg Pizza McPuff and Chicken McGrill burger wereformulated and introduced using spices favored by Indians. The menu development team has 6
  7. 7. been responsible for special sauces which use local spices do not contain beefand pork. Other products do not contain eggs and are 100% vegetarian. TheIndianized products have been so well received that they even export McAlooTikki burger and Veg. Pizza McPuff to the Middle East.II Phase: Brand advertisingBy 2000, McDonalds India was ready to begin TV advertising. The first Indian TV commercial,Stage Fright, attempted to establish an emotional connection between the (Indian) family andthe brand. Over the years advertising has reinforced this positioning, supported by promotions."The Stage Fright campaign aimed to establish McDonalds as a familiar, comfortable place. Itfeatured a child who suffers stage fright and is unable to recite a poem. On enteringMcDonalds, he easily recites it in the stores familiar environment. A second campaign featureda child and his family moving into a new place. He misses his previous surroundings – untilMcDonalds provides something familiar.These storylines were supported by other initiatives. The companys one-minute serviceguarantee attempted to reinforce its reputation for fast, friendly and accurate service and it alsoran in-store events for mothers and children.In the launch phase the communication focused solely on building brand and product relevance.The brands scores on relevance to families and kids were very high. Later, McDonalds realizedthere was untapped potential in the youth audience who considered McDonalds expensive andmainly for children.They launched the Happy Price Menu with a value message for a younger audience. For the firsttime McDonalds India saw a surge of younger consumers and people from socio-economicclass B walk into our stores.They had realized that the Indian consumer was price sensitive and even though theorganization managed to establish a sense of familiarity, Indian consumers continued toperceive McDonalds as an expensive eating out option." 7
  8. 8. McDonalds "Happy Price" campaignPhase III: Appealing to both ends of the age spectrumIn 2008, the campaign from the McDonalds-Leo Burnett stable uses father-son duos from theIndian film industry to reiterate the theme of "Yesteryears Prices". It features Bollywood starsfrom past decades together with their sons and a message that prices have not risen in line withthe passage of time.The Happy Price campaign has also been promoted via virals. Outdoor has also promoted ahome delivery option in a country where home delivery is common in urban areas.McDonalds has also been exploring strategic tie-ups with Indian sports properties such as theIPL cricket tournament, where it was one of the events food providers.The eating out market in India is very large and has huge potential fuelled by rising disposableincomes. There are many Indian and international players who have entered in the market sincethe last decade and unbranded food chains have also grown significantly. "The Indian consumerhas seen value in what we have to offer at our restaurants which is a testament to our model. 8
  9. 9. MC DONALDS MARKETING MIXThe marketing mix is a part of the organizations planning process and consists of analyzing thedefined:  How will you design, package and add value to the product? Product strategies.  What pricing strategy is appropriate to use? Price strategies.  Where will the firm locate? Place strategies  How will the firm promote its product? Promotion strategies.PRODUCTMcDonald’s product portfolio primarily comprises of vegetarian and non-vegetarian burgers.The veg. burgers like Mc Aloo tikki burger, Mc Veggie burger, veg. surprise are offered to thecustomers. Non veg. burgers include chicken Mc Grill, Mc Chicken burger and chickenMaharaja burger.Along with these French fries , veg. pizza Mc puff, wrap chicken Mexican, Mc swirl, softdrinks, coffee and Mc shakes are also offered to increase the variety in the product portfolio.McDonalds also provide meal combos with medium fries and medium soft drinks, happy mealswith small soft drinks and value meals.The most important aspects of this category is functionality, appearance, quality, packaging,brand, warranty, service/support etc. 9
  10. 10. PRICEThe customer’s perception of value is the important determinant of price charged. Customersdraw their own mental picture of what a product is worth.The danger of using low price as a marketing tool is that the customers may feel that a low priceis indicative of compromised quality. It is important when deciding on the price to be fullyaware of brand and its integrity. A further potentially adverse consequence of price reduction isthat competitors match the lower price resulting in no extra demand. This means that the profitmargin has been reduced without increasing the sales.The most important aspects of this category is list price, discounts, allowances, financing ,leasing etc.McDonalds strategy is to offer quality food quickly to customers at a good value. The pricingstructure for McDonalds over years has supported this message. The company strives todifferentiate itself from other fast food restaurants by offering a variety of menu items thatappeal to a variety of people from those who just want great hamburgers, to those who just wanta quick healthy meal. McDonalds differentiates itself by offering a dollar menu, combinationmeals, and a free toy with Happy Meals. Price of different meals available in McDonalds. 10
  11. 11. PLACEMcDonalds focuses on store placement and are always looking for the best locations. Thisstrategy created some weakness in the last 10 years because it seemed that too many stores wereput in some areas, cannibalizing sales from the other McDonalds. The company has also madeconvenience a focus, not only through how fast it serves customers, but also in the location ofits outlets. Freestanding restaurants are positioned so that you are never more than a fewminutes away by foot in the city or by car in the suburbs. In addition, McDonalds is tuckingrestaurants into schools, stores, and more.The most important aspects of this category is channel members, market coverage, locations,logistics, service levels etc. A view of McDonalds , ambience mall , gurgaon.PROMOTIONMcDonalds knows that some customers go to its stores to take a quick break from their daysactivities and not because McDonalds made the food ten seconds faster than their competitorscould. Therefore, McDonalds marketing executives then put together the phrase, "Have you hadyour break today?" They continued to develop this idea with "You deserve a break today," andnow are in the "Im Lovin It!" mantra. "Im Lovin It!" doesnt seem to have as much punch asthe earlier catch phrase, which still seems to be the favorite. McDonalds sees the use of these 11
  12. 12. catch phrases and the use of the Golden Arches as a very successful way ofdifferentiating the restaurants from other fast food competitors. McDonalds hastaken price competition out of the picture because the customer feels they havegotten quality, convenience, service, and value - and McDonalds still makes youfeel like you are getting a break in your hectic day. Creating catch phrases are only one kind ofpromotion, and McDonalds uses many kinds of promotions to keep the restaurants at the top.The most important aspects of this category is advertising, personal selling, public relations,media, budget etc. COMMUNICATION TACTICSEXECUTION STYLE :  Straight sell or factual message- the information concerning the product should be straightforward.  Demonstrations- it illustrates the key advantages of their products and can convince consumers of the benefits of purchasing McDonalds meal.  Testimonial- Company can hire someone who praises the products. As an endorser, he should have an excellent communication skills, popular and well recognized by everyone.MEDIA PLAN:Media objective is to create awareness , attitudes and purchase intention among the targetaudience.  Use TV ads to reach 80 % of target audience over a 1- year period.  Use the radio to reach the other 20% of target audience over a 1-year period.  Outdoor billboards will be used all year round to maintain awareness and attitudes.  Send direct mails to every household every other week.  Heaviest advertising will be during the fall and summer months.  Create purchase intention and awareness to non-customers through the use of sponsorships and events. 12
  13. 13. INTEGRATED MARKETING COMMUNICATION PROGRAMS 1. ADVERTISINGAdvertising does help in building brand recall, but advertising alone does not sustain a brand.The products that they serve are of international standards and they believe that their brand hasgrown because they deliver their promise, sustain the quality and experience promised to theconsumers in the advertisements in the restaurants.McDonalds has for decades maintained an extensive advertising campaign. In addition to theusual media (television, radio, and newspaper), the company makes significant use of billboardsand signage, sponsors sporting events ranging from Little League to the Olympic Games, andmakes coolers of orange drink with their logo available for local events of all kinds.Nonetheless, television has always played a central role in the companys advertising strategy.To date, McDonalds has used 23 different slogans in United States advertising, as well as a fewother slogans for select countries and regions. At times, it has run into trouble with itscampaigns. This "image" or "reputation" advertising has become a trademark of the companyand created many memorable television moments and themes, including:McDonalds is your kind of placeYou deserve a break todayWe do it all for youYou, you are the one.Nobody can do it like McDonalds canRenewed: you deserve a break todayNobody makes your day like McDonalds canIt’s a good time for the great taste of McDonaldsGood times, great tastes , that’s why this is my placeFood, folks and funMcDonalds TodayWhat you want is what you getHave you had your break todayMy McDonaldsWe love to see you smileI’m lovin’ itThe new Happy Price Menu campaign is said to be be based on the insight that while people,especially youngsters are always short of money, theres always a way to make the most of it.Nitesh Tiwari, executive creative director, Leo Burnett India, said, "They believe happinessreally doesnt cost that much. Its not about how much money you have that makes you happy, itis about how happily you make the most of it." 13
  14. 14. The above campaign is for people whore looking for an alternative to having idlis, dosas orvada pavs for breakfast, McDonalds has launched its breakfast menu in Mumbai. Thecommunication for the same has been created by Leo Burnett, and the media chosen are OOH,radio and digital. The plan is to roll out the offering in other cities as well over the next 2-3years. SALES PROMOTIONThis tool is used through coupons, contests, samples, premiums, demonstrations, displays orincentives. It is used to accelerate short-term sales, by building brand awareness andencouraging repeat buying.McDonalds plan to use incentives as they reward or give consumers extra incentives forengaging in certain form of behaviours. The incentives that will be used include the use ofcoupons and premiums. The free standing inserts allow them to deliver the coupons with highquality, four coloured images that draw the attention of the consumers. Direct mail is their mainfocus area for distributing the coupons.Happy Meal Offer at McDonaldsHappy Meal : Har Chotti Khushi Ka Celebration. Get the Happy Meal with a Burger, Fries and one Regular Soft Serve. 14
  15. 15. VALUE MEALS AND TWO MEALS AT ONE PRICEAnother way to get an effective communication strategy is through buzz marketing. With thisstrategy we can get lots of advantages because the consumers themselves who do the marketingfor us. The only matter is we have to create the right buzz and deliver it to them correctly,otherwise the buzz marketing will goes to another way then we expect it. As per theconversation, we came to know that people prefer more to buy combo meals or the value meals. Public RelationsThis integrated marketing communications tool is initiated through public appearances,news/press releases or event sponsorships, to build trust and goodwill by presenting the product,company or person in a positive light.McDonalds consider itself a socially responsible and thus effort fully complies to its duties.Following are the policies of McDonalds: McDONALDS CORPORATE RESPONSIBILITY= VALUES IN PRACTICEMcDonalds values  We place the customer experience at the core of all we do.  We are committed to our people.  We believe in the McDonalds system.  We operate our business ethically.  We give back to our communities.  We grow our business profitably.  We strive continually to improve. 15
  16. 16. Catalogs highlighting the social responsibility aspect of McDonalds 16
  17. 17. DIRECT MARKETINGThis tool will utilized email, mail, catalogs, encourage direct responses to radio and TV, inorder to reach targeted audiences to increase sales and test new products and alternate marketingtactics. The objective is to inform consumers who are not users about the company and educatethem about how their products are better than the competitors. The strategy of direct mail canbe used which will help to stimulate trial, build brand loyality increase the sales and the marketshare and finally lead consumers to repeat purchases. These mails consist of the information onwhat specials they have for the week or introducing a new product line. The above catalog is showing the new spicy range of McDonalds. PERSONAL SELLINGSetting sales appointments and meetings, home parties, making presentations and any type ofone-to-one communication, to reach your customers and strengthen your relationship with yourclients, initiate this IMC tool. One key advantage personal selling has over other promotionalmethods is that it is a two-way form of communication. In selling situations the message sender(e.g., salesperson) can adjust the message as they gain feedback from message receivers (e.g.,customer).The person selling the product should be physically and mentally fit. He should have fullknowledge of the product and the company he is representing. He should be able to explain eachand every aspect of the product i.e. its qualities, how to use it, what precautions to be taken, etc.He should be able to explain the business and service record of the company. He should alsohave knowledge of products of rival companies. So that he can put across the superiority of hisown product. 17
  18. 18. CONCLUSIONMcDonaldss today is one of the worlds great entrepreneurial organizations, with four out ofevery five restaurants worldwide run by an affiliate partner of the company or a franchisee.There are about 30,000 restaurants in more than 119 countries, serving around 50 million peopleeveryday. While much of Indias retail sector is struggling, McDonalds has been largelyunaffected by the slowdown and is planning on accelerating its expansion on the subcontinent.Advertising does have its impact on consumers, but if the product that is being advertised is notgood enough, then it is very difficult to maintain consistency in the sales figures. Mostcustomers, who visit any McDonalds restaurant once, do come back. Their customer base hasincreased substantially since they started operations. The past four years has seen very hightrials from first-time customers- averaging 77-80%. Now they are trying moving away frominviting trials and focussing on building customer loyalty.They believe in the McDonalds promise of "With a sense of fun and youthful spirit, willproudly serve an exceptional McDonalds eating experience that makes all people feel specialand makes them smile, every customer, every time." Every employee strives towards providing100 percent customer satisfaction. They do not compromise on the quality of products and havestringent checks at every step to ensure this. All these have resulted in developing a loyalcustomer base that keeps visiting them again and again. They do believe that it is this drivetowards providing the best that keeps us head and shoulders above the rest.So, advertising does help in building brand recall, but advertising alone does not sustain abrand. All the other aspects of integrated marketing communication like sales promotion,personal selling, PR, direct marketing plays a vital role is sustaining a brand. RECOMMENDATIONS  Consumers likes, dislikes tastes and preferences, health etc. have to be taken into consideration.  Company has to adapts itself to the local culture.  Low fat food should be launched.  Cheese French fries can be a good option.  They should come up with more variety of puff and rolls.  In the malls McDonalds outlet should be enriched with high class restaurant and soothing music.  Outlets should be there in colleges too.  Company should promote games on every table. 18