MCDONALDS MARKETING MIX

MARKETING MANAGEMENT PROJECT

FACULTY:
PROF. A.K.BISWAS
PROF. PANKAJ PRIYA

Submitted by Group 10:

Roll #:

Arpita Panda
Anvita Kumar
Garima Arora
Gaurav Chandwani
Gauraw Prasad
Harsimranjit Kaur Chahal

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29
54
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ACNOWLEDGEMENT
We would like to express our sincere gratitude towards Professor A.K.
Biswas and Professor Pankaj Priya for their extended and unwavering
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support in helping us understand the intricacies of marketing
management. We are indebted for their guidance without which this
project would never have been possible.

Table of Contents
BACKGROUND........................................................................................................ 1
OBJECTIVE.............................................................................................................. 1
COMPANY ANALYSIS............................................................................................... 2
MCDONALDS VISION.......................................................................................... 2
MCDONALDS MISSIONS...................................................................................... 2
CAPABILITIES AND CORE COMPETENCIES...........................................................2
SWOT ANALYSIS OF MCDONALDS......................................................................3
STRENGTHS...................................................................................................... 3
WEAKNESSES................................................................................................... 3
OPPORTUNITIES................................................................................................ 4
THREATS.......................................................................................................... 4
FINANCIAL ANALYSIS........................................................................................... 4
SUSTAINABLE COMPETITIVE ADVANTAGE (SCA)..................................................5
KEY SUCCESS FACTORS...................................................................................... 6
MARKET GROWTH RATE................................................................................... 6
COMPETITOR ANALYSIS.......................................................................................... 8
PIZZA HUT........................................................................................................... 8
WHY PIZZA HUT IS SO FAMOUS IN INDIA?........................................................8
DOMINOS............................................................................................................ 9
FACTORS FOR THE RISE OF DOMINOS IN INDIA................................................9
KENTUCKY FRIED CHICKEN (KFC)......................................................................10
FACTORS OF GROWTH OF KFC IN INDIA.........................................................11
MCDONALDS.................................................................................................... 11
WHY MCDONALDS IS POPULAR IN INDIA?.....................................................12
Marketing Mix...................................................................................................... 14
Product mix.......................................................................................................... 14
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Product Life cycle.............................................................................................. 14

The Vegetarian Products at McDonalds India:...................................................15
The Non-Vegetarian Products at McDonalds India:............................................16
Product decision is led by three things:............................................................17
Product Adaptation for India............................................................................. 18
Co-Branding...................................................................................................... 18
Product Quality................................................................................................. 18
Packaging......................................................................................................... 19
Happy Price Menu................................................................................................ 20
Place mix............................................................................................................. 20
Distribution Channel of McDonalds..................................................................21
Channel structure of McDonalds:.....................................................................22
Market Coverage............................................................................................... 22
Specific Channel Members................................................................................ 23
Inventory Management..................................................................................... 24
Distribution Centres.......................................................................................... 24
McDonalds Supply Chain..................................................................................25
Price mix.............................................................................................................. 26
Pricing Strategies of McDonalds in India..........................................................26
VALUE PRICING.................................................................................................. 26
PRODUCT LINE PRICING.................................................................................... 27
PROMOTIONAL PRICING.................................................................................... 27
PENETRATION PRICING...................................................................................... 27
McDonalds Pricing Vs Competition.................................................................28
BRAND POSITIONING AND PRICE.......................................................................29
Happy price menu............................................................................................... 30
Physical Evidence................................................................................................ 30
People.................................................................................................................. 31
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Process................................................................................................................ 32
Promotion Mix...................................................................................................... 33
Launching The Brand McDonalds..................................................................34
Brand Advertising............................................................................................. 34
Repositioning of Brand...................................................................................... 35
Im Lovin It....................................................................................................... 36
The 'Lost Ring' Campaign.................................................................................37
The Monopoly Game......................................................................................... 37
The Finger Food Fun Festival.............................................................................38
Outdoor Campaigns.......................................................................................... 38
HappyMeal.com................................................................................................ 39
Movies and McDonalds..................................................................................... 39
McDonalds Shrek Forever After watches...........................................................39
McDonalds and The Last Airbender Happy Meal Toys.......................................39
McDonalds and ICE AGE 3................................................................................ 40
Portraying Brand Affordability...........................................................................40
Individual communication................................................................................. 40
Party Time......................................................................................................... 40
Indirect Marketing............................................................................................. 40
Associating with Events.................................................................................... 40
Farmville and McDonalds.................................................................................. 41
Other Unconventional Routes...........................................................................41
Advertising Costs (As Per Annual Report...........................................................41
CUSTOMER QUESTIONNAIRE................................................................................43
FRANCHISEE QUESTIONNAIRE / responses..........................................................45
Survey Results and Inferences.............................................................................46
Percentage of RESPONDENTS:..........................................................................46
Observation and Suggestions..............................................................................55
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WORKS CITED...................................................................................................... 56

BACKGROUND
McDonald's is the leading global foodservice retailer with more than
32,000 local restaurants serving more than 60 million people in 117
countries each day. More than 75% of McDonald's restaurants worldwide
are owned and operated by independent local men and women.
McDonalds origins lie in small restaurant opened in 1940 by brothers
Richard and Maurice McDonald in San Bernardino, California. They
introduced the concept of the "Speedee Service System" in 1948 which
forms the foundation of the principles of the modern fast-food restaurant.
In India, McDonald's is a joint-venture managed by Amit Jatias Hardcastle
Restaurants Private Limited and Vikram Bakshis Connaught Plaza
Restaurants Private Limited. The former owns and heads McDonalds in
west & south India, whereas McDonalds restaurants in North & East India
are owned and managed by the latter.
Celebrating over 14 years of leadership in food service retailing in India,
McDonalds now has a network of over 160 restaurants across the
country, with its first restaurant launch way back in 1996. Prior to its
launch, the company invested four years to develop its unique cold chain,
which has brought about a veritable revolution in food handling,
immensely benefiting the farmers at one end and enabling customers to
get the highest quality food products, absolutely fresh and at a great
value.
OBJECTIVE
The eating out market in India is on an upswing. A rise in the number of
working women and nuclear families and an overall increase in general
affluence levels also contribute to higher discretionary spending on dining
out. According to the Food Franchising Report 2009, 30 per cent of
working singles eat out at least once a month, with a majority spending at
least Rs 101-150 per outing. Urban Indians now eat out six times a month
compared to 2.7 times in 2003. Studies suggest that the expenditure on
eating out at 11 per cent is second only to groceries for Indian
households.
In 2009, McDonalds India won the CNBC Awaaz Consumer Award for the
third time in the category of the Most Preferred Multi Brand Fast Food
outlets. In 2010, McDonalds 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 celebration in other words celebrate little joys
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of life where it positions McDonalds as a venue for enriching lives of

consumers.
Our project aims to study and understand the marketing mix that is 4ps
which are Product, Price, Place and Promotion mix of McDonalds along
with competitor analysis.

COMPANY ANALYSIS
In addition to external threats and opportunities, strategy development
must be based on the objectives, strengths and capabilities of a business.
Understanding a business in depth is important before proceeding towards
the next step that is formation of strategy. Strategies must be evaluated
against the companys objectives not versus alternate target markets or
alternate marketing mixes.
While a company is continually adapting to it competitive environment
certain core ideals remain relatively steady and guide its strategic
decision making process. These unchanging ideals form the Business
Vision and are expressed in the company Mission statement.

MCDONALDS VISION
"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."

MCDONALDS MISSIONS
McDonald's brand mission is to "be our customers' favorite place and way
to eat." Our worldwide operations have been aligned around a global
strategy called the Plan to Win centering on the five basics of an
exceptional customer experience People, Products, Place, Price and
Promotion. We are committed to improving our operations and enhancing
our customers' experience.
Company objectives guide managers in searching and evaluating
opportunities and later planning marketing strategies.

CAPABILITIES AND CORE COMPETENCIES

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Capability-based strategies are based on the notion that internal

resources and core competencies derived from distinctive capabilities
provide the strategy platform that underlies a firm's long-term
profitability.
To define a company's distinctive competence, managers often follow a
particular process. First, dentification of the strengths and weaknesses of
their firm. Next, etermination of the strategic importance of these
strengths and weaknesses in the given marketplace. Then, then analysis
of secific market needs and looking for comparative advantages that
they have over the competition.
Let us discuss about the core competence of McDonalds, one of the
largest food chain companies in the world. McDonald's is the leading
global foodservice retailer with more than 32,000 local restaurants serving
more than 60 million people in 117 countries each day. The greatest
strength was creating an image in the minds of the people and introducing
them to the fast food culture. Delivery speed, customer care and
cleanliness are the core strengths on which these stores expanded.
McDonald's product value is also its greatest strengths. Customers know
when they walk into a McDonalds store they will get the service and
product worth their money. It gives great emphasis to human resources by
satisfying both the customer and the employees. Next is the innovation
aspect where in new products line up to catch up with the new trends and
tastes of the people. Its diversity into other new business ventures can
also be considered as its strengths.

SWOT ANALYSIS OF MCDONALDS

SWOT analysis is a systematic analysis of these factors and is carried out
to determine whether the company has the strengths necessary to deal
with the specific forces in the external environment. The picture identified
by the SWOT analysis helps to suggest which type of strategy, or strategic
thrust the firm should use to gain competitive advantage
STRENGTHS
Strong Brand Image and Reputation
Leader in quick service fastfood industry
Worlds largest burger chain
Over 30,000 stores
Strongest International presence
120 Countries
Real Estate Holdings
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Prime time high traffic locations

Have control over what to do with the land
Easily recognizable product
Big Mac as Trademark
Variety Sources Of income
Franchise Rent and percent - of sales
Company owned Restaurants
Brand Portfolio of Restaurants

WEAKNESSES
High staff turnover including top management
Customer losses due to fierce competition
Legal actions related to health issues ;use of trans fat and beef oil
Uses HCFC -22 to make polystyrene that is contributing to ozone
depletion
OPPORTUNITIES
Diversification and acquisition of other quick-service restaurants
Low-cost menu to attract different customers
Initial public offerings in other countries could raise revenues
Retail merchandise potentially used to raise revenues

THREATS
Increased competition among rival sellers, including price wars,
product innovation, and growth
Health conscious consumers demanding better quality, healthier menu
items
All fast-food chains expected to struggle to meet new consumer health
expectations

FINANCIAL ANALYSIS
With over 32,000 locations in over 110 countries, McDonalds (NYSE: MCD)
is the world's largest fast food restaurant chain. The company experienced
a dramatic turnaround in 2003, driven by a two-pronged strategy. In the
U.S., McDonald's focused on increasing sales at existing locations by
renovating stores, expanding menu options and extending store hours.
Internationally, McDonald's expanded aggressively, opting to franchise
rather than operate its new locations, providing new income with little
overhead. Both strategies have paid dividends - despite its size, sales
have grown by a third since 2003. In the U.S., McDonald's focused on
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increasing sales at existing locations by renovating stores, expanding

menu options and extending store hours. Internationally, McDonald's
expanded aggressively, opting to franchise rather than operate its new
locations, providing new income with little overhead. A growing global
middle class, particularly in emerging markets like China, India, and Latin
America, represents a massive opportunity for McDonald's.
In 2009, McDonalds had revenues of $22.7 billion and operating profits of
$6.8 billion. Sales across all of its company-owned and franchised
restaurants totaled $56.9 billion. Revenues were down 3.3% over 2008,
but profits were up 6.2%. Over 5 years, McDonalds has seen company
revenues increase at an annual rate of 4.9%, while profits increased by
14.0% and storewide sales grew by 9.0%. McDonald's revenues for the
first three quarters of 2009 (ending September 30, 2009), were $11.4
billion, down 10.1% from the first nine months of 2008. At the same time,
operating income increased 1.5% over the same period last year, reaching
$5.0 billion. The declines in revenue were offset by larger declines in
operating cost.
McDonald's has a sizable international presence; the majority of sales
occur outside of the United States. In addition to developed markets like
the U.K., Canada, South Korea and Australia, McDonald's operates in fast
growing emerging markets like China, India, Russia and Eastern Europe.
By tapping into a growing global middle class, the company's international
operations have consistently posted strong same-store sales growth.
China is a particularly promising opportunity. As a result, MCD's June 2010
sales have shown a continuous uptrend in international markets at 7%.
Specifically APMEA (Asia/Pacific, Middle East and Africa) was the major
contributor to MCD's success, along which Japan, Australia, and China
showed most promise. These results have emphasized the importance in
MCD's core value menu offerings and variety in its breakfast menus.
Specifically, MCD's move to expand to international markets means that it
can tap into a less health-conscious market segment that will allow MCD
to utilize a menu that relies less on costly constant product changes.

REVENUES (In millions

Sales By Company Operated
Restaurants

2009

2008

2007

$15,458.
5

$16,560.
9

$16,611.
0

Revenues From Franchised

Restaurants

7,286.2

6,961.5

6,175.6

Total Revenues

22,744.7

23,522.4

22,786.6

Table 1
SUSTAINABLE COMPETITIVE ADVANTAGE (SCA)
SCA is the advantage a company has which is difficult or impossible for
other companies to possess or break through. It can either be the brand,
dynamic customer care, cost structure or its patent. Whatever the
advantage in order to be considered as sustainable it should either be
proprietary or distinctive. Other than this three different aspects that help
in SCA are,
The managerial and organizational process should share a good
integration and coordination. The much needed value is created thereby
as everyone strives to work for a common goal. The organization should
learn and bring about changes according to the need of the hour and
should always be flexible to changes in the environment such as customer
trends, legal or government restriction and developments in the
technology. McDonalds is presently concentrating on this advantage by
concentrating on organizational behavior and managerial expertise.
Previously this advantage was ignored as the organization was more into
expansion of its outlets over the globe than strengthening its core
advantage. As the result the revenue did not see much of a change while
newer outlets were open. The company suffered a massive loss first time
since their inceptions which further lead to the change in the managerial
heads.
Technological, structural and financial assets of a company are excellent
market position which helps in the SCA. McDonalds no doubt is abundant
with such aspects like structure, technology and finance. To identify and
implement these assets in the proper direction towards the improvement
of the company is all that is needed. After 2003 the company has really
started to concentrate on its greatest advantages.
Most of all the greatest advantage is the vision or the dream with which
the company was started. Sustaining this dream over the years is any
companies greatest advantage. A brand usually revolves around this
vision sustaining this vision and working in lieu with it is a great SCA.
McDonalds was started out to help people who had very little time to cook
or was too busy to get into a proper restaurant. The vision was to provide
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quick service, cheap products and quality satisfaction. Keeping this vision
in mind the company which slackened a bit because of incompetent
franchise holders is being weeded and new and better people are put in
this place as the torch bearers of the company sustaining and living the
vision.
KEY SUCCESS FACTORS
The key success factors are those elements that are necessary in order for
the firm to achieve its marketing objectives.

McDonalds key success factors are its low priced items and customer
friendly services.
McDonalds 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. The Slogan Im Lovin It means
that I as an employee is loving the experience of working at
McDonalds and serving the customers and also means that the
customers are happy coming to McDonalds.
McDonald is continuously involved in Internal Marketing. This is
important as it must precede external marketing. This includes hiring,
training and motivating able employees. This way they serve
customers well and the final result is a happy customer
McDonald's has been a trendsetter in advertising. It has focused on
different ethnic groups as well as the physically disabled.
McJobs is a program that employs both mentally challenged adults and
senior citizens.
McDonald's has evolved successfully with the health food revolution,
launching new products and being a part of the Go Green movement
by using environmentally-safe packaging and recyclable goods.
According to a survey done people visit McDonalds due to its variety,
cheap prices and the clean toilets.

MARKET GROWTH RATE

McDonalds is the eighth most powerful brand in the world. (Source:
Millward Brown Optimar including data from Brandz)
On any day McDonalds serves almost 60 million worldwide.
In India, nearly half a million customers visit McDonald's family
restaurants spread across India every day.
Its global market potential is enormous seeing the number of
restaurants it has.
Total Revenue for McDonalds India in2006-07 was $740.2 million.
In India, Rs 400 Crores is being funded for expansion plans into Tier II
cities within next three years.
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cDonalds has a market share of 18 percent in North India (includes

restaurants, cafes, fast food joints)

COMPETITOR ANALYSIS
For a business to be successful it is critical to continue gathering
competitor information and keep an eye out for their strategy and ways of
approaching the market. This not only helps in protecting the market
share of the business but also provides opportunities if gaining more
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market share and attempts to displace the competition to gain supremacy

in the market space. For McDonalds every restaurants and eateries
operating within the quick service sector, could be considered as
competitors but we are studying only Pizza Hut, Dominos and KFC as its
major competitors and analysing the market share, reason of their growth
in India and how McDonalds counter their strategies to build a relation
with Indian consumers.
PIZZA HUT
Pizza Hut is one of the flagship brands of Yum! Brands, Inc., which also has
KFC, Taco Bell, A&W and Long John Silvers under its umbrella .Pizza Hut
opened a restaurant in Bangalore in June 1996 and was the first
international restaurant chain in India to enter this category. Today Pizza
Hut is present in 34 cities of India with 140 restaurants and has become
Indias largest casual dining restaurant brand. They not only serve Pizzas
but also wide range of vegetarian and non-vegetarian appetizers, soups,
pastas, desserts, beverages and salads.
With a 27 per cent market share of the eating-out market and over 70,000
footfalls per day across the country, Pizza Hut has become one of the
most trusted and established brand.
WHY PIZZA HUT IS SO FAMOUS IN INDIA?
Pizza hut India is accredited for bringing an international cuisine into
India .They created Indian toppings and vegetarian pizzas. As we all know
Chicken Tikka, Spicy Korma and the Tandoori range pizzas are a rage in
India.
They kept the price low for money conscious people for example their
`Pan 4 All scheme. Pan Pizzas starts at just Rs 69, which is perhaps
among one of the lowest priced pizza in the India. Now they have come up
with a new campaign for Magic Times, its new meals offering, which starts
Rs 99 per person.
Pizza hut India also offers lucrative deals such as discount coupons, which
can be availed by visiting the site and being a member of pizza hut.

Pizza Hut has three arrangements dine-in, delivery and carry-out. It

is famous for its friendly customer service and prompt delivery. It is
rapidly expanding its delivery operations throughout the country
PIZZA HUT DELIVERY strives to present the food when and where
the customer wishes to and the food delivered is always hot and on
time.

They project themselves as an international brand with an Indian

heart, in terms of product, quality service as well as pricing. As
for,they have purely vegetarian dine-ins at Chowpatty(Mumbai),
Ahmedabad and Surat, which also serve Jain menus. Pizza Hut has
even opened two all-vegetarian restaurants in the western state of
Gujarat to cater to the Jain religious community, whose members
prefer not to eat at places where meat is served.

They have started their operation in the affordable causal dining

segment serving 30 new items in its menu as 70% of their business
in India through dining.

Advertisement: They keep coming up with one or the other

campaign to attract youth. The latest campaign targeted at young
consumers in the age group of 15-24 years who choose to hang-out
in a group for most part of the day and are always looking for
affordable places to get together and chill. The advertisement opens
with a shot of a young college guy, standing in front of his mirror
practicing various excuses and reasons to not give a treat to his pals
for passing his exams. It is obvious that he does not want to spend
loads of money on the treat and is trying to come up with a solid
reason to get out of the situation. However, once he knows about
the Magic Times meals at Pizza Hut, he is more than happy to take
the gang out for a treat and is the first to jump in to clear the
cheque.

They are slowly expanding from Metros to tier I and tier II cities of
India targeting semi-urban areas.

It formed partnership with other recognized brands such as Pepsi. It

holds promotional campaign targeting children and Young adults.

DOMINOS
Jubilant Food Works Limited, holds the master franchisee rights for
Domino's Pizza for India. Domino's Pizza opened its first store in India in
January 1996, at New Delhi. Today Domino's Pizza India has grown into a
countrywide network of 320 stores with a team of over 9,000 people.
According to the India Retail Report 2009, they are the largest Pizza chain
in India and the fastest growing multinational fast food chain between
2006-2007 and 2008-2009 in terms of number of stores. It has 65%
market share in the home delivery segment.
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There are total of 320 stores which are operational. Net Sales for the
quarter ended June 30 2010, stood at Rs 1,356 million with a growth of
60% yearonyear. Net Profit for the quarter under review was Rs. 153
million as compared to Rs. 34 million compared to the first quarter in
2010. In the overall organized pizza segment it has a market share of
around 47%.

FACTORS FOR THE RISE OF DOMINOS IN INDIA

They are trying to reach people in tier II, tier III cities also and have
created stores which are bigger in size than what the conventional
Dominos stores.
Dominos stores may not be right inside the mall, but still they have
gone for fairly high streetish and visible stores.
They are always delivery centric than dine-in.
They continuously work to develop new ways of improving the
experience for their
consumers. They have again launched Pizza Mania which has further
established Dominos Pizza as an affordable and highly accessible
brand.
They have launched Wheat Thin Crust Pizza which provides the
health conscious customer with the choice of a fibre rich and a very
thin and light crust and it has been quite successful product.
To provide easy accessibility to the customer, they have also
introduced online ordering for Dominos Pizza in Bangalore, Delhi,
and Mumbai across 211 stores. At present, it covers close to 65% of
Dominos stores. Such facilities also provides them with a wider
reach.
Products for price conscious Indian such as Pizza Mania relaunch
which is the affordability product, the Rs. 39 start product.This is
again lending a lot to generating more and more orders, as they are
increasing penetration and as well as frequency.
Robust supply chain is one of the highly crucial component of
effective business management. They have four regional supply
centres (Noida,Mumbai,Bangalore and Kolkata) which ensures timely
delivery of raw materials.
They carry marketing initiatives at three levels: National level, Local
store level and at customer level just to ensure quality, reliability
and customer service.
Some other factors such as easy availability and product available in
different sizes and flavours are also helping the brand to grow.
So it is a mix of promotions, new products, robust supply chain, some cut
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through advertising, which has helped Dominos to gain market share of

47% in the organized pizza segment. Their product offerings have not only
increased consumption amongst existing customers but also introduced
people who have never consumed pizzas earlier.

KENTUCKY FRIED CHICKEN (KFC)

KFC is the worlds No.1 Chicken QSR and has industry leading stature
across many countries like UK, Australia, South Africa, China, USA,
Malaysia and many more. KFC is the largest brand of Yum Restaurants. In
India, Bangalore was the city where Yum! re-launched KFC in 2004. It had
come under attack from the Swadeshi lobby when it first entered the
country in 1995. Things have taken a turn for the better in its second
innings.
Now, KFC is growing rapidly and today has presence in 13 cities with close
to 77 restaurants.
FACTORS OF GROWTH OF KFC IN INDIA
KFC has introduced many offerings for its growing customer base in
India while staying rooted in the taste legacy of Colonel Harland
Sanders secret recipe.
Its signature dishes include the crispy outside, juicy inside Hot and
Crispy Chicken, flavorful and juicy Original Recipe chicken, the spicy,
juicy & crunchy Zinger Burger, Toasted Twister, Chicken Bucket and
a host of beverages and desserts.
For the vegetarians in India, KFC also has great tasting vegetarian
offerings that include the Veggie Burger, Veggie Snacker and Veg
Rice meals and recently launched Veg zinger
It is present across all formats high-street, mall, airport and drivethrough.
It uses the mass media very intelligently. The company has, in fact,
set aside 5 per cent of its sale revenue for brand promotion. The
Finger-lickin good campaign, claims the company, led to a 35 per
cent increase in sales.
Innovative products were launched such as of chilled beverages
called Krushers in three variants: Crunchy, smoothies and sparklers.
The range exceeded KFCs expectations and brings in about 10 per
cent of its total sale.
They offer wide range of products when it comes to chicken menu.
In the breakfast market with a brand new morning menu KFC
tried to strengthen its snacking portfolio.
In 2008 they launched Rs 50 snackbox (at Rs 49) and the chana
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snacker that costs just Rs 25 to make people try out the brand.
Knowing where its consumer is, the brand has homed in on states
with over 90 per cent of non-vegetarian population such as West
Bengal, Tamil Nadu, Punjab and Andhra Pradesh besides the cities it
is already present in for further expansion.
Most of the product range targets youngsters, who make up for their
core audience, and has seen tremendous repeat purchases. With the
median age in India just 25 years, versus about 37 years in the U.S.,
KFC hopes to get teens and young adults hooked on its tasty and
not-so-expensive food.
KFCs are decorated in bright colors, offer big, flat-panel televisions,
and seating areas where groups can freely mix.

MCDONALDS
As we know that McDonald's is one of the world's leading fast food service
companies which serves around 50 million customers on a daily basis.
From its initial days the company was so much committed to provide
quality products to its customer that prior to its launch, the company
invested four years to develop its unique cold chain, which has brought
about a veritable revolution in food handling, immensely benefiting the
farmers at one end and enabling customers to get the highest quality food
products, absolutely fresh and at a great value.
There is no single business that McDonald's views as a chief rival.
However, it would be fair to say that all other restaurants and eateries,
especially those that are described as operating within the 'quick service'
or 'fast food' sector, could be considered as competitors.
One good thing about McDonalds is that they are quick in adapting
changing market and customers preferences to ensure profitability. They
keep a close eye on their competitors and not only design their product to
counter the competitors strategy but also come up with their unique
strategy to insure profitability and customer satisfaction.
WHY MCDONALDS IS POPULAR IN INDIA?
After going through the competitors of McDonalds and their strategies, we
can easily say that it is not easy for McDonalds to stay at top in such a
competitive market. While Dominos has strong home delivery system in
place, Pizza Hut offers wide range of products and support Dine-in concept
and KFC is famous for its chicken meals and large spaces and other local
outlets provide their products at cheaper rates. So McDonalds came up
with solutions like starting home delivery services in major cities with
online facility to tackle Dominos, included 30 new items to its menu and
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introduced breakfast products and in addition to this started offering

restaurant space to celebrate birthdays and other occasions unlike Pizza
Hut. As KFC is famous for its chicken menu, McDonalds offers wide range
of products in Vegetarian as well as Non-vegetarian categories, hence
providing its customer more choices to select from. To tackle local outlets,
it introduced a variety of products at lesser price ( as low as Rs 20).There
are other factors as well which helped McDonalds to gain such a place in
Indians heart such as:

The variety they offer in their menu be it a vegetarian item or nonvegetarian item, cold coffee or hot serves, frozen desserts or floats.
Keeping the religious sentiments of people in mind they dont serve
Beef or Pork. Even they keep separate utensils and freezer for
vegetarian and non-vegetarian meals and are prepared in separate
areas of the restaurant.
Keeping the customers demand in mind they have introduced
breakfast menu in selected outlets. The menu includes vegetarian
items like Veggie McMuffin, hash browns, cuppa corn and McMuffin,
chicken Salami McMuffin and Sausage McMuffin etc.
A mixture of Indian and global menu is being served as they have
reengineered the menu for the Indian customers and have
successfully introduced McVeggie Burger, Paneer Salsa Wrap,
Chicken Mexican Wrap.
For health conscious customers they have introduced Salad
Sandwich. McDonald's introduced new whole grain wraps made of
multigrain bread consisting of five different kinds of cereals (barley,
oatmeal, ragi, wheat flour and maida) and a salad mix of five
different kinds of vegetables. For non-vegetarians they offer Chicken
McNuggets which are made from quality white meat chicken
containing zero gram of trans-fat per serving.
Price is the thing of concern for most Indian households, youngsters
and specially students. Keeping this in view McDonalds tried to keep
the cost of all products low. They offer combo meals at reasonable
price to give the customer value for their money.
Most of the outlets are in prime time high traffic locations so that
customer can easily reach to the outlets.
From petrol pumps to kiosk to drive through to home delivery, they
are serving everywhere.
For the convenience of customers they have launched Web ordering
for selected outlets only.
Supply Chain Management is one of the decisive factors for the
normal functioning of any business as it ensures the timely delivery
of raw materials, but it also gives an opportunity to reduce costs
14

and increase profitability, combined with high standards of product

quality. McDonalds developed a chain by collaborating with local
companies that can provide higher quality products. Today,
McDonalds India is working with 38 different suppliers in the long
term.
To attract families, now a days they are providing space inside the
restaurant to celebrate birthdays, playing space for Kids, free toys
with the meals.
McDonalds not only value their customer but also motivate their
employees by giving them stars.
Major emphasis is given on cleanliness inside the restaurant as well
in parking spaces which makes the stay comfortable.
Made For You (MFY) is a unique concept (cooking method) where the
food is prepared as the customer places its order. All new upcoming
McDonalds restaurants are based on MFY. This cooking method has
helped McDonalds further strengthen its food safety, hygiene and
quality standards.
Advertisements are the most effective way to communicate the
offerings to the customer. The aggressive campaign helped
McDonalds to reach people who have never consumed fastfoods.

McDonalds not only delivers value to its customers but also experience. It
targets everyone from children, youth, and family to middleclass and
earning class. Keeping the price low they attract the Indian customer who
is very price conscious. They have countered every strategy of their
competitors well and have developed their own strategies to beat others
in this business. But there are few things that McDonalds have to keep in
mind like Inflation which is high these days which forces restaurants to
increase the price of their products by 2-2.5% every six months. They
have high employee turnover, slow service at drive through windows and
poor order accuracy which are not at all helpful in retaining their
customers.

MARKETING MIX
Marketers have four tools to use to develop an offering to meet the needs
15

of their targeted customers. Collectively they are called the Marketing

Mix. It basically consists of 4 components Product, Price, Place and
Promotion otherwise known as Four Ps of marketing.
McDonalds being the worlds largest chain of fast food restaurants
consists of a tangible and intangible part. The tangible part consists of all
the food items i.e. burgers, beverages, deserts offered by it and the
intangible part consists of the services offered by the restaurants. Since
McDonalds has this service part with it hence the marketing mix of it can
be explained best by the 7 Ps with the additional variables People,
Process and Physical Evidence.
PRODUCT MIX
The important thing to remember while offering menu items to potential
customers is that there is a huge amount of choice available to those
potential customers with respect to how and where they spend their
money. Hence McDonalds places considerable importance on developing
a menu that customers really want and Market research establishes what
exactly that is.
PRODUCT LIFE CYCLE

Customers requirements change over time. What is fashionable and

attractive today may not be regarded the same tomorrow. Marketing
continuously monitors customers preferences In order to meet these
changes, McDonalds has introduced new products and phased out old
ones overtime. Care is taken not to adversely affect the sales of an
existing option by introducing a new option which will cannibalize its
sales .McDonalds knows that sales of products on its menu will vary at
different points in their life cycle. Thus the secret lies in getting profits
with different products in the different stages of the PLC. At any time a
company will have a portfolio of products, each in a different stage of its
cycle. Some of McDonalds options are growing in popularity like while
arguably the Big Mac is at the maturity stage.

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. This is being served with chatpata
16

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.

Following flow chart shows the product mix of McDonalds:

CMSVPDBN
ohcereo
flcVgosvn
tdke
de
Seg
MurV
ecng
ecroMitae
ntvfaesg
uefhe
eaMsM
Cerie
oaxn
nau
eM
a
c

McDonalds Successes: Fries, Happy Meal, Big Mac, Paneer wrap , Pizza
McPuff
McDonalds Failures: Fajita, Carrot Sticks, McLean, and the Arch Deluxe
THE VEGETARIAN PRODUCTS AT MCDONALDS INDIA:

McVeggie:
The McVeggie sandwich starts with the oh-so-familiar sesame seed bun. In
between the bread, you'll find a vegetarian patty that is made from peas,
17

carrots, green beans, red bell pepper, potatoes, onions, rice, and
seasoning. This vegetarian burger is garnished with lettuce, and has
mayonnaise made without eggs spread thickly on the bread

McAloo Tikki
Potatoes are a popular filling food item in India. McDonald's in India's
McAloo Tikki sandwich includes a patty made out of potatoes, peas, and
spices. It also includes tomato slices, onions, and vegetarian mayonnaise.
Paneer Salsa Wrap:
Paneer is referred to as cottage cheese in India. McDonald's Paneer Salsa
Wrap starts with a small slab of paneer that has been dredged in a coating
that is a cross between Mexican and Cajun in flavor. It is fried and the
paneer patty is wrapped in flatbread and topped with a salad mixture that
includes lettuce, red cabbage and celery and then is finished off with
vegetarian mayonnaise, salsa and cheddar cheese.
Crispy Chinese:
McDonald's in India's Crispy Chinese sandwich is crispy, but very China.
It's more an Indianized Chinese. Nevertheless, this vegetarian patty is
topped with a creamy Schezwan sauce and lettuce which makes it a nice
addition to the Indian vegetarian menu.
Veg McCurry Pan:
If you are in the mood for something similar to pizza, but don't want a
tomato-based sauce, McDonald's Veg McCurry Pan is a good choice. It
starts with a rectangular shaped crust that is topped with a creamy sauce
(made without eggs), and vegetables including broccoli, baby corn,
mushrooms and red bell pepper. It is then baked until the crust is crisp
and the toppings are hot and bubbly.
Pizza McPuff:
The vegetarian Pizza McPuff also starts with a rectangular shaped crust,
but instead of a creamy sauce is flavored with a tomato-based sauce and
then is topped with carrots, beans, bell peppers, onions, peas and
mozzarella cheese.

THE NON-VEGETARIAN PRODUCTS AT MCDONALDS INDIA:

18

Chicken Maharaja Mac:

The Indian version of the Big Mac at McDonalds in India, is the Chicken
Maharaja Mac sandwich which is made with 2 grilled chicken patties and is
topped with onions, tomatoes, cheese and a spicy mayonnaise.
McChicken:
The McChicken in India is almost the same as its cousin by the same name
in other McDonalds around the world. It contains one breaded and fried
chicken patty and is topped with lettuce and vegetarian mayonnaise. It is
similar in size (but not taste) to the spicy chicken sandwich on the dollar
menu at McDonalds restaurants in the U.S.
Filet-O-Fish:
The Filet-O-Fish sandwich at McDonalds in India is the only sandwich item
on the menu that is exactly the same as the Filet-O-Fish sandwich you
might eat at a McDonalds in the U.S.
Chicken McGrill:
The Chicken McGrill sandwich starts off with a thin grilled chicken patty
that is embellished with cilantro mayonnaise, onions and tomatoes and is
served on a toasted bun.

PRODUCT DECISION IS LED BY THREE THINGS:

Product
Decision

Brandi
ng

Featur
es

Quality

One of the aims of McDonalds is to create a standardized set of items

that taste same everywhere in the world. McDonalds learned that
19

although standardization helps in substantial cost savings but being able

to adapt to an environment is a key point for success. Prior to its launch,
the company invested four years to develop its unique cold chain, which
has brought about a veritable revolution in food handling, immensely
benefiting the farmers at one end and enabling customers to get the
highest quality food products, absolutely fresh and at a great value. Also
McDonalds has intentionally kept its product width and depth limited in
India. McDonalds studied the behavior of the Indian customer and
provided a totally different menu as compared to its International offering.
PRODUCT ADAPTATION FOR INDIA

Adaptation is required for various reasons such as consumer

taste/preferences and laws/customs. In India McDonalds came out with
various products customized to local flavors. Moreover adaptation was
required at higher level as different regions in India have different taste
for food. McDonald introduced a complete vegetarian section with items
like McAloo tikki ,McVeggie etc as 40% of the population was vegetarian.
McDonalds has also re-engineered its operation to address the special
requirements of vegetarian menu such as maintaining separate cooking
areas and equipments for veg and Non veg items. The cheese and cold
sauces used in India are 100 % vegetarian. Even the crew members
cooking vegetarian food items are identifiable by their green aprons.
Working on these lines, McDonald made amendments to its current
product line to suit Indian conditions like Maharaja Mac replaced Big Mac
(used in US) .McDonalds also adapted the product according to Indian
varied religious laws and customs .For example Hindus do not eat beef,
Muslims do not eat pork and jains (among others) do not eat meat of any
type. Hence McDonalds cares a lot about customers sentiments towards
religion and customs
CO-BRANDING

McDonalds has also Major tie ups with various companies such as Coca
Cola, Barbie, Cadbury, Hot Wheels etc as their co branding strategies.

20

PRODUCT QUALITY

Finally coming to the quality part, McDonalds is very much committed for
giving customers wholesome, healthy and delicious food. Quality
Assurance teams are responsible for monitoring the quality of McDonalds
food products both in restaurants and at suppliers at every stages of
production and transfer. This involves continuous inspection, visits and
audits announced and unannounced to all production facilities, distribution
centres and restaurants. Every supplier is exposed to tight specifications
with every details like exact quantity and quality of raw materials and
the dimension of the finished product and to conform these specifications
McDonalds regularly takes samples from the stock at various distribution
centre.
The quality control continues when food arrives at the restaurant as well
for example no delivery is accepted until a series of quality and safety
checks are completed. All restaurant staff receive comprehensive training
in food safety and hygiene and food preparation procedures. This is a
global practice and is one of the most important features of McDonalds as
fast food restaurants.
Hence McDonalds bring with it a globally reputed brand, world class food
quality and excellent customer specific product features.
PACKAGING

Packaging is designing and producing the wrapper or container for the

product. Its importance can be felt by various test and surveys where food
in the unmarked packaging was always pronounced less tasty than the
food in McDonald's branded packaging, even thought the two foods were
identical.

McDonalds collaborated with its packaging supplier Havi Global Solutions

Perseco on a global packaging scorecard to be used in packaging design
21

and buying decisions. In terms of materials the criteria on the scorecard

included minimising weight, maximising use of recycled materials,
favouring renewable materials. Minimising the amount of chemicals used
in production, reducing CO2 and other greenhouse gas emissions and
maximising recycling possibilities were also key. Hence McDonalds gives
substantial importance to its packaging part trying to make it attractive
for the customers supporting the products position.

HAPPY PRICE MENU

Everyday its all the small joys of life which give us the maximum
pleasure. McDonalds India has beautifully captured this thought in its
Har Chhoti Khushi Ka Celebration campaign which promotes the Happy
Price Menu at Rs. 20 and positions McDonalds as the ideal venue to
celebrate lifes small pleasures.
The Happy Price Menu platform has worked very well for McDonalds in
the past, especially with India being a value driven market. The central
idea revolves around the thought You dont need to think twice when
McDonalds has burgers at only Rs. 20

McDonalds 'Happy Price Menu has been a favourite among the

consumers since its launch which was made specially catering the needs
of Indian customer. 'Happy Price Menu' creatively promotes and
illustrates the theme of branded affordability .It includes popular products
like McAloo Tikki, McPuff Pizza and Salad Sandwich, medium fries, coke
float, etc., among others. These products are available across all
McDonalds restaurants and priced for just Rs 20.
Over the past 12 years, while the patented products like McVeggie and
McChicken have continued to cater to the patrons, McDonalds India was
successful to broaden its audience base through Happy Price Menu to
22

further entrench the market.

PLACE MIX
Place in 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.
Distribution (Place) decisions concerning McDonalds include the following:
1.
2.
3.
4.
5.

Distribution Channel
Market Coverage
Specific Channel members
Inventory Management
Distribution Centres

DISTRIBUTION CHANNEL OF MCDONALDS

Distribution channels move products and services from businesses to

consumers and to other businesses.
Also known as marketing channels, channels of distribution consist
of
a
set
of
interdependent organizationssuch as wholesalers,
retailers, and sales agentsinvolved in making a product or service
available for use or consumption.
Distribution networks may be classified as either simple or complex.
A simple distribution network is one that consists of only a single source
of supply, a single source of demand, or both, along with fixed
transportation routes connecting that source with other parts of the
network. In short, distribution describes all the logistics involved in
delivering a company's products or services to the right place, at the right
time, for the lowest cost. In the unending efforts to realize these goals, the
channels of distribution so selected play a major role in this process.
So, McDonald's had been working critically on its distribution channel part.
Considering the fact that an international brand was trying to make
inroads into the Indian market, its Indian supplier partners were developed
in such a manner that made them stay with the company right from the
beginning.
For McDonald's India, the distribution centres came in the following order:
Noida and Kalamboli (Mumbai) in 1996, Bangalore in 2004, and the
latest one in Kolkata (2007).
McDonald's entered its first distribution partnership agreement with Radha
Krishna Foodland, a part of the
Radha Krishna Group engaged in food-related service businesses. The
association goes back to July 1993, when it studied the nuances of
McDonald's operations and requirements for the Indian market.
23

Around the world, McDonald's traditionally operates with local partners or

local management. In India too, McDonald's purchases from local
suppliers. McDonald's constructs its restaurants using local architects,
contractors, labour and - where possible local materials. McDonald's
hires local personnel for all positions within the restaurants and
contributes a portion of its success to communities in the form of
municipal taxes and reinvestment.
At McDonalds, the customer always comes first. McDonalds India
provides fast friendly service- the hallmark of McDonalds that sets its
restaurants apart from others. McDonalds restaurants provide a clean,
comfortable environment especially suited for families. This is achieved
through McDonalds stringent cleaning standards, carefully adhered to.
CHANNEL STRUCTURE OF MCDONALDS:

Vertical Marketing System (VMS)

Vertical marketing systems are coordinated and integrated channels.
Contractual VMS:
A franchise is an example of a contractual VMS. The franchisee signs an
agreement with the franchisor and has to agree to various stipulations.
The franchisee, however, gets training and the right to use the name.
McDonalds follows this structure of distribution and operates in the
country through its franchises.
MARKET COVERAGE

Any company can cover the market through mainly three ways namely:

Exclusive: Only specially selected resellers or authorized

dealers (typically only one per geographical area) are allowed to sell
the 'product'.

Selective: This is the normal pattern (in both consumer and

industrial markets) where 'suitable' resellers stock the product.

Inclusive: Where the majority of resellers stock the 'product' (with

convenience products, for example, and particularly the brand
leaders in consumer goods markets) price competition may be
evident.

McDonalds strategy of covering the market uses the Inclusive distribution

strategy. It intends to provide saturation coverage of the market by
utilising all the outlets. Total sales are directly related to the number of
outlets. McDonalds goes in for intensive distribution because the
customers have quite a many options to choose from. The McDonalds
outlets are generally located in high density population areas or in busy
24

market places. This attracts more customers and directly contributes in

increased revenues.
Furthermore McDonalds has also come up with the option of Home
Delivery in selected cities in India to cover a larger share of the market.
Also, the concept of Drive-Thru is catching up in India also.

SPECIFIC CHANNEL MEMBERS

McDonalds suppliers and Channel members in India:

Amrit Foods: Amrit Foods, a division of Amrit Banaspati, has been
associated with McDonald's India as a supplier of Dairy Mixes, Soft Serve
Mix and Milk Shake Mix for over a decade now.
Cremica Industries: Cremica Industries was started in 1980 as small icecream unit run by Mrs. Bector out of her backyard in Ludhiana. However
after its initial success Cremica added buns and biscuits to its product line
and in 1996 McDonald's selected Cremica to be its supplier for buns, liquid
condiments, batter and breading in collaboration with its international
partners.
Dynamix Dairies: McDonald's India has approved Dynamix Dairies,
Baramati (Maharashtra) for supply of cheese to its restaurants. Dynamix
has a modern automated plant that is fully computer controlled.
Trikaya Agriculture: Trikaya Agriculture is McDonald's supplier of fresh
iceberg lettuce. The farms at Talegaon, Maharashtra produce the crop
throughout the year.

25

INVENTORY MANAGEMENT

Inventory management is primarily about specifying the size and

placement of stocked goods. It is required at different locations within a
facility or within multiple locations of a supply network to protect the
regular and planned course of production against the random disturbance
of running out of materials or goods. JIT is a form of providing supplies for
customers, as the name suggests, just in time. McDonalds too follows a
Just in Time system of Inventory management wherein it doesnt begin to
cook its orders until a customer has placed an order. A large benefit of JIT
is that it reduces the total cost of ordering and holding inventory. JIT
allows McDonald's to adapt to demand a little bit better. Seemingly, lower
inventory levels would cause McDonald's bigger problems in a higher
demand because they wouldn't have their safety stock. However,
because they can produce burgers in a record time, they don't have to
worry about their pre-made burger inventories running out in the middle
of an exceptionally busy shift.
DISTRIBUTION CENTRES

The success of McDonald's India is a result of its commitment to sourcing

almost all its products from within the country. For this purpose, it has
developed local Indian businesses, which can supply them the
highest quality products required for their Indian operations.
As distribution centres, the company was responsible for procurement, the
quality inspection programmed, storage, inventory management,
26

deliveries to
the restaurants and data collection,
recording and
reporting. Value-added services like shredding of lettuce, re-packing of
promotional items continued since then at the centres playing a vital role
in maintaining the integrity of the products throughout the entire 'cold
chain'. The operations and accounting is totally transparent and is subject
to regular audits.
Over the last 10 years, the company has gained experience and
adopted procedures that helped in maintaining a continuous supply of
food products irrespective of the climatic conditions. Their logistics and
warehousing system is robust that prepares us to deliver products at the
same temperature throughout, without a single break in the cold chain.

MCDONALDS SUPPLY CHAIN

It is this unmatched Supply Chain Structure, which not just ensures on

time delivery of raw materials and supplies to McDonalds but also enables
it to cut down on its cost and maximize profitability along with maintaining
highest quality standards of its products.
McDonalds supply chain is based on a three legged stool concept.
Companies Franchises Suppliers

27

PRICE MIX
Pricing is the only mix that generates turnover for an organization. The
remaining 3 Ps are the variable cost for an organization. It includes list
price, the discount functions available, the financing option available, etc.
Various costs are incurred to design and produce a product. Moreover cost
is also incurred in distribution and promotion of a product. So it is
important for a company to decide its pricing strategy keeping in to
account these cost incurred. Price also affects the demand of the product
by the consumer, so price is the most important element of marketing
mix.
Global pricing is one of the most critical and complex issues that
McDonalds faces while operating in different countries. For each country,
it uses rigorous pricing process to determine the price for a particular
market. For each market following factors are taken in to account:

Selecting the Price objective

Determine demand
Estimating cost

There are main drivers affecting the McDonalds global pricing such as the
company goals, the company costs, the customer demand, the
competition, and lastly the government policies. As for the company
goals, McDonalds have determined which goals that they want to achieve
which are to gain a satisfactory Return on Investment (ROI), to maintain
market share and to meet a specified profit goal by putting priority for
each goals. The McDonalds pricing strategies also been influenced by the
company cost. Before setting up the price, McDonalds considered all the
relevant costs of manufacturing, marketing and product distribution. As
for the factor of consumer demand, it involves the buying power of
consumer which is the key consideration in McDonalds pricing decision.
The countries with low income per capita pose a dilemma because
consumers in such countries are far more price-sensitive as compared to
28

the develop countries.

PRICING STRATEGIES OF MCDONALDS IN INDIA

McDonalds followed the following pricing strategies in India :

VALUE PRICING

Value pricing means setting selling prices on the basis of perceived value
to the customer, rather than on the actual cost of the product, the market
price, competitors prices , or the historical price. This approach is used
where external factors such as recession or increased competition force
companies to provide value products and services so as to retain sales.
McDonalds came with the concept of value pricing for Indian consumers
where in it came
Out with various combos in form of :

Happy Meals comprising of small burgers, fries, coke + toy.

Medium meal combo that consisted of burger, fries and Coke with the
price of Rs 75
Maharaja Mac Meal- Rs 94
Family Dines under Rs 300

The prices for the meals were economical as compared to the offerings in
Pakistan and
Sri Lanka and are 50% less than United States.
PRODUCT LINE PRICING

Product line pricing is used when a primary product is offered with

different features or benefits, essentially creating multiple "different"
products or services. The goal of product line pricing is to maximize
profits. The more features offered, the more consumers will pay.
McDonalds has a unique price strategy which falls solely on many of their
product lines. Their Value Meals falls in the category of Product line
pricing. Where there is a range of product or services the pricing reflect the
benefits of parts of the range. For example, one can order a Two
Cheeseburger Value meal that comes with a medium drink and fries for
around Rs 75 (prices may vary). And can Super Size this meal to get a
large drink and large fries for a little more money or can go with another
value meal that might include different items for different prices.
PROMOTIONAL PRICING

If you have driven past a McDonalds, you will notice that somewhere on
their property,
whether it is a banner on their building or spelled out on their sign, they
are always offering
29

some sort of promotional pricing . This promotion can be seen as a large

banner draped across the building on many restaurants. This promotion
changes weekly and may consist of different menu items packaged
together.
PENETRATION PRICING

When McDonalds first began to break into the coffee market, they ran a
large marketing campaign in order to gain some market share in the
industry. For a limited time frame, you could get a free small coffee every
morning from 4-7am. . This was to promote their new coffee partnership
with Green Mountain Coffee and helped spread the word that McDonalds
was now offering coffee.
As a part of its business strategy to penetrate deeper into the new and
existing markets, the forever young brand McDonalds introduced Happy
Price Menu at Rs.20/- in the year 2004 in India. This value for money
proposition has been well accepted by the discerning customers. The
communication towards this proposition has graduated over the years, but
the Happy Price Menu platform has been consistent.
MCDONALDS PRICING VS COMPETITION

The company has to anticipate competitors response to its pricing

strategy particularly when the strategy aims at winning market share.
McDonalds has adopted various strategies to tackle with its competitors.
Providing quality product at low price has given an edge over others.

McDonalds

Value meal starting from Rs.39

Burger starting from Rs.25
Combos starting from Rs.70
Ice Cream starting from Rs.18

30

Nirulas

Burger starting from Rs.45

Snacks item starting from Rs.35
Regular Pizzas starting from Rs 68

Dominos

Regular Veg pizza starting from Rs 65

Regular non veg Pizza starting from Rs
95
Combo of 4 small Pizza starting from
Rs.200

KFC

Burger with soft drink-Rs 59-79

Chicken rice and gravy meal starting fromRs 115

Success of McDonalds has been mainly due to its value for money offering
to the Indian consumers. The price offered are in the range of lower middle
section of the society.
Moreover its customization in accordance with the taste of Indian
consumers has also worked in its favour .
McDonalds Indias forte has been product, service and price innovation.
From day one it has had a menu adapted to local tastes. 70% of the
current Indian menu doesnt exist anywhere else in the world.
It entered with a low introductory price of Rs. 20 for a veg. burger (still
available for some products). Among all the brands, McDonalds has had
the most aggressive pricing. For less than Rs. 50 all inclusive, one can
have a meal on two McAloo Tikkis or 2 Chicken McGrills. A filling meal at
any of the other four brands profiled here will set one back by a minimum
of Rs. 75-100. Not many other multinationals who have entered India have
got their strategies right as seamlessly as has McDonalds.
BRAND POSITIONING AND PRICE
31

Pricing is influenced by the way firm wants to position its product. It

determines the choice of customers it wants to serve. Historically a three
tier segmentation of economy, mid market, and premium positioned
brands has characterized many markets. The market positioning choice
determine the feasible range of prices that can be chosen.
Mcdonalds in India positioned itself as the Family restaurant. Mc
Donalds mein hai kuch baat projects McDonalds as a place for the
whole family to enjoy. When McDonalds entered in India it was mainly
perceived as targeting the urban upper class people. Today it positions
itself as an affordable place to eat without compromising on the quality of
food, service and hygiene. So McDonalds is considered a place where
entire family can spend quality time and an affordable price. Its target
customer groups are:
TARGET CUSTOMER

WHAT IS McDonalds for them

1.A family with children

2. Urban customer on the move

A fun place to be with children

Great taste, quick service,without
effecting work schdule
3. Teenagers
Hangout place with friends at an
affordable price
So keeping in mind its target customers and its brand positioning,it offer
its products at an affordable price . McDonalds focus more on penetrating
pricing strategy. It came up with very catchy punch line AAP KE
ZAMANE MAI ,BAAP KE ZAMMNAE KE DAAM. This was to attract
middle and lower income group people and the effect can be seen in the
consumer base which McDonalds have now.
HAPPY PRICE MENU

McDonalds has constantly endeavoured to offer customers new products

that appeal to their tastes and preferences. With an ambition to penetrate
deeper into the new and existing markets, the forever young brand
McDonalds introduced Happy Price Menu atRs.20/- in the year 2004 in
India. This value for money proposition has been well accepted by the
discerning customers.
Indian consumers are price sensitive and even though the organization
managed to establish a sense of familiarity, Indian consumers continued
to perceive McDonald's as an expensive eating out option. So in order to
tackle with the price sensitiveness of Indian consumer McDonalds launch
Happy price menu. With Happy Price Menu at Rs. 20 it positions itself as
the ideal venue to celebrate lifes small pleasures. The central idea is you
dont need to think twice when McDonalds has burgers at only Rs. 20
which is much lower than what competitors are offering.
Value has always been a key offering at McDonalds, not only in India but
32

globally. The Happy Price Menu, has been a huge success with consumers
which is quintessentially the youth. HPM is not a one-off initative, but an
on-going strategy for McDonalds, it highlights the everyday affordability
platform.
McDonalds manages to keep its price 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
McDonalds global strategy. Some of its measures to achieve this include

Bulk buying
Long-term vendor contracts
Manufacturing efficiencies

PHYSICAL EVIDENCE

McDonalds lays emphasis on the cleanliness and hygiene of the interiors

of is outlets and at the same time on the attractiveness of its interiors. It
maintains a proper decorum at its joints. The cleanliness, quality, speed and
transparency of the processes at McDonalds is the biggest physical evidence. Physical
evidence found at McDonalds:
The interiors are attractive and there is consistency throughout
the world. Extra care is given to make the joints children friendly.
Counters are kept low and menus pictorially displayed so that
children can order for themselves.
The physical appearance creates an impression outsiders have of
a business and all the way that business functions.
Staff members.
Location and appearance
Buildings Maintenance.
PEOPLE

McDonalds 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. Hence
employees in McDonalds focuses on friendly and prompt service to its
customers besides for ensuring this Intensive training is a mandate for
every McDonalds Employee
McDonald continuously does Internal Marketing. This is important as it must precede
external marketing. This includes hiring, training and motivating able employees. This way
they serve customers well and the final result is a happy customer. In order to motivate its
employees they give them stars as per their performance. In addition to McDonald's
competitive wage and promotion programs, hard work, dedication,
motivation and results are recognized and rewarded at McDonald's.
33

Appreciation comes in many forms - from a simple thank you for a job well
done, to restaurant-wide recognition through programs such as the
'Employee of the Month.' McDonald's also offers great incentive programs
with access to gift certificates, merchandise, free food, etc.
Once in a Lifetime Opportunities' are also offered to restaurant employees
who truly excel. In 2008, a select group of Canadian restaurant employees
traveled to Beijing, China to work alongside McDonald's crew from around
the world at the Olympic Games.
The company is strongly committed to staffing locally and promoting from
within. Hence McDonalds has managers who understand both the local
and corporate cultures. The emphasis while recruiting is that applicants
are customer focused and right attitude is considered as more important
than technical ability. The company believes that the best way to stand
out from the competitors is to satisfy the customers all the time. This is
emphasized in recruitment advertising and continues in preliminary
screening .This is followed worldwide and is one of the part of their
globalization strategy.
The Hamburger University in Illinois, USA is one of a kind. The major
course offered is in operations and is designed for Managers, Assistant
Managers and prospective franchisees. The training is provided in 22
languages and teaches the standard practices to be used in restaurants
worldwide an more importantly teaching is adapted to suit the needs of
overseas students. There are additional training centers in Munich, Tokyo,
Sydney, London and Mainland china. The centers teach Managers details
such as temperatures at which burgers should be cooked and how to
inspect restaurant facilities to ensure that quality standards are met.
Besides Managers are also taught how to give performance reviews, how
to listen and what to do if a person becomes defensive. Managers in turn
pass the details on to their staff.

PROCESS

34

Ready to
cook
frozen
food
material

Delivery
to
customer

Universal
holding
cabinet

Initiator

Assemble
r

Process is an element of service which basically sees the experiences of

customers as an organisation's offering. It is normally viewed as
something that customers participate in at different points in time.
The whole food manufacturing process at McDonalds is visible to the
customers. In fact, the customers are allowed to view and judge the
hygienic standards at Mc Donalds by entering the area where the process
takes place. The customers are invited to check the ingredients used in
food.
These are some of the features of the processes followed in McDonalds:

Each item is prepared separately, using dedicated equipment and

utensils.

Only pure vegetarian oil is used as a cooking medium.

Cheese and sauces are completely vegetarian and egg less.

Separation of vegetarian and non-vegetarian food products is

35

maintained throughout the various stages of procurement, cooking

and serving.

Food manufacturing transparent to customers across the counter.

Training to the licensees about how to operate the franchise.

Invented the most efficient cooking equipment with use of latest

technology.

New methods of food packaging and distribution are followed

PROMOTION MIX
Marketing utilizes many techniques to promote a new product or service.
Utilizing all possible outlets for spreading the word on a product is known
as its promotion mix. Using a combination of the major promotional tools,
ranging from advertising to direct marketing, is the usual method for
rolling out a product. How these tools are utilized varies greatly from
company to company and product to product.
Advertising easily is the most popular element of the promotion mix. This
represents paid promotional placement of a product. Advertising is an
important element of the marketing communications mix. Put simply,
advertising directs a message at large numbers of people with a single
communication. It is a mass medium.

Advertising has a number of benefits for the advertiser. The advertiser has
control over the message. The advertisement and its message, to an
extent, would be designed to the specifications of the advertiser. So the
advertiser can focus its message at a huge number of potential
consumers in a single hit, at a relatively low cost per head. Advertising is
quick relative to other elements of the marketing communications mix (for
example personal selling, where an entire sales force would need to be
briefed - or even recruited). Therefore an advertiser has the opportunity to
communicate with all (or many of) its target audience simultaneously.
So for example, talking about McDonalds:

Business magazines, television news reports, and newspaper

articles provided free media coverage of the product launch and it
became a significant news story.

The media give McDonalds franchise owners and corporate

36

executives an opportunity to explain the reasoning behind the menu

addition and to reassure their customers that McDonalds was still in
the hamburger business.

Television advertisements for the new McPizza explain the new

ovens and attempts to generate excitement for the product.

Sales promotion efforts involves free samples, launch parties, and

store banners.

The promotion mix story of McDonalds starts with its launch in India in the
year 1996. Initially they tried to familiarize the customer with the brand.
They wanted to position themselves as Indian. So they focused on Indian
families and the kids. But later on they realized the untapped potential of
Indian Youth too and hence started aggressive campaigns to attract them.
The promotional strategy of McDonalds helped them in not only position
the brand but also in strengthening it and thus generating profits. From its
launch till today it continues to play an important part.
LAUNCHING THE BRAND MCDONALDS

It is said that every success story starts with first step. The starting point
for McDonald's India was to change Indian consumers' perceptions. Earlier
customers associated McDonald with being 'foreign', 'American', 'not
knowing what to expect' and 'discomfort with the new or different'. So
McDonald's wanted to position itself as 'Indian' and a promoter of 'family
values and culture', as well as being 'comfortable and easy'.
Simultaneously, the brand wanted to communicate that, operationally, it
was committed to maintaining a quality service, cleanliness and offering
value for money. The main focus was on familiarizing the customer with
the brand. The brand was built on establishing functional benefits as well
as experiential marketing.
In earlier days, when cable channel boom was not there and Doordarshan
was the most popular media, McDonald's India did not have enough reach
to use mass media such as television advertising. Instead, most of its
marketing effort focused on outlet design, new store openings and PR
about its attempts to tailor a menu to Indian tastes.
Then came the controversy about using beef in its products. Actually
when McDonald's was launched the management took a conscious call of
not introducing any beef or pork in our products. Thus, when controversies
around McDonald's products started during the early and growth stages of
the Indian business, they reacted quickly.
They tried to educate customers about the build of their products and did
extensive kitchen tours for our customers. They were showed how
separate vegetarian and non-vegetarian platforms were used for cooking
37

a first in any market for McDonald's. The menu development team tried to
develop special sauces which use local spices and did not contain beef
and pork. Vegetarian items were designed and various attempts were
made to increase the awareness about those products.
BRAND ADVERTISING

By the year 2000, McDonald started feeling the need of using promotion
more aggressively and for that they found Television advertisements
suitable vehicle for that. The first Indian TV commercial, Stage Fright,
attempted to establish an emotional connection between the Indian family
and the brand. The Stage Fright campaign aimed to establish McDonald's
as a familiar, comfortable place. It featured a child who suffers stage fright
and is unable to recite a poem. On entering McDonald's, he easily recites
it in the store's familiar environment.

A second campaign featured a child and his family moving into a new
place. He misses his previous surroundings until McDonald's provides
something familiar. Over the years advertisements has reinforced
McDonalds positioning by trying to establish an emotional connection
between the Indian family and the brand, supported by promotions.

In the launch phase the communication focused solely on building brand

and product relevance. The brand's scores on relevance to families and
kids were very high. For example the company's one-minute service
guarantee attempted to reinforce its reputation for fast, friendly and
accurate service and it also ran in-store events for mothers and children.
Also to kids sitting on the Ronald McDonald bench, pumping sauce from
the sauce machine became brand rituals.
McDonalds realized that the way to draw more consumers would be to
increase the visibility of the brand and its products. The more a person
saw food, the greater his urge would be to try it out. The company came
up with its next round of campaign to address and reflect this. The
campaign showed different people dreaming about McDonalds. It
38

depicted how the consumers were totally involved with McDonalds and
the food. New product stories delivered in a memorable and engaging
approach.
REPOSITIONING OF BRAND

Now a time came when McDonalds realized that it has bonded well with
Indian families and kids. Most of the customers were from higher income
group. The general brand perception of McDonalds in India was that of a
place for kids. While the campaigns had worked in the past, targeting kids,
McDonalds recognized the fact that it could not always depend on the
kids niche.
Consequently, the next series of campaigns were targeted to drive in
adult traffic
to break away from the perception. The ad depicted a father being invited
to a birthday party at McDonalds. He is not at ease with the idea of
visiting McDonalds since he perceives it as a kids place. His child reminds
him of the McCurry Pan, Filet-oFish that he would be able to relish at
the birthday party. The food boosts the father to go to the party, where to
his astonishment is his boss party.

The ad asserted that people celebrate birthdays and occasions at places

they are comfortable in.
There was another segment which was still untapped. That was the youth
audience, Indian Youth. But there was a problem. Young people in India
considered McDonald's expensive and mainly for children.

In 2004, it launched the Happy Price Menu with a value message for a
younger audience. They came up with advertisements to promote Happy
Price menu with the sole purpose of attracting younger generation and
people from lower income group.
For the first time McDonald's India saw a surge of younger consumers and
also people from socio-economic class B walk into stores.
Since then they keep coming up with one or the other campaign to attract
youth. In 2008, in one of the campaigns, it uses father-son duos from the
Indian film industry to reiterate the theme of "Yesteryear's Prices". It
features Bollywood stars (not real but duplicates) from past decades
together with their sons and a message that prices have not risen in line
with the passage of time.
39

IM LOVIN IT

McDonalds changed the way it talks to customers and employees around

the world by uniting behind one voice, one campaign- im lovin it.
Successfully established and executed in over 118 countries, this
campaign contributed to the brands resurgence and business
momentum.
The worldwide campaign of im lovin was aimed to build the brand further
in the years to come. With the im lovin it campaign, McDonalds created
a common platform where it can speak to a wide variety of audiences
throughout the world. A simple message and a campaign that is more
than a song or an executional hook a campaign of many real, authentic
and genuine messages told in the wonderful McDonalds storytelling
fashion.

THE 'LOST RING' CAMPAIGN

McDonald's sponsored Alternate Reality Game (ARG) named 'The Lost

Ring' as a part of its multi-pronged marketing campaign to commemorate
four decades of association with the Olympic Games.
The ARG that began in March 2008 attracted gamers from all over the
world. The game started with a series of clues that led to hidden artifacts
across the world, and finally to solving the mystery that involved finding
the sixth Olympic ring. The story was woven around amnesiac athletes
from parallel worlds, lost Olympic sport, Greek mythology, labyrinths,
Esperanto language etc. To solve the mysteries, the participants had to
search for clues both online and offline. The goal was to create global
collaboration and bring the spirit of the Games to people around the
world.
The most interesting fact was that though McDonald's was involved in the
game right from the beginning, the fact that it was sponsoring the ARG
was revealed much later. All through the ARG, no reference was made
either to McDonald's or its products, which left everyone wondering how
40

McDonald's could have benefited from its involvement in the whole event.
Some of analysts termed it as 'Dark Marketing,' as the presence of
McDonald's was barely felt through the entire event.
Over three million people from 100 countries across the world participated
actively in solving the mysteries. The associated websites received
millions of blog and media impressions. This gave McDonalds a path to
make people of those countries aware of its brand where they are not yet
tapped the market or they are planning to enter. In short they made their
presence felt in new untapped markets.
THE MONOPOLY GAME
McDonald's Monopoly game has turned into an annual tradition. The game
usually starts around the beginning of October and ends in Early
November. The McDonald's Monopoly game is much like the board game.
You need to collect properties in order win. To get properties you need to
visit McDonald's and order up some food. Game pieces can be found on
food items like the Big Mac, Filet-O-Fish, McGriddles, Hash Browns, and
other great menu items. Pieces can be found on various beverage and fry
items as well.
The promotion mimics the game Monopoly. Originally, customers received
a set of two tokens with every purchase, but now tokens come only with
certain menu items. Tokens correspond to a property space on the
Monopoly board. When combined into color-matched properties, the
tokens may be redeemed for money.
Much like the board game, the McDonald's Monopoly game gives the
greatest reward for players who own Boardwalk and Park Place. Players
who own these two properties will win one million dollars. While the
giveaway is essentially identical in each country where it is available,
game pieces collected in one country cannot be used in another country.
THE FINGER FOOD FUN FESTIVAL

41

Finger licking just got a whole lot more exciting with McDonalds, kicking
off a celebration of finger food. The 45 day festival, titled Finger Food Fun,
will present McDonalds popular and much loved sides with a range of 7
lip-smacking dips.

Adding zing to some of McDonalds most popular finger foods, including

the venerable French Fries, Potato Wedges and the super-popular
McNuggets, are a choice of delicious dips including Veg Spread, Mexican
Salsa, Tom Mayo, Mint Mayo, Barbeque and Mustard along with an all new
attraction - a delectable Schezwan sauce.

The barbeque dip, Mustard dip and the newly launched Schezwan dip are
available at Rs. 15 each only, while the Veg Sauce, Mexican Salsa, Tom
Mayo and Mint Mayo would be offered at Rs. 10 each only.

The intent behind this festival is to celebrate the success for McDonalds
much loved finger food and to increase customer engagement, be it
chicken Mc Nuggets, French fries or Wedges.

They have also created a fun campaign around the festival which includes
a new television commercial, outdoor ads as well as in- store promotions
The Finger Food Fun festival is on at all McDonalds outlets in all metros
and other major cities of india till December 31st 2010 and is also
available with the Extra Value Meals and Happy Meals.
OUTDOOR CAMPAIGNS

After a gap of seven-eight years, the fast food chain launched a hi-blitz
outdoor campaign in India. The new campaign focused on the 'value-formoney' proposition and for now had advertised in Mumbai and Bengaluru.
The creatives were simple, highlighting single product and the respective
price on a bright red background on large hoardings and other formats.

42

In Mumbai, about 47 billboards and 27 backlit bus shelters were taken up,
while 25 touch points in Bengaluru created the required buzz. The aim
was to create impact and buzz by announcing the value for money
offering to the consumers through main arterial routes.The other cities are
being targeted with television, coupled with other local media such as
radio.

HAPPYMEAL.COM

McDonald launched this website to promote its product. This website is

interactive one, where the users can not only play online games, solve
puzzles but also can send messages which are displayed on the home
page.

MOVIES AND MCDONALDS

McDonalds associated itself with movies like Shrek and Ice Age 3 which
had audiences from every age group. But the major focus was on the kids
again. Watches and character toys were given on the purchase of different
products to attract more and more kids to their stores.

MCDONALDS SHREK FOREVER AFTER WATCHES

These watches were given away with every McDonalds Happy Meal
purchased at McDonalds restaurants throughout the US and Canada from
June 11 to June 24, 2010, when Shrek-the movie was set for release. There
were 4 collectible watches in this set. Each watch features a favorite Shrek
character Shrek, Donkey, Gingy and Puss in Boots. The McDonalds Shrek
watches were fun toys and it was a hit with kids who love the Shrek
movies. Each watch had a novel way of opening up to reveal the watch
face and each made the use of the Shrek character's eyes and ears to set
the clock.

43

MCDONALDS AND THE LAST AIRBENDER HAPPY MEAL TOYS

These toys hit McDonalds restaurants throughout USA and Canada. The
12 character toy set was inspired by The Last Airbender movie in 3D
which The Last Airbender toy promotion carries on from the McDonalds
Shrek Forever After watches.
The toys in the Last Airbender set were plastic. A few of the toys had been
designed to appeal to girls such as Katara's Fan and the Katara Figure and
Bracelet. Each toy came with its own Last Airbender Character Card.
MCDONALDS AND ICE AGE 3

As part of this promotion, kids received one of the eight toys from The
ICE AGE 3 with the purchase of every Happy Meal. The eight toys
includes 4 colour changing drinking glasses with Ice Age 3animals
embossed on it and 4 lolly ice makers that are easy to use and a fun
kitchen accessory for Kids to make mutli colored lollies.
PORTRAYING BRAND AFFORDABILITY

Branded affordability has creatively portrayed over the years by engaging

the audiences with memorable campaigns like - The Bahanaas, bees
mein full dhamal, baap ke Jamane ka daam and Har Chotti Khushi Ka
celebration where it conveys the message of celebrating small joys does
not take much, come and celebrate with McDonalds with menu offerings
of Rs 20 onwards only.
INDIVIDUAL COMMUNICATION

The focus of McDonalds is on providing QSC & V that is quality, service,

cleanliness, and value to the customers. They know that if customers are
happy and satisfied, word of mouth publicity will take place that is kind of
free publicity which will ultimately lead to profitability.
PARTY TIME

To attract kids they not only focused on advertisements but also

organizing child amusement activities at outlets. A part of the store is
dedicated as kids section in most of the outlets. They offer to celebrate
kids birthdays at their stores.
INDIRECT MARKETING

McDonalds targeted kids by offering toys with the meal. By doing this
McDonalds also attracted families as parents always accompany their
children wherever they go. Thus company also created their impression in
the minds of several families. This is indirect marketing and they have
excelled in it.
ASSOCIATING WITH EVENTS
44

McDonalds associate itself with various events life stage shows for
promotion.
It has also been exploring strategic tie-ups with Indian sports properties
such as the IPL cricket tournament, where it was one of the event's food
providers.

FARMVILLE AND MCDONALDS

Farmville is the hottest game, being played by the members on Facebook.

On seeing its popularity, McDonalds associated itself with this game.
The McDonald's Promotion Event took place on October 6, 2010, and was
only available for players living in the USA. On this limited time players
were able to visit McDonald's Farm and receive rewards.

OTHER UNCONVENTIONAL ROUTES

Its Fresh Salads, Breakfast Giant Egg and interactive LED campaigns
and installations are just some of the ones that have created much
buzz for the brand.
McDonalds alliances in India by inking with petroleum giants BPCL
and HPCL. Two such alliances with BPCL outlets are in Mathura
(2000) (UP) and Doraha (2002) (Punjab)
Novel menu formats such as an Express Model with a limited menu
and Kiosks with a variety of dessert offerings.
McDelivery on bicycle at Chandni Chowk.
In addition, facilities like Wi-Fi are also provided to attract students
to the outlets like the one at Vile Parle in Mumbai.
ADVERTISING COSTS (AS PER ANNUAL REPORT

Advertising costs included in operating expenses of Company operated

restaurants primarily consist of contributions to advertising
cooperatives and were (in millions):
45

2009$650.8; 2008$703.4; 2007$718.3.

Production costs for radio and television advertising are expensed when
the commercials are initially aired. These production costs, primarily in the
U.S., as well as other marketing-related expenses included in selling,
general & administrative expenses were (in millions):

2009$94.7; 2008$79.2; 2007$87.7

46

CUSTOMER QUESTIONNAIRE
1) How often do you eat at McDonalds in a month?
* 0-2 times

* 2-5 times

* 5-10 times

* >10 times

2) In a month, how much would you roughly spend there?

* 0-100

* 100-500

* 500-1000

* 1000+

3) Which fast food joint do you prefer?

* McDonalds

* Pizza Hut

* Dominos

* Haldiram

* KFC

* Bikanerwala

* Other:

4) Why do you eat at McDonalds?

* Tastes Good

* Value for money

* convenient

* Other:

5) Rate McDonalds' value for money on a scale of 1-5 (1 is the lowest, 5 being the
highest)
*1

*2

*3

*4

*5

6) Rate McDonalds speed of service on a scale of 1-5 (1 is the lowest, 5 being the
highest)
*1

*2

*3

*4

*5

7) Rate McDonalds quality of service on a scale of 1-5 (1 is the lowest, 5 being the
highest)
*1

*2

*3

*4

*5

8) How long have you been a customer of Mcdonalds?

* 0-2 years

* 2-5 years

* 5-10 years

* >10 years

9) You most frequently visit Mcdonald's with:

* Family

* Friends

* Colleagues

* Other:

10) Age Group

* <15

* 16-22

* 23-30

* 30-50

* >50

11) Income Group (Rs/Annum)

* N/A

* 0-300,000

* 300,001-500,000

* 500,001-800,000

* >800,000

12) What is/are your favourite item(s) from the Mcdonald's menu?
13) How do you find the quality of Happy Price Menu?
*1

*2

*3

*4

*5

14) Which Promotional activity influences your decision to buy Happy Price Menu?
* TV Commercials

*Ads in print media

47

*Promotional event

15) Are you satisfied with the price of Happy Price menu?
* Yes

* No

16) What are the problems you faced at McDonalds?

*Wrong Order

*Less number of Seats

*Other Problems *No Problem

17) Any Suggestions for McDonalds

49

FRANCHISEE QUESTIONNAIRE / RESPONSES

How long do you keep the frozen goods before disposing of them?

McD (CP, Inner Circle)

1 week

McD (CP, Outer Circle)

1 week

McD (CP, Janpath)

McD (GN, Ansal Plaza)

1 week
1 weeks

Have you ever faced a short supply in any material / ingredient due to
the centralised distribution system?

McD (CP, Inner Circle)

No

McD (CP, Outer Circle)

No

McD (CP, Janpath)

McD (GN, Ansal Plaza)

No
No

How important, on a scale of 1-5, 5 being the most important, do you

think your customers feel the hygienic conditions at McDonalds are
when choosing to dine out?

McD (CP, Inner Circle)

McD (CP, Outer Circle)

McD (CP, Janpath)

McD (GN, Ansal Plaza)

5
5

Which McDonalds preparation do you feel is the most popular?

McD (CP, Inner Circle)

McChicken Burger

McD (CP, Outer Circle)

Aloo Tikki Burger

McD (CP, Janpath)

McD (GN, Ansal Plaza)

McVeggie Burger
Aloo Tikki Burger

Which McDonalds preparation do you think provides your company the

highest margin?
51

McD (CP, Inner Circle)

Chicken Maharaja Mac

McD (CP, Outer Circle)

Chicken Maharaja Mac

McD (CP, Janpath)

McD (GN, Ansal Plaza)

Chicken Maharaja Mac

Not Sure

Who, according to you, is the closest competitor to McDonalds in

Delhi / NCR?

McD (CP, Inner Circle)

KFC

McD (CP, Outer Circle)

KFC

McD (CP, Janpath)

McD (GN, Ansal Plaza)

KFC
KFC

53

SURVEY RESULTS AND INFERENCES

The following data has been collated based on the feedback by 127
respondents. The questionnaire used a 5 point Likert Scale to record the
responses.
PERCENTAGE OF RESPONDENTS:

35%

Salaried-45
Student-82

65%

Percentage of Salaried

18%

22%
0-300,000
300,001-500,000
500,001-800,000

24%

>800,000
36%

55

70
65
60

50

46

40

Count
30

20

10

0
0-2 times

2-5 times

5-10 times

Visit Frequency

57

>10 times

80

696969

70

60

50

Count

40

Value for Money

Speed of Service
Staff Courtesy

30

29
28

28
24
22

24

20

10
3

44
2

0
1

Rating

59

70
2
4
60
4
5

50

26

40

19
>10 times

Visit Count

5-10 times
2-5 times

30

0-2 times

20
34
29
10

0
<15

16-22

23-30

Age Group

61

1
2

30-50

>50

3.94 1.57

19.69

42.52

6.3

7.87

18.11

Customers Preference of Fast Food Restaurants

63

6.3
7.87

42.52
18.11

No. of times customers visit McDonalds in a month

65

17.32

52.76

29.92

Promotional Activity which influences customers choice

67

1.57
16.54

22.05
Tastes Good
Value for money
convenient
Other:

59.84

Why do customers prefer McDonalds

69

2.36 3.15
22.83
17.32

1
2
3
4
5

54.33

Customer Rating for the service provided by McDonalds

OBSERVATION AND SUGGESTIONS

SLOW SERVICE AT DRIVE-THRU WINDOWS

McDonalds needs to implements the drive-thru and revolving door
concepts in India to improve their returns. India currently leans towards
71

the dine in culture.

POOR ORDER ACCURACY
Better staff training is required to improve on this parameter. This is also
directly linked with the issues that McDonalds is facing to improve their
services on the drive-thru windows in India.
SPACE CONSTRAINTS IN OUTLETS
McDonalds outlets in certain areas suffer from a heavy space crunch. This
affects the dine in experience adversely and may discourage return
customers.
HOME DELIVERY SERVICE NOT UP TO THE MARK
McDonalds has been losing ground on this parameter. They do not service
areas beyond a 2 kilometer radius from the outlet as opposed to several
competitors. Also, their outlet network is not very dense and this is
another reason for them losing ground in many residential areas.
VARIETY IN THE MENU
Many respondents complain that not much variety is being offered by
McDonald India. Customers tastes change with time. Its high time that
McDonalds should introduce new products in the menu, both in Vegetarian
as well in Non-Vegetarian Menu.

73

WORKS CITED
http://ezinearticles.com/?McDonalds-Business-Analysis&id=687438
http://en.wikipedia.org/wiki/Market_analysis
http://en.wikipedia.org/wiki/Market_environment
http://economictimes.indiatimes.com/articleshow/5474815.cm
http://indiatoday.intoday.in/site/Story/96380/Taste+of+growth.html?complete=1
http://ivythesis.typepad.com/term_paper_topics/2009/02/strategic-businessanalysis-of-mcdonalds.html
http://mcdonaldsindia.net/about/our_journey.htm
http://misfall09.blogspot.com/2009/09/mcdonalds_23.html
http://www.aboutmcdonalds.com/mcd
http://www.aboutmcdonalds.com/mcd/our_company.html
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