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Can you guess the name of the company which: Is the ninth most valuable brand in the world? Has replaced the US army as the Nations largest job training organization? Controls the market share of more than 3 food chains taken together in America? It’s none other than McDonald’s Corporation USA. Looking at the above statistics makes one wonder that what is the driving force behind all these achievements? How is it that the chicken burger available in San Francisco is same as the one available in Delhi? Many of these questions have been answered in the book “McDonald’s: Behind the Golden Arches” written by John Love. But are these standards being carried out in India as well? The golden arches of McDonald’s are slowly becoming an integral part of the Indian landscapes. Everyone knows McDonald’s is big, but very few know just how significant its impact on Indian business really is. The inside of McDonald’s remains a mystery. McDonald's India is a joint venture of McDonald’s Corporation with Amit Jatia and Vikram Bakshi. Amit Jatia handles the operations in western region whereas Vikram Bakshi in the northern region. McDonald's India is an employer of opportunity, providing quality employment and longterm careers to the Indian people. The average McDonald's restaurant employs more than 100 people in 25 different positions – from cashier to restaurant manager. McDonald's world class-training inputs to its employees can be seen in the present close to 2000 employees currently in Mumbai and Delhi.
But the most overlooked fact of McDonald’s India is its contribution to the food processing industry. Six years prior to the opening of the first McDonald's restaurant in India, McDonald's and its international supplier partners worked together with local Indian Companies to develop products that meet McDonald's rigorous quality standards. Part of this development involves the transfer of state-of-the-art food processing technology, which has enabled Indian businesses to grow by improving their ability to compete in today’s international markets. McDonald’s dedication to its suppliers has lead to their growth, beyond the boundaries of the India. These aspects of McDonald’s do not get covered and highlighted by the news hungry press. But when the false news of using beef tallow in the French fries hit the market, the press did not leave a chance to exaggerate it. Despite the fact that right form the beginning; no beef ingredients have been used in any of the products in India. The marketing agency of McDonald’s, Mudra comes to its rescue in such times. The advertisements created by Mudra are a rage all over the nation, especially amongst the children. Who can forget the little kid who gets nervous in the school competition, but becomes happy again when his father takes him to McDonald’s? McDonald’s India has tried not to leave any stone un-turned in its objective to satisfy the Indian customer. But in Amit Jatia’s words, “Customers are generally not forgiving.” According to the survey conducted, customers demand low prices, more seating space, more variety, home delivery, and the list is endless. The fundamental secret to McDonald’s success is the way it achieves uniformity and allegiance to an operating regimen. McDonald’s India has to adhere to many rules and regulations laid down by the parent company, and it still has to cater to the Indian customer and his needs. McDonald’s India is a case study on how to mix conformity with creativity.
HISTORY OF MCDONALD’S
1954, a fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San Bernardino, California, and envisioned a massive new industry: fast food. In what should have been his golden years, Raymond Kroc, the founder and builder of McDonald's Corporation, proved himself an industrial pioneer no less capable than Henry Ford. He revolutionized the American restaurant industry by imposing discipline on the production of hamburgers, French fries, and milk shakes. By developing a sophisticated operating and delivery system, he insured that the French fries customers bought in Topeka would be the same as the ones purchased in New York City. Such consistency made McDonald's the brand name that defined American fast food.
Worlds Oldest McDonald’s
This 44 year-old site is the oldest in the worldwide chain of 20,000 restaurants and the last one with redand-white striped tile exterior. After opening in 1953, it immediately became the standard for the fast food franchises across the country. The building and its 60foot high neon sign with "Speedee the Chef" are eligible for listing on the National Register of Historic Places. Employees wear 50's style uniforms of paper hats, white shirts and bolo ties. The restaurant serves the
1.2 Worlds Oldest McDonald’s
original menu of hamburgers, cheeseburgers, fries and old-fashioned milkshakes. Also available are more recent McDonald's items such as Big Macs and Happy Meals. McDonald's reopened the facility as it was with walkup windows and outdoor seating. They also constructed and addition housing a museum, gift shop, restrooms and more outdoor seating.
Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonald's Corporation is created.
Chicken McNuggets is introduced. New Hamburger University campus opens in Oak Brook, Illinois. Set in 80 wooded acres. Training is provided for every level of McDonald's management worldwide.
Quality, Service, Cleanliness and Value (QSC& V) becomes the company motto.
50 billionth hamburger sold. Ronald McDonald Children's Charities is founded in Ray Kroc’s memory to raise funds in support of child welfare.
The 100th McDonald's opens in Chicago.
Hamburger University opens in Elk Grove, near Chicago.
McDonald's is listed on the Frankfurt, Munich, Paris and Tokyo stock exchanges.
One billion hamburgers sold. Ronald McDonald makes his debut.
McDonald's opens in Pushkin Square and Gorky Street, Moscow.
Filet-O-Fish sandwich is introduced.
The first McDonald's at sea opens aboard the Silja Europe, the world's largest ferry sailing between Stockholm and Helsinki.
McDonald's Corporation goes public.
The first restaurants outside of the USA open in Canada and Puerto Rico.
Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad and United Arab Emirates, bringing the total to over 15,000 in 79 countries on 6 continents.
1996 The Big Mac is introduced. The 1,000th restaurant opens in Des Plaines, Illinois. McDonald's opens in India – the 95th country. 1972
A new McDonald's restaurant opens every day. The Quarter Pounder is introduced.
Egg McMuffin is introduced.
The first Ronald McDonald House opens in Philadelphia. The Happy Meal is launched.
MCDONALD’S IN INDIA
company managed by Indians. McDonald’s India, a subsidiary of McDonald’s USA, has expanded its presence in India via 2 joint venture companies – Connaught Plaza restaurants and Hard castle restaurants. McDonald’s (India) has a 50 per cent equity stake each in both joint venture companies. Connaught Plaza restaurants manages operations and expansions across North India (Delhi, Jaipur and Punjab) – led by Vikram Bakshi – and Hardcastle restaurants, which is headed by Amit Jatia, manages operations and expansions across Western India (Mumbai, Pune, and Gujarat). Around the world, McDonald's traditionally operates with local partners or local management. In India too, McDonald's purchases form 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. Six years prior to the opening of the first McDonald's restaurant in India, McDonald's and its international supplier partners worked together with local Indian Companies to develop products that meet McDonald's rigorous quality standards. Part of this development involves the transfer of state-of-the-art food processing technology, which has enabled Indian businesses to grow by improving their ability to compete in today’s international markets.
Mr. Jatia and Mr. Bakshi
McDonald’s worldwide is well known for the high degree of respect to the local culture. McDonald's has developed a menu especially for India with vegetarian selections to suit Indian tasted and culture. Keeping in line with this McDonald's does not offer any beef and pork items in India. McDonald's has also re-engineered its operations to address the special requirements of a vegetarian menu. The cheese and cold sauces used in India is 100% vegetarian. Vegetable products are prepared separately, using dedicated equipment and utensils. Also in India, only vegetable oil is used as a cooking medium. This separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. The McDonald's philosophy of Quality, Service, Cleanliness and Value (QSC&V) is the guiding force behind its service to the customers. McDonald’s India serves only the highest quality products. All McDonald’s suppliers adhere to Indian Government regulations on food, health and hygiene while continuously maintaining their own recognized standards. All McDonald’s products are prepared using the most current state-of-the-art cooking equipment to ensure quality and safety. At McDonald’s, the customer always comes first. McDonald’s India provides fast friendly service- the hallmark of McDonald’s that sets its restaurants apart from others. McDonald’s restaurants provide a clean, comfortable environment especially suited for families. This is achieved through McDonald’s stringent cleaning standards, carefully adhered to. McDonald’s menu is priced at a value that the largest segment of the Indian consumers can afford. McDonald’s does not sacrifice quality for value – rather McDonald’s leverages economies to minimize costs while maximizing value to customers. The company has invested Rs 450 crore so far in its India operations out of its total planned investment of Rs 850 crore till 2007.
McDonald’s India Pvt. Ltd. has moved an application to the government seeking permission for payment and remittance of the initial franchise fee and royalty to Mc Donald’s Corporation. The permission has been sought on two grounds: McDonald’s India would pay an initial franchise fee of $45,000 on each of the McDonald’s restaurants already franchised or to be franchised, in the future, in India; and a royalty equal to 5 per cent of the gross sales from the operations of all its Indian restaurants on a monthly basis to McDonald’s International. The company hopes to break even in 2008. They currently serve around 5 million customers a day and hope to grow at the rate of 50% to 70% a year.
In order to satisfy the palate of the local population in a country, McDonald's offers a regionalized version of its menu. The result is McDonald's foods and meals not seen in other countries.
Bahrain In addition to the McArabia, McDonald's restaurants in Bahrain, beginning in March 2008, sell the McCrispy, a meal consisting of 1, 2, or 3 chicken strips served in a wrapper for a single strip or in a box for 2 or 3, with a choice of barbecue, sweet & sour, or garlic sauce. Like all Middle Eastern McDonald's restaurants, all food served in Bahraini outlets is halal.
McDonald's Chinese New Year meal, grilled chicken sandwich and twisted French fries. Tray liner has an image of the Chinese zodiac.
In China, the Chicken McNuggets come with the traditional BBQ, Sweet & Sour, and Honey Mustard sauces, but there's also a chili garlic sauce (very popular in China). In China there are specific McDonald's restaurants and counters for ice cream, beverages, and desserts (otherwise rare in China). They also include crispy chicken wings on their menu which comes in 2, 4, and 6 pieces. There is also a seasonal Chinese New Year meal available, including Grilled Chicken Burger, curly fries, with a horoscope of the twelve zodiac animals of Chinese astrology and traditional "red" packets, or gift bags, for monetary gift giving as good luck. Note that all chicken burgers offered in Chinese McDonald's use thigh fillet (eg Premium Grilled Thigh Fillet Burger, Hot and Spicy Grilled Thigh Fillet Burger), rather than breast meat as per usual in occidental countries.
During the Bun Festival on Cheung Chau, a special item called McVeggie Burgers were sold. McDonald's sells beef, chicken and pork burgers. Fried chicken wings and nuggets are also popular. In some restaurants, a separate counter sells ice cream and desserts to pedestrians. Soft Serve Ice Cream can be ordered with either red beans or green beans. Some restaurants have a section for the McCafé. Apart from the general menu, it also promotes some other foods seasonally or longer, like spicy french fries, the Shogun Burger (a Teriyaki pork patty with lettuce, served in a sesame seed bun), Grilled Chicken Burger, twisted macaroni breakfasts, salads, soups, pineapple or red bean sundae, pineapple pies, taco flatbreads with pork, beef or chicken, rice fan-tastic (a burger-like entree with rice patties in place of buns) and many others. Hong Kong hosts some of the world's busiest McDonald's with many operating round the clock. It also sells many toys or dolls, like Hello Kitty, Snoopy, and Disney figures in addition to set meals, which are very popular. In Chinese New Year, red packets (lai see) are included in set meals. During the local Bun Festival, McDonald's restaurant on the island of Cheung Chau sells mushroom burgers instead of hamburgers and any other items which contains meat. In Kowloon Park, there is also a small counter named Snack Station selling ice cream, as well as a counter that sells McDonald's drinks in the swimming pool.
The McCurry Pan is a very popular dish across India. It is an original creation of McDonald's India. Beef and pork products are not served to cater to Indian religious sensitivities. Chicken (only Halal) along with fish are the only meat products used. In India, meat and vegetarian meals are prepared in separate areas of the restaurant because of religious laws about preparation of food for vegetarians and meat-eaters. Cooks preparing vegetarian dishes wear distinctive green aprons. The Big Mac is replaced by the Maharaja Mac, which was originally made with lamb but is now made with chicken. Mexican-style wraps for both vegetarians and non-vegetarians, such as the Paneer-Salsa wrap and the Chicken-Mexican wrap, and Curry pans in Shahi-Paneer and Chicken-Tikka variations are also offered. Other items on the Indian Menu include chicken products such as the McChicken Burger and Chicken McGrill (a burger with a thin chicken patty, thin slices of both onions and tomatoes, filled with green chutney replacing the usual layer of mayonnaise). The vegetarian burger menu consists of the McAloo Tikki Burger. It is a vegetable burger with potato, peas, and spices, tomato, onion, and a vegetable-tomato mayonnaise.
McVeggie is another Vegetarian burger on the menu. It looks similar to the above McAloo Tikki Burger, but is made from mixed vegetables, peas, and spices, lettuce and veg mayonnaise (referred to as Veg Sauce in India). Another new Menu Item added is the McSurprise burger. It contains a patty, onion, Italian mayonnaise.There is also a Pizza McPuff, consisting of a puff pastry stuffed with peas, sliced cheese etc.
McDonald's sells fried chicken, which is by far more popular than the hamburgers. McRice is also offered, a small mound of steamed, plain rice. McSoup is a chicken flavored soup with bits of reconstituted croutons and vegetables. A bun containing a beef patty covered with satay sauce (spicy ground peanut sauce) is sold as Mc Sate.
There is a special menu named Prosperity Burger only for the Chinese New year festive season. There is also the Ayam Goreng McD which literally translated means McD's Fried Chicken, a crispy two piece fried chicken meal. The McSpicy available in Singapore is also available in Malaysia, marketed under the name Chicken McDeluxe. During the 2006 football season, spicy McNuggets were also introduced for a short period of time along with spicy Ayam Goreng McD. Another long time favourite is Bubur Ayam McD which literally translates to "chicken porridge" or congee. Bubur Ikan McD which is fish porridge/congee was also served for a short time. Fried chicken is also offered in Malaysia but it is not more popular than hamburgers as in neighbouring Indonesia, perhaps because of competition from Kentucky Fried Chicken and local fried chicken outlets. For a limited time only, a burger consisting of four beef patties, called the Mega Mac, was introduced in Malaysia.
There is a Spicy McChicken burger that has chutney in it. There is also a McChutney Burger, a meatball sandwich called the McKofta, and strawberry custard pie. Also, McArabia was recently introduced, with a chicken patty rolled up in Pita bread.
Logic: Marketers have four tools to use to develop an offering to meet the needs of their targeted customers. Collectively they are called the marketing mix.
You may have heard of the "four Ps" of marketing: product, price, place, and promotion. Collectively these are called the marketing mix. More comprehensively they are viewed as: product, service, or program - something of value you are offering the customer, client, or park visitor price - what the customer, client, or park visitor pays (direct costs are financial, indirect or alternative costs are such things as time it takes and the things people give up if they choose your offering) place, distribution, location, or accessibility - where the transaction takes place, perhaps in a park promotion or communication - this is how you inform the target market the benefits in your marketing mix. Collectively these are the tools organizations uses to develop offerings to satisfy their target market(s) ... the only tools at their disposal. Remember: If your marketing mix doesn't meet their needs they will not be satisfied - and if they aren't satisfied you are unlikely to meet your objectives. The marketing mix should be viewed as an integrated and coordinated package of benefits that reflect the characteristics of customers and various targeted publics and satisfy their needs, wants, and expectations. Note that the elements of the marketing mix should be integrated because each element of the mix usually has some impact, direct or indirect, on the other three. For example, if you improve the product or service you probably have to change the price because it costs more to produce. Although you may not have to change where the product is delivered to the customer, you will almost certainly have to change the promotion or communication with the customer because you need to tell the customer about the changes you have made in the product and how the changes will make it more desirable and satisfying.
One problem in many organizations is that different divisions may be responsible for different elements of the marketing mix. This happens even in well managed organizations. The result is that the offering is confusing to the target market. Lack of communication among divisions makes this problem worse. And if they don't share the same view of organizational objectives, the problem is worse still. These variables are known as the marketing mix or the 4 P's of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The firm attempts to generate a positive response in the target market by blending these five marketing mix variables in an optimal manner.
The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc.
Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing.
Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in proportion to the product price, a break-even analysis should be performed when making promotion decisions. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them. Promotion decisions involve advertising, public relations, media types, etc.
Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics, and levels of service.
Product: The product, service, or program includes both tangible and intangible elements. The tangible, of course, are those things that the customer can see, touch, feel, taste, or smell. The intangible include such things as the image of the offering ... which includes the image of the organization making the offering, the psychological aspects of pricing (high price to many customers is equated with high quality - and vice versa).
Price: The price is what the customer pays. It includes direct and indirect costs as well as opportunity costs. The benefits of the product have to be great enough to warrant the price. Price includes all costs associated with the product, service, or program. Place: The place is where the customer receives the product, service, or program. The place of delivery, including all of its resources, is part of what the consumer buys. A place that meets his or her needs better may be worth more. The place may be a park, a visitor center in the park, or an interpretive exhibit along a trail. In setting its strategy, the organization must determine how much the target market is willing to pay for atmosphere and physical resources of place. Promotion: Promotion includes all forms of communication you use to communicate the benefits of your offering to the target market(s). The objective is to persuade the customer in such a way that he or she recognizes that your offering is uniquely qualified to meet his or her needs. The term promotion mix is commonly used to refer to the types of communication that are available: advertising, public relations, personal selling, publicity, and sales promotion. Some authors include direct marketing. Word of mouth, though seldom discussed, is powerful promotion.
The marketing mix principles (also known as the 4 p’s.) are used by business as tools to assist them in pursuing their objectives. The marketing mix principles are controllable variables, which have to be carefully managed and must meet the needs of the defined target group. The marketing mix is apart of the organizations planning process and consists of analyzing the defined: How will you design, package and add value to the product? Product strategies. What pricing strategy is appropriate to use? Price strategies. Where will the firm locate? Place strategies. How will the firm promote its product Promotion strategies.
Product Product Decision
Bene f i t s o f fe red
We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying ‘Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer’. The vegetarian burger menu consists of the McAloo Tikki Burger. It is a vegetable burger with potato, peas, and spices, tomato, onion, and a vegetable-tomato mayonnaise. McVeggie is another Vegetarian burger on the menu. It looks similar to the above McAloo Tikki Burger, but is made from mixed vegetables, peas, and spices, lettuce and veg mayonnaise (referred to as Veg Sauce in India). Another new Menu Item added is the McSurprise burger. It contains a patty, onion, Italian mayonnaise.There is also a Pizza McPuff, consisting of a puff pastry stuffed with peas, sliced cheese etc. McDonald’s concentrated on studying the Indian culture, its value-systems and its influence in food consumption decision making. It found that although a substantial proportion of the populations were non-vegetarians, they stuck to mostly fish, mutton and
chicken. Muslim took beef but though pig meat to be dirty; Hindus preferred neither beef nor pork; Christian took both beef and pork. McDonald’s decided, for the first time in their business history, to drop ham and beef burger from their menu. Two years back, they even excluded mutton burgers from their offerings. McDonald’s developed a menu especially for Indian with vegetarian selection to suite Indian taste. It introduced products like McTikki Aloo for the Punjabi taste buds. McDonald’s has also re-engineered its operation to address the special requirements of a vegetarian menu. The cheese and cold sauces used in India is 100 % vegetarian. McDonald’s are committed for giving customers wholesome, healthy, and delicious food. They ensure that the cooking area as well as cooking equipment for vegetarian products is visibly segregated from the non Vegetarian sections. What’s more- their crew members cooking vegetarian food items are identifiable by their green aprons.
Pricing is the only mix which generates a turnover for the organization. The remaining 3p’s are the variable cost for the organization. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship.
Penetration Skimming Competition Pricing Strategies Product Line Bundle Psychological
The customer's perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item; it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrity. A further consequence of price reduction is that competitors match prices resulting in no extra demand. This means the profit margin has been reduced without increasing sales. 21
PHYSICAL EVIDENCE: The physical evidence factor of all the McDonalds centers are the signboards, golden arches, buildings, interiors, colours combination of yellow and red, clean facilities, visible food preparation section etc. the site shown in the picture is 52 years-old and is the oldest in the worldwide chain of 20000 restaurants and the last one with red-andwhite stripped tile exterior. After opening in 1953, it immediately became the standard for the fast food franchises across the country. The building and its 60-foot high neon sign with “Speede the Chef” are eligible for listing on the national register of historic. A very popular punch line of Mcdonals-“Aap ke zamane mein, baap ke zamane ka daam”. The main reason of this price strategy was too attract the middle class & the lower class of people in India. After this not only the upper class prefers going there but all class of people go there. Value Pricing
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Happy meal – small burger ,fries ,coke+toy Medium Meal Combo- burger ,fries,coke-veg Rs:75 ,Maharaja Mac Meal Rs: 95 Family Dines under Rs: 300 Price lower than Pak ,Srilanka ,50% lower than U.S.
A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional mix can consist of: Advertising Public Relation Sales Promotion Promotional Mix Personal Selling Direct Mail Internet/ E-Commerce The promotions aspect of the marketing mix covers all types of marketing communications. The methods include advertising, sometimes known as 'above the line' activity. Advertising is conducted on TV, radio, cinema, online, poster sites and in the press (newspapers, magazines). Key objectives of advertising are to make people aware of an item, feel positive about it and remember it. The more McDonald's knows about the people it is serving the more it is able to communicate messages which appeal to them Messages should gain customers' attention and keep their interest. The next stage is to get them to want what is offered. Showing the benefits which they will obtain by taking action, is usually sufficient. The right messages must be targeted at the right audience, using the right media.
The Media Magic “You Deserve a break today, so get up and get away- To McDonald’s” The above break commercial was one of the initial commercial themes adopted by McDonald’s United State which became the best known commercial song on television and, in fact, the most identifiable advertising themes of all time.
Needham was one of the first advertising agencies of McDonald’s which made many revolutionary advertisements for the company. Needhams advertising formula became know in McDonald’s as “Food, Folks, and Fun” and it remains the backbone of all the chain’s advertising campaigns.
McDonald’s is now, one of the world’s mightiest consumer marketers. Its brand valuation is $25 billion, making the ninth most valuable brand in the world. Why Mudra in India?
DDB Needham and Leo Burnett are the advertising agencies of McDonald’s are worldwide. Hence, when they came to India, The subsidiary of both the companies pitched for the account and ‘Mudra’ the Indian partner of DDB Needham got the account. Since the very beginning Mudra has been the advertising agency of McDonald’s India. The Mudra team meets up with McDonald’s marketing team on a regular basis and they have a debate and discussion on the new strategies to be adopted.
McDonald’s uses various Medias like television, hoardings and bus shelters. They are almost out of print ads. McDonald’s also sponsor many Television Programmers like kaun Banega Crorepati, Children shows etc.
Even the paper Mats on the trays at the McDonald’s are designed as per the ongoing Marketing Strategy of McDonald’s. For e.g.: During the French fries issues, all their
Paper mats had description of the burgers, how the vegetarian products are made etc, to regain the confidence of the customers. The placing of the pamphlets, banners in and around the outlets is decided upon by the area sales manager and the operations manager, in co-ordination with the restaurant manager. For e.g. : currently they have the Bugs Life Theme going on wherein they give free Bugs Life toys with the happy meal. All the outlets are decorated with the pictures of the toys and even the paper mats have pictures of the toys on them. The hoardings around the outlets carry the same theme. The 80-20 Menu Boards
Even the menu counters in the outlet are a marketing tool for the company. They have to be designed such that they catch the attention of the customer and tempt him to order the product. So McDonald’s have menu boards that are descriptive as well as visual. They call it the 80-20 menu board eighty percent visual and twenty percent descriptive. Under the recent research conduct by McDonald’s they found that the consumers would have a clear remembrance of the 80-20 Board. This board also helps give a feel of the product before it is purchased.
Reconnecting with customers’ thro’contemporary global marketing direction “I’m loving it”. “I am loving it” refers an attitude we want your employees to embrace & reflect in their services.
Their other lucky Promotion strategies were like :• Collaboration with coke, M Tv, Hungama .com, Sony Music, etc. • Scratch cards on large jumbo meals. • Prices- caps, T-shrit, internet card, CD’s, Free tickets to Lucky Ali’s contest. • Purchase of 2nd meal in a month qualified for Opel Corsa/ NZ trip.
Refers to how an organisation will distribute the product or service they are offering to the end user. The organisation must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organisation is to meet its overall marketing objectives. If organisation underestimate demand and customers cannot purchase products because of it profitability will be affected.
The following table summarizes the marketing mix decisions, including a list of some of the aspects of each of the 4Ps.
Functionality Appearance Quality Packaging Brand Warranty Service/Support
List price Discounts Allowances Financing Leasing options
Advertising Personal selling Public relations Message Media Budget
Channel members Channel motivation Market coverage Locations Logistics Service levels
“Mc Donald’s mein hai kuch baat” a place for entire family to enjoy. Mc Donald’s positioned for youth families. Positioning is about communicating your unique selling advantage or proposition to your target audience in everything you do. Marketing, sales, customer service. The consistency helps your customer remember. Can't articulate your unique selling proposition in less than 10 words? Maybe you lack clarity about positioning.
Our marketplaces have lots of choices. Too many, perhaps, for the average consumer to evaluate logically. With hundreds of choices in any given locale, many people simply look for a referral to a product or with professional services: a company that their friends trust. Those who shop around, consider two or three options and take the best of the three. With hundreds of choices, and with products and services that most consumers find hard to differentiate, how do you set yourself, apart from the crowd?
Positioning allows a marketer to think about why a customer would want to do business with them. What do you offer that the other producers don't? What does a potential client get by doing business with you, that will serve their needs well?
Positioning has three components:
What are your strengths? Your distinctive competencies? What about your offerings provide value to your customers?
Who is your target customer? What about them, makes them an ideal fit for the value you offer?
How are you different from your competitors in ways that your customers and potential customers will value? In other words, what is your unique selling proposition? Your competitive advantage?
When all three are put together, you have a positioning statement. Positioning statements are the basis for all marketing messaging, sales scripts, and at a corporate level: branding. So here are the things you need to know to be able to develop your own market positioning:
Who are you? As a company? As a sales rep? What is your firm or known for? (Ask people what they think. It may not be what your internal talk says it is. Is it prompt claims? Or telling it like it is? Or it might just be everyone knows you.)
What do your customers appreciate about your products or services? (Ask your colleagues and your customers. Again, it might not be what you think. Maybe you are known for high quality. Or perhaps for returning calls promptly or your problem solving ability. Maybe it is just that you are convenient. )
What are you particularly strong at? (These are your core competencies.) What are you better at, than anyone else in your business? As a company? As a professional? As a sales rep? (Quality? Innovation? Cost effective choices?)
Who are your most satisfied customers? What is it that they value most about what you have to offer?
Based upon your sales goals and annual plan, who is your target market? The key here is the fit between what you do well and who or what type of business needs what you are good at.
What value can you bring your customers that they will value the most, based upon your unique strengths?
At a company level, can you articulate this competitive value for your target, best customers? Does your branding reflect this? Do your communications use this messaging as its foundation?
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Are your web, collateral, and sales force attuned to this value? Do your services focus on this value? Does your customer service reflect this value? Does your customer service reflect the promise of the brand? Or are customers continually shocked that the customer service is not like the brand image at all?
Your customers are bombarded with hundreds - perhaps thousands - of commercial messages each day. Believe it or not buying your product or service is probably not their most important priority. So, in the end, it comes down to relationships. Does your vendor understand your needs?
Thus, positioning is EVERYTHING, because, positioning is that unique value you offer, to that target market you seek, in ways that are better, more effective, more amazingly meeting your needs than any of your competitors. And, the customer service, and employee relationships need to MATCH or be INTEGRATED with the market positioning.
Impotance Of Positioning
Marketing strategy that aims to make a brand occupy a distinct 'position,' relative to the competing brands, in the mind of the customer. Firms apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. • Develops Brand Image • Creates Demand • Creates Demand • Creates Value In The Mind Of Customer • Commands Premium Price
If I will Launch Pizza hut in Market I will try keeping the following things in the mind: 1. Target Customer: •
Young Families: They are the people who prefer outing with their
families.These people believe in working hard and partying harder.
Senior citizens: Generally these fast food restaurants have targeted kids
or younger generations. So I would like target them.
2. Price: The burgers I think is rightly priced here but the beverages are little bit high priced which most people can’t afford it. It should’nt happen that people come here only to eat burgers but also have these beverages. So the beverages would be priced accordingly that everyone could afford it. 3. Product: I think the product here are little bit westernized .The senior citizens would not find it familiar it with them. The burgers and eatables to more Indianized so that senior citizens find it familiar. And to introduce more milky beverages so that it would attract more senior citizens and kids. 4. Place: I would try opening these restaurants in residential areas so that senior citizens would not find any problem in going out. And open these in malls and multiplexes so that the young generations which likes to hang out in these places would find it easier to go there.
Marketing Research of McDonald’s
There are approximately 22,000 registered restaurants in India, which have sales of over $15,000 per month. In addition, there are more than 100,000 roadside restaurants (dhabas) selling their prepared foods in small stalls in cities and on highways. There are 1,568 registered hotels in India.
The opportunity for U.S. food companies in India's food service market is small but growing. Sales by Indian food service companies totaled approximately $6 billion in fiscal year 1998. Restaurants account for approximately 55 percent of Indian food service sales. The institutional sector consists of hospitals, prisons, defense establishments, schools, company canteens, railways and airlines.
3.1 Indian Food Service Sub-Sector Sales FY 1998 100 percent = $6 billion Hotels 5%
* Excludes roadside restaurants Source: Literature search, Interviews, PSi analysis
Factors driving increased food service sales:
Growth in Personal Income: The increase in buying power of Indian consumers is driving growth in the food service sector. India's per capita income has increased by over 20 percent from 1992 to 1996. Shrinking Household Size: The total number of households in India has increased by less than 3 percent per year from 1990 to 1998; however, the number of households in middle, upper and high-income categories has grown by more than 12 percent annually. These households have higher disposable income per member and have a greater propensity to spend on food. Urbanization: Approximately 50 percent of high, upper and middle-income group Indian consumer households reside in urban areas. Growing Number of Women in the Workforce: Over 16 percent of the population of Indian women work full-time and spend most of their time away from home. Due to these changes many Indian consumers are opting for meals away from home. Menu Diversification: High-income Indian consumers are seeking variety in their choice of food. Urban Indian consumers are aware of various international cuisine (e.g. Continental, Chinese, Mexican, Italian, Thai, and Japanese) and an increasing number are willing to try new foods A growing number of specialty restaurants, fast food outlets, home delivery and takeaway restaurants have opened in the last few years. A number of foreign restaurant chains (e.g. Domino's, Pizza Hut, Pizza Express,TGIF, KFC and Baskin Robbins) have started operations in India and have achieved success.
Promotional Techniques Which We Would Have Used
Before adopting any promotional techniques we would have conducted a survey.
Ratio of Vegetarians and Non-Vegetarians visiting McDonald’s
McChicken Burger 19%
McVeggie Burger 12%
French Fries 42%
Do you find the product line satisfactory?
40% 30% 20% 10% 0%
35% 30% 25% 20% 15% 10% 5% 0%
31% 26% 21%
Shifting Sleeping Traffic Others House Couple Policemen
Do you find McDonald’s value for money?
Problems faced in the visits to McDonald’s
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
24% 9% 3%
Other No Problems Problems
Suggestions to improve McDonald’s
No Suggestions Better Music More Space Home Delivery More Variety Low Prices
22% 7% 13% 15% 19% 24%
10% 15% 20% 25%
Unique Selling Proposition of McDonald’s
30% 25% 20% 15% 10% 5% 0%
17% 6% 8%
Based on this survey we arrive at our promotional techniques which should be appropriate to be used for increasing the sales:
1. Increase its product line. 2. To have more variety to choose from, to include more deserts and more items like Pizza McPuff. 3. To provide better and quick service. 4. Lower the supply chain cost so that it helps in cost reducing. 5. To expand their Happy Meal choices to attract and retain customers. 6. To educate about healthy lifestyle. 7. Introduction of McCafees serving premium and specialty coffees and other beverages and other products such as cakes, pastries etc in the existing McDonald’s. 8. Provide with better ambience. 9. Focus on gifts for all generations i.e. youth, kids’ especially senior citizen which is a completely new concept. 10. Special promotions during festivals. 11. Increasing the space for provision of birthday party areas. 12. Try to sponsor college festivals. 13. Work for social welfare of the society. After analyzing the marketing mix of McDonald’s, it is clear that the company can be said to be `global’, i.e. combining elements of globalization and internationalization. McDonald’s have achieved this through applying the maxim, `think global, act local’.Which is one of the most important reasons for their success in India.
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