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A COMPARATIVE STUDY ON MARKETING STRATEGIES OF MCDONALDS IN INDIA AND USA CHAP.

1 INTRODUCTION
Meaning of Marketing Mix The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market. Definition: An organization's strategy that combines all of its marketing goals in to one Comprehensive good marketing strategy should be drawn from market research and focus on the right product mix in order to achieve the maximum profit potential and sustain the business. The marketing strategy is the foundation of a marketing plan 7 Ps of Marketing Strategies Price: refers to the value that is put for a product. It depends on costs of production, segment targeted, ability of the market to pay, supply - demand and a host of other direct and indirect factors. There can be several types of pricing strategies, each tied in with an overall business plan. Pricing can also be used a demarcation, to differentiate and enhance the image of a product. Product: refers to the item actually being sold. The product must deliver a minimum level of performance; otherwise even the best work on the other elements of the marketing mix won't do any good. Place: refers to the point of sale. In every industry, catching the eye of the consumer and making it easy for her to buy it is the main aim of a good distribution or 'place' strategy. Retailers pay a premium for the right location. In fact, the mantra of a successful retail business is 'location, Promotion: this refers to all the activities undertaken to make the product or service known to the user and trade. This can include advertising, word of mouth, press reports, incentives, commissions and awards to the trade. It can also include consumer schemes, direct marketing, contests and prizes.

People: To incorporate people as the part of the marketing mix is also very essential. They are the ones who make the products and services a success along with that they are the ones who have the strength to tarnish the products image. This is mostly applied if the product offered is a service. Process: This is refers to the process and methods of offering a products and service. For instance, the method of handling sales, processing of orders and after-sale service can be very important elements of the marketing mix. It is good to have a detailed knowledge of whether the services are useful to the consumers. Physical Evidence can also refer to the people within your company and how they dress and act. It can refer to how your office is set up, the professionalism of your staff, nice brochures, how you interact with your customer base, and every single visual element about your company. OBJECTIVES OF THE STUDY.

To identify different activities of McDonald's follow in order to establish itself in a local market and increasing sales by being in customer's mind and heart.

To analyze the level of customer satisfaction for products offered by McDonalds.

To identify the strategies used by McDonalds

HYPOTHESES OF THE STUDY Ho: There is increase in sales after adopting marketing strategies by Mc Donalds in India and USA. H1: There is no increase in sales after adopting marketing strategies by Mc Donalds in India and USA. METHODOLOGY OF THE STUDY My study is based on secondary data which is collected from various websites.

CHAP. 2 REVIEW OF LITERATURE


The organisation must consider labor costs, the long term benefits that may result from introducing new technology; possible increase in income and reduction in cost by improving quality and long-term benefits such as employee training. McDonalds have been able to improve efficiency by providing high quality choices that offer customers a variety of choices to meet a balance as well as specialist dietary need. The quality of output in terms of does the product meet the customer requirements. McDonalds has continued to product high quality products that meet customer needs. McDonalds has continued to offer completely new ranges of products as well as improving or varying existing ones. McDonalds has focus on reducing the Trans fat and salt content of its products without changing taste and have been successful in their use of new healthier cooking oils. The organisation establishing the needs and wants of the customers, developing products that satisfy those needs and wants, measure the products in terms of value, quality and customer satisfaction and exchange of transactions between the organisation and its customers. McDonalds has mainly focused on this strategy in order to reposition itself and has done so

CHAP.3 INTRODUCTION OF COMPANY


HISTORY McDonald's in India is a 50-50 joint venture partnership between McDonald's Corporation [USA] and two Indian businessmen. Amit Jatia's company Hardcastle Restaurants Pvt. Ltd. owns and operates McDonald's restaurants in Western India. While Connaught Plaza Restaurants Pvt. Ltd headed by Vikram Bakshi owns and operates the Northern operations. Amit Jatia and Vikram Bakshi are like-minded visionaries who share McDonald's complete commitment to Quality, Service, Cleanliness and Value (QSC&V). Having signed their joint-venture agreements with McDonald's in April 1995, they trained extensively, along with their Indian management team, in McDonald's restaurants in Indonesia and the U.S.A. before opening the first McDonald's restaurant in India. Mc Donald's international through its wholly owned subsidiary McDonald's India entered into two JVs, one with Connaught Plaza Restaurants Pvt. Ltd. in the northern & eastern region and another with Hard castle Restaurants Pvt. Ltd. in the western & southern region. As a leader in QSR (Quick Service Restaurant) segment McDonalds has pioneered various industry benchmark practices over the past decade of serving Indian customers, including new concepts such as: McDonald's in India is a locally owned and managed company run by Indians, employing local staff, procures from local suppliers to serve its customers. McDonald's India opened its first family restaurant at Basant Lok in Oct, 1996; today it has 165 Restaurants across India. This vibrant decade has seen McDonald's evolve Indian menus, Indian sensitivities and yet remain as globally innovative as ever. This journey has seen McDonald's develop a rich brand identity amongst its customers and employees as well as partners alike. At McDonald's India we have had a single mantra: providing 100% total customer satisfaction and the formula for achieving this goal in our restaurant operation is the long-standing commitment to the McDonald's Promise. McDonald's worldwide is well known for the high degree of respect for the local customs and culture. McDonalds has developed a menu especially for India with vegetarian selections to suit Indian tastes and preferences. Keeping in line with this, McDonalds does not offer any beef or pork items in India. In the last decade it has introduced some vegetarian and non-vegetarian products with local flavors that have

appealed to the Indian palate. There have been continuous efforts to enhance variety in the menu by developing more such products. McDonald's has also re-engineered its operations repeatedly in its 13 years in India to address the special requirements of a vegetarian menu. Vegetable products are 100% vegetarian, i.e.,

They are 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 maintained throughout the various stages of procurement, cooking and serving.

International Standards. McDonalds entered India in 1996. McDonalds India has a joint venture with Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India. Apart from opening outlets in the major metros, the company is now expanding to Tier 2 cities like Pune and Jaipur. Two brothers, Richard and Maurice McDonald founded McDonalds in 1937. The brothers developed food processing and assembly line techniques at a tiny drive-in restaurant east of Pasadena, California. McDonalds first international venture was in Canada, during 1967. Shortly afterwards, George Cohon bought the licence for McDonalds in eastern Canada, opening his first restaurant in 1968. Cohon went on to build a network of 640 restaurants, making McDonalds in Canada more lucrative than any of the other McDonalds outside the USA. The key to the international success of McDonalds has been the use of franchising. By franchising to local people, the delivery and interpretation of what might be seen as US brand culture are automatically translated by the local people in terms of both product and service. McDonalds now has over 20,000 restaurants in over 100 countries, and around 80 per cent are franchises.

Challenges in Entering Indian Markets Regiocentricism: Re-engineering the menu McDonalds has continually adapted to the customers tastes, value systems, lifestyle, language and perception. Globally McDonalds was known for its hamburgers, beef and pork burgers. Most Indians are barred by religion not to consume beef or pork. To survive, the company had to be responsive to the Indian sensitivities. So McDonalds came up with chicken, lamb and fish burgers to suite the Indian palate. The vegetarian customer India has a huge population of vegetarians. To cater to this customer segment, the company came up with a completely new line of vegetarian items like McVeggie burger and McAlooTikki. The separation of vegetarian and non-vegetarian sections is maintained throughout the various stages Marketing at McDonalds Marketing Objectives A marketing strategy must be created in order to determine the means by which a set of clear objectives may be met. Objectives communicate what marketers want to achieve, guide marketing actions and are used to measure how well a plan is working. They can be related to market share, sales, reaching the target audience and creating awareness in the marketplace. Long-term objectives are broken down into shorterterm measurable targets, which McDonalds uses as milestones along the way. Results can be analyzed regularly to see whether objectives are being met. This type of feedback allows the company to change plans and allows flexibility. Once marketing objectives have been established, the next stage is to define how they will be achieved. The marketing strategy is the statement of how objectives will be delivered. It explains what marketing actions and resources will be used and how they will work together.

CHAP .4 MARKETING STRATEGIES OF MC DONALDS


After segmenting the market, finding the target segment and positioning itself, each company needs to come up with an offer. McCarthy (1975) formulated the concept of the 4Ps product, price, promotion, and place marketing mix. For many years these have been used as the principal foundation on which a marketing plan is based. However, with particular attention being paid to services marketing in recent years, theorists have identified additional variables which could be added to the 4Ps. Fifield and Gilligan (1996) recognised the following variables as an integral part of the marketing mix process, physical, and people. Market research identifies these factors and anticipates how they will affect people's willingness to buy. As the economy and social attitudes change, so do buying patterns. McDonald's needs to identify whether the number of target customers is growing or shrinking and whether their buying habits will change in the future. Market research considers everything that affects buying decisions. These buying decisions can often be affected by wider factors than just the product itself. Psychological factors are important, e.g. what image does the product give or how the consumer feels when purchasing it. These additional psychological factors are significantly important to the customer. They can be even more important than the products' physical benefits. Through marketing, McDonald's establishes a prominent position in the minds of customers. This is known as branding. It is these 7Ps that we will use in analyzing the marketing of McDonalds: 1. Product features, quality, quantity. 2. Place location, number of outlets. 3. Price strategy, determinants, levels. 4. Promotion advertising, sales promotion, public relations. 5. People quantity, quality, training, promotion. 6. Process blueprinting, automation, control procedures. 7. Physical cleanliness, dcor, ambience of the service.

1. Product Product is the physical product or service offered to the consumer. Product includes certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the non-tangible aspects of the product and service. McDonalds has intentionally kept its product depth and product width limited. McDonalds studied the behavior of the Indian customer and provided a totally different menu as compared to its International offering. It dropped ham, beef and mutton burgers from the menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Chicken Maharaja Mac. The perceived secret of McDonalds success is the willingness to innovate, even while striving to achieve consistency in the operation of its many outlets. For example, its breakfast menu, salads, Chicken McNuggets, and the McLean Deluxe sandwich were all examples of how the company tried to appeal to a wider range of consumers. The long history of innovation and experimentation resulted in new profit centers like Chicken McNuggets and the breakfast menu. Innovation and

experimentation also produced some disappointments like the McLean Deluxe, but inevitably experimentation in limited outlets provides McDonalds a way to retain its key strengths-quality and consistency-while continuing to evolve. The use of franchising, again, provides various perspectives that, in turn, lead to innovation for products and solutions. Franchisees agree to operate their restaurants in the McDonalds way but there remains room for innovation. Many ideas for new menu items come from franchisees responding to customer demand. Developing new products is crucial to any business even those that successfully relied on a limited menu for many years. As consumer tastes change, menu innovation injects enthusiasm allowing the firm to explore markets previously overlooked or ignored. The Egg McMuffin, for example, was introduced in 1971. This item enabled McDonalds to accommodate consumers of the breakfast market. Filet-o-Fish, Drivethrus, and Play lands were all product of McDonalds already has a history of doing this so it will not require major changes to its operations strategy-at least initially. If the product line-up gets too large, then the task of maintaining quality becomes exponentially harder. The trick is to consider how to eliminate some of the existing

menu items when you introduce new ones, while making sure the staff is fully trained in how to execute these products successfully. McDonalds serves the world some of its favorite foods Fries, Big Mac, Quarter Pounder, Chicken Mc Nuggets, and the Egg Mc Muffin. McDonalds had done well with a limited product range. Declining per unit sales and competitors gaining ground, may indicate that McDonalds menu needs a face-lift. One way to do that is by inserting a couple of new, highly promoted menu items. This would refresh the product menu and provide new, satisfying experience for dinner consumers. Quality Assurance teams are responsible for monitoring the quality of McDonalds food products, both in the restaurants and at suppliers at all stages of production. This involves a continuous round of visits, inspections and audits, announced and unannounced, to all production facilities, distribution centres and restaurants. Visits even extend to secondary suppliers such as farms, to monitor crops growing in the field or to inspect seeds prior to planting. Every supplier manufactures to very tight specifications, which detail the exact quantity and quality of raw ingredients and the dimensions of the finished product. The specifications also stipulate extensive checking procedures. In addition to studying all production run records which are sent to McDonalds by suppliers, McDonalds regularly take samples of stock at distribution centres to ensure that they conform to specifications. The quality controls continue when the food arrives at restaurants. No delivery is accepted until a series of quality and safety checks is 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 distinguishing features of McDonalds as a fast-food restaurant McDonalds Indian Menu: In Vegetarian McVeggie, McAlooTikki, Paneer Salsa Wrap, McCurry Pan, Pizza McPuff. In Non vegetarian Chicken Maharaja Mac, McChicken Burger, Shahi Chicken McCurry, Wrap Chicken Mexican, Fillet-O-Fish, Chicken McNuggets 2. Place McDonalds currently has over 24,500 restaurants in 116 countries across the world. McDonalds continues to focus on managing capital outlays more effectively through prudent and strategic expansion. In 1998, the company added 1,668 restaurants

system-wide (whether operated by the company, franchisee or joint venture), compared with 2,110 in 1997 and 2,642 in 1996. In 1999, McDonalds expected to add about 1,750 restaurants with a continued emphasis on traditional restaurants primarily in locations outside the USA. McDonalds realizes the potential for growth in international markets and plans to benefit from lessons that they learned in the USA. For example, they used to add 300-400 restaurants a year, every year, in the USA regardless of circumstances. It was a strategy that created a gap between them and the competition. However, they realize looking back that they could have built even more restaurants at a time when competition was not so great. This would have meant that a lot of those other restaurants could have been McDonalds. They have applied this lesson to their rapidly growing international business, especially in markets where competition is not so strong. Although this strategy is an example of globalisation, it is still clearly a glocal focus as McDonalds can now sh are ideas, best practices and human resources across borders, thus further enhancing its competitive advantage and strengthening its leadership position. The place mainly consists of the distribution channels. It is important so that the product is available to the customer at the right place, at the right time and in the right quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonalds outlet. 3. Pricing For each country, there is a rigorous pricing process that is used to determine the price for that particular market. (1) selecting the price objective; (2) determining demand; (3) estimating costs; (4) analyzing competitors costs, prices and offers; (5) selecting a pricing method; and (6) selecting a final price.

The process above sets out the basic framework that allows McDonalds to set localised pricing. McDonalds overall pricing objective is to increase market share. In each country, they look at the demand for their product as a barometer for setting price. In the USA, for example, a Big Mac with fries costs the equivalent of a Chicago office workers earnings during 14 minutes. However, elsewhere, a meal like this is perceived as a luxury, as opposed to a normal product, and would cost a lot more relative to earnings. Thus, depending upon the perception of price by the consumer, then will the price of the McDonalds product be determined. By looking at the product MIXMAP, it is clear that, although placed in the same box, the consumer in Lagos perceives the McDonalds products as having more quality than the consumer in Chicago. Therefore, in Lagos, the consumer will be willing to pay a higher price relative to their earnings; hence, McDonalds prices its goods accordingly. This pricing strategy does not always work successfully, though, as was the case in the USA in 1997 when McDonalds was losing domestic market share. To combat this, they had to lower prices in an attempt to increase revenues. The official stance on McDonalds pricing policy is highlighted in the companys mission statement, where it states that the most fundamental element of determining price was: Being in touch with the pricing of our competitors allows us to price our products correctly, balancing quality and value. Pricing includes the list price, the discount functions available, the financing options available etc. It should also take into the consideration the probable reaction from the competitor to the pricing strategy. This is the most important part of the marketing mix as this is the only part which generates revenue. All the other three are expenses incurred. The price must take into consideration the appropriate demand-supply equation. McDonalds came up with a very catchy punch line Aap ke zamane mein, baap ke zamaneke daam. This was to attract the middle and lower class consumers and the effect can clearly be seen in the consumer base McDonalds has now. McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal, family meal etc to increase overall sales volumes. 4. Promotion Promotion, or the marketing communications mix, was seen by Kotler (1994) as consisting of five major tools:

1. advertising; 2. direct marketing; 3. sales promotion; 4. public relations and publicity; and 5. personal selling. Using these tools, McDonalds looks to localize its marketing communications strategy as it needs to consider the enormous range of cultural and other differences that it would be faced with in each country. It would be nave to ignore the various local markets and the factors which may affect the performance of its product in them. It also needs to analyze consumers attitudes towards its product, usage patterns and ethnic, moral and religious considerations in that environment. Although the idea is to promote McDonalds as a global image, McDonalds focuses on the needs of the communities they are entering. In a communications context, the maxim brand globally, advertise locally (Sandler and Shani, 1991) is the McDonalds promotional strategy. To understand this more fully, further exploration of the key elements of the promotional mix, appropriate to McDonalds, must be examined. The various promotion channels being used in India by McDonalds to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. There are three main objectives of advertising for McDonalds are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonalds does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Some of the most famous marketing campaigns of McDonalds are: You Deserve a break today, so get up and get away- To McDonalds Aap ke zamane mein, baap ke zamane ke daam. Food, Folks, and Fun Im loving it.

5. 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. 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 A blend of US human resource practices and host country norms. A new McDonalds opens somewhere in the world every eight hours. Two thirds of the 1,200 to 1,500 new restaurants which the company opens annually are outside the USA. The firm has more than a million employees, and estimates that the figure will double in the next few years. Before entering a country for the first time the human resource department has a list of questions that must be answered. These include:

What are the labour laws? Would McDonalds be able to establish part-time and flexible work schedules?

Is there a maximum number of hours an employee can work?

McDonalds then adapts to each individual situation, therefore one could describe the process as glocal. The company is strongly committed to staffing locally and promoting from within. This means that McDonalds has managers who understand both the corporate and the local cultures. The emphasis when recruiting is that the applicants are customer-focused; the right attitude is seen as more important than technical ability. The company believes that the best way to stand out from the crowd is to satisfy all of the customers, all of the time. This is emphasized in recruitment advertising and continues in preliminary screening; this is standard the world over and another clear example of a globalization strategy. There is a hamburger university in Illinois, USA. The main course is in advanced operations; this is designed for managers, assistant managers and prospective franchisees. It provides training in 22 languages, although the course teaches a standard practice to be used in restaurants worldwide, and teaching is adapted to suit the needs of overseas students. The training centers teach managers such details as the temperature at which hamburgers should be cooked and how to inspect restaurant facilities to ensure that quality standards are

met. 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. 6. Process There are 25,000 McDonalds restaurants in over 100 countries. The procedure for making the food is identical everywhere. This epitomizes globalization; McDonalds standards have to be met the world over. McDonalds worldwide is well known for the high degree of respect for the local customs and culture. McDonalds has developed a menu especially for India with vegetarian selections to suit Indian tastes and preferences. Keeping in line with this, McDonalds does not offer any beef or pork items in India. In the last decade it has introduced some vegetarian and nonvegetarian products with local flavors that have appealed to the Indian palate. There have been continuous efforts to enhance variety in the menu by developing more such products. It is completely transparent and visible to the customers, allowing them to judge hygiene standards where the process takes place. The customers are even invited to check the ingredients used in the food. Suppliers have to meet all the specifications and demand that McDonalds sets them; if they cannot do this, McDonalds vertically integrates. The procedures for making the food in the restaurants are identical globally; each restaurant has the same kitchen layout. Local adaptation is again apparent as different international McDonalds have slightly different menus; therefore new food preparation techniques are used. The point of purchase at McDonalds is again standardized globally. Many companies operating globally discover language translation problems and therefore cannot use systems globally. McDonalds overcame this problem by using pictographs; employees worldwide ring up sales on machines that display symbols of Big Macs, French fries, or colas instead of words or numerals. Software links price and total items. One key to McDonalds success is the constant push to speed up production without sacrificing consistency. Corporate goals include the filling of walk-in orders within 90 seconds and a guarantee that customers will never have to wait more than three-and-a-half minutes at drive-through windows. Company representatives monitor performance by making surprise visits to McDonalds outlets every quarter. To focus on consistent delivery of quality, service and cleanliness through excellence in our restaurants. This is the McDonalds message in every franchise throughout the world. The customer

knows that, whatever McDonalds they enter, the message of a family environment will still be conveyed. It just depends on where you are in the world as to how that message is broadcast. In 1994, McDonalds changed their advertising slogan to Theres nothing quite like a McDonalds. This saw McDonalds attempting an image change, as they adopted a more personal approach to their customers, trying to talk to them rather than at them. This was again a bid by McDonalds to add to the whole McDonalds experience and to add to their image as a global brand. The traditional US value of service with a smile is embodied in the staff at McDonalds restaurants throughout the world and is now characterized as an expectation of the McDonalds consumer. It is these expectations that McDonalds has to try to continue to meet to keep their competitive advantage in the fast food sector. McDonalds has also re-engineered its operations repeatedly in its 11 years in India to address the special requirements of a vegetarian menu. Vegetable products are 100% vegetarian, i.e,

They are 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 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

7. Physical evidence:Physical evidence is an important element of the marketing mix which allows to the customers again making a judgment on the McDonalds product, quality, services, pricing etc. If any customer goes to McDonalds the first choice of every customer will be Cleanliness, Friendly dealing, Environment friendly product and Good product. Physical evidence is a very significant part of the service mix McDonalds

always give more focus on the clean and hygienic. McDonalds focuses on clean and hygienic interiors of is outlets and at the same time the interiors are attractive and the fast food joint maintains a proper decorum at its joints. Staff members dress in McDonalds Dress code with Green shirts, Blue trousers, Black caps and Customized Ronald McDonalds tie. Building maintenance and visible cues are provided by the golden arches, the trademarks and the logos in the premises. The delivery scooters also add to the physicality of the company. Product Mix (McDonald's Product Mix) As explained earlier Product mix deals with the dimensions of product line, quality and design of the product, its packaging, brand name, product range, etc. The product breadth or number of products offered by McDonalds can be classified as:

Vegetarian products Non vegetarian products Beverages Desserts Add-ons

All this shows the wide product range of McDonalds. Vegetables We use freshly shredded lettuce, onions and tomatoes in our restaurants. All our vegetable products are processed from high quality graded vegetables in a 100% dedicated vegetarian plant. Potatoes McDonald's world-famous French Fries are produced only from the best quality potatoes. Shepardy Potatoes are used in French fries. These potatoes are cut, blanched and processed on state-of-the-art processing lines to ensure maximum retention of nutrients. French Fries are cooked at the plant and our restaurants in 100% vegetable cooking oil.

Chicken The chicken patties are made from high quality boned breast and leg meat and are covered in a specially seasoned, lightly battered coating. They are shaped in uniform sizes to ensure consistency in weight and value. Fish The fish patties in McDonald's Filet-O-Fish are 100% pure whole white fillets that are lightly breaded. The fish comes from a variety caught around the south-west coast of India. Cheese & othis Dairy Products All our dairy products like cheese, McShakes and Soft Serves are made from fresh dairy milk. All dairy products including cheese have a role to play in a balanced diet because they contain a wide variety of essential nutrients such as protein, calcium, fat soluble, phosphorus, etc. Buns McDonald's uses buns made from locally grown wheat flour. They are baked locally and delivered fresh, several times each week to McDonald's restaurants. Cooking oil All preparations are done in 100 % refined vegetable oils at restaurants and plants. McDonalds use liquid oil and not hydrogenated oil. This means there are no TFAs or Trans Fatty Acids in our French Fries or any of our products. Additionally, these vegetable oils contain some essential fatty acids [EFA] necessary for growth. MSG McDonald's products do not contain any added MSG (Mono Sodium Glutamate). Food Freshness Thanks to our uncompromising quality standards, McDonald's customers always receive the hottest and freshest food right after they've ordered. And this, at the speed they've come to expect of McDonald's, which has defined fast service for the past five decades. Backed by the cold chain, the McDonalds quality inspection system combines advanced equipment, sophisticated computer technology and operating procedures in the kitchen. Food freshness is more than just an operating system. Since products are prepared as per calculated estimates, food waste is reduced. To illustrate,

once prepared, our finished product is maintained in a temperature-controlled unit. However, should it not be sold within 10 minutes of its preparation, it is discarded. While maintaining speed in service, we also attempt to accommodate special requests, which take slightly longer in being served. Nothing but the Best That's how McDonalds plan product range. Food quality is key at McDonald's. That's why they take pride in the foods they serve you and your family. They seek out fresh lettuce and tomatoes, quality buns and potatoes, select poultry and fish and wholesome dairy products. Despite extensive and meticulous quality tests at the supplier end, all products are once again carefully scrutinized at the restaurant. Our immaculate standards of quality allow for nothing but the best to reach your tray. (Daily Production Safety Checklist) Cold Chain The term Cold Chain describes the network for the procurement, warehousing, transportation and retailing of food products under controlled temperatures. McDonalds restaurants store products to be used on a daily basis, within a temperature range of 18C to 4C. About 52% of our food products need to be stored under these conditions before they are used. Trikaya Agriculture - Supplier of Iceberg Lettuce Implementation of advanced agricultural practices has enabled Trikaya to successfully grow specialty crops like iceberg lettuce, special herbs and many oriental vegetables. Farm infrastructure features:

A specialized nursery with a team of agricultural experts. Drip and sprinkler irrigation in raised farm beds with fertilizer mixing plant. Pre-cooling room and a large cold room for post harvest handling. Refrigerated truck for transportation.

Vista Processed Foods Pvt. Ltd. - Supplier of Chicken and Vegetable range of products A joint venture with OSI Industries Inc., USA, and McDonald's India Pvt. Ltd. Vista Processed Foods Pvt. Ltd. produces a range of frozen chicken and vegetable foods. A world class infrastructure at its plant at Taloja, Maharashtra, has:

Separate processing lines for chicken and vegetable foods. Capability to produce frozen foods at temperature as low as -35 Degree Celsius to retain total freshness.

International standards, procedures and support services.

Dynamix Diary - Supplier of Cheese Dynamix has brought immense benefits to farmers in Baramati, Maharashtra by setting up a network of milk collection centers equipped with bulk coolers. Easy accessibility has enabled farmers augment their income by finding a new market for surplus milk. The factory has: Fully automatic international standard processing facility. Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose, casein & whey protein and humanized baby food. Stringent quality control measures and continuous Research & Development

Amrit Food - Supplier of long life UHT Milk and Milk Products for Frozen Desserts Amrit Food, an ISO 9000 company, manufactures widely popular brands - Gagan Milk and Nandan Ghee at its factory at Ghaziabad, Uttar Pradesh. Its plant has:

State-of-the-art fully automatic machinery requiring no human contact with product, for total hygiene.

Installed capacity of 6000 liters / hour for producing homogenized UHT (Ultra High Temperature) processed milk and milk products.

Strict quality control supported by a fully equipped quality control laboratory.

Product strategies: In order to achieve the desired rate of profits and growth, a firm has to continuously adjust its products and product mix to the changing needs and targets of the market. This matching of products to the requirements of competition and buyers is known as product strategy. Some of the important product strategies, which firms adopt, are as follows:

Limited Line Strategy:

This refers to the offering of one product or a small number of products to cater specific market. The main benefit of this strategy is low cost of operations. However, it cannot meet the requirements of different types of customers in different markets.

Full Line Strategy:

This is also known as broad line strategy; it implies the offering of a large number of products to meet the requirements of different customers in different markets. This strategy ensures a better product-marketing integration.

Trading up and trading down:

These are alternate or opposite strategies for expanding the product mix. Trading up implies addition of some high is priced products to the existing product line of lowered priced products for improving the sales of old products. Trading down refers to the addition of lower-priced products to the existing high is priced product to boost total sales.

Changing models or style of existing product

Price Mix Price and Pricing strategies: Price is the key element of marketing mix because it relates directly to the generation of total revenue. The term pricing policy refers to a systematic approach to pricing of different products in different markets to evolve an appropriate pattern of prices in the long run. It is the plan defining the initial price range and the planned price movements through time that the firm will use to achieve its marketing objectives. Pricing policy includes not only the determination of base prices but also the terms and conditions of sale. Company pricing policies: The price must be consistent with company pricing policies. Many companies set up a pricing department to develop policies and establish or approve decisions. The aim is to ensure that the salespeople quote prices that are reasonable to customers and profitable to the company. Now a days most companys follows buyer based pricing. They are basing their prices on the products perceived value. They see buyers perception of value, not the sellers cost, as the key to pricing. The company using

perceived-value pricing must establish the value in the buyers mind concerning different competitive offers. McDonald began with skimming prices, i.e. setting a very high price for a new product initially and to reduce the price gradually as competitors enter the market. The initial high price serves to skim the cream of the market, that is, relatively insensitive to price. This approach to pricing is, in effect, an experimental search for the right price and it may result in a market-determined price. This method starts with a high price and moves the price downward by steps until the right price is reached. Initially McDonalds charged high price than what is being charged now. But now it introduces new schemes for value of money. Place Mix (Distribution) This element of marketing mix involves a choice of the place wise the products are to be displayed and made available to the customers. It is concerned with decisions relating to the wholesale and retail outlets or channels of distribution. The objective of selecting and managing trade channels is to provide the products to the right customer at the right time and place on a continuing basis. McDonalds distribution centres are wide, located in every area of India McDonalds has Dine-in restaurant, Drive-Thru, Mc Delivery. McDonalds has 165 restaurants in India of which 90 are in north & east India and 75 in west & south India For the Big Mac, the current calendar year will be the biggest in terms of restaurant openings, and by year-end, 16 new restaurants would be in place, informs Vikram Bakshi, Managing Director, McDonald's India The new outlets will be a combination of highway restaurants, outlets at railway stations, at shopping malls and Cineplexs, besides at residential areas with significant footfalls. McDonald's India recently won the tender for setting up an outlet each at railway stations in Mumbai and Jaipur. The fourth McDonald's highway outlet on the Delhi-Jaipur highway is expected to begin operating shortly. The chain's other three highway restaurants are located on the Delhi-Agra highway, the Delhi-Ludhiana highway and the Mumbai-Pune highway. Fresh markets McDonald's intends to tap this year include Punjab. And takeaway counters are being planned at most Mac outlets. Promotion Mix Promotion is a process of communication with the potential buyers involving information, persuasion and influence. It includes all types of personal or impersonal communication with customers and intermediaries. Promotion mix refers to the

combination o various promotional tools used by a business firm to create, maintain and increase demand. It involves an appropriate integration of advertising, personal selling, sales promotion and publicity. Advertising: Advertising is any paid form of non-personal presentation and promotion of goods, services or ideas. The past four years have seen very high trials from first-time customers - averaging 77-80 per cent. Now we are moving away from inducing trials, and striving for repeat customers, informs Bakshi. Which explains the chains new advertising tack? For the first time since it began advertising on Indian television channels, McDonald's has changed its ad line. It is now `To aaj McDonald's ho jaaye,' against the earlier `McDonald's mein hai kuch baat'. This fore, the happy family scenario, complete with goofy dad and adorable kid. While more commercials could follow later this year, the theme will be the same. The objective will be to continue to position McDonald's as a comfort zone for young families. Sales promotion Sales promotion includes all those short-term marketing activities, othis than personnel selling and advertising and publicity that stimulate customer purchasing and dealer effectiveness. The main objective of sales promotion is to attract the prospective buyer toward the product, and induce him to but the product at the point of purchase. The importance of sales promotion in modern marketing has increased mainly on account of its ability in promoting sales and preparing the ground for future expansion. A promotional measure by McDonalds A Kids Carnival promotion with Luxor Pens and L'il Tomatoes (a kids' garments' marketer) is scheduled to take off early next month. The current fiscal's advertising and promotional budget has been fixed at Rs 18 crore. McDonalds continually review and improve its menu offerings to make sure that not only they meet customers expectations, but also exceed them. As a result, they have introduced a series of ongoing value options to suit their customers different needs. Value Meal Value Meals consist of a burger, fries and a drink and are available in 2 sizes: Medium and Large.

Customer Characteristic: India is the second most populated country in the world. It has 28 states and almost 4 times the population of USA. India has more than one billion population. Three fourth of Indian population lives in Urban areas. Though per capita income is very low in India but still people like to spend on costly products and eating out. out of millions of households in India 49% lives on low income,30% lower Middle income,12% Middle income group, 5% Upper Middle income group and 4% high income group. Comparing this with USA where middle income group is very high. Consumers in India are highly family oriented. McDonalds targets high income earner, Middle income earner and lower middle income earner in India. Indian consumer are getting brand awareness through internet, TV, Newspapers, Radio, Magazines etc. Middle income group is getting bigger in size day by day as a result of economic boost in India and that is very good news for McDonalds. Indian consumers are now getting environmental awareness. They like to use Eco-friendly products and McDonalds is very helpful in terms of packaging, and recycling. Family system gives a big chance for McDonalds to get their sale rise as Indians are buying food in bulks. Indian consumers are becoming very open minded which is a positive sign for McDonalds. For McDonalds to succeed as they are now, they should go to expand in urban areas as well as rural areas and target middle and lower income earners and beside this they should introduce certain products which can be afforded by low income earners. Customers like spicy foods and McDonald has introduced many products which are spicy and tasting according to the preference of Indians. Competitive Strategies: As we know fast food industry proved to be very competitive industry. McDonalds from its day first has always tried to have strong competitive advantage over its rival. This is the only way for McDonalds to survive in globalised environment. McDonalds strong rivals KFC, Dominos, Pizza Hut and Subway are also operating in India as well as USA. In the fast food most important thing for some customers is how quickly you take order and ready the meal for customer.KFC and Jumbo King are offering very quick service to customers and in this way taking customers from McDonalds. McDonalds has tried very well to overcome this advantage by making and readying its food as quickly as possible. McDonalds is trying to improve its graph for customer satisfaction and they are investing heavily throughout the world

including India. McDonalds uses Wi-Fi and they are trying to emphasize on demographic characteristic of its customers in the area. Each month McDonalds add something special in its menu. To check McDonalds quality and reliability administration has developed a very unique idea of Gap buster visiting McDonalds as mystery customer. They are expertise who comes in the form of a customer and after serving give credits scoring to the store. McDonald has introduced Mc Breakfast from 6 am to 11 am. McDonalds in its competitive strategies is emphasizing to target customers in the new urban areas. McDonalds Indian menu offers very competitive strategy for McDonalds. Vegetarian products, Halal and non vegetarian foods for its customer is a unique and successful idea in India. Kids like McDonalds in India as they are giving free toys to customers who buy happy meal deals. McDonalds has actively invested in Discount vouchers given as a leaflets, newspapers, Magazines certainly is a good business strategy and it has boosted McDonalds customer number, Business and sales. Diversification: McDonalds has diversified product range in India and all over the world. Due to diversified nature of products McDonalds is famous among masses. They offer McBreakfast, Lunch and Dinner, Coffee and many more diversified products. Now if McDonalds move to fully new business for example Hotel (McHotel) will be a concern. According to guardian news moving to totally new business will damage the image of McDonalds. If they are really interested they should do a partnership with another company. As Burger King has done it. land or marketing Director said move like this will certainly change the fundamentals of the company. Diversification can be revealed from Indian market.75 % menu has been Indianite. Halal food for Muslims has been introduced. McDonalds happy price menu in India, the 5ps and flexible operating platform all shows McDonalds to be a diversified organization. Standardization Vs Adaptation: Standardization: MacDonalds has a slogan. Think globally and act locally. MacDonalds sell standardized product. The taste make up, ingredients, looks, weight etc will be similar in one part of the world to the other part of the world. Cheese Burger in United Kingdom will taste similar to a cheese burger in USA. Think globally and act locally

can be proved in India as MacDonalds in India has changed its menu list. Halal Burger and McVeggie burgers have been introduced looking to the customers believe in India. Similar experience has been exercised in Middle East and Fiji. In Middle East eating of Bacon is banned by government. Halal food is served in Middle East. McVeggie Burger in India will taste the same in comparison to McVeggie burger in Fiji. McDonalds sell standardized products. All the products should be looking, tasting, weighing and prepared in the same way across the globe. McVeggie burger was prepared in India after Research and Development was conducted purely in India. Adaptation: McDonalds follows strategy of product adaptation. McDonalds slogan think globally and act locally is the best example. The best example for McDonalds adaptation strategy will be India. McDonalds cannot use beef Tallow to fry the fries and burger cutlets (Cows are sacred due to religious belief of Hindus).Bacon cannot be used in Middle east as they are Muslim countries and it is against their religious belief to eat pork. Products are tailored according to the personal taste of the country people where it operates. Due to adaptation McDonalds menu in various countries is different. Motivation for Market entry: Parent company of McDonalds USA was aware of some facts that motivated them to enter Indian market. Some of them are given below. The worlds second largest country by population after china. Indias population is 4 times more than USA. India call itself the most democratic nation in the world so it means all the decisions are made by parliament and not one person or dictator who can freeze assets for a company in any kind of bad relations emerging. Brand awareness is improving day by day, literacy rate is improving, middle class is getting larger, econonomy of India is booming (now counted in BRIC s nations which means Brazil, Russia, India and China they are the fastest developing countries and future economic

power),Unemployment is reducing, Laws are flexible for foreign businesses. All these facts contributed to motivation of McDonalds to enter Indian fast food Market. Modes of Market entry: There are different ways a company can start opening their business in another country. For example franchising, licensing, Joint Venture, wholly owned subsidiary

etc. But McDonalds entry to India involved joint venture and Franchising technique. Franchising is the right a firm acquires from another firm that allows them to do particular business activities, such as service or selling the good, under the name of a specific firm, e.g. McDonalds. In Franchising a company follows strict rules from its parent company. McDonalds have 210 stores in India. McDonalds all over the world has almost 85% of franchises. The benefit of franchising is that in short period a company expands its business. The risk involved for parent company to move into another country and invest heavily can sometimes be too risky but when local people start doing it by themselves, the risk level is minimized. Quality control is difficult with franchising. Although McDonalds Indian is a 50-50 joint venture company managed by Indian. Performance: Much of retail is struggling in India but McDonalds has been seen unaffected and its planning on accelerating its expansion on the Indian subcontinent. Mr. Jatia who is managing half of the Indian franchises said number of customer is jumping 10% to 15 % each month compared to a year ahead. People of India are now relying on McDonalds. McDonalds adaptation policy has boosted its sales. McDonalds annual sale throughout the world is $29 billion annually. Burger king is the second largest fast food organization in terms of sales and is strong competitive rival. Due to company having a customized menu in India McDonalds is getting popular day by day. Performance can be measured in terms of outlets opened by McDonalds in the past years. in 2010 and 2011 McDonalds opened 80 stores in India. In 2010 McDonalds sale improved by 30%.Vikram Bakshi MD McDonalds India said the total sale of $29 billion dollar McDonalds India just accounts for 0.37% of the whole sale. But the potential is so high and are expecting to get higher in future. Although McDonalds is facing certain problems like roads are not in very good condition for transport, power supply shortage etc but still sales rise and customer satisfaction shows that McDonalds in India is performing very well. Short, Medium and long term strategies employed: Strategy is a planning that is used by an organization to achieve its goal and objectives. Short term strategy starts from a minute to 6 months, medium account from 6 month to a year and long term mean 5 years or more strategy. In short term McDonalds is trying to bring in innovation and make customer satisfy. Day to day

issues are planned to satisfy customers. New products are introduced each month. in medium term they are trying to maximize its profit and sales. In long run McDonalds is planning to open new branches across India and Indian McDonalds sale which accounts only 0.37 % of overall sale of McDonalds to be taken to 0.50 percent and more in the coming years. SWOT ANALYSIS SWOT analysis will give us a quick review of an organization current status. Strength: McDonalds is a market leader in the fast food industry. McDonalds has a very strong brand image. McDonald has expanded its business to more than 125 countries with more than 33000 outlets throughout the world. McDonalds has one competitive advantage and that is Strategic location. In India they are located in busy shopping malls, Airports and busy drive through. Weaknesses: McDonalds has created very successful brand image but the market segment is too focused on Kids. McDonalds is often related to unhealthy food and obesity. Employee turnover rate is so high. These all are weaknesses of McDonalds in the world and India in particular. Opportunity: McDonalds can introduce healthy food consisting of low calories items. They should put more efforts in Research and Development. Management should try find ways to reduce food wastage which leads to cost control. new products with different variety should be introduced to capture the market. Threats: McDonalds is facing major competition from its rivals KFC and Burger King all over the world. In India local curry shops are offering great challenge to McDonalds. Company rapid growth has made McDonalds very vulnerable to other countries economic slowdown. Press associating McDonalds with obesity destroys McDonalds image. McDonalds in the past has been sued for its unhealthy products. McDonalds should try and solve these problems by investing heavily and effectively in research and development.

CHAP.5 CONCLUSION
McDonald's is concerned about how the firm will fulfill the needs and wants of its customers and in the activities associated with maintaining the relationships with its stakeholders. McDonald's has shown care for customers through the decisions to add more healthful foods to the menus, by changing how products are packaged or how foods are prepared. Local adaptation, no doubt, has contributed to McDonalds business growth in India .The restaurant has developed competitive advantages in the industry of serving quality fast food at a low cost. McDonald's faces some difficult challenges in moving away from the fast food king to a more health conscious provider for customers who care about what they eat. The keys to its future success will be maintaining its core strengths-an unwavering focus on quality and consistency-while carefully experimenting with new options. McDonalds is considered to be the King of the fast food. To achieve this greatness McDonalds has tried hard for ages to prove itself in the competitive environment of Fast food. The key factors in success of McDonalds in my view is innovation, customization, good management and above all best Marketing strategies adopted by McDonalds. McDonalds in India has a very bright future because of the customers bank, customized approach from McDonalds towards its customers and above all the strong brand Image.

CHAP.6 SUGGESTIONS AND RECOMMENDATIONS

To have more variety to choose from, to include more deserts and more items. To expand their Happy Meal choices to attract and retain customers. To educate about healthy lifestyle. Focus on gifts for all generations i.e. youth, kids especially senior citizen which is a completely new concept. Special promotions during festivals as Indians tend to spend more at such events. Increasing the space for provision of birthday party areas. Work for social welfare of the society. Maintain consistency in the taste and quality of products. Include more promotional and advertising measures to increase its sales or to increase its market share. Recognize the small outlets and give more discounts. They should focus more on their promotional strategies like advertising etc.

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