2nd Feb, 2010

McDonald¶s ± Behind the golden arches«
MARKETING ASSIGNMENTu
Submitted to Prabu Doss«

Submitted By:Richa Nanda 84 Sudipta Swain 105 Tanveer Ulhaq 108 Vikas Chug 114 Vikas Nigam - 115

Marketing Assignment« Table des Matières
Executive Summary Objectives Situation Analysis Business Model Industry Analysis
Company Analysis Competitor Analysis SWOT Analysis

03 04 04 04
04 06 06 08

Market Segmentation, Targeting and Positioning Marketing Mix Road Ahead and Learning Conclusion Exhibits Bibliography

08 10 15 18 19 34

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Marketing Assignment« McDonald·s ² Behind the golden arches«
1. Executive Summary:Now who doesn't know McDonald's? That unmistakable red logo with its golden-yellow arches of the 'M' is a familiar sign to the world of fast food eaters in a lot of countries around the world...and India is no stranger to it. McDonald¶s although was successful in catering to the upper class and upper middle class customers only, but later due to its good and competitive pricing got special appeal amongst the lower middle class as well. Thus, McDonald¶s grew in India at a brisk pace. In this document we are trying to analyze McDonald¶s success story in India. We have done current situation analysis which comprises of the industry, company and competitors¶ analysis, so as to get an idea of what the company going through at this time in the market. After this we have tried to understand the type of customers i.e. market segmentation, which has made the fast food chain very popular out here. Then to understand McDonald¶s precisely we have done a SWOT analysis as well. Since, the fast food chain is well established in India, we have tried to study the marketing mix which gives the clear picture of prevailing marketing techniques adopted by McDonald¶s. After getting through all the data we have then tried to predict what McDonald¶s as a company should do to increase the market share as well as its brand image amongst the Indian consumers. Thus, the document gives a vivid picture of McDonald¶s India¶s marketing strategies.

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2. Objectives: To understand the marketing strategy of McDonalds with respect to targeting, positioning and Marketing mix.  The study the franchising model of McDonald¶s.  To find out the ways by which McDonald's can improve upon its service quality and bring more satisfaction to customers and thus add value to its bottom line.

3. Situation Analysis ²
Business Model ² 
Franchise Model  Product Consistency  Act like a retailer and think like a brand

Industry analysis:Fast food is the term given to food that can be prepared and served very quickly. The percentage share of total consumer expenditure on outside eating has increased from 2.6% in 2001 to 6% in 2009. A younger and richer India is fuelling rapid growth in the eating-out segment with more than 25% of the country¶s population eating out two times every month, according to a recent Technopak report. The growth in nuclear families, particularly in urban India, exposure to global media and Western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends.

India¶s fast food industry is growing by 40% a year and is currently generating almost a billion and a half dollars. Foreign investment in this sector stands at Rs. 5000 million which is about one-fourth of total investment made in this sector. Because of the availability of raw material for fast food, Global chains are flooding into the country.

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Market Size & Major Players: McDonalds dominates the fast food market with 165 outlets. Domino¶s pizza is present in around 300 locations. Pizza hut is also catching up and it has planned to establish 125 outlets at the end of 2005. Subways have established around 145 outlets in 26 cities. Nirula¶s is established at Delhi and Noida only. However, it claims to cater 50,000 guests every day. The home grown chains have in the past few years of competition with the MNCs, learnt a few things but there is still a lot of scope for improvement. Indians can have western food occasionally, but it¶s unthinkable for someone to have it on daily basis,´ says Parag Datta, COO of East West Ethnic Foods. REASON FOR EMERGENCE  Gender Roles  Customer Sophistication and Confidence  Paucity of Time  Double Income Group  Large population  Relaxation in rules and regulations  Menu diversification CHALLENGES FOR THE INDUSTRY  Social and cultural implications of Indians switching to western breakfast food  Emphasis on the usage of bio-degradable products  Profit repatriation  Environmental friendly products cost high  Balance between societal expectation and companies economic objectives  Health issues

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Company analysis
McDonald¶s India was launched in the year 1996. McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. Initially, McDonald found it tough to cater to Indian tastes. McDonald's has tweaked its menu and prices to suit Indian tastes and pockets. Unlike in most western markets, the chain does not serve beef and pork in mostly vegetarian and religious India. They do sell chicken and mutton burgers which are a craze in majority of locations.

McDonald's India has presence in 30 cities and currently has 165 restaurants operating across the country. The Indian unit of McDonald's Corp., the world's largest restaurant chain, is doubling its turnover at very three years. McDonald's operates in India through a 50:50 joint venture with Vikram Bakshi and Amit Jatia. Some 350,000 customers are served every day across the country. Its vegetarian burgers are amongst the cheapest company-produced fast foods available in India. McDonald's India is planning to open 180-190 company-owned restaurants by 2015 with an estimated investment of up to Rs 570 crore. It generally takes about 3-crore investment to open a restaurant.

Human resource - McDonalds believes that it¶s not just a burger company serving people; they are a people company serving burgers. The world-class training that they impart allows their people to provide the customers the ultimate McDonald's experience. As of today, they employ close to 5000 people in India and about 40 people in a restaurant. McDonald has opted for green marketing showing its concern for environment.

Competitors Analysis
Major competitors of McDonalds are:  KFC  Pizza Hut  Dominos Pizza  Café Coffee Day 6|P a ge

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Barista  Nirulas, Haldiram  Jumbo King Jumbo King competes using a back-to-basics approach of quickly serving up burgers for time-pressed consumers. On the higher end, the KFC has become potent competitor in the quick service field, taking away customers from McDonald¶s. KFC being a specialist in fried chicken has got an image of pure non vegetarian restaurant, as a result of which it loses a huge customer base that are strictly vegetarian. Because of the nature of the chicken segment innovation was never a primary strategy for KFC. McDonald¶s serves breakfast which neither Dominos nor Pizza Hut offers. Pizza hut and Dominos however have limited menus.

Nirulas

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SWOT Analysis Strengths Weakness

Strengths SWOT Opportunities
Opportunities 4. Selecting the target market :

Weakness

Threats
Threats

It is not possible for a company to cater to the needs of everyone.

Segmenting McDonalds divides a large market into smaller segments of consumers according to their tastes and needs. Customers with disposable income are a prime target of McDonalds. Some people come to McDonalds to have food; some come to celebrate birthday functions and some just to spend their leisure time.

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Geographic Segmentation ± McDonald¶s India divided the country into different zones based on directions and concentrated particularly on north and West Zone as its first segment to attract on.  Demographic segmentation ± Divides the market based on variables such as age, income, family life cycle, education.  Psychographic Segmentation ± Social Class, Life style.  Behavioral Segmentation ± Occasions, User rates. Targeting ± The lower rates say that the primary target is the lower middle class and middle class, but the combo meals, additional offerings and happy meals include the higher income segment and families with small kids also. Giving different types of toys with different meals shows that children are the target.

The possible target market decided on was only 10% of India¶s population. Initially their focus was on metros ± Mumbai, Delhi. Recently they have started expanding to smaller satellite towns like Gurgaon, Pune and even tourist places like Jaipur and Agra. They would setup outlet only in cities where they can ensure the quality of products ± Vikram Bakshi (North Zone).  Age ± Primarily target the kids and youth. Kids are the ones that will be driving the entire family to McDonalds. Children are enormously powerful medium for relationship building in India.  Income ± Manly targets the middle consumers with a monthly income greater than Rs. 20,000/ Family life cycle ± Target the young singles and married with children.  Education ± Offer products for grade school students to college graduates.  Social Class ± primarily targeted the upper and middle classes. It even offer products that are affordable to the middle class.  Lifestyle ± Targets the people on the basis of interests (family, food, fashion, recreation).  Occasion ± Helps McDonalds increase its profits. It offers different occasional packages, e.g. Mothers day, Father¶s day, Valentineµs day, Eid.  User rate ± Targets the heavy users that make up only 20% of patrons but eat up 60% of all the food served. Targets light users with ads and promotions. 9|P a ge

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McDonald¶s followed concentrated marketing (or niche marketing), a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

Different phases to move into target markets was scheduled on ± y Phase I ± Focus on cities of relatively high incomes where citizens are exposed to western food and culture. y Phase II ± Move to smaller satellite towns (Gurgaon, Pune). Positive spill-over effect of reputation from main metros. Other cities like Jaipur, Agra were also targeted to attract foreign tourists. y Phase III ± Move on to crowd pulling centers like malls, multiplexes, highways, railway stations and airports. y Phase IV ± Introduce new low-priced products with same quality and service for middle ± class income groups of people.

Positioning ± ³Mc Donald¶s mein hai kuch baat´, a place for entire family to enjoy. Mc Donald¶s positioned for the entire family to enjoy. Differentiation was done by highlighting brand, food and variety.

5. Marketing mix : I.
Product ²
McDonald¶s India has set its product line keeping in mind the following product levels:

1. Core Benefit: Core benefit is that they provide an alternative of satisfying one¶s hunger against the traditional Indian restaurants.

2. Basic Product: The basic product is the fast food. Hence, a quick alternative to the regular eating joints which take a lot of time in serving the food. 10 | P a g e

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3. Expected Product: Tasty burgers, French fries, wraps with a soft drink and a neat and cool place to eat what customers are looking for in the food. While eating they look forward to the opportunity to drink and talk to friends and various combo schemes.

4. Augmented Product: Presence of Wi-Fi connectivity and happy meals for kids who are offered free toys and providing free coca cola as a compliment if they are not able to deliver the order to the customer within a minute of placing the order.

McDonald¶s concentrated on studying the Indian culture, its value systems and its influence in food consumption decision making. It has intentionally kept its product depth and width limited. It found that although a substantial proportion of population was non-vegetarian, they stuck to mostly fish, mutton and chicken. McDonald¶s decided for the first time in their business history to drop ham and beef burger from their menu. They even excluded mutton burgers from their offerings. They developed a menu especially for Indians with vegetarian selections and Indian taste. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The cheese and cold sauces used in India are completely vegetarian.

Mc Donald¶s are committed for giving customers wholesome, healthy and delicious food. They ensure that the cooking area as well as the cooking equipment is visibly segregated from the non-vegetarian sections. Moreover, the crew members cooking vegetarian items can be identified by their green aprons.

II.

Place ²

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. McDonald¶s India is a locally owned company and comprises of few other franchisees in tier 2 cities. But since McDonald¶s is an internationally acclaimed food chain it had to deliver at the same levels in India as well. To ensure this, McDonald¶s developed local businesses, which can supply it highest quality products and in the process McDonald¶s infused about Rs. 400 crore in this project. This supply chain was named as Cold Chain. Cold Chain was one of the unique concepts of McDonald¶s supply chain in India, on which it had spent more than six years to get the system into place. 11 | P a g e

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Through this McDonald¶s has been able to both cut down on its operational wastage, as well as maintain the freshness and nutritional value of raw and processed food products. Following are few of its partners in supply chain: y y y Dynamix Dairy Industries (Supplier of Cheese) Trikaya Agriculture (Supplier of Iceberg Lettuce) Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of products including Fruit Pies) y Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen Desserts)

McDonald¶s has been selective in selecting its joint locations. All of its joints were located in such a way that they were in a close vicinity of their distribution centres.

The distribution channel is of two types for McDonald¶s in India

MANUFACTURER

MANUFACTURER

RETAILER

CONSUMER CONSUMER

III.

Price ²

They missed out on the lower middle class acceptance. This was due to the general perception of McDonald¶s being expensive. Thus, they adopted the penetrative pricing strategy and hence, lowered prices for its products. They brought products at very competitive prices against the existing Indian 12 | P a g e

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chains. They came up with a very catchy punch line ³Aap ke zamane mein ,baap ke zamane ke daam´. This was one of the main reasons for the increasing popularity of McDonald¶s over the years later on.

Product Bundling: McDonald¶s has certain value pricing and bundling strategies such as happy meal, combo meal, family meal etc to increase overall sales volumes. The most important reason for McDonald¶s pricing flexibility is its well established supply chain management, which ensures efficiency and speed in distribution. Besides, huge increases in volume sales and food processing technology have been helping the company to offset its cost.

IV.

Promotion ²

Advertising: McDonald¶s use television as their prime medium of advertising, though some advertisements are also there which use the print media as well. They even promote hoardings and bus shelters.

Happy meal film on Cartoon Network, Zee. Special promotions during festivals. Collaboration with Coke, MTV, Hungama.com, Sony music and GM. Scratch cards on large combo meals. Prizes like caps, t-shirts, CDs, internet cards, free tickets to contests. Purchase of a 2nd meal in a month qualifies for a holiday trip. A Ronald sitting outside each McDonald outlet attracts children.

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This advertisement from McDonald¶s was created to assure customers that McDonald¶s has products which are pure vegetarian. This has been depicted by the burger with all vegetables in it and its been shown in a green backdrop which emphasizes its vegetarian preparation.

Besides the advertisements McDonald¶s also promote their products by sponsoring various family television shows like Kaun Banega Crorepati etc.

Some of the most famous marketing campaigns of McDonald¶s are: ³You Deserve a break today, so get up and get away- To McDonald¶s´ ³Aap ke zamane mein ,baap ke zamane ke daam´. ³Food, Folks, and Fun´ ³I¶m loving it´.

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 80-20 menu board, eighty percent visual and twenty percent descriptive. The board also helps give a feel of the product before it is actually purchased.

V.

People:

McDonald¶s understands the value of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer. McDonald continuously does Internal Marketing. This is important as it must precede external marketing. This includes hiring, training and motivating able employees.

The level of importance has changed to be in the following order:1. Customers 2. Front line employees 3. Middle level managers 4. Front line managers 14 | P a g e

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The punch line ³I¶m loving it´ is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.

6. Road Ahead (Plan for the next year):McDonald¶s will embark on the second phase of growth in the Indian market in the next three years. they are planning to foray into Eastern India this year as also the non-metro cities. they are also planning to open 25 restaurants in cities like Benaras, Amritsar, Patiala, Jhabli, Greater Noida, Delhi-Jaipur Highway, Kolkata, etc, over the next two years. The company is also expanding into food courts, kiosks and delivery. They will be opening four plants in the next three years depending on the availability of raw materials.

SUGGESTIONS: 
In India the service sometimes leaves a lot to be desired! We suggest increasing the number of people behind the counter to ensure quick delivery.  The outlets lack hygiene and often the tables are dirty, sticky and sometimes even stinky. We strongly recommend taking care of this thing.

1. DISTRIBUTION: 

We suggest Joint ventures with supermarkets and departmental stores. These stores are already crowd pullers, the footfall of departmental stores like Shoppers Stop is very high. So, if we put in our outlets inside such stores it will boost the sales and expand the reach. 

Entry to Tier 2 and Tier 3 cities ± The main target customer for McDonald¶s is the new urban Indian family. With the customer demographics constantly changing and economic social and cultural shifts being observed in Tier 2 and Tier 3 cities.

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Tourist places like Jaipur, Katra (J&K), Srinagar which pull a huge number of tourists, mostly

foreigners need to be targeted. These places are potential raw material suppliers too.  Setting up McDonald¶s outlets at petrol filling stations.  More outlets in places like malls, multiplexes, airport and railway stations.  Increasing seating capacity and change in ambience can be a step towards increasing sales. Family cabins can be introduced in order to attract customers for celebrating kitty parties. In restaurants like Café Coffee Day a single group of customers orders 2 to 3 times in a single visit only because they get to spend lot of time inside. This is not true for McDonalds. 2. PRODUCT:  The current coffee menu is very much limited, so we recommend addition of more varieties so that it can attract CCD goers. It will strengthen its value proposition  People getting more and more use to cream and pastries so we suggest for the introduction of pastries.  Expand their happy meal choices to attract and retain customers. 
Respond to social changes - by innovation within healthier lifestyle foods.  They have industrial, Formica restaurant settings; they could provide more upscale restaurant

settings, to appeal to a more upscale target market 
The ³formats´, McCafe, having Wi-Fi internet links should help in attracting segments. Also

installing children¶s play-parks and its focus on educating consumers about health, fitness. 
Introducing more premium offerings like fruit drinks, desserts and coffee at their traditional

outlets which would prove to be a key growth driver in future.

3. PROMOTION:  Focus on gifts for all generations.  Festive promotions, as Indians tend to spend more on festivals.  Sponsoring college festivals and events. 16 | P a g e

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Work for social welfare.  Use of social networking sites as promotional tool.  SMS alerts  Use of CRM, database marketing to more accurately market to its consumer target groups. It could identify likely customers and prevent brand switching.

4. PRICE  Include more and more products in lower price range.  Include more products in the premium range so as to attract the premium segment.  Continued focus on corporate social responsibility, reducing the impact on the environment and community linkages.

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7. Conclusion:At McDonald¶s customer¶s order is usually processed within 60-90 seconds from the time it is placed. Providing the customer fast and friendly services is the philosophy of McDonald's. This is the big advantage McDonald's is having over the other restaurants. The customer satisfaction levels are better than the other competitors McDonald's is having. But when we compared the space management, Nirula's is having a better space management than McDonald¶s and Pizza Hut. But the advantage McDonald¶s has over the other restaurant is Ambience, Employee behavior, Cleanliness and Price. There is a price and service quality factor today, which the customer is looking for. This is what gives an edge to McDonald's over Nirula¶s, Dominos and Pizza Hut. Consumers have been changing. They are worried about the effects the products or its package might have on the environment. While this awareness is growing up, a new challenge had been approached: protecting the environment. While many companies had seen the outbreak of environmentalism in the late 1980¶s as a threat, McDonald¶s saw an opportunity: the chance of knitting a responsible environmental policy into its evolving operations strategy. McDonald¶s took Environmental Defense Fund (EDF) as a new partner. They engaged EDF to help address environmental concerns, one aspect of increasingly complex situation in which the company now found itself.

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Marketing Assignment« Exhibits
I. Mission Statement

McDonald's brand mission is to "be our customers' favorite place and way to eat." Our worldwide operations have been aligned around a global strategy called the Plan to win centering on the five basics of an exceptional customer experience -- People, Products, Place, Price and Promotion. We are committed to improving our operations experience. II. and enhancing our customers'

Vision

´A supply system that profitably yields high-quality, safe food products without supply interruption while creating a net benefit for employees, their communities, biodiversity, and the environment´ III.

McFactoids
McDonald¶s plans to open as many as 140 restaurants throughout India this year, focusing on drive-through outlets. Investment of more than Rs.400 crore in the next two years to expand its operations. Transform itself into a high-volume, mass-market brand with compounded annual growth at around 30 per cent to 35 per cent in the next few years. Addition of franchisees as current 75% income generated is from franchisee centers affiliated to McDonald¶s. Moving out of the metros and concentrate its efforts on other mid-sized cities in providing service. The plan is to enter a new city, understand the market and then multiply by opening up more outlets in these cities rather than spreading to too many cities at a time 19 | P a g e

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y y y y Increase the number of customers turning up at its restaurants around the country by providing the same service and quality by achieving 100% customer satisfaction. Target on customers between age-groups 24-38 with children¶s to position itself as a family restaurant and the ideal place for kids and teenagers. Increase brand loyalty among customers. To build a new generation who will stay with the brand and then emerge as a long-term player. Introduce new innovative menus by development of new products, which cater to people's needs by keeping Indian tastes in mind and to provide greater choice whilst ensuring that the products meet the requirements of a balanced diet, so that the crowds keep pouring through the doors.

IV.

Porter¶s 5 forces:5. The threat of entry of new competitor

McDonalds, has made an entry barriers that others competitor cannot enter the fast food industry easily because, McDonalds has good product and service that customer has learned to expect from fast food industry. People choose McDonalds compare to others fast food like KFC, Burger King or A&W because McDonald's has cheaper price, a lots of menu that suitable with Malaysian taste and good service like MC Delivery compare to others fast food restaurant. The greatest strength was creating an image in the minds of the people and introducing them to the fast food culture. Delivery speed, customer care and cleanliness are the core strengths on which these stores expanded. They created a corporate symbol and their advertisement campaigns were highly successful in establishing the brand image and logo in the minds of the millions. Two main competitors generally identified with McDonald are the Burger King and the KFC. McDonald marketing strategy is concerned with the internal resources. A large amount of product differentiation exists in the industry. The McDonald brand ranks as 8th in Business Weeks Scoreboard over global brands. Furthermore the brands KFC and Pizza Hut are also represented (with place nr. 61 and 63 on the scoreboard). This signifies a large consumer preference to the global brands, and would create somewhat of a barrier for new entrants.

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2. The bargaining power of supplier Different suppliers have different bargain powers in the fast food industry. The fast food industry is interested in having the soft drink producers being a part of their own branding. The Pepsi and Coca Cola brand have a global brand ranking of respectively 23 and 1. With the smaller fast food places the soft drink suppliers are holding all the bargaining power, since the individual fast food companies does not form a significant part of the supplier clientele, and their business could be partially dependent of the suppliers willingness to provide necessary equipment for the company. 3. The bargaining power of customers (buyers) Since the industry is flooded with many different kinds of fast foods and many different suppliers of fast food, then the buyer are in a situation where many suppliers are offering products that have a certain similarity. Since the global fast food chains have been trying to match each other¶s successful products and product packages, then the buyers can actually buy similar products from multiple suppliers, and that is a situation the empowers the buyer. Furthermore, if the fast food industry does not match the demands of the buyers and the general consumer trends, then the buyers can choose not to buy their product and convince others to do the same. 4. The threat of substitute products or services The generic products of fast food are mainly considered as convenience. Convenience and availability are the main drivers for choosing fast food. However, this is backed up by focus on value. Since the market as a whole consists of many differentiated fast food companies, then the customers are used to having the option of choosing the best value products. The value of the substitute products in general matches the fast food products and the consumer preferences of the consumers. The substitute product offers both cheap value meals and quality products for both ends of the quality scale that the fast food industry normally targets. Furthermore, it offers healthy alternatives to match the consumer needs and wishes. The differences between McDonald and 21 | P a g e

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their others competitive are services of delivery that is Mc Delivery that give a good service, faster and make customer easy to buy from any kind of set of menu at McDonald's. 5. The rivalry among existing firms in the industry McDonald traditional competitors include many of the other fast food outlets across the country has been shown that the presence of a KFC, Pizza Hut, Dominos, will increase the likelihood that McDonald will open nearby. Thus, it can be seen that the threat of competition from traditional rivals is intense and should never be over looked. In general, McDonald and its main competitors are active in making fresh moves to improve their market standing and business performance by introducing their product innovation and launching many outlets franchise. A good example of this would be the price competition between multiple fast food chains¶ value meals. The high level of competition forces the individual competitors to copy of each others are products and ideas quickly since the competitors are always keeping an eye out for new ideas for themselves, and so far there have been no way of protecting a burger or sandwich recipe. In Malaysia, every Chinese New Year, there will be a prosperity burger. Thereby they have found a way to differentiate, which gives them a bit more space to move in, and thereby a little less fierce competition. The main competition goes through the branding. In addition, the competition to create the strongest brand is fierce. Firstly, normal advertising through TV, posters radio-commercials are regular. However, the biggest brands like McDonald¶s and Burger King have been branding their own brand through piggy backing on other brands power.

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V. Marketing Mix:-

1. Product

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2.Price:-

Low

Quality

High

Low

Price

High

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2.Promotion:-

Advertisng

Sales Promotion

Marketing Communication Mix

Personal Selling

Public relations

Direct Marketing

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VI. Importance of PLC in McDonalds:The requirements of customers change over time and thus the product offering has to be changed accordingly. What is the fashion today may be out of market within few weeks. Thus continuous innovation is required.

To counter these changes McDonalds has continuously introduced new products and has phased out the old ones which were at the decline stage of their PLC. The introduction is timed such that the new product does not cannibalize the product already in the maturity or growth stage. Thus the secret lies in getting profits with different products in the different stages of the PLC.

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A perfect example of revitalising a product in decline phase

The French Fries have been an important part of the McDonalds menu worldwide. But now it was in the stage of decline and was actually not generating proper return. In an attempt to revitalize it, a new variant was introduced namely Shake Shake Fries. This is being served with chatpata spice mix which has resulted in increase in the sales of French Fries and has elevated it from to the decline stage. This is used to delay the decline of a well established product which has the potential of generating further revenue.

BCG Matrix 27 | P a g e

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VII. PEST Analysis:-

Political:1. One of the largest democracy 2. Fairly stable government 3. Armed forces - neutral 4. Bureaucratic red tape omnipresent. 5. Anti-Western / MNC factions 6. Health activists, Environmentalists, Sons of the soil campaigners. Economic:1. Entry and exits in sectors controlled by government 2. MNCs restrictions 3. Deregulation since 1991 but swadeshi mindset still continues. 4. MPs comment on MNC in consumer sector 5. Changes in income and in consumer spending patterns. We want computer chips, not potato chips 28 | P a g e

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Social: 1. Geographic shifts in population. 2. Lifestyle and demographic changes Technological:1. Organization to keep up with the fast pace of change. 2. High research and development budgets.

VIII.

McDonald¶s Menu:-

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SWOT Analysis
Strengths
y

McDonalds has built up huge brand equity. The USP of McDonald¶s is Quality, Service, Cleanliness & Value for money.

y

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 minimise costs while maximizing value to customers.

y

McDonalds invests a huge amount of money in training its staff. Good innovation and product development. It continually innovates to retain customers in the business. Supplier Integration. Large amounts of investment have gone into supporting its franchise network. They successfully and easily adapt their global restaurants to appeal to the cultural differences. For example, they serve lamb mutton in India.

y y y

y

McDonald's takes food safety very seriously. More than 2000 inspections checks are performed at every stage of the food process. McDonalds are required to run through 72 safety protocols every day to ensure the food is maintained in a clean contaminate free environment. Also the same day product is destroyed if it exceeds its normal time cycle.

y y y

It is a major attraction to teens and youth as a place to chill out. Loyal staff and strong management team. McDonald's believes in giving back to the community it serves. For example, McDonald's has introduced the concept of µLitter Patrols¶ ± McDonald's employees go around the market every day, picking up garbage left behind not only by customers from McDonald's restaurants but also by other visitors in the area. The result is a cleaner neighborhood.

Weaknesses y Low depth and width of product. Core product line out of line with the trend towards healthier lifestyles for adults and children. Product line heavily focused towards hot food and burgers. Their test

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marketing for pizza failed to yield a substantial product. Leaving them much less able to compete with fast food pizza chains. y y y y High employee turnover in their restaurants. They have yet to capitalize on the trend towards organic foods. Decline market share, slowed revenue and income growth. Quality issues across the franchise network.

Opportunities y Growing nuclear families ± Parents and kids prefer fast food due to its quick service and satisfying appetite at affordable prices. y y Growing urban lifestyle ± People in cities and towns are having additional incomes. Expansion into semi-urban and rural cities via franchising or direct expansion. Threats
y

Social changes - Government, consumer groups encouraging balanced meals, 5 a day fruit and vegetables.

y

Changing customer lifestyle and taste. Focus by consumers on nutrition and healthier lifestyles. Looks almost the same.

y

Competitive pressures on the high street as new entrants offering value and greater product ranges and healthier lifestyles products. E.g. subway, supermarkets, M&S.

y

Recession or down turn in economy may affect the retailer sales, as household budgets tighten reducing spend and number of visitors.

y y y

Pressure groups - environmental. Increased competition. Ready to eat products are more in demand in the market owing to the fact that consumers have to take minimum trouble in preparation out of which the results are healthy food, rich nutritional value, easy on pockets and higher value for money.

y

Health Concerns due to low quality ingredients used in majority of the fast food joints.

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McDonald·s ² Behind the golden arches«

Marketing Assignment« References ² 
www.mcdonalds.com 

www.mcdonaldsindia.com  http://www.mcdonaldsindia.com/aboutus/supplychain/index.html  www.businessstandard.com  www.ibef.com  www.mouthshut.com  www.businessweek.com  www.casestudy.co.in  www.scribd.com  www.economictimes.com  www.articlesbase.com  www.docstoc.com  www.harvardbusinessreview.com  www.business.rediff.com

32 | P a g e

McDonald·s ² Behind the golden arches«

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