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•The story of McDonald’s started in 1954, when its founder Raymond Kroc saw a hamburger stand in San Bernardino, California and envisioned a nationwide fast food chain. •Today McDonald’s is the world’s largest fast food chain serving 47 million customers daily. • McDonald’s is now one of the most valuable brands globally, worth more than $25 billion. •Though the company has roots in the US, McDonald’s today has become an accepted
McDonald’s in India
• McDonald’s entered India in 1996. • McDonald’s 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
Challenges in Entering Indian Markets
• Re-engineering the menu - McDonald’s has continually adapted to the customer’s tastes, value systems, lifestyle, language and perception. Globally McDonald’s 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 McDonald’s 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 nonvegetarian sections is maintained throughout the various stages.
McDonalds Marketing Mix (5 P’s)
• Product: McDonalds has intentionally kept its product depth and product width limited. • McDonalds studied the behaviour 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.
• Place:There is a certain degree of fun and happiness that a customer feels each time he dines at McDonalds. • There are certain value propositions that McDonalds offer to its customers based on their needs. McDonalds offers hygienic environment, good ambience and great service. • Now McDonalds have also started giving internet facility at their centres and they have been playing music through radio instead of the normal music. There are certain dedicated areas for children where they can play while their parents can have some quality time together.
• Price:McDonald’s came up with a very catchy punch line “Aap ke zamane mein ,baap ke zamane ke 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.
• Promotion:There are three main objectives of advertising for McDonald’s 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. McDonald’s 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 McDonald’s are: “You Deserve a break today, so get up and get awayTo McDonald’s” “Aap ke zamane mein ,baap ke zamane ke daam”. “Food, Folks, and Fun” “I’m loving it”.
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• 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. This way they serve customers well and the final result is a happy customer. • The level of importance has changed to be in the following order (the more important people are at the top): • Customers • Front line employees • Middle level managers • Front line managers • The punch line “I’m loving it” is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.
• Strengths: 1) Globalization: 31,000 restaurants serving 120 countries. Of the 31,000 restaurants at least14,000 restaurants in the US 2) Active Children's Charity: The Ronald McDonald House 3) Adjusted Ingredients and product offerings to comply with upgraded health standards deemed necessary by the USDA 4) Earns revenue not merely by fast food sales, but also as a property investor, a franchiser of restaurants. 5) Branded (name recognized) menu items such as Big Mac, Quarter Pounder and Chicken McNuggets
• Weaknesses: 1) Advertisement techniques that target children 2) Consumers use disposable income to purchase fast food meals so when the budget it threatened, consumers redirect these funds 3) Public perception: McDonald's has been impacted by negative press like the documentary "Supersize Me" by Morgan Spurlock in which he contributed our societies obesity to McDonald's and other fast food chains.
• Opportunity: 1) IInnovation: Continued adaptation to societies needs such as USDA and Supersize Me upgrade. 2) Conservation: Researching green energies and green packaging solutions and incorporating these findings as a part of their marketing strategy and advertisements. 3) Exploration: Create new product offerings. Continue to use technology to influence revenue strategy: possibly use text messages to deliver specials offers to individuals who sign up for such services.
• Threats: 1) Current world economic standing: the company's revenue streams are diversified, but depending on the the length of this "recession", they will inevitably be negatively impacted by the trickle down effect. 2) More Casual Dining Restaurants increasing their "burger" offering and decreasing the price: Restaurants like Ruby Tuesdays have $6 burger meals that they strongly advertise…If you're not in a hurry, which one would you choose? 3) Public Health Crisis: with a growing number of obesity cases among Americans, fastfood chains like McDonalds will continued to be overshadowed by their previous product offerings (Supersized Meal, no fruits or yogurt, slim salad selection).