Escolar Documentos
Profissional Documentos
Cultura Documentos
UNIVERSITY OF MUMBAI
PROJECT ON
McDONALD’S
SUBMITTED BY
PROJECT GUIDE
PROF.MRS.MAHALAKSHMI SANKAR.
SEMESTER V
(2009-2010)
V.E.S COLLEGE OF ARTS, SCIENCE & COMMERCE,
SINDHI COLONY, CHEMBUR - 400071
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McDonald’s
UNIVERSITY OF MUMBAI
PROJECT ON
McDONALD’S
Submitted
In Partial Fulfillment of the requirements
For the Award of the Degree of
Bachelor of Management
By
DEEP NANDKUMAR KADU.
PROJECT GUIDE
PROF.MRS.MAHALAKSHMI SANKAR.
SEMESTER V
(2009-2010)
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McDonald’s
DECLARATION
______________
Student’s Signature
DEEP NANDKUMAR KADU.
Name of Student
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McDonald’s
CERTIFICATE
Course Co-ordinator
Mrs.A.Martina.
External Examiner
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McDonald’s
ACKNOWLEDGEMENT
It gives me great pleasure to submit this project to the University of Mumbai as a part of
curriculum of my BMS course. I take this opportunity with great pleasure to present before you
this project on “McDonald’s” which is a result of co-operation, hard work and good wishes of
many people.
No words can adequately express my sincere thanks to all those who have help me in making
this project a success.
Also I acknowledge my deep sense of gratitude towards my guide Professor Mrs Mahalakshmi
Sankar .
I would also like to take this opportunity to thanks Mr.Bharat.Krishna.Vaity Restaurant
Manager (Khalapur Store).
I am grateful to Mrs. J.K.Phadnis, Principal of V.E.S College of Arts, Science & Commerce
and Prof Mrs. A. Martina, BMS Co-ordinator (Bachelor of Management Studies)
My debt to those who have helped me in one way or the other is heavy indeed. I would like to
appreciate contribution of my family and friends who have extended their complete support in
completion of this project.
Last but not the least; I am thankful to the Almighty for giving me strength, courage and patience
to complete this project.
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McDonald’s
EXECUTIVE SUMMARY
McDonald’s is a globally successful fast-food restaurant. From the time of its birth it has
gain enormous success and is growing at the international level. The powerful entry through
franchisee system the standardization and adaptation strategy play an important role in gaining
the huge success of McDonald’s and brand image of McDonald’s.
McDonald’s strategy of standardizing their products on its preparation, techniques of
presentation along with the adaptation strategy has created a difference in McDonald’s as
compared to that of its competitors.
Marketing being my subject interest knowing the strategy of one of the most successful
company will really help me out. Thus, I have chosen McDonald’s as my study of subject for
my 100 marks project in TYBMS. This has really helped me out to know lots of marketing
techniques and practically understand the McDonald’s strategy of standardization and
adaptation.
[
STUDY:
In the project focus has been made on McDonald’s franchisee in India. The challenges
faced, their target market, segmentation strategies. The supply chain of the company and its
ability to provide best quality food at the best cost. The 5 P’s of McDonald’s and the various
schemes provided by the company to its employees while working in McDonald’s and even after
their retirement from the company. McDonald’s as a service industry its life cycle is also studies.
The present strength and weakness of the company and the future opportunities and its future
threats are also study for better analysis of McDonald’s marketing in India.
CONCLUSION:
Studying McDonald’s and its marketing system has helped me a lot in understanding the
marketing subject in a better manner. And it will be helpful for me in near future.
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McDonald’s
INDEX
TITLE PAGE NO.
1. INTRODUCTION 01-02
2. HISTORY 03-04
3. FRANCHISEES 05
CHAPTER V: - MC EMPLOYEE
1. EMPLOYEE BENEFITS 27-30
2. FACILITIES
27
3. EMPLOYEE RECOGNITION
28
4. RETIREMENT BENEFITS
29
30
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McDonald’s
CONCLUSION 51
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McDonald’s
INTRODUCTION
The McDonald’s Corporation is one of the most successful global restaurant chains
around the world. They have used effective management and global expansion strategies to enter
new markets and gain a share of the foreign fast food market. McDonald’s has achieved this
enormous success, its best practices in the global food industry, international growth trends and
challenges, and various lessons that have been learned from their expansion in foreign countries.
This shows how McDonald’s creates both customer and brand loyalty for their products and
services.
In 1937 Brothers Dick and Mac McDonald open a hot dog stand called the Airdrome at
the airport in Monrovia, California & in 1940 the brothers move the Airdrome building to San
Bernardino, California, where they open the first McDonald's restaurant. Although McDonald's
did not invent the hamburger or fast food, its name has become nearly synonymous with both.
The McDonald's Golden Arches logo was introduced in 1962. It was created by Jim
Schindler to resemble new arch shaped signs on the sides of the restaurants. He merged the two
golden arches together to form the famous 'M' now recognized throughout the world. Schindler's
work was a development of the stylized 'v' logo sketched by Fred Turner, which was conceived
as a more stylish corporate symbol than the Speedee chef character that had previously been
used. The McDonald's name was added to the logo in 1968.
McDonald's has its familiar golden arches logo; McDonald's has 31,886 restaurants
worldwide serving Big Macs, Chicken McNuggets, salads and French fries. Most restaurants
offer drive-thru service and some suburban locations offer outdoor playgrounds for children.
Approximately 70% of McDonald's restaurants are operated by independent franchisors. The
number of restaurants in the U.S. has reached saturation and most new McDonald's are now
being opened in Europe, Middle East and Asia.
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McDonald’s
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McDonald’s
HISTORY
The first McDonald's restaurant was located in San Bernardino, CA in 1954 and operated
by two brothers Dick and Mac McDonald. Ray Kroc, a milk shake machine salesman, thought
the restaurant was great and purchased the rights from the brothers. Kroc opened his first
McDonald's restaurant in Des Plaines, IL in 1955 and preached cleanliness in restaurants.
McDonald's would grow quickly as it signed on franchisees to open restaurants around the
country. McDonald's would go public in 1965.
The Big Mac was introduced system wide in 1968 and was the brainchild of Jim
Delligatti, one of Ray Kroc's earliest franchisees, who by the late 1960s operated a dozen stores
in Pittsburgh. The Egg McMuffin was developed by owner operator Herb Peterson in 1973.
The site of the McDonald brothers' original restaurant is now a monument. With the
expansion of McDonald's into many international markets, the company has become a symbol of
globalization and the spread of the American way of life. Its prominence has also made it a
frequent topic of public debates about obesity, corporate ethics and consumer responsibility.
In 2007, the company had record revenues of $22.8 billion, a 9% increase from the
previous year. Net income was $2.39 billion. McDonald's sold the Boston Market restaurant
chain in 2007 and owns a stake in Chipotle Mexican Grill. In 2007, the Company completed the
sale of its businesses in Brazil, Argentina, Mexico, Puerto Rico, Venezuela and 13 other
countries in Latin America and the Caribbean to a developmental licensee organization. An
estimated 10% of all workers have once worked at McDonald's in their lifetime.
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McDonald’s
FRANCHISEES
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McDonald’s
Franchising refers to the methods of practicing and using another person's philosophy
of business. The franchisor grants the independent operator the right to distribute its products,
techniques, and trademarks for a percentage of gross monthly sales and a royalty fee. Various
tangibles and intangibles such as national or international advertising, training, and other support
services are commonly made available by the franchisor. Agreements typically last five to
twenty years, with premature cancellations or terminations of most contracts bearing serious
consequences for franchisees.
McDonald's does business in more than 30,000 restaurants in 119 countries around the
world serving 47 million customers each day. In many countries around the world it does not
have a presence and its current strategy is to focus on the markets where it does not do business.
No firm date has been established for the opening of new markets. In certain markets
McDonald's have a presence but it is not seeking franchisees and it has included instructions
regarding those markets. McDonald's sincerely appreciate the customers expressed interest in
McDonald's and their continued patronage of our restaurants.
MCDONALD’S INDIA
The Indian beginning
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McDonald’s
A 50-50 joint venture partnership between McDonald’s Corporation [USA] and two
Indian business, McDonald’s began its journey in India in October 1996. Connaught Plaza
Restaurants Pvt. Ltd headed by Vikram Bakshi owns and operates the northern and eastern
operation which includes restaurants in New Delhi, Uttar Pradesh, Rajasthan, Punjab, Haryana,
West Bengal etc.
Amit Jatia’s company Hardcastle Pvt. Ltd. Owns and operates McDonald’s restaurants
in West and South India. HRPL has restaurants in Maharashtra, Madhya Pradesh, Karnataka and
Andhra Pradesh, Chennai and its growing rapidly.
These includes:-
Construction
It is involves in all construction and design related work for the stores as per
McDonald’s standards. It prepares project plans for new stores to be put to the management and
implements the same after approval.
Country Purchase
All the purchases of raw material for restaurants products are done by the country
purchase department team for both the Delhi and Mumbai markets. It works as a national supply
chain. The main aim is to purchase the best quality material from the authorized supplier and at
lowest possible cost. Once the material is ordered by a country
purchase it first goes to the distribution centre and then to the restaurants according to their
requirement.
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McDonald’s
Corporate Affairs
It associates with brand building and protection of the brands. It works closely with
real estate in doing feasibility studies for sites from a legal angle. It looks after license and
liaison activities of the company with outside agencies, i.e. regarding media
and government authority.
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McDonald’s
Operation
This department id responsible for the day to day functioning of the restaurants in a
profitable manner.
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McDonald’s
Our vision is to be the world’s best quick service restaurant experience. That means that
our restaurant will be the best place for our customers to enjoy fast, friendly services …… fresh
food favorites…… a clean welcoming environment…… and a fun experience at a fair price.
OUR VALUES
Our vision is supported by a set of core values:
• We are dedicated to providing customers unparalleled levels of quality, service,
cleanliness, and value. It is what RAY KROC taught us.
• We are committed to our people because we know that a diverse team of well trained
individuals working together is the key to our continued success.
We celebrate our achievements, yet we are never satisfied with our results.
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 non-
vegetarian sections is maintained throughout the various stages.
McDonald’s uses demographic segmentation strategy with age as the parameter. The
main target segments are children, youth and the young urban family.
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McDonald’s
80% 71%
70% 59%
60% 52%
50%
40%
30%
20%
10%
0%
Biscuits Burgers & Pizzas Fruit Juices
As shown above, kids reign supreme in FMCG purchase related to food products. So to
attract children McDonalds has Happy Meal with which toys ranging from hot wheels to various
Walt Disney characters are given (the latest in this range is the toys of the movie Madagascar).
For this, they have a tie-up with Walt Disney. At several outlets, it also provides special facilities
like ‘Play Place’ where children can play arcade games, air hockey, etc. This strategy is aimed at
making McDonald’s a fun place to eat. This also helps McDonald’s to attract the young urban
families wanting to spend some quality time while their children have fun at the outlet. To target
the teenagers, McDonald’s has priced several products aggressively, keeping in mind the price
sensitivity of this target customer. In addition, facilities like Wi-Fi are also provided to attract
students to the outlets like the one at Vile Parle in Mumbai.
“Mc Donald’s Mein Hai Kuch Baat” projects McDonald’s as a place for the whole family
to enjoy. When McDonald’s entered in India it was mainly perceived as targeting the urban
upper class people. Today it positions itself as an affordable place to eat without compromising
on the quality of food, service and hygiene. The outlet ambience and mild background music
highlight the comfort that McDonald’s promises in slogans like “You deserve a Break Today” &
“Feed your inner child”. This commitment of quality of food and service in a clean, hygienic and
relaxing atmosphere has ensured that McDonald’s maintains a positive relationship with the
customers.
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McDonald’s
Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their
values. The customer’s expect the brand to enhance their self-image. Customer responses
obtained at the Vile Parle, Mumbai outlet confirmed the fact that they connect strongly with the
brand. However, fulfilling some of the customer expectations like a broader product variety
provide McDonald’s a great scope for improvement.
SUPPLY CHAIN
Supply Chain is one of the critical factors for the smooth functioning of any business.
And when we are talking about fast food business with McDonald’s as the subject of the study it
can expected a Supply Chain model of one of the highest precisions. It is this unmatched Supply
Chain Structure, which not just ensures on time delivery of raw materials and supplies to
McDonalds but also enables it to cut down on its cost and maximize profitability along with
maintaining highest quality standards of its products. The level of commitment of McDonalds
can be gauged from the fact that even before it set up its first restaurant in the country it infused
Rs 400 Crore to set up its delivery mechanism. McDonald’s initiative to set up an efficient
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McDonald’s
supply chain and deploy state-of-art technology changed the entire Indian fast food industry and
raised the standards of performance to international levels.
As already mentioned, McDonalds had been working on its supply chain even before it
opened its first joint in the country. McDonalds, an international brand which was trying to make
inroads into the country, developed its Indian partners in such a manner that they stayed with the
company from the beginning. The success of McDonalds India was achieved by sourcing all its
required products from within the country. To ensure this, McDonalds developed local
businesses, which can supply it highest quality products. Today, McDonalds India works with 38
different suppliers on a long term basis and several other stand alone restaurants for its various
other requirements. McDonald’s distribution centres in India came in the following order: Noida
and Kalamboli (Mumbai) in 1996, Bangalore in 2004, and the latest one in Kolkata (2007).
McDonald's entered its first distribution partnership agreement with Radha Krishna Foodland, a
part of the Radha Krishna Group engaged in food-related service businesses. The association
goes back to July 1993, when it studied the nuances of McDonald's operations and requirements
for the Indian market. As distribution centres, the company was responsible for procurement, the
quality inspection programme, storage, inventory management, deliveries to the restaurants and
data collection, recording and reporting. Value-added services like shredding of lettuce, re-
packing of promotional items continued since then at the centres playing a vital role in
maintaining the integrity of the products throughout the entire 'cold chain'.
Cold Chain was one of the unique concepts of McDonalds supply chain in India, on
which it had spent more than six years to get the system into place. This system brought about a
veritable revolution, immensely benefiting the farmers at one end and enabling customers at
retail counters get the highest quality food products, absolutely fresh and at great value. Through
its unique cold chain, McDonalds 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. This has
involved procurement, warehousing, transportation and retailing of perishable food products, all
under controlled temperatures. The following list of suppliers, who build up the major supply
chain of McDonalds, reveal how this ‘Cold Chain’ works and contributes towards the efficiency
of McDonalds.
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McDonald’s
From farm two degrees Celsius in 90 minutes is the first step to quality. For example, the Rs
262-crore Dynamix Dairy Industries, located in Baramati in Pune district of Maharashtra,
manufactures cheese slices for McDonald’s at 10 metric tonnes per month. Dynamix has helped
set up 15 bulk cooling centres throughout the district from which it purchases milk. Each cooling
centre, which is equipped with modern measuring and
testing equipment and a large cooling tank, is not more than a few kilometers away from local
dairy farms. A farmer can deliver milk even twice a day on his bicycle and get a printed receipt
on the spot, which also lists the quality of the milk supplied by him as per fat content, colour and
solids content.
If the milk is sub-standard or adulterated, it is rejected on the spot. A batch of milk can
vary from one litre to 10 litres, or more. Each batch is mixed in one large stainless steel cooler
and chilled immediately to two degrees Celsius to stop bacterial growth and preserve freshness.
From this point onwards, until just before the burger is actually served in a McDonald’s
restaurant hundreds of kilometers away, the temperature is never allowed to increase. When the
refrigerated milk arrives at the Dynamix plant at Baramati, the milk in every single tanker is
thoroughly tested and rejected if found sub-standard, adulterated or contaminated. The
sophisticated testing lab can check fat content with an accuracy of 0.1 per cent. It can even detect
minute traces of pesticides or antibiotics administered to cows. This instant feedback and the
rejection of the entire tanker-load forces farmers to follow the best practices in terms of animal
husbandry, use proper feeds, cut down on the indiscriminate use of pesticides and animal
medicines and completely stop even the slightest attempts at adulteration.
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McDonald’s
Trikaya Agriculture, a major supplier of iceberg lettuce to McDonald's India, is one such
enterprise that is an intrinsic part of the cold chain. Exposure to better agricultural
management practices and sharing of advanced agricultural technology by McDonald's has made
Trikaya Agriculture extremely conscious of delivering its products with utmost care and quality.
Initially lettuce could only be grown during the winter months but with McDonald's expertise
in the area of agriculture, Trikaya Farms in Talegaon, Maharashtra, is now able to grow this crop
all the year round. McDonald's has provided assistance in the selection of high quality seeds,
exposed the farms to advanced drip-irrigation technology, and helped develop a refrigerated
transportation system allowing a small agri-business in Maharashtra to provide fresh, high-
quality lettuce to McDonald's urban restaurant locations thousands of kilometers away. Post
harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room to remove field
heat, a large cold room and a refrigerated van for transportation where the temperature and the
relative humidity of the crop is maintained between 1º C and 4º C and 95% respectively.
Vegetables are moved into the pre-cooling room within half an hour of harvesting. The pre-
cooling room ensures rapid vacuum cooling to 2º C within 90 minutes. The pack house, pre-
cooling and cold room are located at the farms itself, ensuring no delay between harvesting, pre-
cooling, packaging and cold storage. With this cold chain infrastructure in place, Trikaya
Agriculture has also a plan to export this high value product to other international markets,
especially to McDonald's Middle East and Asia Pacific operations. McDonald's expertise in
packaging, handling and long-distance transportation has helped Trikaya to do trial shipments to
the Gulf successfully. In addition to export, McDonald's assistance has enabled Trikaya
Agriculture to supply this crop to a number of star-rated hotels, clubs, flight kitchens and
offshore catering companies all over India.
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McDonald’s
Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of
products including Fruit Pies)
A joint venture with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and Vista
Processed Foods Pvt. Ltd., produces a range of frozen chicken and vegetable foods. A world
class infrastructure at their plant at Taloja, Maharashtra, has:
Vista Processed Foods Pvt. Ltd., McDonald's suppliers for the chicken and vegetable
range of products, is another important player in this cold chain. Technical and financial support
extended by OSI Industries Inc., USA and McDonald’s India Private Limited have enabled Vista
to set up world-class infrastructure and support services. This includes hi-tech refrigeration
plants for manufacture of frozen food at temperatures as low as - 35° C. This is vital to ensure
that the frozen food retains it freshness for a long time and the 'cold chain' is maintained. The
frozen product is immediately moved to cold storage rooms. With continued assistance from its
international partners, Vista has installed hi-tech equipment for both the chicken and vegetable
processing lines, which reflect the latest food processing technology (de-boning, blending,
forming, coating, frying and freezing). For the vegetable range, the latest vegetable mixers and
blenders are in operation. Also, keeping cultural sensitivities in mind, both processing lines are
absolutely segregated and utmost care is taken to ensure that the vegetable products do not mix
with the non-vegetarian products. Now, at Vista, a very wide range of frozen and nutritious
chicken and vegetable products is available. Ongoing R&D, both locally and in the parent
companies, work towards innovation in taste, nutritional value and convenience. These products,
besides being supplied to McDonald's, are also offered to institutions like star-rated hotels,
hospitals, project sites, caterers, corporate canteens, schools and colleges, restaurants, food
service establishments and coffee shops. Today, production of better quality frozen foods that are
both nutritious and fresh has made Vista Processed Foods Pvt. Ltd. a name to reckon within the
industry.
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McDonald’s
An integral part of the Radhakrishna Group, Foodland specializes in handling large volumes,
providing the entire range of services including procurement, quality inspection, storage,
inventory management, deliveries, data collection, recording and reporting. Salient strengths are:
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.
• Installed capacity of 6000 ltrs/hr for producing homogenized UHT (Ultra High
Temperature) processed milk and milk products.
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McDonald’s
All suppliers adhere to Indian government regulations on food, health and hygiene while
continuously maintaining McDonald's recognized standards. As the ingredients move from farms
to processing plants to the restaurant, McDonald's Quality Inspection Programme (QIP) carries
out quality checks at over 20 different points in the Cold Chain system. Setting up of the Cold
Chain has also enabled it to cut down on operational wastage
Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety
that emphasizes prevention within its suppliers' facility and restaurants rather than detection
through inspection of illness or presence of microbiological data. Based on HACCP guidelines,
control points and critical control points for all McDonald's major food processing plants and
restaurants in India have been identified. The limits have been established for those followed by
monitoring, recording and correcting any deviations. The HACCP verification is done at least
twice in a year and certified.
The relationship between McDonald's and its Indian suppliers is mutually beneficial. As
McDonald's expands in India, the supplier gets the opportunity to expand his business, have
access to the latest in food technology, exposure to advanced agricultural practices and the
ability to grow or to export. There are many cases of local suppliers operating out of small towns
who have benefited from their association with McDonald's India
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McDonald’s
After segmenting the market, finding the target segment and positioning itself, each
company needs to come up with an offer. The 5 P’s used by McDonalds are:
1. Product
2. Place
3. Price
4. Promotion
5. People
Product: How should the company design, manufacture the product so that it enhances the
customer experience?
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.
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McDonald’s
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. McDonald's success worldwide has been attributed to the ‘“Think Global, Act Local and
Sell like a Retailer” philosophy. McDonald’s followed this international mantra while opening
doors to the Indian subcontinent. With respect to the cultural and traditional sentiments, not only
did McDonalds not serve it’s most popular product The BIGMAC (a beef burger) but also
developed an egg-less mayonnaise for the first time in the worldwide system.
To suit the Indian palette, the McAloo Tikki™ burger, Veg. Pizza McPuff™ and Chicken
McGrill™ burger were among other offerings that were formulated and introduced using spices
favored by Indians. Furthermore, each restaurant kitchen was designed to maintain separate
Vegetarian and Non-Vegetarian food counters.
Reasons for introducing the products
• Beef which was a taboo in the Indian market was planned to replace by filling of Aloo
Tikki to match up with the Indian culture.
• Salad sandwich was introduced targeting the people who are more conscious about
health.
• The introduction of jain salad in the outlet keeping the jain people rituals of not eating
ginger ,onion, potatoes etc.
• Seeing to the Indian mentality of having wheat chapattis led to the idea to introduce
paneer salsa wrap and chicken Mexican wrap.
• Filet-o-fish was introduced keeping in mind the demand of the sea food lovers having no
competitors in the segment before.
Place: Where should be the product be available and the role of distribution channels?
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McDonald’s
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 McDonald’s outlet.
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.
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 has certain value pricing and bundling strategies such as happy meal, combo meal,
family meal etc to increase overall sales volumes.
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McDonald’s
time to add new people to the fold. The Indian consumers continued to perceive McDonald’s as
an expensive eating out option. The challenge was to overcome this perception and be accepted
as an affordable brand. While the patented products like McVeggie™ and McChicken™
continued to cater to the patrons, the company needed to broaden the audience base to further
entrench into the market.
Promotion: What is the suitable strategy and channels for promotion of the product?
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McDonald’s
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.
The first step for the brand was to establish itself as a familiar,
comfortable place. Taking a cue from the Indian family values, the
year 2000 saw the first ever McDonald’s ad aired in the country. A
child, who is unable to recite a poem and suffers stage fright, but when
he enters McDonald’s, he easily recites it when in the comfortable
familiar environment of McDonalds.
Working on the insight – similarly when his family moves into a new place, the child
misses all that has always been so familiar and dear. He then has the comfort of something that is
dear and familiar to bring a smile to his face. McDonald’s was successful in creating an image of
a warm and comfortable ambience through its
ads. ‘McDonald’s Mein Hai Kuch Baat’: Making McDonalds the consumers’ favorite place and
way to eat. While kids and families were key, it was also important to talk to the generation that
had not grown up on McDonald’s burgers and fries. An adult who works with logic and
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McDonald’s
reasoning would need a reason tempting enough. And what better way to talk to them than talk
about McDonald’s core competence – food!
Even in Dreams:
McDonald’s realized that the way to draw more consumers would be to increase the
visibility of the brand and its products. The more a person saw food, the greater his urge would
be to try it out. The company came up with its next round of campaign to address and reflect this.
The campaign showed different people dreaming about McDonald’s. It depicted how the
consumers were totally involved with McDonald’s and the food. New product stories delivered
in a memorable and engaging approach. It was imperative for the success of the brand to be
‘Indianized’ – to continuously speak to consumers in their ‘language’ without taking away from
its core American parentage. ‘From tears to smiles’ - campaigns were produced to introduce
new, scrumptious products.
The general brand perception of McDonald’s in India was that of a place for kids. While
the campaigns had worked in the past, targeting kids, McDonald’s recognized the fact that it
could not always depend on the kids’ niche. When kids move up the consumption chain, there is
a possibility of losing out on consumers. Moreover, the family outings with children only happen
over the weekends and holidays. It was imperative to rope in adults who would patronize the
brand over the weekends. Consequently, the next series of campaigns were targeted to drive in
adult traffic to break away from the perception. The ad depicted a father being invited to a
birthday party at McDonald’s. He is not at ease with the idea of visiting McDonald’s since he
perceives it as a kids place. His child reminds him of the McCurry Pan™, Filet-o-Fish™ that he
would be able to relish at the birthday party. The food boosts the father to go to the party, where
to his astonishment is his boss’ party. The ad asserted that people celebrate birthdays and
occasions at places they are comfortable in!
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.
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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):
1. Customers
2. Front line employees
3. Middle level managers
4. 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.
MC EMPLOYEES
Employee benefits
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which means that all team members at MC DONALD’S are approachable at any time. Crew
meetings are held every month in your restaurant where all the store related issues are discussed.
Besides this you will also have rap session and meet 5 where you can express your view
candidly.
RAP SESSION:-
Rap session are small informal discuss between crew and management for the purpose of
discussing ideas, suggestions and problems. These sessions will be held about once every three
months or whenever needed by the store manager or a member of the management team. Rap
sessions are an opportunity for the crew to make their views known to the company. You will be
paid for attending a rap session.
Opinion survey:-
About once a year we will ask all employees to complete a confidential
questionnaire relating to their work and the operation of the store, the answers will help us to
improve our management of the restaurant and conditions of employment.
Facilities
Crew room
This room is provided for the employee for recreation and rest during the break time. The
employee can study, listen to music, and get trained in this room.
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Breaks
It is not easy to maintain quality, service, and cleanliness. It take hard work and hustle. To keep
energy level high, all the crew member working above five consecutive hour are eligible for an
unpaid break of an hour.
Employee Meal
One of the best things about working for McDonald’s is for food. Employees can enjoy quality
nutritious food at world standard hygiene levels. It is free to managers and crew. All the meals
consumed must be recorded and consumed in the restaurants itself.
Locker Facility
Lockers are available for the employees use at the restaurants for keeping the personal
belongings in a safe and secure place during the shift.
Other Facilities
In addition to the above facilities the employee also enjoys with the team member during the
yearly store outing and various inter-store activities arranged system-wise and patchwise. These
activities are fun and provide opportunity to have a good time and know fellow employees better.
Employee recognition
Incentives
All the crew at McDonald’s have the opportunity to get McDonald’s branded
merchandise. Each restaurant is allotted “Mahabucks” every month based on monthly store
allocation and various inter-store competitions. Mahabucks is a crew incentive programme where
the Mahabucks coupons can be redeemed for the set of utility items available for that year. The
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employee have the opportunity to earn the Mahabucks by becoming face of the month, face of
the quarter, various rewards organized by the stores and through various inter store competitions.
Retirement Benefits
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Bonus
Depending upon the law applicable at the relevant time the employee will receive an
amount of 8.33%of the basic salary earned during the financial year.
Gratuity
All the full time employee who have completed 5 years of continuous employment with
the company are eligible for gratuity. The employee will receive an amount of 15 days basic
salary for every week worked. The amount is given at the time of separation or retirement from
the company.
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Core
Service
Supplementary
Product
Delivery
Process
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During the Service Delivery Process, each moment of interaction between the firm and
the customer, called “Moments of Truth”, helps understand the opportunities that a firm has to
win or lose the customer. For example, these “moments of truth” are created for McDonald’s
every time the guard at the McDonald’s outlet meets the customer, every time an attendant takes
down the order from the customer waiting in the queue, every time the cashier interacts with the
customer, every time the attendant helps the customer guided the customer towards the table,
every time the attendant cleans the tables etc.
Process and the various stages in the process that are exposed to the customers.
Transparency in the processes at its outlet has helped McDonald’s bring the back office in its
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outlet at the front so that the customer is able to know the operations and provide feedback on
service design improvements.
Internal Customer Focus is equally important as External Customer Orientation in order
to win these “moments of truth”. McDonald’s focus on its People and their service delivery
methods therefore plays a very important role in creating a successful Service Brand. The quality
and the consistency of the service delivered by McDonald’s have been greatly enhanced by the
combination of the factors mentioned above. This has helped McDonald’s become Service
Leader and a successful Service Brand. This is evident from the fact that very few of its
customers opt for take-home parcels or home deliveries while most of them prefer to eat at the
outlet and enjoy the McDonald’s experience.
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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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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.
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ANALYSIS
Competitors Analysis
McDonald’s has been a leading fast-foods outlet in Vile Parle. But the outlet understudy has
other competitors eating away into its market share. In addition to its traditional rivals—KFC,
Dominos, Pizza Hut—the firm encounters new challenges. 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. Perhaps in the new environment, fast, convenient service is no longer enough to
distinguish the firm. At this time, a new critical success factor may be emerging: the need to
create a rich, satisfying experience for consumers. This brings us to service and experience
based competition which McDonald’s can use for competitive advantage against Jumbo King.
Keeping in mind the demographics of the area, McDonald’s has Wi-Fi enabled the outlet to cater
to the student community. It is for this overall “Food, Fun & Folks” experience that customers
pay a premium over the other competitors.
Competition also reduces product lifecycle; inducing firms to revise their products
portfolios and to revisit their product market to understand changing needs, expectations and
perception of different market segments. The new McBreakfast would be introduced between 6
to 11 am as a pilot project. This would open up a whole new revenue stream for McDonald’s by
tapping into the student and working population by providing a healthy and wholesome
breakfast. This shows how demographic shift can affect the demand for products and services.
McDonald’s has anticipated these changes to maintain its competitive edge.
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SWOT Analysis
➢ Rolling out McBreakfast across all outlets – In India, the company has recently
launched its entry into the breakfast food category. This is now launched on a pilot basis
on select stores. In Mumbai, it available at the Vile Parle outlet. The company views this
category as a key growth driver in future.
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Exhibits
Survey Questionnaire
Q. Which is your favorite product at McDonald’s?
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Q. What is the first thing that strikes your mind about McDonald’s?
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McDELIVERY
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McDONALD’s KIOSK
At McDonalds we have made effort to cover every possible area for serving to the Customer
needs. After serving the meals we have made Kiosk as a means of fulfilling the custom of
something sweet following the main course.
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• The Chart below reflects the KIOSK as a strength for the system.
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CONCLUSION
About 50 restaurants will be added to the 47 already in the India according to Vikram
Bakshi, managing director of Connaught Plaza Restaurants, which holds the franchise for New
Delhi and the north of the country."McDonald's considers China and India to be vital for
expansion and will continue to invest more and more in both these countries," Mr Bakshi told
Bloomberg News. He said the expansion is expected to cost between 10bn and 13bn rupees
(£136-176m; $211-275m). Western India will get fifteen new outlets over the next 12 months at
a cost of 600m rupees, according to Amit Jatia, managing director of regional franchise holder
Hardcastle restaurants.
Indian growth
McDonald's has invested about 7bn rupees in India since it entered the market in 1996
and reported growth of about 40%. India has a population of over 1 billion and an emerging and
affluent middle class. The food chain has tailored a number of its products to the Indian market,
including the Paneer Salsa Wrap, McAloo Tikki and the mutton speciality for a country which
does not eat beef, the Chicken Maharaja Mac. "In the next two years, we should finally have a
menu that is entirely relevant to the Indian household," Mr Bakshi said.
From the above information it is very clear that Mc Donalds is aggressive about its Indian
operations and this fast food chain is here to stay feeding millions of Indians the Jai ho way think
global act local.
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