Comparitiveanalysisofmajorfastfoodjointsinindia 110127202341 Phpapp02

COMPARITIVE ANALYSIS OF MAJOR FAST FOOD JOINTS IN INDIA
INTRODUCTION Objectives To identify and analyze the marketing strategies of the three fast food chains: McDonalds Wimpys Nirulas
Under the fast food market. Analyzing the performance of the above chains since the past five years. Making a comparative analysis of the above three restaurants. Identifying the recruitment and selection procedures adopted by the stated restaurants at : Managerial Supervisory Clerical and Operational level (Operations comprise an important part in any restaurant).
SaurabhGupta ICFAI BUSINESS SCHOOL HYDERABAD
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Conducting market research study to determine : Percentage wise consumer preferences Frequency of visit at each of the stated restaurants Identifying unique factors that attract people to the stated restaurants.
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METHODOLOGY Information regarding the organisation, 4Ps of marketing, and consumer preferences has been obtained through : a. Primary Sources b. Secondary Sources. Primary Sources i. Marketing personal, PR personnel of the concerned organisation were approached to obtain in formation about the concerned subject (Sample questionnaire on the next page). McDonalds marketing and other details had to be obtained indirectly through its public relations firm since direct accessibility to the corporate office was not possible. ii. Market research study was conducted in order to find out percentage wise preferences of the stated fast food restaurants. Secondary Sources i. ii. iii. iv. Internet Libraries such as CII and PHD House Articles from A & M and economic times Company brochures, literature and pamphlets.
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Based on the information obtained from the above sources concepts were developed on which analysis could be made. Conclusions and recommendations have been thereby given after a thorough evaluation of the marketing strategies of the three restaurants.
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ORIGIN OF THE FAST FOOD MARKET IN INDIA Traditionally over the ages, fast food for the average Indian customer meant having breads i.e., paranthas, rotis etc. with sabzi or achaar. These were the traditionally available snacks or in the form of samosas etc. All the items were available at the roadside dhabas or the local sweet shops. There were no established eating places or restaurants for the average Indian customer. It was the Nirulas family way back in 1920s that started the trend of opening good eating places in the city. Nirulas initially when they entered the restaurant business, were more into catering and hotel business. It was only in the late 50s and early 60s that they decided to open up a restaurant serving snacks and fast food. By 70s they had a pastry shop, snack place and Hot Shoppe. This started the trend of eating joints in the city and over the country. Nirulas was considered to be the pioneer in fast food business. Seeing its success in the country other local fast food joints and restaurant started coming up in the 80s. With the coming up of these local joints Nirulas was not left behind. It had a well-established fast food chain over the next decade. However seeing the potential in the country in the 90s due to the changing life styles, the established chains world over made their entry into the Indian food market. However the tastes and the style of the kind of food which these MNCs we offering the Indian customer has been made familiar to him by Nirulas only. Although the concept was introduced to the Indians way back, but in the true sense market for fast food has been developed only after the entry the various
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MNCs starting with Wimpys to McDonalds, Pizza Hut, TGIF, Dominos etc., with many more to come over the next few years.
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THE INDIAN FAST FOOD MARKET - AN OVERVIEW Upto the year 1995 Indian food market was predominantly dominated by the traditional dhabas, potential restaurants in the customers colony and some restaurants in a five star hotel. Having fast food i.e., burgers, pizzas etc., was considered to be an option for eating out. It was not at all synonymous with the American concept of fast food as a quick takeaway bite or a substitute for lunch. Apart from fast food being available at the local colony restaurants and at some five star restaurants, Nirulas was the only fast food chain existing in the country with its restaurants expanding with every passing year since its inception. It has been almost 50 years now since its set up and there is hardly any one who doesnt know that Nirulas exists. Nirulas was the first one to bring fast food to India back in the 50s since then it has evolved into an eating place with a tremendous brand equity and brand recognition. It proved to be a perfect eating place for an average middle class who wants to eat out at an affordable price who cant afford the five-star restaurants and would not want to go to the local dhabas. Nirulas almost had a monopoly for decades due to the way it has been placed. It is a place where a person from an average middle class group to upper class group can go to eat out. Its popularity has increased over the decades. With the trends changing and the incomes rising almost anybody who can afford to eat out could go for a snack at Nirulas.
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However the year 1995-96 witnessed a drastic change. 1996 is considered to be the year of Indias entry into the world food market. International giants such as McDonalds, KFC, TGIF, Dominos, Pizza Hut all bombarded the Indian food market. Before these, UK-based joint called Wimpys had established its chain in the country in 1990. By year 1996 it had about three to four joints established in Delhi. However it did not pose much of a threat to Nirulas reason being lack of variety and that Wimpys was looked at more of a hangout place rather than eating out with the family. Its been the American international giants i.e., McDonalds, Pizza Hut etc., who have targeted their restaurants to the families. Apart from the foreign and Indian fast food chains setting up shop, there are a range of specialty restaurants offering varied fare such as Chinese, Mexican, French, Italian etc. These places however offer range of items different from burgers, pizzas etc, but they definitely are competition to both foreign and Indian fast food chains. However, restaurant business is such which is surrounded by threat from everywhere be it Indian joints or foreign joints. It is only these international joints and specialty restaurants which are gradually coming up and some Indian restaurants which have made up the food market. Prior to this it was only the local restaurant that became visible while passing by or through local banners etc., and the five star restaurants were for the elite class out of reach by the average middle class customer. There was hardly any awareness or promotion to beat competition.
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Each of the foreign food joints that have come into the country has their own strategy lined up to differ from the rest. Each of these studied the Indian tastes and style and thereby targeted the Indian customer. An average Indian restaurant goer is no convenience eater, unlike the Americans. If he is paying, he is paying for food that tastes good (Spicy, soft, savory etc.), not for how pleasantly the stuff is served or how spotless the widows are. He wants food for that can make him come back to the restaurant. An Indian food joint owner would definitely understand this but an American company, which comes and places it directly without knowing the customer is definitely in for trouble. Customer loyalty in a restaurant business is essentially low. A customer when he comes to a restaurant usually looks at the quality of food, variety, ambience, speed of delivery and the location. The variety would influence the frequency of visits since taste is a dominating factor to the Indian customers. Almost all the fast food chains both Indian i.e., Nirulas and foreign i.e., McDonalds etc., are targeting the families. This serves to be an advantage because the turnaround time is short and family has higher propensity to spend because different members order larger variety of dishes. Each of these restaurants delivers quality, value and services in its own way through its line of strategies. The emphasis is on the value that the restaurant is delivering to the customers.
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WIMPYS A). AN OVERVIEW World Wide Operations Wimpys overseas limited has its origin in United Kingdom since 1954. Wimpy Overseas limited has an outlet almost all over the world. Current wimpy operation spreads from Jamaica in the West to the Philippines in the Far East. It has it strongest representation in the Middle East. Its most Northerly restaurant is in Bodo, Norway within the Arctic Circle. The furthest South restaurants are in South Africa where there are currently about 200 wimpy restaurants operating. Story behind the name Wimpy The name Wimpy was first heard of in the POPEYE THE SAILOR MAN CARTOON. Popeye and his girlfriend, Olive, had a friend called Wimpy. Wimpy was a rounded, hamburger-eating gentleman, whose slow drawn out voice was based on a famous wit of that period. He was the inspiration for the Wimpy Empire. Even today Mr. Wimpy is a similar shape, he is dressed as a beefeater as this is the name of the Queens guards who according to tradition, protect the Crown Jewels.
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This way the fact that Wimpy is a very and also the heart of the business, the HAMBURGER are linked in one person as the trade mark for the company. Indian Operations Wimpy is the oldest of the international chains to enter the Indian scene. The company in India i.e., Wimpys international Ltd., is a hundred percent subsidiary of Wimpys overseas limited. Wimpys in India is the master Franchise for South East Asia. It extends its operations to Katmandu and Sri Lanka. It started its operations in India in 1989 with the opening of one outlet in Delhis Connought Place area. Today Wimpys has about 15 outlets in the country with more expansion plans around the corner for more outlets in the next two to three years. B. MARKETING FUNCTIONS Wimpys opened its first restaurant in Delhi in 1989. Its been almost nine years since it was established, Wimpys is primarily recognised as the burger Chain. Initially while Wimpys entered the Indian market it hardly had any competition, except from the local restaurants or from local fast food joint Nirulas. In order to beat against competition the company has to decide upon its target audience. Since its inception the Target Consumer with Wimpys have been youngsters between the age group of 18-30 and the kids. Even today Wimpys aims to target the same audience.
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Wimpys as a fast food restaurant has been positioned as a very pleasant resting-place where a wide variety of items are available through fast service. It is basically selling ambience and atmosphere. Wimpys marketing strategy lies in Fast Food. Based on this the details of its marketing mix i.e., product, price promotion and Distribution are explained below: Product Based Strategies Wimpys is offering in the market and to its customers fast food in the form of burgers, pizzas, salads, beverages, milkshakes, ice creams and assorted treats. Any product has three levels i.e., Core product: here a consumer buys a burger or a pizza to satisfy its taste buds. Actual Product: The burger that he buys that is neatly packed with Wimpys mentioned on the cover is the actual product. Augmented product: Ambience, past service atmosphere, cleanliness all augment the product. Wimpys has about 5 to 6 different product lines namely: Burgers
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Pizzas Salads Milkshakes/Beverages Ice Creams Assorted Treats. Following are the range of items at the Wimpys restaurant: Burgers (in Variety) 14 Pizzas (in variety) 8 Available in two sizes Ice Creams (in variety) 17 3 Includes Nuggets and fries Additional
Its unique selling proposition lies in its product line. Aim is to offer increasing choice and variety of items to its consumers. However, when Wimpys had started its operations it had about 3 to 4 product Lines. Since the past five years its product line has remained same till date. Ofcourse changes are constantly being made to offer new variety in each of its product lines.
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For example: Consider Burgers, when its started it had about six variety of burgers to offer. Over a period of time it has included new varieties almost every year. This year it has included chicken liliput burger and veggie Lilliput burger that is especially for the kids. Under its assorted treat line, which includes French fries, fish N chips, Nuggets etc. has also been modified from time to time. Since the past two to three years it has started including new varieties to it almost every year. The most recent additions have been veggie nuggets and chicken drumsticks. Wimpys also provides with economical meals, which include a coke, burger, french fries or any combination of these three. It keeps on coming with new meals every six months. The most recent meals that it had in its menu were the Navratra meals, which had a combination of pizza and coke; vegburger, Frenchfries and coke; and salad, Frenchfries and coke. Before the Navratra meals it had come up with Liliput Meals (especially for the kids) i.e., Veggie Lilliput burger meal, Chicken Lilliput burger meal etc. (Wimpys has always kept the kids into consideration for deciding its product lines). Although the restaurant did have pizzas in its menu earlier i.e., about a year back but since the past 8 months the restaurant has come up with a new variety and quality of pizzas. The product line of pizzas that it had in its menu earlier was not showing good results i.e., there were not much of sale of
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pizzas in the restaurant. But since the modified version has been introduced, sales have definitely gone up. Wimpy even has this special Breakfast Meal only at its restaurant in Connaught Place. The meal is quite different from its rest of the meals. It has Eggs in a Bun, Doughnuts, Orange juice, Tea/Coffee. It is targeted to the tourists, executives and the Shoppers in C.P. The customer now has more variety available to him and he has a wide range of items available to choose from. All this has been done by Wimpys to change its image, keeping the competition in mind. Pricing Strategies All the items at Wimpys have been competitively priced. The price of pizzas is far lower than other outlets, such as Dominos, Pizza Hut etc. Its cheese pizza (regular) is priced at Rs. 45 compared to Pizza huts regular cheese pizza for Rs. 65. Even the Burgers are reasonably priced. Min. availability is at Rs. 14 for Veggie Lilliput burger and maximum at Rs. 48 for Grilled Chicken burger. Even for Pizzas min price is about Rs. 45 for a regular cheese pizza and max at Rs. 75 for Half non-veg Half veg. This price is quite reasonable considering the prices of regular pizzas at Dominos where they go as high as Rs. 150-200 for a regular pizza.
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The prices are so designed to suit everyones pocket, such that an average middle class person can afford a meal at Wimpys. Promotion Strategies Since its inception is 1989 Wimpys has promoted its restaurant mainly via instore posters and danglers or through outstore posters. However its promotional strategies have under gone a change in these nine years considering the competition coming from everywhere. Its promotional strategy has been to emphasize and publicize the concept of variety, reach out to people and convince them to eat at Wimpys. In brief, the aim is to reach the right target and do it effectively. The media most commonly used by Wimpys can be classified as:
Instore Use of posters and
Out store Danglers. Use of Flyers, which are gradually
Informing about latest meal combos coming down. Emphasis now is on and latest additions in the menu. newspapers and is press ads.
Recently there
this Wimpys
Graffiti Show that is being aired on Times FM. Use of T.V under
consideration.
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Coca-Cola also assists in promoting and marketing of Wimpys restaurants. The posters and dangers used for advertising are designed via free lancers. Wimpys provides sales promotion schemes through the economical meals that its offers. Recently it has started giving coupons in great savers magazine of September issue, whereby on order of Rs. 200-299 you get veggie nuggets/Chicken nuggets free. Also, on order of Rs. 300 or above you can have any one of the salads free. During the past two years, the idea has been to improve the image of the restaurants. This is being done through improving the menu boards and the nameplates. Also the mascot Mr. Wimpy is being promoted more and more in their posters. Since the past four to five years. Wimpys has always been coming up with special menus, contests, gift schemes etc., in the festive season such as Navratras, Diwali and Christmas. It comes up with special menus and meals during Nawratras, such that people can still come and have meals during that time. Aim during the past two years has been to change the image and make Wimpys more and more visible to the people.
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Distribution Strategies Wimpys started with just one outlet in Delhi in 1989. In 1993 it had about 3 outlets in Delhi. By 1998 it has about 10 outlets in total in the city with one outlet in each of the cities i.e., Jalhandar, Ludhiana and Bangalore. The opening of its outlet at New Delhi Railway Station in 1997 had a effect on other outlets around that area. In order to expand its distribution network it has come up with a scheme whereby an individual can franchise with Wimpys. Wimpys gives him the right to use the brand name, but he has to have resources i.e., land and capital to become a franchisee with Wimpys. The restaurant manager and the operation staff would go from the company itself.
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CUSTOMER DEMAND Knowing what factors attract a customer to eating joint is important for every restaurant. The factors influencing customer demand for Wimpys menu items are as follows: The image of Wimpys as a burger chain and its popularity for its juicy burgers. Wimpys is considered to be the most preferred eating-place especially by the teenagers and the youngsters. It is them who are mostly the regular customers almost at every Wimpys restaurant. Almost every wimpy restaurant is spacious enough to attract large crowd of customers. Normally one would not have to wait for long to get a seating place at its restaurant (except during peak hours).
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NIRULAS A). AN OVERVIEW History and Background Nirulas today is a well-known name in the hospitality industry. Nirula family was the first to offer western style fast food in India. It came to Delhi in 1928. They realized the paucity of good eating places in and around New Delhi, began Hotel India in 1934 with 12 rooms and a restaurant with a bar license. They also specialized in catering to parties and soon Nirulas catering became famous. Meanwhile, Nirulas had set up the India Coffee Shop in Janpath on request of the Coffee board. A few years later, the Coffee Board of India seeing the success of the international decided to run the business itself. It 1939, whine the Second World war had started, Nirulas rented more space in Connaught Circus (what is currently the ground floor of Nirulas, L-block) and opened a Restaurant with music and dancing serving a six course dinner for only Rs. 1. The restaurant proved to be popular with both Indian and foreign guests. It also started serving Indian food and introduced ballroom dancing and cabaret. However, business fluctuated widely since it was dependent on the quality and reputation of those evenings performers. Hence, in 1950 the restaurant with the cabaret was given up in favour of the Brasserie.
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The Brasserie was a popular self-service restaurant serving beer and liquor with a limited menu of Indian and Western food. The Brasserie gave way to the Cafeteria; the first of its kind in India with a variety of Dishes and the guests could help themselves to whatever they fancied. Before 1947, Nirulas had also opened the first fruit preservation unit in Delhi. The jams and squash and other preserves were marketed under the name of Nirulas and had an all India distribution. With the partition of India in 1947, the supply of raw material was disrupted and this unit was stopped. In 1950, Nirulas started the Chinese Room which was the first restaurant of its kind in India. Nirulas created history by being the first Indians of nonChinese origin to have a Chinese food restaurant in India. In 1954, Nirulas were the first ones to introduce espresso coffee in India. Gaggia, the inceptors of espresso coffee machines gave Nirulas sole distribution rights for their machines and Nirulas sold these to the luxury hotels and first class restaurants. Nirulas store was opened in the 1950s with a section for cold meat and delicatessen products and a separate section for bakery and confectionery produce. Nirulas Hotel was started in 1958 and was the first modern 3-star hotel in India. In 1960 two specialty restaurants were opened. La Bohame was a modern restaurant where tea, coffee, snacks and meals were very popular. It was the most popular restaurant of its time in India. Gufa was an Indian
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restaurant with Indian style seating and an all silver thali service in a romantic atmosphere. The Pastry shop was independently introduced in 1972 and did externally well. The opening of the Snack bar in 1972 and Hot Shoppe in 1977 again ventured into the quick service food business, which was instant success. The first Ice Cream Parlor in India was started in 1978. Potpourri restaurant with the first salad bar in India and the Pegasus Bar were started in 1979. All of these exist till today. The Expansion Plan It was only by early 80s that Nirulas decided to expand itself. Its first restaurant outside Connaught Place opened at Vasant Vihar in 1980 and soon followed by Chanakya (1981) and Defense Colony (1986). In 1985 the Central Kitchen, comprising of the first section bulk kitchen, Ice Cream section and the bakery section was opened at Okhla, thus enabling Nirulas to expand faster. Also in 1985, Nirulas opened their first restaurant outside India in Katmandu, Nepal. Production facilities were also set up. This was followed by another in Katmandu in 1986 and one in Pokhra, June 1993. Mean while Nirulas also took over the management of restaurants at Tejs (Nov. 1985) Karol Bagh (March 1986), New Friends Colony (April 1988),
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Bungalow Road (Oct. 1990), East of Kailash (Aug 1994) Gurgaon (Jan 1998) and Faridabad (Feb 1998). Nirulas also set up a unit in Noida, a suburb of Delhi. This unit started with a restaurant in Jan. 1987 and was soon extended to also include a Hotel (March 1991) the first of its kind in India offering the most modern and attractive facilities at very reasonable prices. It also started catering services for the Railways in July 1993 by providing food on the August Kranti Express from Delhi to Bombay. In 1994, a Food Delivery Service was started at L-block, Chanakya and Defence Colony and was soon extended to all the units. Nirulas was the first to introduce in the country services on such a large scale. In Jan. 1996, a restaurant complex with a large family style restaurant, Pastry Shop and a Potpourri restaurant was commissioned in Preet Vihar. An "express Restaurant where the thrust is on take away and delivery service was opened for the first time at Vasant Kunj in March 1996. Another outlet at Bawa Potterries Complex at Vasant Kunj opened in Aug 1996. Second express restaurant was opened at Rajindra Place in 1997. Two restaurants were opened in Haryana in quick succession in Gurgaon in 1998 and Faridabad 1998. A new restaurant at Vikaspuri is being completed and will open soon. Negotiations are in progress for opening more Hotels and restaurants in and
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around Delhi and in major metro cities in Northern India. The company even plans on opening its outlets in Singapore and in South East Asia. Besides opening new outlets to cater to the ever-expanding market, Nirulas have always believed in expansion and improvement of its existing facilities. It has always welcomed other restaurants stating as they assist in developing the overall business. Even though a number of new restaurants have started Nirulas is still the most popular chain of restaurants with among the highest sales per square foot. They continue to experiment, introduce new items and continue to give the citizens of Delhi and tourists what they desire-excellent quality food at a reasonable economical price in pleasant surroundings and such a variety that every one in the family feels catered to Fun Foods for the Whole family. Nirulas stands for Quality, Service Cleanliness and value for money. B. MARKETING FUNCTIONS In early 80s when Nirulas started expanding its operations, it positioned as a family style restaurant for the kids and the entire family. To target the family, the chain has simultaneously focused on the Child who will get the rest in. People between the age group of 8-80 have been the target audience. It is ideally for the kids and the elders. Nirulas marketing strategy rests in the adaptation of the fast food concept to the Indian situation.
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Nirulas in order to provide products at best quality has a single central kitchen that caters to all its outlets in Delhi. Keeping marketing strategy in mind details of the marketing mix are explained below: Product Based Strategies The menu at every Nirulas restaurant is designed keeping in view the tastes that appeal to the average urban resident. The product line, which every Nirulas restaurant has, whether inside or outside Delhi can be categorized into. : Burgers Pizzas Foot longs Ice Creams Beverages / Shakes Hot Numbers. At some of its restaurants keeping in mind the local tastes it extends its product line to: South Indian
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Tandoori N Curries. Following are the range of items available at any Nirulas restaurant: Burgers (in variety) 15 Served as meal combos too with fries and coke Pizzas (in variety) 12 Available in three sizes Ice Creams (in variety) 21 Additional (in variety) 5 Includes tandoori items, footlongs, hot nos. etc.
Nirulas has always designed the products keeping local tastes in mind. It keeps on adding new varieties to its product line every now and then. The emphasis here is more on indianised food and considering Indian tastes and consumer into account the products are designed and modified. Nirulas expanded its menu including Tandoori items, South Indian food etc., during early 90s and this definitely helped the restaurant in increasing its clientage.
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Nirulas keeps on coming up with desi-style burgers, the most recent addition in the burger category have been the channa Buger, Bhaji Burger and omelette burger. Prior to these Nirulas had added the Panner Tikka Burger and Chicken Tikka Burger to its menu. The rest of the variety has remained more or less the same over the past many years. Due to the inclusion of the above few items in the list, Nirulas has re-invented itself. Vegetarian customers are being offered with separate exclusive items and non-vegetarian ones are offered similar exclusive items. Nirulas has constantly changed the menu as and when consumer preferences have changed. It is the only serious restaurant chain offering a complete meal with wide variety. Pricing Strategies Inspire of Nirulas having a monopoly situation for decades with its brand of restauranting, it has always been cautious about the way in which it has increased prices. Its strategy is to rely on high volumes and low margins. Nirulas has never relied on competition to price its products. The items on the menu are such, that they can suit every pocket. All kind of people from all strata visits the restaurant.
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It has a burger, which is max for Rs. 71 and min at Rs. 16. Its Pizzas range from Rs. 63 to Rs. 96 for a regular size. These prices are for lower than the pizza chains that have entered the country. Promotional Strategies The ad line for Nirulas goes something like: Fun foods for the entire family. This serves the purpose of positioning the restaurant as a family, eating-place. Promotional material used by the restaurant mostly includes distribution of flyers, menu cards, and through newspapers. It has its own in house design department and creative department, which designs posters and banners for advertising. It is more of in house promotions. Newspaper releases that come out every now and then of Nirulas are handled by its public relations firm. Children have always been the prime target group with Nirulas since they play a key role in deciding where the family should eat. There is constant promotional activity carried on for the kids by the restaurant. There is a birthday club membership for children below 13 years of age, who receive a birthday card and a free scoop of ice cream to celebrate the occasion.
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During April, to coincide with the annual exams, there is Nirulas Scholars award. School children scoring more than 90 per cent troop in with their report card to claim a Triple Sunday free. Nirulas scholars are sent best of luck cards in March. In 1991 when this scheme was introduced there were only 600 entrees. The members grew to 3000 in 1993 to 15,000 in 1994. By 1998 the figure has increased to 90,000. Over 90,000 kids come do Nirulas for a free sundae. Nirulas also organizes for birthday parties for the kids at some of its restaurants. Any festival that comes, Nirulas is associated with it. During Christmas time Santa Clans appears in all its outlets to hand out sweets to children. During Diwali it comes up with special gift packs etc. Distribution Strategies
Today Nirulas has about 25 outlets in Delhi and 3 in Nepal out of the 18 outlets in Delhi 2 of the outlets are express restaurants where the thrust is on take away and delivery service. Nirulas carefully uses its locations and also the meal timings to aim at different target groups. Each of its outlets has its own personality. For example: Connaught Place has a major share of tourists or foreigners where as
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Chanakya Puri and Defense Colony get a lot of young students. It has carefully chosen the locations of its outlets at Vasant Kunj Leisure Bowl and Destination Point Faridabad. Such places attract lots of crowd on holidays and even on weekdays. This is a very effective distribution strategy placing yourself where opportunity exists to attract people into the restaurants. Setting up of restaurants at such places is a way to ward off competition. Aim is to move into residential location and making its outlets more accessible for its clients. Nirulas started its home delivery services in an organized manner in 1994. Looking at competition coming from the MNCs who established themselves as home delivery chains, Nirulas did not want to left behind. Another reason for starting home delivery services was the rise of the customer base. 1984 Only 22000 customers came in a day 1989 35,000 Customers per day 1994 44,000 Customers per day 1996 46,000 Customers per day. By 2004, 17 Nirulas outlets had home delivery services. The company witnessed a ten-fold increase in home delivery revenues since it started. Today, the number of outlets has gone up to 25, which are having delivery
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services. CUSTOMER DEMAND The factors influencing customer demand for Nirulas menu items are as follows: Adapting the western style fast food to Indinised tastes and standards. Long term brand-image built by the restaurant over the past 50 years. Nirulas as a restaurant has its own image and distinction vis-a-vis other restaurants in the market. At Nirulas the customer can choose from Indian tandoori items to western style burgers and pizzas. Nirulas restaurant has been placed at the most looked upon places. One can find a Nirulas joint at the most popular markets, cinema complexes and bowling alleys. The restaurant has been placed as a family style restaurant in the market. Considering this the inside of the restaurant is such that there is enough place for families to come and enjoy their meal.
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McDONALDS A). AN OVERVIEW History and Background In 1955, Ray Kroc, a 52-year old salesman of milkshake mixing machines, became interested in a string of seven restaurants owned by Richard and Maurice McDonald. These two founded the quick service restaurant industry when they converted their barbecue drive in with carhops into the worlds first McDonands limited menu, self-service drive-in in 1958, in California. Kroc liked their fast-food restaurant concept and bought the Chain for $2.7 million. He opened his first McDonalds in Illinois in April 1955 and founded the company that evolved into McDonalds corporation. He decided to expand the chain by selling Franchises, and the number of restaurants grew rapidly. Worldwide Operations There are more than 23,000 McDonalds restaurants in III Countries (as of Jan. 1998). McDonalds 1997-year end system wide sales were $ 33,368.3 billion. McDonalds is the largest and the best known global food service retailer. Its global market potential is enormous seeing the member of restaurants it has. On any day McDonalds serves less than one percent of the worlds population. Its outstanding brand recognition. (It is one of the most recognised brand all over the world), experienced management,
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high
quality
food,
site
development, high quality food, site development expertise, advanced operational systems and unique global infrastructure position it to capitalize on global opportunities. McDonalds Vision is to dominate the global food service industry. Global dominance means setting the performance standard for customer satisfaction and increasing market share and profitability through successfully
implementing convenience value and exception strategies. In order to expand its operation McDonalds goes by a simple thumbrule to estimate haw many outlets it wants: One restaurant for every 25,000 people with new markets sprouting in so many parts of the would, the chain is expanding at a breathtaking pace of one restaurant every three hours. This can be known from the following:
Period Jan. 1997 Jan 2005
No. of outlets 19,400 33,000
Countries 95 119
Sales $ 30 billion $ 44 billion
McDonalds franchises restaurants in many international markets, and decisions relating to the selection of candidates are made local by the management in the country where the restaurant is located.
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McDONALDs India A locally owned Company McDonalds India is a locally owned company managed by Indians. In Mumbai Amit Jatias company, Hard castle restaurants Pvt. Ltd., owns and manages McDonalds restaurants. In Delhi, McDonalds restaurants are owned and managed by Vikram Bakshis Connaught Plaza restaurants Pvt. Ltd. Both these individuals are responsible for the running of McDonalds India. Local Sourcing is Key for Truly Indian Products Around the world, McDonalds traditionally operates with local partners or local management. In India too, McDonands purchases from local suppliers. McDonalds constructs its restaurants using local architects, contractors, labour and - where possible - local materials. McDonalds hires local personnel for all positions within the restaurants and contributes a portion of its success to communities in the form of municipal taxes and reinvestment. Its 98% of the inputs are obtained domestically.
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McDonalds sources food products from local companies. mutton patties are supplied by Al-Kabeer, Hyderabad, Andhra Pradesh; fresh lettuce comes from Pune, Ooty, Maharashtra and Dehradun; cheese from Dynamix Dairies, Baramati, Maharashtra; sesame seed buns and sauces from Cremica Industries Phillaur, Punjab, and pickles from VST Natural Foods, Hyderabad, Andhra Pradesh. Setting Up of an Extensive Food Chain For three years before the opening of the first McDonalds restaurant in India, McDonalds and its international supplier partners worked together with local Indian companies to develop products that meet McDonalds vigorous quality standards. These standards also strictly adhere to Indian Government regulation on food, health and hygiene. Part of this development involves the transfer of state-of-the-art food processing technology which has enabled
Indian business to grow by improving their ability to compete in todays international markets. For instance, Cremica Industries worked with another McDonalds supplier from Europe to develop technology and expertise which allowed Cremica to expand it business from baking to also providing breading and batters to McDonands Indian and other companies. Another benefit is expertise in the areas of agriculture that allowed McDonalds and its suppliers to work with farmers in Ooty, Pune and Dehradun and other regions to cultivate high quality lettuce. This includes sharing advanced agricultural technology and expertise
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like utilization of drip irrigation systems which reduce overall water consumption and agricultural management practices which result in greater yields. In some cases, these Indian suppliers had the technology - but no market for the products they produced. For example, Dynamix Dairies -- through its relationship with McDonalds was introduced to a large customer of milk casein and other milk derivatives. The two companies entered into a business relationship resulting in an initial export order of approximately US $ 12 million per year - with the potential to increase. McDonalds local supply networks through Radhakrishna Foodland, to get products from the various suppliers to restaurants in Delhi and Mumbai. Respect for the Indian Customer and Culture McDonalds worldwide is well known for the high degree of respect to the local culture. McDonalds has developed a menu especially for India with vegetarian selections to suit Indian tastes and culture. Keeping in line with this McDonalds does not offer any beef or pork items in India. McDonalds has also re-engineered its operations to address the special requirements of a vegetarian menu. Vegetable products are prepared separately, using dedicated equipment and utensils. This separation of vegetarian and nonvegetarian food products is maintained throughout the various stages of procurement, cooking and serving.
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An Employer of Opportunity McDonalds India is an employer of opportunity, providing quality employment and long-term careers to the Indian people. the average McDonalds restaurant employs more than 100 people in 25 different positions - from cashier to restaurant manager. McDonalds world-class training inputs to its employee could be seen in the present close to 10000 employees currently in Mumbai and Delhi. Community Partnership McDonalds believes in giving back to the communities it serves. Wherever McDonalds goes it becomes a part of the community it operates in and contributes towards the development of the locality. For example, McDonalds has introduced the concept of Litter Patrol - McDondlds employees go around the immediate vicinity of the restaurant every day, packing up garbage left behind not only by customers from McDonalds restaurants but also by other visitors to the area. The result is a cleaner neighborhood. To commemorate 50 years of Indian independence, on 15 August 1997, McDonalds Mumbai organized a No Garbage Drive, in association with the Brihan Mumbai Municipal Corporation and five schools in Bandra. Inaugurated by the Municipal Commissioner, this was in support of BMCs Zero Garbage, initiative. Other community activities undertaken by
McDonalds in India include the adoption of local public parks for restoration and beautification, thereby providing a play area for children. In fact in Delhi,
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McDonalds has even addressed the security issues relevant to a particular residential colony. Charities, especially those benefiting children, are often the recipients of McDonalds support - either through the use of the restaurants for meetings or for fund-raising activities. McDonalds International charitable foundation, Ronald McDonald House Charities supports charities around the world. In fact, in 1993, RMHC donated to the Indian Prime Ministers Relief Fund following the devastating earthquake in Maharashtra. Quality, Service, Cleanliness and Value The McDonalds philosophy of QSC & V is the guiding force behind its service to the customers. McDonalds India serves only the highest quality products. All McDonalds suppliers adhere to Indian government regulations on food, health and hygiene while continuously maintaining McDonalds own recognized
standards. All McDonalds products are prepared using the most current stateof-the-art cooking equipment to ensure quality and safety. At McDonalds the customer always comes first. McDonalds India provides fast, friendly service - the hallmark of McDonalds that sets its restaurants apart from others. McDonalds restaurants provide a clean, comfortable environment especially suited for families. This is achieved through McDonalds stringent cleaning
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standards, carefully adhered to. McDonalds menu is priced at a value that the largest segment of Indian consumers can afford. McDonalds does not sacrifice quality for price - rather McDonalds leverages economies of scale to minimize costs while maximizing value to customers. McDonalds has a 20-year profitability plan for India and it intends having at least 50 restaurants here by the year 2000. The company has already invested Rs. 50 crore in its Indian operations, and each of the two joint venture partners has invested about Rs. 17.56 crore. B). MARKETING FUNCTIONS Mc Donalds started its operations in India in October 1996 and by July 1998 it has served about 10 million customers in the country. Mc Donalds marketing philosophy is captured in its motto of Q.S.C.V., which is the guiding force behind its service to the customers. Mc Donalds India serves only the highest QUALITY products. All Mc Donalds suppliers adhere to Indian government regulations on food, health and hygiene while maintaining Mc Donalds own recognised standards. All its products are prepared using the most current, state of the art cooking equipment to ensure quality and safety.
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At Mc Donalds, the customers always come first. Mc Donalds India provides fast friendly SERVICE the hallmark of Mc Donalds that sets its restaurants apart from others. Its restaurants provide a CLEAN, comfortable environment especially suited for families. This is achieved through Mc Donalds stringent cleaning standards, carefully adhered to. Mc Donalds menu is priced at a VALUE that the largest segment of Indian customers can afford. Its strategy in India is to target the plain and simple mass market. The target consumers for Mc Donalds are the family and the kids. Mc Donalds has been positioned as a Family Restaurant. Product Related Strategies World over Mc Donalds is known for its juicy beef burgers. But in order to settle in India the entire concept of beef burgers had to be changed. India is the only country where Mc Donalds is offering veggie burgers and non-veg burgers without beef (uses mutton instead). This is a classic case of Product Adaptation, where Mc Donalds adapted its product according to the culture and norms of the country in order to position itself in the market. There has been other product adaptations too. Mc Donalds sells a spicier Maharaja Mac in India as its flagship product in place of the globally famed Big
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Mac. It also has a large capacity for vegetarian burgers, the production and serving of which is separated in such a way that the customer can actually see it. Mc Donalds product line is almost similar to other burger chains in the country. Burgers Desserts Beverages/shakes Assorted items.
Burgers (in variety) 12
Pizzas (in variety) -
Ice Creams (in variety) 2
Additional (in variety) 2 (french fries and veg nuggets)
Meal Combos 7
Product standards, packaging, quality, processing are all the same like at any other Mc Donalds outlet in the world. The quality standards are so stringent that nowhere, not even is its rawest state, is any of the food touched by hand. The typical burger undergoes 54 checks before it is served. The menu at Mc Donalds has remained more or less the same over the past 2 years except a
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couple of additions in the burgers variety and inclusion of couple of items in the dessert variety. Mc Donalds even has the calorie count carefully worked out for its burgers. A veg burger offers 418 calorie, 10 gm of protein, 22gm of fat and 48 gm of carbohydrate. All Mc Donalds menu items fit into a balanced diet and it offers certain items that fit well within a low fat diet (option of burger with or without cheese). Pricing Strategies Worldwide Mc Donalds is known for its Purchasing power pricing. The ability to pay-of a large section of customers has been the sole criteria. This was assessed through market research. It wanted to price its products in such a way that it can even be accessible to a child. For this it examined Indian spending on snacks and other foods before setting on the prices. Price variations from 1996 to 1998 for a couple of items are as follows: Item Mc Burger Maharaja Mac Entry level (1996) Rs. 12 Rs. 42 (2005) Rs. 20 Rs. 59
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The company continued with the 1996 prices for about a year in order to meet its one million-target audience. One look at the restaurant and it doesnt seem that the prices of its products would be this low. Reason being that Mc Donalds gets the materials (55 per cent of outlets running expenses) at very cheap rates. Therefore this is one of the reason that Mc Donalds products are priced reasonably. It buys its supplier from 35 suppliers who sell at incredibly low prices. Products at Mc Donalds are neither elitist in its pricing nor at the dhaba level, they are average in its pricing. Mc Donalds was offering a softie at a price of Rs 6/- about a year back during the festive season. Today this softie costs only a rupee more at Rs.7/-. No restaurant of this caliber offers a product at this rate. Mc Donalds recently has come up with Economeals, in which one can afford to have a burger and coke for as little as Rs. 29/- and at max for Rs. 49/(Instore pamphlet enclosed) Mc Donalds keeps on coming up with such meals almost every month such that almost anyone can afford to have a Mc Donalds product.
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Promotional Strategies Mc Donalds ad line goes like: I am loving it Mc Donalds had started its promotional activity with local area banners and posters and now it has moved on to movie hall commercial. Its commercial is a 60-second close up which focuses on a burger being prepared in slow motion tantalizing the audience as though its a strip tease. It has even started advertising through local channels such as siti cable. Mudra is the ad agency, which puts up publicity banners in Delhi and Mumbai and takes up the local TV commercials. Newspapers such as Delhi times are also being used for local advertising. McDonalds plans to advertise in national newspapers such as Hindustan Times and Times of India in another couple of months. In addition to this Mc Donalds also has a public relation agency handling its account that takes care of publicity and press releases. McDonalds keeps on coming up with sales promotion schemes every now and then. During World Cup Soccer it came up with this soccer game for Rs.11/- with every meal combo ordered. Since kids are the prime targets by the restaurant,
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it has come up with happy meals especially for the kids along which a game is free. Also, for the kids Mc Donalds is the most happening place for birthday parties kids love the place due to all the attention and knick-knacks they are showered with. The restaurant even has playpens displayed especially for the kids. McDonalds also comes up with special schemes during the festive season Last month i.e. September, during Navratras it came up with special Shudh Shakahari Meal where a meal for two was for Rs. 99/- and a meal for four was for Rs. 199/- (Instore pamphlet enclosed). Another way through which Mc Donalds is promoting its image is via community services. There are Mc Sermons on maintaining parks, conducting litter patrols and putting up public trashcans. At majority of McDonalds restaurants, the management emphasizes on developing parks for the kids as a playground for them. E.g. at McDonalds G.K. restaurant there is a playground developed for the kids in front of the restaurant. The management has put boards at these parks to put across certain messages for the community as a whole, such as: If you see someone without a smile, give them one of yours Children are the light of our future etc. In addition to all these promotional measures, McDonalds has boards put all over the roads to show directions to their restaurant. These boards are put
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almost two to three kms before the location of the restaurant. This makes it easier for the customer who is not familiar with McDonalds restaurant location. Distribution Strategies Till date Mc Donalds has 187 outlets in India out of which 56 are in Delhi and five in Mumbai. In 1997 there were about 3 outlets in Delhi and fifty three more outlets have been added to the list by 1998. By the year 2000 Mc Donalds plans to have about 50 outlets in the country. At Mc Donalds, while opening a restaurant the emphasis is, to choose a site whereby 150-200 seating capacity can be available. This is to attract as many people as possible into its premises.
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CUSTOMER DEMAND The factors influencing customer demand for McDonalds menu items are as follows: McDonalds worldwide is known for its quality burgers. This worldwide name for burgers has influenced the demand for it in the Indian market. This can be known from the fact that within two years it has served about 10 million customers at its restaurants. The factor that influences customer demand for the organizations product to a great extent is the offering of highest quality product, providing services which is fast friendly and accurate, creating a restaurant atmosphere which is always clean, comfortable and ideally suited to India families and children. McDonalds products are offered at a value that can be affordable by the maximum number of Indian consumers. The Chain of restaurants provide a variety of comfortable seating arrangement to accommodate different size groups of people from individuals to large families.
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McDONALDS Customer Base In 1997, Mc Donalds 3 outlets received about 15,000 customers daily. A Mc Donalds restaurant with about 150-200 seating capacity serves about 40,000 customers per month. By July 1998, Mc Donalds has served 10 million customers in the country.
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MARKET RESEARCH (a) Research Objective The objective of conducting a market research study is to: (i) Identify the unique factors that attract people to each of the three stated restaurants. (ii) Determine the percentage wise preference for these for these restaurants. (iii) Finding out the frequency of visit at each of the stated restaurants.
(b) Methodology (i) A set of attributes was generated on basis of which objective I could be determined. This would eventually determine what attributes/benefits the consumer desires. - Price - Quality of food - Speed of Delivery - Cleanliness/hygiene (ii) - Accessibility - Variety - Space - Decor
Based on above attributes concepts were developed on which analysis could be made.
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(iii)
Finally a personally administered questionnaire survey was conducted (Based on which findings have been presented).
(c) Reasons for selecting the various questions (i) Question 1 & 2
To determine the frequency of visit to all three fast food restaurants and determine the income generated approximately on basis of the expenditure incurred. (ii) Question 3
Various factors being considered by respondents to select a restaurant. (iii) Question 4
Evaluation of most preferred fast food restaurant on various criteria. (d) Data Preparations A total of 20 questionnaires used to conduct the survey. In accordance with the response drawn from the questionnaire tables and graph have been prepared
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Determination of Percentage wise Preference

(Calculations shown in Appendix 1) Percentage wise preference for the three stated fast food restaurants as indicated by market research study is : Restaurants Nirulas Mc Donalds Wimpys Consumer Preferences (in %) 26 65 09
Wimpys 9%
Nirulas 26%
Mc Donalds 65%
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BARGRAPH INDICATING FREQUENCY OF VISIT (Computations in Appendix II) The above pie diagram shows that 26 per cent of consumers would prefer going to Nirulas restaurant,65 per cent prefer for Mcdonalds and only 9 per cent prefer a Winpys joint. The unique attributes which attract consumer to Nirulas that makes it stand out from the rest is variety, accessibility and value for money. McDonalds and Wimpys (both foreign entrants) have a very little difference in their preferences by the consumer. Preference for Nirulas over and above the other two states that over the past many decades Nirulas has maintained its brand recognition till date and it is very much likely to continue in the future, since Nirulas being an Indian company knows the customer tastes and preferences better than the foreign entrants.
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BARGRAPH INDICATING FREQUENCY OF VISIT (Computations in Appendix II)
14
Nirulas
12 10 10 8 8 7 10
McDonald's
Wimpy
5 4
4 2 2 1 0 Do not visit Occasionally Monthly 1 1
1 0
Weekly
More than once a week
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Identifying Unique Attributes The unique attributes of the three fast food joints are: Nirulas: Variety, Accessibility, value for money. Wimpys: Spacious, Quality of food Mc Donalds: Spacious, Service, hygiene, value for money. Criteria most commonly considered by respondents while selecting a fast food joint. Criteria Quality of food Cleanliness /hygiene Variety Speed of Delivery Price (Computations in Appendix III) Ranking (from 1 to 5) 1 2 3 4 5
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COMPARITIVE ANALYSIS A comparative analysis for the three food chains has been made on the following five parameters: Performance Variety Price Accessibility Service
Performance Nirulas started its operations in the country as early as in 1930s but its first fast food restaurant came up around in 1950s. This means that the chain is about five decades old. Wimpys is about 8-9 years old and Mc Donalds just two years old. Each of these chains has its own reputation and name in the market. Nirulas being in the country for so long still has its distinguished fan following and is surviving in the market despite the coming in of the international chains such as Mc Donalds and Wimpys. Nirulas is considered to be more of a dinein eating-place than a fast food joint like the other two. Most of the time the customers coming in at Nirulas are not in a hurry to leave, they want to relax
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and enjoy their meals. In contrast Mc Donalds and Wimpys are considered to be a place to grab a bite or quick take away fast food joint. McDonalds in US is a lunch time place from which customers keep away in the evening. Nirulas on the other hand is packed after dusk with carloads of families to have dinner. Despite Mc Donalds being placed as a comfortable family-eating restaurant, a person would come to the restaurant to have a quick meal for lunch or dinner alone or with his family. When Wimpys came into the country in 1990, with two outlets in Delhi, Nirulas had about 11 outlets all performing well, serving a wide variety of items from thaalis to hotdogs to pizzas. But Wimpys was not performing well except in a couple of locations such as C.P and G.K in Delhi. The worst came for Wimpys when Mc Donalds had itself in locations where there was already a Wimpys outlet. Market became sluggish for Wimpys after the entry of Mc Donalds. Preference for the Mc Donalds burger increased vis--vis the Wimpy burger for quite some time (about a year). People started liking its service, quality of food, ambience etc. However, in the past six to eight months Wimpys has tried to review its position by offering a variety in the menu i.e. inclusion of salads, pizzas etc, to beat competition. The trend for kids birthday parties at these restaurants which was initiated by Wimpys has witnessed quite a set back from the entry of Mc Donalds. The audience suddenly started preferring Mc Donalds for birthday parties than
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Wimpys within a year of its entry. (On an average Mc Donalds hosts about five to six birthday parties at each week at majority of its restaurants). When Mc Donalds came up in locations where Nirulas was already established, it affected the restaurant drastically in the initial few months. But as and when the customers had tried the Mc Donalds product, they returned back, happy that Nirulas offers a wider choice and tastier food. Hence, Nirulas is still performing well in the market despite the coming in of Mc Donalds and Wimpys. Wimpys however would need to re-define its strategy to survive since it is in for a lot of competition and as far as Mc Donalds is concerned, its worldwide brand recognition is enough to make it sustain in the market. Variety The range of items that each of these joints has can be seen in the following table.
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Name
Burger (in variety)
Pizzas (in Variety) 12 8 -
Ice creams (in variety) 21 17 2
Additional( includes assorted items)
Nirulas Wimpys Mc Donalds
15 14 12
15 8 2
No. of Meal Combos Nirulas Mc Donalds Wimpys 15 7 4
The range of items given in the above table and no. of meal combos are standard items which the restaurant has. In addition to this Nirulas comes up pizza of the month and ice cream of the month. Wimpys comes up with new meal combos every two months and Mc Donalds comes up with a meal combo also almost every month.
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For all the product lines Nirulas takes the cake vis--vis other two joints. The customer has a range of items to choose from at Nirulas. He is just not restricted to a few items in the menu list. One has every thing from Indian to Western food at most of its joints, Wimpys too has a variety of items in the list, but nowhere near to what Nirulas is offering. Though McDonalds has the least variety of items in its menu, it is surviving in the market because of its world wide brand recognition. The fact that McDonalds burger is famous all over the world, is what that is making it sell like hot cakes in India. However if one wish to just grab a bite one could go to McDonalds but if one is looking for variety then Nirulas is the place to go to. From the market research study conducted to know consumer preferences, Nirulas is the most preferred eating place and variety is one of the unique attributes for Nirulas, which attracts customers to its restaurant. In the burgers category Nirulas has the maximum variety, Wimpys stands second and Mc Donalds has the least variety. For Pizzas Nirulas has more variety than Wimpys and for ice creams too Nirulas has maximum variety. Price Each of the products at Wimpys, Nirulas and Mc Donalds are priced so as to suit everyones pocket. When Mc Donalds opened its first restaurant in the country it adopted a price strategy whereby all its products were priced lower than the domestic counterparts. It had priced its chicken burger at Rs. 39, a rupee below Nirulas
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equivalent in 1996. Today, the burger is priced at Rs. 20 and Nirulas burger is for Rs. 40.The 2005 prices of each of the three restaurants for their chicken and veg burger are: Chicken Burger (Rs.) Nirulas Mc Donalds Wimpys 45 49 43 Veg Burger (Rs) 40 20 33
The prices of its products are very much competitive with a rupee or two below or above. Another interesting feature of these restaurants is the meal combos that they serve. All the three food joints offer these meal combos with a combination of burger + pepsi + fries. Basic idea behind this is to offer meals at a very economical rate. The meal combo rates of each of the three joints can be depicted from the following table:
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Veg Meal Combo (Veg Burger + Coke+ Fries) Nirulas McDonalds Wimpys Rs. 57 Rs. 51 Rs. 65
Non-veg Meal Combo (Chicken Burger + Coke + Fries) Rs. 64 Rs. 55 Rs. 75
Again for these meal combinations too the prices are competitive for all the three restaurants. Nirulas offers these meals at the most economical rates compared to McDonalds & Wimpys. However, from the market research study conducted price is considered to be the fifth most important variable while selecting a fast food joint. The emphasis is more on quality of food, cleanliness, variety and speed of delivery. Therefore price becomes an in significant characteristic to the extent that the product is affordable by the consumer.
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Accessibility Every restaurant has to be placed at the right location such that it attracts the maximum number of customer into its premises. All the three restaurants in the city are located at the most frequently visited places by the customer. Nirulas started with its expansion plan by opening a joint in C.P. (the most frequently visited place in the city). Soon more and more joints followed and all of them are located at either the most popular markets in the city or cinema complexes or bowling alleys. This way anybody going for shopping, watching a movie or just playing some games doesnt have to go to another part of the city to have meals. Wimpy;s too opened its to first restaurant in the city at C.P., to be accessible to the tourists, shoppers and executives in that area. McDonalds opened its first restaurant in Vasant Vihar Complex to be accessible to the movie watchers coming there. How ever, Nirulas has an added advantage in terms of accessibility vis--vis the other two joints due to its home delivery services. Although the services are restricted to the locality where the restaurant exists, still it has an advantage because the customer if he does not feel like going to the restaurant and have a meal he can still consider it if the home delivery services are made available. Amongst the three restaurants Nirulas has the maximum no. of outlets in and around Delhi. This is mainly due to amount of time for which it has been into the business.
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However, all the three restaurant are located at the most frequently visited places by the people such as shopping areas, cinema halls, bowling alleys etc. Service McDonalds takes the share on this attribute for providing the customer with fast and friendly services. At Mc Donalds you get your order usually within 60 to 90 seconds from the time it is placed. Providing the customer with fast and friendly services is under the philosophy of McDonalds. This is one big advantage Mc Donalds has over Wimpys and Nirulas. Even at Wimpys you get your order between two the three min. but this is followed at only few of the restaurants. It is not a standard rule everywhere, but at Mc Donalds it is at every restaurant. On this attribute, Nirulas has a disadvantage. Once an order is placed it normally takes about 10 to 15 min. to get the order. This is probably because of the fact that the kind of food served and the production facilities used by Nirulas differs from the production facilities used by McDonalds and Wimpys. Mcdonalds and Wimpys have an assembly line approach to fast food where a certain number of orders are already prepared/cooked, the idea is that as soon as the payment is made at one counter, the food can be picked from the next almost instantly. On the other hand at Nirulas the order is dealt with after it has been placed. But whatever may be the case, provision of fast and friendly services to the customer is very important for any fast food restaurant. In the market research study services is the unique factor for McDonalds that attracts the customer to its restaurant. The customer prefers being serviced by a friendly countrer assistant than someone who is arrogant and least interested in entertaining the customer properly.
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The above analysis can be summarized in the following chart: Variety NIRULAS Has 15 types of Burgers, 12 types of Pizzas & 21 types of Ice-Creams to choose from 14 types of burgers, 8 types of Pizzas & 17 types of Ice-creams to choose from 12 types of burgers, no Pizzas, 2 types of Ice-creams to choose Service Takes about 10-15 min. for order to arrive Ambience Not too Spacious Price Moderately Expensive Accessibility Located at the most visited places Taste of Food Spicy
WIMPYS
Take about 5 to 6 min certain joints & 60-90 sec. in another
Spacious
Expensive
Located only at certain major markets
Not too spicy
MCDONALDS
Average McDonalds restaurant serves in about 60-90 sec.
Very Spacious
Affordable
Located only at certain major markets
Not at all spicy
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SWOT ANALYSIS SWOT Analysis is an overall evaluation of the previous analysis and the marketing strategy of the organization in terms of its strengths and weaknesses of the unit, the opportunities available to it and the threats posed by the external environment. The strengths, weaknesses, opportunities and threats faced by each the three restaurants are presented individually. McDONALDS Strengths Mc Donalds serves its customers with high quality products. There are extensive quality tests at the supplier and all products are examined again in the restaurant to ensure that they are of highest quality possible. Mc Donalds provides fast, friendly service. Any customer visiting Mc Donalds is usually served within 60 seconds. Mc Donalds menu is priced in such a way that the largest segment of Indian consumers can afford. It has a wide variety of products at different prices to be affordable to as many as possible. Mc Donalds is an active participant in community services.
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Weaknesses Mc Donalds has limited range of items in its menu. However, to get a item included in the menu approval has to be made from the high tech kitchens at Mc Donalds headquarters in suburban Chicago. In India burgers are a long way from becoming the common mans food, having fast food is considered to be another option for dining out, unlike other countries. Opportunities Mc Donalds can develop two regional training colleges in India, one each in Delhi and Mumbai. This can save the expense of the organization is sending its management team and crewmembers to outside countries like Indonesia and America. Mc Donalds expects to expand its chain in the coming years. It plans to open about 50 restaurants by the year 2000. This can have the opportunity to serve and employ more people. Threats Mc Donalds faces tough competition from other food chains in the country both international i.e. Kentucky Fried Chicken, Wimpys and Pizza hut and domestic i.e. Nirulas.
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The decision taken by Mc Donalds India to serve Shudh Shakhari meals at its restaurants can risk the global American image of Mc Donalds. NIRULAS Strengths The consumer has a wide variety of items to choose from at Nirulas (Both Indian and Western). These items are constantly modified keeping the consumer preferences in mind. Nirulas brand loyalty has not changed (at least till now) despite the coming in of the MNCs. Home delivery services started by the restaurant have improved its customer base. This would prove to be an added advantage in the long run.
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Weaknesses The restaurant does not have stringent cleanliness/hygiene standards. The restaurant does not provide with fast and friendly service. At times it takes about 30 min for a meal to be served. Opportunity The home delivery services started by the restaurant can be expanded further by introducing it even at those joints where is has not started. This would help the restaurant to expand its customer base and serve more clients. The opening of Nirulas restaurants at places like destination point and leisure bowl has tremendous opportunity for serving its clientele. Threats Nirulas mainly faces competition from international fast food chains that have established themselves in the country about two to three years back such as Mc Donalds, Pizza Hut, Dominos, KFC etc. The international food chains that are opening their outlets in the country might give attractive offers to its employees. Hence there could be a problem in keeping its employed workforce.
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WIMPYS Strengths Wimpys serves its customers with a wide variety of items. The consumer has a list of items to choose from the menu. The crewmembers at the restaurant are friendly and meals are served in about 5 to 7 minutes from the time of its order. At certain restaurants meals are even served immediately after the order is placed. The restaurant is a clean and spacious enough to have a comfortable meal. Weaknesses Does not adhere to strict service standards at all its restaurants in a similar way. If a meal is provided at one restaurant in 60-90 seconds, it should be provided at the second restaurant in the same time limit. Opportunity With the coming up of a modified menu and changing the image of the restaurant during the past months, opportunity does exist for Wimpys to make itself visible to the customers. It plans to go on these lines for some more time such that its customer base can be improved. Opening of its restaurant at New Delhi Railway Station has improved its clientele at the nearby restaurants around that area.
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Threat Competition exists for Wimpys both from foreign and Indian food Chains i.e. Mc Donalds, Pizza hut, Nirulas etc. It is going to face problems in competing with international burger chains come into the market and others coming into the market.
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LIMITATIONS There are following drawbacks in the findings: Sales figures (current and past) could not be made available for any of the three restaurants. Distribution strategies of Mc Donalds not upto the mark. Customer base figures not available for Wimpys. Organisation structure for McDonalds could not be made available.
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CONCLUSIONS AND RECOMMENDATIONS CONCLUSIONS Indian food market has witnessed several entrants into the country over the past few years. Each of the established food chains and the ones entering the market pose a threat to each other. In the food market each restaurant faces competition from 1000 other restaurants, it could be a 5-star restaurant or a roadside dhaba. In order to prove itself, the restaurant has to have a well-defined marketing strategy and famous brand recognition to survive in the market. The three fast food chains whose marketing strategies have been compared and analyzed also need to look on their marketing strategies to do more than just survive in the market (Certain recommendations have been put forth in the coming pages). The attractiveness of the three restaurant chains in the fast food market can be judged from the following factors: Existing Competition The Indian food market today has many established global chains that have opened their restaurants at major cities in the country. It is only those restaurants who have built their image over many years in the country i.e., Nirulas and world famous brands such as McDonalds are the ones to sustain themselves in the market. Any other restaurant below this caliber
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would not have the power to fight these joints. Nirulas has the power to fight competition because it is not identical to the MNC chains and has not duplicated their policies. Also as long as it continues to deliver value to its customers it is unlikely to feel the heat of competition. McDonalds however is new to the market but in a short period of time it has built a place for itself in the market by reaching the maximum number of audience in almost all income groups. Wimpys however will have problems competing with the multinational burger chains come into the market. Substitutes Available There are end numbers of substitutes available to the customer for fast food in the market. The customer can choose from traditional Indian cuisine to specialty cuisine such as Chinese, Italian, Thai etc. For the three fast food joints there must be more than a thousand restaurants to choose from as substitutes. Even Wimpys burger could be a substitute for Nirulas Pizza or vice versa. It all depends on the choice of the customer of what he wants to have.
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Likely New Competition Looking at the changing lifestyles and the disposable income of the middle class increasing, the food market has enormous potential. Wimpys definitely will have problems in the future if new multinational burger chains enter into the market. With this its market share will fall and it could even become a non-player in the near future. McDonalds with its purchasing power pricing policy however has dominated the middle class segment in the market. Until and unless some chain with the same policy attacks the market, McDonalds does not have any threat from new burger chains entering the market. For Nirulas however it is the variety and the location factor, which can save the chain from new competition.
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RECOMMENDATIONS For the purpose of growth of each of the thee fast food restaurants i.e., Wimpys, Nirulas and McDonalds certain recommendation have been given below:
McDONALDS Variety: Mc Donalds should start considering new additions to its menu looking at the expansion plan the company has lined up for India, it cannot do much until and unless it makes new additions to the menu. Being an international chain, there is scope for drive in restaurants in certain joints of Mc Donalds. The new outlets, which the company plans to come up with, this would be an excellent way of introducing something new in the country.
WIMPYS Accessibility: Wimpys could come up with a restaurant at the International Airport/Domestic airport considering the success of its NDR station joint. Home delivery services could also improve its clientele.
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Compared to the items of McDonalds, the masses do not derive value for money for certain items and hence its price should be reduced atleast marginally. If done in places where both are located, more income could generated by Wimpys
NIRULAS Accessibility: Nirulas should look at more and more places like Destination Point and Leisure bowl to expand its chain of outlets. Standard of hygiene: People of India are becoming more hygiene conscious. Therefore the management needs to become more hygiene conscious. The restaurant should start providing with disposable spoons, plates etc., Mineral water should also be provided free of cost. Dcor: Any new restaurant that Nirulas plans to come up with should be spacious, vibrant and give a pleasant look. Services: Staff needs to be more efficient and friendly. Other than the variety provided by Nirulas a low calorie diet could also be added to its menu. This would attract health conscious people into the restaurant thus improving its customer base.
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The companys plan of opening up of outlets in West and South East Asia should be materialized as soon as possible as this would affect the image of the restaurant nationally. Common Recommendations for all three : Overnight services could be started by a few joints of Nirulas , Wimpys and McDonalds. Since overnight services are there at McDonalds restaurants in certain parts of the world, it could start these services in India too. However these restaurants can quote extra charges for their service after 12O clock midnight.
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BIBLIOGRAPHY Sources Referred 1. Internet : McDonalds Website Nirulas, Website. 2. Company Literature : McDonalds India Information Booklet Nirulas Company Information Booklet, 3. News Papers : Economic Times
Dated - 15th September 1995 July 21st 1996 4. Magazines : A & M - Issue 15th February 1997
A & M - Issue 31st May 1998 A & M - 15th January 1995 First City - January 1997 5. McDonalds Restaurant Brochures 6. Nirulas Restaurant Brochures 7. Wimpys Restaurant Brochures
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COMPARITIVE ANALYSIS OF MAJOR FAST FOOD JOINTS IN INDIA

SaurabhGupta ICFAI BUSINESS SCHOOL HYDERABAD