Indian Retail With Special Focus On McDonalds India Project Guide : Prof.

Deepa Rohit

Group Members
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Name Mohit Kanadkhedkar Kunal Kapoor Anoop Khurana Gurpreet Lamba Subodh Mayekar Pravina Nagpal Chanpreet Kaur Obhan

Roll Number 2012065 2012073 2012081 2012089 2012097 2012105 2012113

Index

Sr.No. 1 2 3 4 5 6 7 8 9 10 11

Particulars Indian Retail Industry Indian Food Industry About McDonalds SWOT Analysis PESTEL Analysis Marketing Mix 7Ps Competitors Analysis STP Analysis Issues Solutions Bibliography

Page Number 4 5 6 10 14 20 28 36 45 49 52

Indian Retail Industry

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Retail industry can be classified into two broad categories organized retail and unorganized retail. Organized retail - Those traders/retailers who are licensed for trading activities and registered to pay taxes to the government. Unorganized retail It consists of unauthorized small shops - conventional Kirana shops, general stores, corner shops among various other small retail outlets - but remain to be the radiating force of Indian retail industry. Overview Retail industry, being the fifth largest in the world, is one of the sunrise sectors with huge growth potential and accounts for 14-15% of the countrys GDP. Comprising of organized and unorganized sectors, Indian retail industry is one of the fastest growing industries in India, especially over the last few years. According to the Global Retail Development Index 2012, India ranks fifth among the top 30 emerging markets for retail. The recent announcement by the Indian government with Foreign Direct Investment (FDI) in retail, especially allowing 100% FDI in single brands and multi-brand FDI has created positive sentiments in the retail sector. Emerging Areas Some sectors that occupy a prominent position with the retail industry are: Apparel Retail: Everybody understands the impact of fashion and textiles on the environment. Almost $19.5 billion were spent on online apparel shopping in the year 2009 and increasing since then. Fashion & Lifestyle Retail: In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the retail to grow faster.
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Food & Beverage Retail: Backed by huge potential and changing lifestyles, the food and beverage retail market is growing at a robust 30-35 per cent per year.

Pharmaceutical Retail: Driven by therapies like anti-diabetic, vitamin, anti-infectives and dermatology, it accounted for a robust 15% growth in 2011.

E-commerce or E-tailing the next big revolution: With the advent of e-commerce in the retail industry, retail stores are facing stiff competition from e-stores. The rising demand for e-shopping has lead to a new debate cropping up in the world.

Indian Food Industry

The Indian food services industry is estimated to be nearly worth Rs 75,000 crore (US$ 13.77 billion) and is growing at a healthy compound annual growth rate (CAGR) of 17 per cent, according to a Franchise India report released at the Indian Restaurant Congress. It is expected to reach Rs 1,370 billion (US$ 25.16 billion) by 2015. "In the future, the organised market is expected to grow even faster - at around 20 to 25 per cent per annum," according to Mr Gaurav Marya, President of Franchise India. The Indian food services industry is anticipated to grow at a CAGR of around 12 per cent during 2012-2015, as per a RNCOS research report titled, 'Indian Food Services Market Forecast to 2015'. In addition, India has also been recognised as one of the largest potential market for organic food consumption worldwide. The organic food is invariably increasing among the Indian retailers, especially with the niche retailers, as per RNCOS research report titled, 'Indian Organic Food Market Analysis'. The report further highlighted that the sector will grow at a CAGR of 15 per cent during 2011-2013. India is fast becoming an important investment destination for foreign players with companies like Starbucks and American brand Dunkin' Donuts, who have recently entered the country.
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About McDonalds
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in companyoperated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken, French fries, breakfast items, softdrinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps and smoothies. McDonald's restaurants are found in 119 countries and territories around the world and serve 68 million customers each day. McDonald's operates over 34,000 restaurants worldwide, employing more than 1.7 million people. The company also operates other restaurant brands, such as Piles Caf. Mcdonalds Vision

"McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile." McDonald's Missions Be the best employer for our people in each community around the world Deliver operational excellence to our customers in each of our restaurants; and Achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology. Year 1955 Events Ray Kroc opens his first restaurant. McDonalds

Corporation is created 1957 Quality, Service, Cleanliness and Value (QSC & V) becomes company motto 1963 1965 1968 1974 1996 Ronald McDonald makes debut The company goes public Big Mac is introduced` Happy Meal is launched McDonalds opens in India, the 95th country

BUSINESS MODEL Franchise Model Only 15% of the total number of restaurants are owned by the Company. The remaining 85% is operated by franchises. The company follows a comprehensive framework of training and monitoring of its franchises to ensure that they adhere to the Quality,

Service, Cleanliness and Value propositions offered by the company to its customers. Product able to Consistency achieve By developing product a taste sophisticated and quality supplier across

networked operation and distribution system, the company has been consistent geographies. Act like a retailer and think like a brand McDonalds focuses not only on delivering sales for the immediate present, but also protecting its long term brand reputation.

McDonald's in India is a locally owned and managed company run by Indians, employing local staff, sourcing from local suppliers to serve its customers.

In India, the brand McDonalds is managed by two entitiesConnaught Plaza Restaurants Pvt Limited, led by Mr. Vikram Bakshi, is spread across North & East of India; and Hardcastle Restaurants Pvt Limited, led by Ms. Smita Jatia, is spread across West & South of India. Today, we are 235 restaurants strong and counting, with our presence spread across 45 cities in the country When we opened our doors in India at Basant Lok in New Delhi in October 1996, it was the 95th country where the McDonalds was operating. India was the only country in McDonalds system, serving a menu which did not have any beef or pork based products.

SWOT Analysis
Strengths
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McDonalds is

the market

leader in

fast

food

franchise

with huge

customer base around the world. It has a strong global presence with its nearest domestic competitor being only half its size. Approximately 85% of McDonalds businesses are owned by franchisee operating full time in more than 33,000 restaurants in 125 countries. MacDonalds benefit from cost reduction through economies of scale because of its enormous size and its huge global presence allows it to diversify risk involved with the economic performance of specific countries. In international markets, MacDonalds is well placed to expand and take advantage of long-term economic growth. One of the main competitive advantages of McDonalds is strategic

locations; these restaurants have global locations in all major airports, cities, along the highways, tourist locations and shopping malls. The McDonalds brand is the most well known house-hold brand, the golden arches and spokes character (Ronald McDonalds the clown) is most recognizable logo in the globe. McDonalds marketing has successfully created a brand image of fast food delivery speed, cleanliness and customer care in the minds of millions of consumers. This strong brand recognition creates significant opportunities for the company. MacDonalds is able to generate more sales because of its brand recognition. Strong and marketable product which comes with affordable price are able to captivate children and youth society, also the low and mid-range income community who forms the majority of the consumer power in fast food industry. Customer knows what to expect when walking into McDonalds

restaurant. Innovation is a key emphasis for McDonalds to produce new product and diversifies its business venture to suit to the changing trends and tastes of people and culture around the globe. McDonalds is easily adapted their global restaurants to appeal to cultural indifferences
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around the world. Its products are localized to the peoples culture and taste in the country. For example, in Islamic countries, McDonalds restaurants maintain Halal menu, signify the compliance with Islamic laws of food preparation. In India, the McDonalds menu is adapted to local Indian culture McDonalds has good governance of its operating line, following strictly food safety guidelines to provide nutritional values in the food. There were more than 2000 inspections checks in the food preparation processes. McDonalds runs through 72 safety protocol days to ensure food is maintained in clean and contaminate-free environment. Nutrition information is provided to customer and it is printed on all packaging including in McDonalds internet web-sites. McDonalds is a community oriented and socially responsible company. The famous Ronald McDonalds Houses provides accommodation, food and sibling support for families with children needing extensive hospital care. Weaknesses Over the years, McDonalds had created successful branding and image in the heart of children and teenage group. The market segment is too focusing on kids. McDonalds must start to change its marketing strategy and expand their business into other segment to remain competitive. McDonalds brand is often related to unhealthy food and obesity, such as hamburger, french fries. Little has been done by McDonalds to counter these claims. One of the fastest growing trends in recent year is organic food. McDonalds has yet to capitalize on the trend towards organic food. Like any other organization in the hospitality industry, McDonalds is also faced with high employee turnover rate, which leads to more money spent on recruitment and training. In India employee turnover rate is as high as 83% in front end as per Thomas Reuters Report. McDonalds has problem
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with fluctuations in operating and net profits which impact its investor relations. MacDonalds has to deal with the prospect of looming market saturation, which could make it difficult to add new outlets. There is also an increasing price competition driven by too many competitors, which reduces the companys ability to increase revenue. Nevertheless, the swift of the companys focus from a value menu to a more diverse one has recently limited the negative effect of the intense price competition that was traditionally taking place among the industry leaders. Opportunities With a good management and product development, the company will survive all the changes and competition in these day and future. Changing trends in eating habits toward more healthy eating, seen as a threat to McDonalds can also be seen as an opportunity. McDonalds can introduce healthy food such as low calorie items, putting more effort in the R&D on introducing healthy food and eating habit. McDonalds can expand its product offering into organic food. These strategies will allow McDonalds to ensure their place in top spot above all others. The management can improve the company fluctuating operating profit with better cost control to reduce food wastage and better manage its production and front-line offices with lean management. McDonalds can tapped on outsourcing to reduce resources spent on administration and also food delivery, leverage on off shoring for 24 by 7 customer care hotline and internet online technology for taking orders. McDonalds also needs to cope with the fast changing consumer needs and trends to ensure sustainability and competitive advantages. The marketing and product R&D will need to work on offering more varieties to entice existing and new customer base. For example, besides fast food, the business can be expanded to offer fast beverages such as
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coffee varieties, milk shake series. One of the strategies that McDonalds can venture into is expanding its restaurant varieties to capture different market segments such as business executives, internet caf surfer. Such recent business innovative is Mc Caf. McDonalds still needs to penetrate in many cities and has tremendous opportunity in India. Openining a fully veg restaurent was really welcomed. If McDonalds keeps inventing like this it has a really huge potential to grow.

Threats
McDonalds faces major competition from the fast food industry and hamburger business. McDonalds faces huge competition from KFC, Subway, Pizza Hut, Dominos, Jumbo King and other local vada pav retailers. Other franchisee fast food restaurents also giving McDonalds run for its money. McDonalds had faced critics from parent advocate groups for their marketing practices and ethicality. McDonalds, just like other fast food industry, often receives bad

press because of its link obesity. McDonalds has been sued multiple times for unhealthy food allegedly with addictive additives contributing to obesity epidemic. As a leader in the global food service retailing business, McDonalds needs to strategize on its business, market, product R&D to minimize and overcome these threats. Major threat McDonalds faces is to keep prices low. Inflation is increasing in India and it is hard to keep prices low. McDonalds has to find innovative solutions to keep the prices low.

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PESTEL Analysis
Political Factors The international operations of McDonalds are highly influenced by the individual countrys policies enforced by each government. For instance, there are certain groups in India, Europe and the United States that clamour for state actions pertaining to the health implications of eating fast food. They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products. On the other hand, the company is controlled by the individual policies and regulations of operations. Specific markets focus on different areas of concern such as that of health, worker protection, and environment. All these elements are seen in the government control of the licensing of the restaurants in the respective states of the country. For instance, there is an impending legal dispute in the McDonalds franchise in India where certain infringement of rights and violation of religious laws pertaining to the
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contents of the food. The existence of meat in their menus in India is apparently offensive to the Hindu religion in the said market. There are also other studies those points to the infringement of McDonalds Stores with reference to the existing employment laws in the target market. Like any business venture, these McDonalds stores have to contend with the issues of employment procedures as well as their tax obligations so as to succeed in the foreign market like India. India is quite rich as far as the political structure and policies are concerned that is the reason why international organizations face difficulties when they are entering in India. In the similar manner it can be said that India is a nationalist country that is the reason why they create difficulties for international entrants. However, there are certain other factors like consumer taxation, different political infrastructures and the scenario of the global market. Economic Factors Organisations in the fast food industry are not excused from any disputes and troubles. Specifically, they do have their individual concerns involving economic factors. Branches and franchises of McDonalds have the tendency to experience hardship in instances where the economy of the respective countries are hit by inflation and changes in the exchange rates, India is not an exception to it. The customers consequently are faced with a stalemate of going over their individual budgets whether or not they should use up more on these foreign fast food chains like McDonalds. Hence, these chains may have to put up with the issues of the effects of the economic environment. Particularly, their problem depends on the response of the consumers on these fundamentals and how it could influence their general sales. In regarding the operations of the company, McDonalds tend to import much of their raw materials into a specific countrys territories if there is a dearth

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of supply. Exchange rate fluctuations will also play a significant role in the operations of the company. As stated in the paragraph above, McDonald stores have to take a great deal of consideration with reference to their microenvironment. The companys international supply as well as the existing exchange rates is merely a part of the overall components needed to guarantee success for the foreign operations of McDonalds. Moreover, it is imperative that the company be cognizant of the existing tax requirements needed by the individual governments on which they operate. This basically ensures the smooth operations of the McDonalds franchises. In the same regard, the company will also have to consider the economic standing of the country on which they operate on. The rate at which the economy of that particular country grows determines the purchasing power of the consumers in that country. Hence, if a franchise operates in a particularly economically weak country, their products shall cost higher than the other existing products in the market, then these franchises must take on certain adjustments to maintain the economies of scale. However in case of India the company has been able to maintain a constant level of prices for their products. Socio-cultural Factors McDonalds seem to function on several fields to guarantee lucrative returns for the organisation. To illustrate, the organisation improves on establishing a positive mind-set from their core consumers. McDonalds indulge a particular variety of consumers with definite types of personalities. It has also been noted that the company have given the markets such as the United Kingdom and India, an option with regards to their dining needs. McDonalds has launched a sensibly valued set of food that tenders a reliable level of quality for the respective market where it operates. Additionally, those who are aged just below the bracket of thirty-five are said to be the most frequent consumers of McDonalds franchises.
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The multifaceted character of business nowadays is reflected in the harsh significance of the information on the subject of the existing market. This procedure is essentially identified in the field as market research. Information with regards to the appeal and potential fields of the market would double as obstructions to the success of the company if this area of the operations is neglected. In the case of McDonalds they establish a good system in determining the needs of the market. The company uses concepts of consumer behaviour product personality and purchasing decisions to its advantage which is clearly evident in case of India as the company was quick in removing their Pork and Mutton products from Indias menu. It is said to have a major influence on the understanding of the prospective performance of the organisation in a particular market. Technology Factors McDonalds generates a demand for its own products. The companys key tool for marketing is by means of Online Facebook and Google ads, Collaboration with websites like Snapdeal and Timesdeal to promote sales in India, television advertisements, banners and hoardings. There are similarly some claims that McDonalds are inclined to interest the younger populations more. The existence of play spots as well as toys in meals offered by the company shows this actuality. Other demonstration of such a marketing strategy is apparent in the commercials they use. They employ animated depictions of their characters like Grimace, Ronald and Ham burglar. Other advertising operations employ popular celebrities to promote their products. The like has become endorsers for McDonalds worldwide Im loving it campaign. Moreover, the operations of McDonalds have significantly been infused with new technology. Elements like the inventory system and the management of the value chain of the company allows for easy payments for their suppliers and other vendors which the individual stores in respective markets deal with. The integration of technology in the operations of McDonalds tends to add value to their products. Basically, this
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is manifested in the improvements on its value chain. The improvement of the inventory system as well as its supply chain allows the company to operate in an international context. McDonalds use the internet to their advantage. The cost-effectiveness, interactivity and real- time effects of the communications are a good way to find suppliers. It is also a good way to correspond with the respective McDonalds headquarters in every Country. The company must also look into the use of IT to enhance their inventory operations. As the operations in its inbound and outbound logistics improve, the company will expect significant savings and reduction of costs in the operations. Environmental Factors The social responsibilities of McDonalds on the country are influential to the operations of the company. These involve accusations of environmental damage. Among the reasons why they are charged with such claims is the employ of non-biodegradable substances for their drinks glasses and Styrofoam coffers for the meals. Several civic groups in India have made actions to make the McDonalds franchises in India aware of the rather abundant use of Styrofoam containers and the resultant abuse of the environment. The company should find out the environmental regime that governs the operations in every market. It should also monitor the waste disposal of the company. McDonalds should minimize the use of Styrofoam materials and plastic cups. Constant updating of the social corporate responsibility is imperative. This should also entail that the headquarters should take in hand, a manner of internal control of those that would infringe upon this company objective. Sanctions such as revoking of the franchise license or a particularly high fine should be installed to serve as a deterrent to infringement.

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Legal Factors There has been the recurrent bellowing in opposition to the fast food industry. This has similarly made McDonalds apply a more careful consideration on their corporate social responsibilities. On the whole, this addressed the need of the company to form its corporate reputation to a more positive one and a more socially responsible company. The reputation of McDonalds is apparently a huge matter. Seen on the website of the company, it seems that they have acquired strides to take in hand the key social censures that they have been berating them in the past decades. The company has provided their customers the relevant data that they need with reference to the nutritional substances of their products. This is to attend to the arguments of obesity charged against the products of the company. In the same way, the consumers provided freedom in choosing whether or not they want to purchase their meals. This is tied up with the socio-cultural attributes of the market on which they operate. For instance, operations in predominantly Muslim countries require their meat to conform to the Halal requirements of the law. In the same regard, those that operate in countries in the European Union should conform to the existing laws banning the use of genetically modified meat products in their food. This was prime reason which forced McDonalds to eliminate beef, pork and Mutton out of Indias product menu. Other legal concepts like tax obligations, employment standards, and quality requirements are only a few of important elements on which the company has to take into consideration. Otherwise, smooth operations shall be hard to achieve. As a certified fast food operator, there are many regulations and procedures that McDonalds should follow. McDonalds should protect its integrity and consumer confidence by ensuring all materials and process are as claimed or must followed. Other legal requirement that the business owner should
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follow as stipulated in laws are such as operating hours, business registration, tax requirement, labour and employment laws and quality & environment certification (such as ISO) in which the outlet has been certified. The legal requirement is important because the offenders will be fined or have their business prohibited from operating which can be disastrous. The company should hire local counsels to deal with the legal conflicts in individual markets on which the company may encounter. This shall ensure the company that the lawyers that will handle their legal affairs are more versed with the legal regime that would ease out certain problems on their operations.

Conclusion As we all know that the most significant contribution of this generation is the combination of globalization and internationalization in the businesses sector. Developments in the international setting have an effect on the more particular factors in the operations in individual organisations. Alterations could take place and require intense modifications to the operations such that it could have an adverse effect on the entire structure of the company. However, as indicated in the above PESTEL analysis, this could be acquired by setting a certain level of flexibility in the organisation. This level of flexibility can basically be acquired through the acquaintance of both the internal and external environment of the company. Even though McDonalds may have been deemed as demigod in the fast food business in the international scene, but what it preserves as revealed in its processes is the need for flexibility. The slight changes that take place in the market have an effect on the operations of the business in any case. This denotes that having the information on the effects of these alterations swiftly provides these fast food industry giants to take fine-tuning actions on their acts and still preserve their market position. As implied the markets of
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nowadays manifest a cutthroat rivalry with the individual competitors, recognized brands or otherwise. Hence, any business in spite of the muscle of the brand name or the size of its reserves could not afford any failures in their individual markets.

McDonalds Marketing Mix (7 Ps)

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After segmenting the market, finding the target segment and positioning itself, each company needs to come up with an offer. The 5 Ps used by McDonalds are:

1. Product 2. Place 3. Price 4. Promotion 5. People 6. Physical Evidence 7. Process

Product:How should the company design, manufacture the

product so that it enhances the customer experience?

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Product is the physical product or service offered to the consumer. Product includes certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the non-tangible aspects of the product and service. McDonalds has intentionally kept its product depth and product width limited. McDonalds studied the 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. During their study McDonalds found out that India is a country where 85% population doesnt eat beef so its no point serving beef. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Mcspicy Chicken. McDonalds found out that Indians have peculiar connection with spicy food. Hence, McDonalds came out with perry perry fries and its latest Mcspicy burgers. McDonalds bring with it a globally reputed brand, world class food quality and excellent customer specific product features.

Place: Where should be the product be available and the

role of distribution channels?

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. 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
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great service. Now McDonalds have also started giving internet facility at their centres and they have been playing music through radio instead of the normal music. There are certain dedicated areas for children where they can play while their parents can have some quality time together.

Price: What should be the pricing strategy?

McDonalds 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. In 2004, McDonalds came up with a very catchy punch line Aap ke zamane mein ,baap ke zamane ke daam. This was to attract the middle and lower class consumers and the effect can clearly be seen in the consumer base McDonalds has now. McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal, family meal etc to increase overall sales volumes.

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Promotion: What is the suitable strategy and channels for

promotion of the product?

The various promotion channels being used by McDonalds to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. There are three main objectives of advertising for McDonalds are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonalds does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion. Some of the most famous marketing campaigns of McDonalds are: You Deserve a break today, so get up and get away- To McDonalds Aap ke zamane mein ,baap ke zamane ke daam. Food, Folks, and Fun Im loving it. McDonalds also banks on its 80 20 menu board. In this 80% is visual and 20% is descriptive. Also it has kept prices like 29,49,69,99 so that its easier for people to understand. Pricing strategies, quick service, no tips attracts middle class.

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Key objectives of McDs promotion strategy were to, Get them in.Trade them up.Get them back . Get Them In : To make consumers step into McDonalds restaurant. Trade Them Up : To shift the consumers to McDonalds core products like Burger with cheese, McChicken Burger, Fillet-o-Fish, etc.,

Get Them Back:To increase the frequency of visit by making the McDs brand experience

People: How to converge the benefits of internal and

external marketing?
McDonalds understands the value of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer. McDonald continuously does Internal Marketing. This is important as it must precede external marketing. This includes hiring, training and motivating able employees. This way they serve customers well and the final result is a happy customer. 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 Im loving it is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.

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The McDonalds Experience Marketing in a services industry is becoming an increasingly complex challenge. The paradigms of service marketing demand a passionate understanding of customer expectations and perceptions, and linking them to product design & delivery as well as operational planning. This is where McDonalds has excelled due to its ability to successfully integrate the customers perspective in its products and operations in a comprehensive manner. The revamped menu in India is an example of McDonalds strategy of integrating the customers perspective in its products. And, the operational integration is evident from McDonalds emphasis on its suppliers as its customers as well as its treatment of its consumers as co-producers of services. The ultimate aim of Service Marketing is not just to become a Service Leader but to create a Service Brand. The Service Delivery Process is the key to achieving this aim of Service Marketing.

Service Delivery Process Core Product

Supplementary Process

During the Service Delivery Process, each moment of interaction between the firm and the customer, called Moments of Truth, helps understand
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the opportunities that a firm has to win or lose the customer. For example, these moments of truth are created for McDonalds every time the guard at the McDonalds 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 table, etc. Managing these moments of truth is a great challenge in Service Marketing especially due to customers involvement as a co-producer of services (e.g. McDonalds self-service concept wherein the customer not only collects the order but also cleans the table after consuming the food). However, McDonald's has been able to create a great experience for its customers by understanding the nature of the entire Service Delivery Process and the various stages in the process that are exposed to the customers. Transparency in the processes at its outlet has helped McDonalds bring the back office in its 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. McDonalds 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 McDonalds have been greatly enhanced by the combination of the factors mentioned above. This has helped McDonalds 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 McDonalds experience.

Physical evidence
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The physical appearance affects not only the impression outsiders have of a business but also the way that business functions. McDonalds focuses on clean and hygienic interiors of its out lets at the same time they are attractive. It maintains a proper decorum at its joints. Staff members dress in McDonalds Dress code with Green shirts, Blue trousers, Black caps and Customised Ronald McDonalds tie. Building maintenance and visible cues are provided by the golden arches, the trademarks and the logos in the premises. The delivery scooters also add to the physicality of the company.

Processes
McDonalds worldwide is well known for the high degree of respect for the local customs and culture. McDonalds has developed a menu especially for India with vegetarian selections to suit Indian tastes and preferences. Keeping in line with this, McDonalds does not offer any beef or pork items in India. In the last decade it has introduced some vegetarian and nonvegetarian products with local flavours that have appealed to the Indian palate. There have been continuous efforts to enhance variety in the menu by developing more such products. It is completely transparent and visible to the customers, allowing them to judge hygiene standards where the process takes place. The customers are even invited to check the ingredients used in the food. McDonalds has also re-engineered its operations repeatedly in its 11 years in India to address the special requirements of a vegetarian menu. Vegetable products are 100% vegetarian, i.e, They are prepared separately, using dedicated equipment and utensils. Only pure vegetarian oil is used as a cooking medium. Cheese and sauces are completely vegetarian and egg less.

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Separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. Food manufacturing transparent to customers across the counter. Training to the licensees about how to operate the franchise. Invented the most efficient cooking equipment with use of latest technology. New methods of food packaging and distribution are followed

Competitors Analysis
Dominos Pizza : The brand, Domino's Pizza, was founded in the US in 1960 by Thomas and James Monaghan. Since then, it has grown into a global network of over 9000 pizza stores in more than 60 countries around the world. Jubilant FoodWorks Limited (the Company) is a Jubilant Bhartia Group Company, The Company was incorporated in 1995 and initiated operations in 1996, The Company got listed on the Indian bourses in February 2010, Mr, Shyam S, Bhartia, Mr, Hari S, Bhartia and Jubilant Enpro Private Ltd, are the Promoters of the Company. The Company & its subsidiary operates Domino's Pizza brand with the exclusive rights for India, Nepal, Bangladesh and Sri Lanka, The Company is India's largest and fastest growing food service company, with a network of 500+ Domino's Pizza stores Stores (as of 31st March, 2012)The Company is the market leader in the organized pizza market with a 54% market share (Euromonitor Report 2010) and 70% share in the pizza home delivery segment in India, The Company has strengthened its portfolio by entering into an agreement with Dunkin'
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Donuts Franchising LLC, for developing the Dunkin' Donuts brand and operating restaurants in India, Over the period since 1996, Dominos Pizza India has remained focused on delivering great tasting Pizzas and sides, superior quality, exceptional customer service and value for money offerings. We have endeavored to establish a reputation for being a home delivery specialist capable of delivering pizzas within 30 minutes or else FREE to a community of loyal consumers from all our stores around the country. Dominos vision is focused on " Exceptional people on a mission to be the best pizza delivery company in the world!" We are committed to bringing fun, happiness and convenience to lives of our consumers by delivering delicious pizzas to their doorstep and our efforts are aimed at fulfilling this commitment towards a large and ever-growing customer base. Dominos constantly strives to develop products that suit the tastes of our consumers and hence delighting them. Dominos believes strongly in the strategy of Think global and act local. Thus, time and again we have been innovating with delicious new products such as crusts, toppings and flavours suitable to the taste buds of Indian Consumers. Further providing value for money and affordable products to our consumers has been an important part of our efforts. Our initiatives such as Fun Meal and Pizza Mania have been extremely popular with consumers looking for an affordable and value for money meal option. Dominos believes that when a box of pizza is opened, family and friends come together to share the pizza. Hence, our brand positioning: Yeh Hai Rishton Ka Time KFC ( Kentucky Fried Chicken )

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KFC

(Kentucky

Fried

Chicken)

is

fast

food

restaurant

chain

headquartered in Louisville, Kentucky, United States, which specializes in fried chicken. An "American icon", it is the world's largest fried chicken chain and the third largest restaurant chain after Subway and McDonald's, with over 17,000 outlets in 115 countries and territories as of December 2011 The chain primarily sells fried chicken pieces and variations such as chicken sandwiches and wraps, salads and side dishes such as French fries and coleslaw, desserts and soft drinks, often supplied by PepsiCo. Its most famous product is pressure fried chicken pieces, seasoned with Sanders' "Original Recipe" of 11 herbs and spices. The exact nature of these ingredients are unknown, and represent a notable trade secret. KFC is famous for the slogan "finger lickin' good", which has since been replaced by "Nobody does chicken like KFC" and "So good". KFC's two major single markets are in its home country and China, which together contain around half of its outlets. The first Indian KFC was opened in the city of Bangalore in June 1995. This resulted in protests from the left wing, anti-globalisation and environmental campaigners, as well as local farmers, who believed that the chain was bypassing local producers. Many Indians protested the onslaught of consumerism, the loss of national self-sufficiency, and the disruption of indigenous traditions. The protests came to a head in August 1995, when the Bangalore outlet was repeatedly ransacked. The Bangalore outlet demanded, and received, a police van permanently parked outside it for a year. M. D. Nanjundaswamy claimed that KFC would adversely affect the health of the impoverished, by diverting grain from poor people to make the more profitable animal feed. Former environment minister Maneka Gandhi joined the protestors. KFC was also accused of using illegally high amounts of monosodium glutamate (MSG) and frying its food in pork fat. A store in Delhi was closed by the authorities, purportedly for health reasons, but more
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likely to avoid a repetition of the Bangalore incident. KFC eventually abandoned the Indian market, not returning until 1999, with a new Bangalore outlet.This was the sole KFC in India until 2004, when the chain began to expand. KFC has the strategic objectives of expansion along with profits and sales growth. KFC has also been applying its strategies at improving services and making them more and more customer friendly. It has not only been customizing its menu according to the countries that it has been operating in, it has also been trying to cater to different ethnic groups like African Americans and Hispanics. Such types of strategies are focused on increasing the customer base by better customization of products. Other than the traditional eat-in restaurants, KFC has also been expanding into nontraditional facilities like shopping malls, hospitals, universities, stadiums; office buildings etc and a number of strategies have been formulated to aid this kind of expansion. Subway Subway is an American restaurant franchise that primarily sells submarine sandwiches (subs) and salads. It is owned and operated by Doctor's Associates, Inc. (DAI). Subway is one of the fastest growing franchises in the world with 37,881 restaurants in 98 countries and territories as of November 7, 2012. It is the largest single-brand restaurant chain globally and is the second largest restaurant operator globally after Yum! Brands (over 37,000 locations). Opened in India in 2001 at Saket,Delhi The strategic objectives of Subway focus on creating a global strategic plan to enable Subway restaurants to succeed internationally. Other than this subway is intent upon introducing the concept of healthy fast food. Sandwiches of Subway have been included in diet plans by experts. Subways stand regarding obesity in children is not new to its customers.
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Strategies at Subway are not only about a really ambitious increase in franchises all over the world but they are also about making the food more and more appealing to the health conscious customers because health conscious attitudes, according to the experts, are here to stay now. One of the greatest competitive advantages that Subway was born with is its healthy menu. The salads and sandwiches appeal much more to the people as compared to fried chicken, burgers, fries and pizzas. With its advertising and promotion, Subway has long been highlighting its healthy food in advertising and promotions and with the passage of time, it has established itself as a healthy brand. Another competitive advantage that subway enjoys is the fact that along with traditional locations, Subway restaurants can be found in more than 4,000 non traditional locations such as food courts, health clubs, hospitals, universities, amusement parks or just about anywhere. In fact, Subway restaurants can even be found in automobile showrooms and Laundromats! This global presence is indeed a sustainable advantage for Subway and needs to be managed properly. Subways fresh food is also a competitive advantage because unlike its competitors like McDonalds it allows its franchisees to choose their own food suppliers, to ensure they can access the freshest ingredients. Pizza Hut Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including salad, pasta, buffalo wings, breadsticks, and garlic bread. Corporately known as Pizza Hut, Inc., it is a subsidiary of Yum! Brands, Inc., the world's largest restaurant company. As of 2012, there were more than 6,000 Pizza Hut restaurants in the United States, and more than 5,139 store locations in 94 other countries and territories around the world
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Pizza Hut is one of the flagship brands of Yum! Brands, Inc., which also has KFC, Taco Bell, A&W and Long John Silvers under its umbrella. Pizza Hut is the worlds largest pizza chain with over 12,500 restaurants across 91 countries. In India, Pizza Hut has 140 restaurants across 34 cities, including Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Pune, and Chandigarh amongst others. Yum! is in the process of opening Pizza Hut restaurants at many more locations to service a larger customer base across the country. When we talk about strategic objectives, Pizza Hut says: We want to satisfy our customers by offering them The best. Diversification of the products that Hut are guided by they principles like offer Cleanliness, Hospitality, has Accuracy, Product always been a focal point of strategies at Pizza Hut. The strategies at Pizza Maintenance,

quality and Speed (CHAMPS). Since its a global chain, the strategies are based upon customizing the services, advertising and marketing activities according to the countries that they are operating in. Customer service and satisfaction have of course always been a vital aspect of the strategies. Another important feature of the strategies are the 3 Fs (Fun, Weaknesses: At one time, the biggest marketing problem Pizza Hut faced was lunch. As compared to McDonalds, its restaurants had virtually no lunch time sales, and neither did any of its pizza competitors. The reason, of course, is that it takes 20 minutes to cook a pizza from scratch in a traditional pizza oven, and most people wont spend that long at lunch time waiting to be served. By using a new, continuous-broiling technology adapted from burger business, Pizza Hut developed a personal pan pizza that could be served in
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Pizza Friendly and Familiar).Problems

Huts and

less than 5 minutes. It was quick, tasty and moderately priced. And Pizza Hut rolled it out to all 4500 stores worldwide and locked up the pizza-lunch business almost everywhere, almost overnight. One of the weaknesses of Pizza Hut that it hasnt overcome yet is its price. Local chains are constantly springing up, offering lower prices and similar recipes. Most people dont mind giving a lower price for slightly different taste because of which the sales at Pizza Hut at are suffering. Growing awareness about eco-friendliness has forced a lot of the food chains to maintain practices that conform to international environmental standards. For example McDonalds is introducing coffee beans grown in environmental friendly conditions in order to appeal to the people who are conscious about environmental friendliness. In the pizza selling restaurants, organic pizzas are the new concepts that are appealing to the masses to these days. Its a phenomenon that highlights the health conscious attitude as well as environmental friendliness. Pizza Hut on the other hand has not come up with any strategy in this area and if it doesnt even in the future, it is going to lag behind the chains that offer healthier food. Pizza Hut has the first mover advantage in the pizza chains because of which it has developed a strong customer base which is one of its strengths. In the Indian QSRs industry, the delivery service of Pizza Hut is clearly a competitive advantage that it enjoys. Pizza Huts delivery service is one of quickest and the pizzas delivered are oven hot in the real sense of the world. Pizza Hut is often referred to as Pizza Innovation Leader because it is constantly coming up with new varieties of pizzas to appeal the different audiences and at the same time, people at the Pizza Hut have a really good idea about which varieties are appealing to the customers and they are thus retained in the menus. The first mover advantage is an advantage that Pizza Hut was born with but time, Pizza Hut has been successfully creating competitive advantages like a
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traditionally strong brand name for itself and the quality service that it provides.

Local Vada Pavs and Udipi Restaurants Local vada pavs and udipi restaurants have long been here in India. Despite the entries of various MNCs entering India these restaurants are still going strong. There are thousands and thousands of these restaurants present in India. The main competitive advantage of these restaurants are affordability and availability near business districts and near home. Local vada pav dealers have traditionally been famous in India because their roadside presence everywhere and low prices. These factors have been crucial in their survival. Local Vada Pav is available at 8rs whereas any burger of McD is available from 25rs. Hence, low income group individuals prefer these retailers over McD or any other MNC

Source : as per each companies website

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Number of outlets of each store

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STP (Segmentation, Targeting and Positioning )

To develop the marketing strategy, companies need to understand its target customers. To communicate product effectively to the customers they need to segment its target market and position the product properly.

McDonalds

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SegmentationMcDonalds has segmented their products according to bases of

Demographic, Psychographic and Behavioural. 1) Demographic- Kids, Family and Students McDonalds offers different products like Happy Meal which includes a free toy for kids. For families it has made different outlets and meals which are suitable for takeaways and drive-thru. McDonalds has made its environment which is suitable for students of school to hang out with their friends and can get their lunch at McDonalds. 2) Psychographic- McDonalds has adopted itself according to the convenience and lifestyle of the Indian consumers, as India has a huge vegetarian population so McDonalds came up with a different and new product line which includes items like Mc Veggie burger and Mc Aloo tikki Burger. They also made McDonalds as a place to relax and even for entertainment.
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3) Behavioural- Occasions such as birthday etc. Target MarketWorking Adults- Who seeks convenience meals. Students- Primary, Secondary as well as college students. Families- Which prefers to go out for meals on weekend and holidays. Cafe Goers- The people who seek place to relax or read or even business entertainments.

Target Segment A Family with children Urban move Teenager customer on

What is McDonalds for me? A treat to children, a fun place to be for the children. the Great taste, quick service without affecting the work schedule Hangout with friends, but keep it affordable.

PositioningPositioning is a process of creating an image in the mind of consumers by which consumers can understand the uniqueness about your product when compared to competitors product. In India positioning of McDonalds has been directed as a Family restaurant. Then they started positioning according to the kids as well by introducing new advertising of toys with their products such as Happy Meal. In the start they made certain special efforts to not allow it to convert into a teenage and adults (20 to 24 years of age) hangout place. Now youngster and adults has become so use to fast foods that McDonalds has targeted them and tried to position McDonalds

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as a place for all. They also targeted adults because they can pay for quality and variety of products. This helped McDonalds to be most recognizable brand in India for people of all ages. Or we can say that they followed concept of undifferentiated marketing in which they offered same marketing mix to mass audiences.

KFC

SegmentationGeographicKFC has outlets internationally and sells its products according to geographic needs of the customer. In India KFC focuses how geographically its customers demand different products.

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In north India Chicken is the main selling product, while in the south the Veg. items sell more than the chicken. DemographicIn demographic segmentation, the market is divided into groups based on an age, gender, family size, income, occupation, religion, race and nationality. KFC divides the market on demographic basis in this way: Age between 6 to 65 Including both genders According to family size According to income level

PsychographicDividing a market into different groups based on social class, lifestyle, or personality characteristics is called psychographic segmentation. KFC divides market on the basis of psychographic variables like Social classes-Middle and upper Personality

Target MarketAs the outlets of KFC are in posh area and prices are too high (overhead expenses-rent, air-conditioning, employees), so KFC targets upper and middle classes. Target market depends upon size and growth rate of population, Company resources and structural attractiveness of market segment.

PositioningIn KFC feedback is taken from the customer in order to know the customer demands and then improvements are made in products. KFC focuses on pure and fresh food in order to create a distinct and clear position in the minds
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of customers KFC has a strong brand name and they are leading the market in fried chicken.

Pizza Hut

Segmentation GeographicLocalize product, advertising, promotions and sales efforts to fit the needs of the individual areas and cities. PsychographicDividing the market into different groups based on social class, lifestyle or personality characteristics. For e.g. they offer their customers to choose price between 499 or 699.

Target MarketThe target market of pizza hut is middle level and upper level class. Mainly they are targeting the college graduates as they spend a lot on fast foods. Positioning-

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Pizza hut is positioning themselves on the basis of Quality and Frequency. They are using the tagline as Best pizzas under one roof. Also under the saying Customer mania, they are positioning themselves as best service provider.

SUBWAY

SegmentationGeographicSubway segmented their market based on the test of different geographic location. As more number of people in India is vegetarians, they provide menu mostly with vegetable without beef. DemographicSubway concentrates majority of customers on the age group in between 18 to 39 years mostly the people are either studying or working. PsychographicSubway core customer between the age of 16 to 39 are found to be more health conscious. Therefore, by providing healthy and fresh food, subway segmented the customer based on the trends or psychological. Behavioural45

Subway considers that with hectic and busy lifestyle, catering of fresh, healthy and fast food is required in everyday life. Subway also make special promotion during occasions like Christmas and new year by offering gift card, etc. on the purchase of its food. This shows that they segments he customer based on the occasion under behavioural of its customer. Target Market Subway targets market is young adults between age of 16 & 39, although people of all ages and background enjoy the delicious and healthy sandwiches. Majority of population in India lies in between these age groups. Subway identified its target market as Demanding Young People Who Know Their Own Minds. The youngsters who like to have nutrition food rather than pizzas, burgers and fries. PositioningProviding a healthy fast food chain for a healthier and hygienic food is a brand value strategy of Subway. The listing of the healthy items includes the fresh and fast food items that reflect the menu. It sends messages to its customer that they are positioned as a fresh and healthy food.

Dominos Pizza
Segmentation Geographic Region dominos outlets in different countries is a way of segmenting their market according to region and finding out potential markets.

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City they also segment the cities as class i, class ii, metros, small towns.

Demographic age under 13years, 13 to 21 years21 to 35 years, 35 to 50 years, 50+ years. family income lower middle class, middle class, upper middle class, high class

Targeting Dominos pizzas have target the families who like to go out for dinner once in a week. They also target teenagers of school. Spending habits of college freshmen also indicates a high percentage of money being spent on non-essential items. Dominos has made delivery services for those customers who like to have pizzas in their home with their families or friends.

Positioning Indias Pizza Delivery expert and market leader in the organized pizza home delivery segment announced the launch of their new brand positioning campaign Yeh Hai Rishton Ka Time. After spending four years with the emotional proposition of Happiness Home delivered- Khushiyon ki Home Delivery. Dominos Pizza endeavours to deepen the engagement with consumers, through its new brand positioning that focuses on relationships and bonding.

Local Vada Pav and Jumbo King

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Segmentation They have segmented the market into Psychographic, Demographic. Its for anyone who needs fast snack, on the move. Lower and middle income group people in Mumbai (mainly students and working class) Target Market They mostly target people between age group of 18-30. Mostly to college going students who prefer easily available fast food also to working professionals who has less time and prefer to have easily available fast food. Their biggest target customer is the middle level social group. PositioningThey have positioned themselves on the basis of quality, hygiene and size. They also position themselves as the easily available fast food with low cost.

Issues
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McDonalds had been accused of destruction of vast areas of the rainforest for the production of cattle to produce beef, promoting unhealthy food with a risk of cancer and heart disease, taking advantage of children with its advertising and marketing, and cruelty to animals. There had been complaints as regards the nutrition, hygiene etc. Social Networking Issues- McDonalds #McDStories

In mid-January, McDonalds launched a Twitter campaign using the hashtag #McDStories. McDonalds asked users to post nostalgic stories about their experiences on Happy Meals, however, the #McDStories campaign quickly took a whole different turn very quickly as users started using the hashtag to instead share horror experiences and shock tales. From poor work conditions to appalling food quality, McDonalds campaign turned negative attention back to itself.

Here are just a few examples of tweets on the #McDStories Hashtag:

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Nutrition and Health

One of the most fundamental and enjoyable aspects of the day-to-day lives of people had been eating food of their choice and the circumstances in which it was eaten. For most people this generally meant eating the healthiest possible food (bearing in mind constraints of time and poverty), usually cooked on site and then eaten communally - either in a family or
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home setting, or with others while at work or in school. But there were rapid changes as the pace and nature of society had shifted. An industrial or service infrastructure increasingly dominated the local neighborhoods and people's lives, undermining existing patterns of human interaction, whether among families, friends, neighbors or in the community in general. Mass-produced, processed food gradually and increasingly replaced fresh and healthy foods in people's diets over the course of the twentieth century. In recent decades, McDonalds capitalized on this situation by promoting quick meals to be eaten outside the home. This change in eating habits brought serious consequences to human relations and health. These consequences sparked a debate about healthy food. They also brought out a whole range of new campaigns and movements dedicated to encouraging healthy eating and healthy lifestyles. Macro environmental factors affected McDonalds, forced it to become defensive, and they had to resort to lip service to try and deflect public criticism. In the health debate, food industry was heavily criticized for creating products that are high in fat, sugar and salt. Health consciousness was rising amongst people with the obesity crisis hitting the world. The concern was serious as it was children who were the most affected. Nutrition and exercise issues which were important and needed to be reviewed earlier, now were considered, discussed, and debated only after witnessing the frightening consequences. Many critics blamed McDonalds like businesses for public health concerns, contending that fast food menus and portion sizes contribute to obesity, diabetes and heart disease and a variety of other diet related problems. But at the same time, it was worthwhile to note that the type of demand exhibited by the market initiated the processes within the companies. As long as the demand for fast food continued, nutritional issues would continue to be argued and deliberated upon. India also had its own set of so called nutritious and non-nutritious food. People in India appeared to prefer food for its taste. Bhel Puri, Samosas and Potato Wada which were some of the very popular Indian snacks were
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weak in terms of nutrition. However, a large level of population savored them for the spicy taste ignoring the hygiene and the value in terms of nutrition. Trans- fats and their use in food also had been a major controversial issue. It had been established scientifically that artificial trans- fats were bad for human health. In United States, New York City was the first city to announce a ban on all restaurants from using artificial Trans fats with the deadline on July 1, 2007. When the legal system imposed bans and developed a regulatory framework, the food industry was compelled to respond. In January 2007, McDonalds picked new Trans fat free oil for cooking its famous French fries after years of testing. In view of the health risks and dangers, it was important that food service did not just confine to respond to the basic need of hunger. Food industry was required to innovate and work on introducing healthy eating options and making them available. This would create a situation where the final choice would then be made by the consumers. A healthy lifestyle only would help overcome the health problems gripping the society. Awareness about health needed to be built up and somewhere the responsibility definitely lay with companies which were into the food business. Health concern was a global call and responding to this was the need of the hour. Need for constant Innovation McDonalds find itself in a peculiar situation. It needs to constantly innovate its products and practices. But just coming out with new products doesnt solve the problem. They need to be organic and healthy. McDonalds mainly targets youth and todays get bored with a same thing very quickly. One cannot expect youth to have same burger and fries over and over againg. McDonalds needs to innovate and bring out new products. Also for kids it needs to keep up with the trends and get new toys to keep up the interest levels of kids.
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Decreasing Market Share McDonalds is facing cut throat competition from other franchisees as KFC, Dominos, Subway etc as well Indian franchisee startups as Faasos, Jumbo King and local Vada Pav retailers. Indian market is growing at 34% CAGR and if McDonalds wants to grow it has to get back to competition. McDonalds is still the market leader but other competitors are eating away its share. If McDonalds doesnt do anything quickly it may find itself in a sticky spot very soon.

Recommendations / Solutions
Increasing Drive Thrus : Mcdonalds is looking to increase drive thrus with the help of IOC. IOC operates nearly 8000 petrol pumps. We are planning to double the current number of driver thrus. We are also planning 30 to 35 drive thrus in tier 2 cities at the cost of 175 crores. McDonalds already has some drive thrus with the association of HPCL and BPCL. Increasing Pure Veg Restaurants : In India nearly more than 80 million people are hindu. Out of these 80 million people many of them are veg. McDonalds recently opened a Pure Veg restaurant near Golden Temple in Punjab. This clearly shows that demand is there to be captured. Hence, going for more number of veg restaurants can work if planned appropriately. McD near holy shrines or temples : India is a religious country. There are number of religious places where people visit in thousands and in some places in lakhs. So there is huge potential to be tapped. We can initially setup some restaurants on temporary basis and if the idea works we can go forward. Targeting the festivals like Kumbh Mela : Gatherings like kumbh melas are goldmine if tapped. In 2013, 80 million people were expected to visit
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Kumbh Mela. 80 million is a huge figure even by Indias population. We can setup temporary kiosks at strategic positions and at the same time not compromising on the quality of food served. Already companies are looking towards festivals like Kumbh Mela, if we move fast we can take advantage of First Mover Advantage. Menu Innovations: McDonalds have indianised its menu for its India entry. Even after so many years McDonalds have always been innovative in menu. Some experiments have failed while some are hit. McDonalds realized Indians taste for spice and launched piri piri fries and McSpicy burgers. But still menu innovations need to be continued as competition is catching up and people are getting bored really quickly. Hence, menu innovations need to be there in quick successions. Also, we can look forward to creating a healthy menu such as Chicken salad, oats in breakfast etc. Indians traditionally love paneer but sadly till now paneer is limited to only wrap. We can introduce a burger having paneer. Innovations : McDonalds need to be innovative and need to think on its feet. One good thing we did was launching of McDelivery. Delivery concept is wholly a new idea. McDonalds is not into delivery in US and other markets. But India is unique. We realized that Indians love to eat with their family and not all the times they would like to come visit store. Also, with this move we hope to take a bit of market share of pizza chains like Dominos. Indians love to eat with their families and friends. Hardly anyone comes alone. Keeping this in mind McDonalds needs to improve its brand image as full family restaurants. Associations with other brands : McDonalds can associate with other brands to improve its sales. We can associate with theaters, BEST buses, sites like snapdeal and timesdeal. McDonalds can launch some innovative schemes which can help improve sales and margins. Indians love sale and
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free things so if McDonalds can launch schemes like buy 2 get 1 it will automatically improve its sales. Planned Expansion : Name of the state Andhra Pradesh Himachal Pradesh Gujrat Rajasthan Uttarakhand Sikkim Goa Tamil Nadu Maharashtra Delhi Source GDP capita 71,480 74,899 81400 47,506 82,193 121,440 192,652 94,796 101,314 175,812 per YOY Growth ( in %) 18.4 16.1 25 17.4 14.6 18 N.A. 14.8 12.8 16.1 :

http://en.wikipedia.org/wiki/List_of_Indian_states_by_GDP We have chosen above states to expand based on their GDP per capita, yoy growth and some are being chosen because of high population base as well as tourist centers. We will look to expand in these states . We as McDonalds are looking to expand and double our stores in 2 years. The cost of above expansion will be aroung 600 crore which can vary. Involvement with community : McDonalds will look to be involve and connect with the society. As a CSR activities McDonalds can adopt a village or sponsor hospitals or arrange medical programs in the villages. Especially if we can do CSR activities in the villages from where we source our raw materials it will be very useful in building a brand image.

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