McDonalds

Introduction
 Today McDonalds is the worlds largest fast food
chains serving 47 million customers daily.
McDonalds is the eighth most powerful brand in
the world. ---source: Millward Brown Optimor

One of the most valuable brands, worth more than

$25 billion.
 McDonald's revenues grew 27% over the three
years ending in 2007 to $22.8 billion, and 9%
growth in operating income to $3.9 billion.
 Brief History
 Maurice and Richard McDonald(brothers) were inspired by
a hot dog stand nearby, which always did brisk business
while other businesses were struggling due to the great
depression.
 In 1937, the McDonalds brothers started a hot dog stand,
called Airdrome in California .
 Later, in 1940, they opened a barbeque restaurant in san
Bernardino and called it McDonalds Barbeque.
 Ray crock a distributor of milk shake machines expressed
interest in the business, and he finalized a deal for
franchising with McDonalds brothers in 1954.
 He established a franchising company, the McDonalds
system Inc. and appointed the franchisees.
 Events

year Events
1955 Ray crock opens his first restaurant and McDonalds corporation is
created.
1957 Quality, service, cleanliness and value ( QSC & V) becomes
company’s motto.
1963 Ronald McDonald makes debut.
1965 The company goes public.
1968 Big Mc is introduced.
1974 Happy meal is launched.
1996 McDonalds opens in India, the 95th country.
 Marketing Mix
(4 P’s)
 Product
Price
Promotion
Place
 Product
McDonalds emphasis is on developing a menu which customers
want.
However, customers requirements change over time.
 In order to meet these changes, McDonald’s have introduced
new products and phased out old ones, and will continue to do
so.
 In India, McDonalds have provided a totally different menu as
compared to its international offerings which includes ham,
beef and mutton burgers.
 India is the only country where McDonalds serve vegetarian
menu as the majority of customers are vegetarian in India.
 Even the sauces and cheese used in India are 100% vegetarian
 Price
This is the most important part of marketing mix as this is the
only part which generate revenue. All the other 3 are
expenses incurred.

 Low prices as a marketing tool can be a disadvantage as

customer may feel that quality is being compromised.

 In India McDonalds classified its products namely the

branded affordability (BA) and branded core value products
(BCV).

 This has been done to satisfy consumers which different price

perceptions.
Branded Affordability Products (BA) Branded Core Value Products (BCV)

• The BA products include • The BCV products mainly

McAloo tikki and Chicken include the McVeggie and
McGrill burgers. McChicken burgers.

• BA products costs Rs20-30. • BCV products cost Rs 50-60

 Promotion
The methods from which promotion of the product is
done, are as follows:
 One of the methods employed is advertising.
Advertising is conducted on TV, radio, in cinema,
online, using poster sites and in the press for example
in newspapers and magazines.
 TV advertising makes people aware of a food item and
press advertising provides more detail.
 Other promotional methods include sales promotions,
point of sale display, merchandising, direct mail, loyalty
schemes, door drops , hoarding etc.
 Advertising
( A very strong promotional tool )
T.V

Cinema Radio

Magazine
Newspaper
 Place
The place mainly consists of 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 are some value positions that McDonalds
offers to its based on their needs.

It offers:
 hygienic environment
 Good ambience
 Great service
 Internet facility
 Dedicated areas for children. Like play ground, swings etc.
Play place for children to attract more
children
 Product mix
Veg Menu Non Veg Menu Beverages Frozen Deserts
 McVeggie  Chicken Maharaja  Cold Coffee  soft serve cone
Mac
 McAloo Tikki  Mc Chicken  Ice Tea  Mc Swirl

 Paneer Salsa Wrap  Fiet-o- Fish  Soft Drinks  Soft serve

 Veg Mc Curry Pan  Chicken Mexican  Mc Shakes  Flavor burst

Wrap
 pizza McPuff  Chicken McGrill  Hot serves  Floats

 Crispy Chinese
McDonalds Menu
Items Price
McVeggie 40 - 50

McAloo tikki 20 - 50

Paneer salsa wrap 20 - 30

Crispy Chinese 30 - 40

Veg McCurry pan 20 - 50

Pizza McPuff 20 – 30

Large fries 40 – 50

Happy meal 50 – 60

combos 30 – 70

Soft drinks 20 onwards

SWOT analysis
 STRENGTHS
 Larger market share.
Considered as worlds most valuable brands,
worth more than $25 billion.
 Consistency of food.
 Fast service
 Good brand equity
Goodwill
Customer satisfaction and intimacy.
Product innovation.
 WEAKNESS
• Unhealthy products are manufactured.
• Their test marketing for pizza failed to yield a
substantial product. Leaving them much less able
to compete with fast food pizza chains.
• High employee turnover in their restaurants leads
to more money being spent on training.
• They have yet to capitalize on the trend towards
organic foods.
• McDonald's have problems with fluctuations in
operating and net profits which ultimately impact
investor relations.
 OPPORTUNITY
1. International expansion.
2. Only serving 1% population of the world.
3. Introducing healthier products ( like: fruits , salad ) to
respond to changing consumer tastes and preferences.
4. Enter into breakfast category.
5. In today's health conscious societies the introduction of a
healthy hamburger is a great opportunity. They would be
the first QSR (Quick Service Restaurant) to have FDA
approval on marketing a low fat low calorie hamburger
with low calorie combo alternatives. Currently
McDonald's and its competition health choice items do
not include hamburgers.
Introduction of breakfast
meal.
 THREATS
1. They entice children as young as one year old into their
restaurants with special meals, toys, playgrounds. Children
grow up eating and enjoying McDonalds and then
continue into adulthood. They have been criticized by
many parent advocate groups for their marketing
practices towards children.
2. They have been sued multiple times for having
"unhealthy" food, allegedly with addictive additives,
contributing to the obesity epidemic in America.
3. More health conscious consumers.
4. Increasing competition from local fast food outlets, like
KFC, dominos, King, Starbucks, Taco Bell, Wendy's etc.
 Market Share : Competitors v/s
McDonalds in 1997 &2002
2002 Market share 1997 Market share
McDonalds 7.3% McDonalds 7.8%
Burger king 7.0% Burger king 3.6%
Wendy’s 2.4% Taco bell 2.2%
Sub way 1.9% Pizza hut 2.1%
Taco bell 1.9% Wendy’s 2.1%
 Marketing Strategies

 Think global act local

Adjusting price strategy
 Promotional strategies
 Demographic segmentation strategy
Involvement in local communities.
 Think global act local
The company took various measures to adapt itself
to the local market conditions. Even before
entering a particular market, McDonalds invests
a lot on researching the market and then
developed its products to suit local tastes and
tradition.
• When starting in India they learned that the local
Hindu population considered the cow as sacred,
so beef based products were not sold at there
outlets.
 Think global act local
• In India, to serve a large no. of vegetarians in the
country, the co. started to sell vegetarian burgers
called McAloo tikki, pizza McPuff etc.
• In all Islamic countries, as well as in Malaysia and
Singapore, McDonalds offered ‘halal’ menu and
the food was prepared according to the Islamic
laws
• McDonalds thus used different names for the
same meals in order to suit the market needs.
• In Taiwan, it served a toasted rice burger , a bun
made of rice grain.
 Adjusting price strategy
McDonalds adjusted its price according to the value of
the currency of target country. When fixing the prices
of its menu, it considered various factors like location
and income distribution in the region. The prices was
fixed keeping in mind its primary target group, the
middle and upper class people. For the same reason,
McDonalds started setting up stores first in the major
metros of the countries into which it entered.
In some markets, the co. gave discounts on certain
items from time to time, to promote a particular item
or boost sales during lean periods.
 Promotional strategies
McDonalds promotional activities worldwide were
handled by DDB Needham and Leo Burnett and their
partners in different countries. The promotions were
planned in association with the local partners in
different countries.
• “ I’m loving it,” adopted worldwide in 2003 as its first
global advertising campaign.
• In India, it popularized “aap k zamane mein, baap ke
zamane ke daam,” in Hindi, which emphasized the low
prices.
• In UK it ran a promotion of ‘buy one get one free’ for
Big Mac.
 Demographic segmentation strategy

 Uses demographic segmentation strategy

with age as the parameter.
The main target segments are children,
teenagers, young urban families.
children
Target
market
youngsters
 Target segment and positioning
• McDonalds was positioned as a family restaurant.
• Extra care has been taken to make the restaurant
children-friendly.
• McDonalds strategy is obviously to make eating- out
function the focus of these outings.
• Focused on price penetration.
• Aimed at 100% customer satisfaction for every
customer , on every visit i.e., service, quality food,
accuracy in order taking, knowing needs.
• McDonalds not only highlighted the economic value
but also the experiential aspects at their stores.
 Involvement in local community
• In every country which McDonalds entered, it created
employment opportunities for the local people, not only
through direct recruitment into the company but also by
giving business to local suppliers and entrepreneurs. Apart
from having local owners, the company went in for local
employees. Through most multinational company avoided
hiring locals in the top management positions.
• The co. also undertook some corporate social responsibility
initiatives in the different countries in which it operated .
• It also supported some social causes and gave financial aid.
• It also tried to remain an environment friendly organization in
every possible way.
 Introduction of Happy Meal

• In late 1970’s McDonalds was looking for new

ways to attract the customers.
• Research indicated that children were strong
influencers in the restaurant decision making
process.
• This resulted in worlds first HAPPY MEAL – a
combo meal for children featuring a free Walt
Disney toy which attracted children across the
globe.
 Mission statement
McDonalds vision is to be the world’s
quick serve restaurant experience.
Being the best means providing
outstanding quality, service,
cleanliness and value, so that we
make every customer in every
restaurant smile.
 Supply chain
Trikaya agriculture : suppliers of iceberg lettuce
Grows specialty crops like iceberg lettuce, A specialized nursery with a team of
special herbs and any oriental vegetables. agricultural experts.

Vista processed foods pvt. Ltd. :suppliers of chicken and

vegetable range of products
Wide range of frozen and nutritious chicken and
International standards and procedures vegetable product is available.

Dynamix diary: supplier of cheese

Capability to convert milk into cheese, ghee,
Fully automatic international standard
skimmed milk powder, humanized baby food
processing facility.
etc.
 Organizational structure
Restaurant Trainee floor
Floor manager
manager manager

First assistant Shift running

Training squad
manager floor manager

Second
Trainee
assistant crew member
manager
manager
 Conclusion
The last half of the twentieth century witnessed the
development of many fast food chains. None were as
successful as McDonald’s at maximizing profit and
minimizing cost. By keeping employee wages low and
refraining from hiring full time workers, the company was
able to save money on health care packages and employee
benefits. In addition, McDonald’s was able to gain ground
on its competitors in the 1970’s when a depression caused
most other fast food chains to halt their growth. McDonald’s
used its superior resources to continue to grow and expand.
Now, the restaurant is perhaps the greatest symbol of
contemporary American capitalism. When it comes to the
environment, McDonald’s irresponsibility toward the effects
of their business practices is highly evident.
Thank you..!!