A Report On the Courses of

Services Marketing, Sales & Distribution

Management and Consumer Behaviour

For the Company

McDonalds

Division Roll No. Name of the Student Signature

A 28 PRATHAMESH BHAGWAT

A 33 RAVI SUSTE

A 44 SHRIKANT RAUT

A 47 SHUBHAM SHELKE

A 50 SWAPNIL PATIL

SUBMITTED TO
Shree Chanakya Education
Society’s Indira Institute of
Management, Pune

In partial fulfillment of the requirements of

Term End Exam Project 2020 (Semester – II)
 INTRODUCTION

McDonald's Corporation is an American fast food company, founded in 1940 as a restaurant

operated by Richard and Maurice McDonald, in San Bernardino, California, United States.
They rechristened their business as a hamburger stand, and later turned the company into a
franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix,
Arizona. In 1955, Ray Kroc, a businessman, joined the company as a franchise agent and
proceeded to purchase the chain from the McDonald brothers. McDonald's had its original
headquarters in Oak Brook, Illinois, but moved its global headquarters to Chicago in June 2018.

McDonald's is the world's largest restaurant chain by revenue, serving over 69 million
customers daily in over 100 countries across 37,855 outlets as of 2018.Although McDonald's
is best known for its hamburgers, cheeseburgers and French fries, they feature chicken
products, breakfast items, soft drinks, milkshakes, wraps, and desserts. In response to changing
consumer tastes and a negative backlash because of the healthiness of their food, the company
has added to its menu salads, fish, smoothies, and fruit. The McDonald's Corporation revenues
come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-
operated restaurants. According to two reports published in 2018, McDonald's is the world's
second-largest private employer with 1.7 million employees (behind Walmart with 2.3 million
employees).
 HISTORY

Siblings Richard and Maurice McDonald opened the first McDonald's at 1398 North E Street
at West 14th Street in San Bernardino, California on May 15, 1940, but it was not the
McDonald's recognizable today; Ray Kroc made changes to the brothers' business to modernize
it. The brothers introduced the "Speedee Service System" in 1948, putting into expanded use
the principles of the modern fast-food restaurant that their predecessor White Castle had put
into practice more than two decades earlier.[citation needed] The original mascot of
McDonald's was a chef hat on top of a hamburger who was referred to as "Speedee". In 1962,
the Golden Arches replaced Speedee as the universal mascot. The mascot, clown Ronald
McDonald, was introduced in 1965. He appeared in advertising to target their audience of
children.

On May 4, 1961, McDonald's first filed for a U.S. trademark on the name "McDonalds" with
the description "Drive-In Restaurant Services", which continues to be renewed. By September
13, McDonald's, under the guidance of Ray Kroc, filed for a trademark on a new logo—an
overlapping, double-arched "M" symbol. But before the double arches, McDonald's used a
single arch for the architecture of their buildings. Although the "Golden Arches" logo appeared
in various forms, the present version was not used until November 18, 1968, when the company
was favoured a U.S. trademark.

The present corporation credits its founding to franchised businessman Ray Kroc on April 15,
1955. This was in fact the ninth opened McDonald's restaurant overall, although this location
was destroyed and rebuilt in 1984. Kroc purchased the McDonald brothers' equity in the
company and began the company's worldwide reach. Kroc was recorded as being an aggressive
business partner, driving the McDonald brothers out of the industry.

Kroc and the McDonald brothers fought for control of the business, as documented in Kroc's
autobiography. The San Bernardino restaurant was eventually torn down in 1971, and the site
was sold to the Juan Pollo chain in 1976. This area serves as headquarters for the Juan Pollo
chain, and a McDonald's and Route 66 museum. With the expansion of McDonald's into many
international markets, the company has become a symbol of globalization and the spread of the
American way of life. Its prominence has made it a frequent topic of public debates about
obesity, corporate ethics, and consumer responsibility.
 PART I – SERVICES MARKETING

Explain the role and description of extended 3 P’s in the service experience of McDonalds

McDonald’s is the popular and the largest restaurant in the world. This fastest growing global
food service retailer is serving food and drink to less than one percent of the world’s population.
This service organization has thirty thousand restaurants in one hundred and twenty countries.
It attracts millions of customers with-it high-quality food both of vegetarian and non-vegetarian
selections, excellent brand recognition and highly experienced management.

McDonald’s capitalizes on global opportunities with its unique global infrastructure and
advanced operational system. It has earned the high score regarding individual learning,
diversity and inclusion, people-centricity, and organizational learning.

In this section, the organization and the service blueprint is presented which shows the
operations carried out in McDonald’s and is same for all the outlets. The service blueprints act
as a platform, which is designed for effective decision-making. It is recognized as a "customer-
focused process" to identify the factors to deliver high quality service.

This is a tool that helps determine ways to perform superior service and create optimal
experiences for the clients. The figure below represents the blueprint of McDonald’s. It is used
to ensure all the factors are in place. It is used to detect the areas of service failure. It shows the
various internal actors and inter-relationships between their various actions in customer
service. The service blueprint constructed includes five aspects of the proposed service. These
are consumer actions, front stage and backstage elements, physical evidence and support
processes.
 Service Blueprint Of McDonalds

McDonald’s uses demographic segmentation strategy with age as the parameter. The main
target segments are children, youth and the young urban family. In order to attract children
McDonalds has Happy Meal with which toys ranging from hot wheels to various Walt Disney
characters are given (the latest in this range is the toys of the movie Madagascar). For this, they
have a tie-up with Walt Disney. At several outlets, it also provides special facilities like ‘Play
Place’ where children can play arcade games, air hockey, etc. This strategy is aimed at making
McDonald’s a fun place to eat. This also helps McDonald’s to attract the young urban families
wanting to spend some quality time while their children have fun at the outlet. To target the
teenagers, McDonald’s has priced several products aggressively, keeping in mind the price
sensitivity of this target customer. In addition, facilities like Wi-Fi are also provided to attract
students to the outlets like the one at Vile Parle in Mumbai. “Mc Donald’s mein hai kuch
baat” projects McDonald’s as a place for the whole family to enjoy. When McDonald’s entered
in India in 1996 it was mainly perceived as targeting the urban upper-class people. Today it
positions itself as an affordable place to eat without compromising on the quality of food,
service and hygiene. The outlet ambience and mild background music highlight the comfort
that McDonald’s promises in slogans like “You deserve a Break Today” & “Feed your inner
child”. This commitment of quality of food and service in a clean, hygienic and relaxing
atmosphere has ensured that McDonald’s maintains a positive relationship with the customers.
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 Quality, Service , Cleanliness and Value propositions offered
by the company to its customers.
▪ Product Consistency – By developing a sophisticated supplier networked operation
and distribution system, the company has been able to achieve consistent product taste
and quality across geographies.
▪ Act like a retailer and think like a brand – McDonald’s focuses not only on
delivering sales for the immediate present, but also protecting its long-term brand
reputation.

PEOPLE:

In the process of meeting customer needs an organisations staff will directly or indirectly affect
the quality of the service delivered. Often this element relates to the direct contact with the
customer in service marketing and consumption. This makes this element a powerful tool of
the marketing mix in building a sustainable competitive advantage. The ‘people’ element also
considers the possibility of consumer-consumer interaction.
In the process of meeting customer needs an organisations staff will directly or indirectly affect
the quality of the service delivered. Often this element relates to the direct contact with the
customer in service marketing and consumption. This makes this element a powerful tool of
the marketing mix in building a sustainable competitive advantage. The ‘people’ element also
considers the possibility of consumer-consumer interaction.

The employees in Mc Donald’s have a standard uniform and Mc Donald’s specially focuses
on friendly and prompt service to its customers from their employees. All new franchises are
trained in customer management and in keeping the customers happy.They are also trained for
handling negative responses from customers and what to do when there is high pressure on the
outlet. Such kind of training is especially useful when the employee has no job experience and
is working in a McDonalds outlet which is bound to get crowded on weekends or festivals.

McDonald's India is an employer of opportunity, providing quality employment and long-term

careers to the Indian people. The average McDonald's restaurant employs 60-80 people from
crew to restaurant manager. McDonald's world class-training inputs to its employees can be
seen in the present close to 4000 employees currently in India.
PROCESS:

The process element relates to how the customer accesses the product or service. ‘Process’
provides a framework for analysing the delivery of the service. Although developed with
service marketing in mind its importance has again become recognised when marketing
physical products.

The food manufacturing process at Mc Donald’s is completely transparent i.e. the whole
process is visible to the customers. In fact, the fast food joint allows its customers to view and
judge the hygienic standards at Mc Donald’s. The customers are invited to check the
ingredients used in food. Process refers to a set of activities performed in order to achieve
something. McDonald’s undertakes a number of activities to deliver its products to
customers. For example, food preparation is an important activity in the overall process. The
food preparation at McDonald’s is completely transparent i.e. the whole process is visible to
the customers. Other aspects of the process include but not limited to how customers place their
orders, how long they wait for their food, and how they are treated by the customer care
assistants.
PHYSICAL EVIDENCE:

This element relates to the physical properties of the services and the tools used to market the
service offer. With tangible products the customer can actual touch the product, a physical
object that they can interact with before a decision has been made on whether it meets their
needs and ultimately should they purchase the item or not.

McDonalds focuses on clean and hygienic interiors of is outlets and at the same time the
exteriors are attractive and the fast food joint maintains a proper decorum at its joints. The last
element of the marketing mix of McDonald’s is physical evidence which refers to the elements
of the physical environment visitors and customers experience. The physical evidence impacts
not only on the impressions of the customers of the restaurant, but also the way McDonald’s
functions. McDonald’s interiors are attractive and the restaurant maintains clean and hygienic
interiors of its outlets.
 Physical
evidence

Cleanness Speed Quality Tranparency

The McDonald’s philosophy of QSC & V is the guiding force behind its service to the
customers.
McDonald’s India serves only the highest quality products. All McDonald’s suppliers adhere
to Indian government regulations on food, health and hygiene while continuously maintaining
McDonald’s own recognized standards. All McDonald’s products are prepared using the most
current, state-of-the-art cooking equipment to ensure quality and safety.

At McDonald’s the customer always comes first. McDonald’s India provides fast, friendly
service - the hallmark of McDonald’s which sets its restaurants apart from others. McDonald’s
restaurants provide a clean, comfortable environment especially suited for families. this is
achieved through McDonald’s stringent cleaning standards, carefully adhered to. McDonald’s
menu is priced at a value that the largest segment of Indian consumers can afford. McDonald’s
does not sacrifice quality for price - rather McDonald’s 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 crores in its Indian operations,
and each of the two joint venture partners.
 CONCLUSION

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 operative philosophy of the McDonald's system is based on the Quality, Service, Cleaning
and Value for 44 years. The company offers a standard menu, although it develops in each
culture special products that are adjusted to the pleasure of the community. McDonald's is
successful because it has a system of corporate norms and individual opportunities, to all the
Franchises they are integrated in the same philosophy of values and clear expectations.
McDonald's guides all the actions according:

• to organizational values as working in team,

• to feel passion for the work always offering the best of themselves,

• to be committed with the partners and with the mission of the company,

• to be entire in each one of the actions, to be leaders