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 III-CONSUMER BEHAVIOUR

CONSUMER DECISION MAKING PROCESS

WHAT IS CONSUMER DECISION MAKING PROCESS?

Consumer decision making process involves the consumers to identify their needs, gather
information, evaluate alternatives and then make their buying decision. The consumer
behaviour may be determined by economic and psychological factors and are influenced by
environmental factors like social and cultural values.

The consumer decision making behaviour is a complex procedure and involves everything
starting from problem recognition to post-purchase activities. Every consumer has different
needs in their daily lives and these are those needs which make than to make different decisions.
Decisions can be complex, comparing, evaluating, selecting as well as purchasing from a
variety of products depending upon the opinion of a consumer over a particular product. This
renders understanding and realizing the basic problem of the consumer decision making
process for marketers to make their products and services different from others in the
marketplace.

5 STAGES OF CONSUMER BUYING DECISION PROCESS

The marketer is responsible for selling the goods in the market so he must have the knowledge
how the consumers actually make their buying decisions. For this he must study the consumer
buying decision process or model. It involves five stages.
1.) Need recognition - Consumer buying decision process starts with need recognition. The
marketer must recognize the needs of the consumer as well as how these needs can be satisfied.
For example, if a person is hungry then food is desired or if it is a matter of thirst than water is
desirable.

2.) Information search –In consumer buying decision process information search comes at
second number. In this stage consumer searches the information about the product either from
family, friends, neighbourhood, advertisements, whole seller, retailers, dealers, or by
examining or using the product.

3.) Evaluation of alternatives – After getting the required knowledge about the product the
consumer evaluates the various alternatives on the basis of its want satisfying power, quality
and its features.

4.) Purchase decision – After evaluating the alternatives the buyer buys the suitable product.
But there are also the chances to postpone the purchase decision due to some reasons. In that
case the marketer must try to find out the reasons and try to remove them either by providing
sufficient information to the consumers or by giving them guarantee regarding the product to
the consumer.

5.) Post purchase behaviour – After buying the product consumer will either be satisfied or
dissatisfied. If the consumer is not satisfied in that case, he will be disappointed otherwise If
he is satisfied than he will be delighted. It is usually said that a satisfy consumer tell about the
product to 3 people and a dissatisfy consumer tell about the product to 11 people. Therefore, it
is the duty of the marketer to satisfy the consumer.
CONSUMER DECISION MAKING PROCESS AT MCDONALDS:

1.) Need recognition –This stage can also be referred as awareness of needs; this is the
difference between the desired state & the actual state, deficit in assortment of products. In case
of fast food restaurant (Hunger-Food), hunger stimulates a consumer that they need to eat. In
this stage the need is recognized, i.e. the consumer is hungry and he/she needs to eat in order
to survive.

2.) Information search -This could be completed in the 2 ways i.e. internal search (memory)
or eternal search (in case more information is required, relatives & friends are referred). In our
scenario, when a person feels hungry, he does an information search which leaves him with
possible alternatives like Chinese food, Indian food, McDonalds, Burger King.

3.) Evaluation of alternatives -At this stage criteria for evaluations are established, what
features a customer wants or does not wants, consumer weights/ranks the alternatives or resume
the search. In our case, the consumer may decide to each something spicy and should be non-
veg, the list of alternatives (such as Burger King, Pizza Hut, McDonalds, etc) is ranked
according to the need (i.e. spicy & non-veg). If the consumer is not satisfied with the choice,
they return to the search phase and think of another restaurant.

4.) Purchase decision –At this stage, consumer from the list of alternatives opts for the best
option and purchases the product. In our scenario, after searching for various options,
McDonalds was chosen finally to eat food from the vast list of fast food restaurants, McDonalds
was chosen because it was fulfilling all the needs of the consumer, i.e. under their menu they
were offering spicy chicken burger at pocket friendly prices.

5.) Post purchase behaviour –At this stage the consumer evaluates weather he/she is
satisfied or dissatisfied or weather the decision taken by him was right. After eating a fast food
meal i.e. chicken burger, buyer might think he would have opted for a Chinese meal instead.
However, in our case, eating a meal at McDonalds completely satisfies and the buyer decides
to visit again because of the quality of the meal at reasonable prices and also the ambiance
provided by the restaurant was clean and welcoming.
FACTORS AFFECTING THE DECISION MAKING PROCESS

1) Cultural

Culture is one of the main causes of consumer’s wants and behaviour. McDonald’s carefully
standardized food items according to local tradition and culture. New menu for Vegetarian in
India as some people doesn’t consume meat, in addition to this they avoided beef as cow is
sacred in Hinduism i.e. majority religion in India,

Each culture has subcultures such as nationalities, religion, racial group, geographic religions
and so on. McDonald’s tried to localize their food menu by designing new product according
to different cultures and understood consumer buying behaviour. Furthermore, McDonald’s
marketing and advertising strategy were different for different regions. Their advertisement
reflected different culture, subculture, racial group and social class. Also, regular and repeated
exposure of an advertisement brings about a familiarity and positive feeling about the brand.

2) Social Factor

Social factors also affect the buying behaviour of consumers. It also strongly affects consumer
responses, so it must be taken into account by company when designing marketing strategies.
The important factors here are family, reference group and status. Consumer is highly
influenced by the member of the family. If buying decision of some product is influenced by
children then McDonalds will target kids in their advertisement. Reference group have the
potential in forming an impression or persons attitude towards the product. The effect of
Reference groups varies across product. It tends to be strongest when the product is visible to
other consumers. For instance, if the product such as burger, French fries, soft drink and so on
then influence by reference group will be high.

3) Personal

These factors can also impact the consumer buying behaviour. Some of the important factors
that influence the buying behaviour are: economic situation, occupation, age, lifestyle and self-
concept. Different age group of consumers have different buying behaviour of product.
McDonalds target almost everyone from kids, student, adults and business people. For children
they offer happy meals with Disney toys or other things to attract them. For teenagers and
student, some of the meals are really affordable and cheap for them. In addition to this there
are free WIFI for them to access free internet. For adults and business people, they tend to
prefer things that is done fast and less time consuming and this is exactly what McDonalds did,
they serve fast food and also there are Drive through for many Business type consumer who
are on the go.

4) Psychological Factor

There are main four factors under affecting the consumer behaviour. These are motivation,
perception, learning and beliefs and attitudes. First is motivation. The level of motivation can
affect the buying behaviour of customers. Every person has different needs such as
physiological needs, social needs, esteem needs, safety needs and so on. The nature of the needs
is that, some of the needs are more important than the others. Therefore, needs becomes a
motivation when it is more pressing than the other and direct the consumer to seek satisfaction.
For instance, McDonalds will create more and different type of food items which is delicious
such as Burgers, fries, wraps, etc.
 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