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Blackbook Project On Mcdonalds Marketing
Blackbook Project On Mcdonalds Marketing
Blackbook Project On Mcdonalds Marketing
SUBMITTED BY
ZAID QURESHI.
TYBMS
(ROLLNO. 19)
PROJECT GUIDE
SEMESTER V
AND ECONOMICS
SUBMITTED BY
ZAID QURESHI.
TYBMS
(SEATNO. 19)
PROJECT GUIDE
SEMESTER V
AND ECONOMICS
PLACE:
DATE:
______________
Student’s Signature
ZAID QURESHI
Name of Student
CERTIFICATE
Course Co-ordinator
DR Deepak salve
External Examiner
McDonald’s
ACKNOWLEDGEMENT
It gives me great pleasure to submit this project to the University of Mumbai as a part of
curriculum of my BMS course. I take this opportunity with great pleasure to present before you
this project on “McDonald’s” which is a result of co-operation, hard work and good wishes of
many people.
No words can adequately express my sincere thanks to all those who have help me in making
this project a success.
I am grateful to Mr. K.Y. shinde Principal of sant gadge Maharaj College of Commerce
& and Prof Mr. Dipak boricha BMS Co-ordinator (Bachelor of Management Studies)
My debt to those who have helped me in one way or the other is heavy indeed. I would like to
appreciate contribution of my family and friends who have extended their complete support in
completion of this project.
Last but not the least; I am thankful to the Almighty for giving me strength, courage and patience
to complete this project.
(ZAID QURESHI
EXECUTIVE SUMMARY
McDonald’s is a globally successful fast-food restaurant. From the time of its birth it has
gain enormous success and is growing at the international level. The powerful entry through
franchisee system the standardization and adaptation strategy play an important role in gaining
the huge success of McDonald’s and brand image of McDonald’s.
Marketing being my subject interest knowing the strategy of one of the most successful
company will really help me out. Thus, I have chosen McDonald’s as my study of subject for my
100 marks project in TYBMS. This has really helped me out to know lots of marketing
techniques and practically understand the McDonald’s strategy of standardization and
adaptation.
[
STUDY:
In the project focus has been made on McDonald’s franchise in India. The challenges
faced, their target market, segmentation strategies. The supply chain of the company and its
ability to provide best quality food at the best cost. The 5 P’s of McDonald’s and the various
schemes provided by the company to its employees while working in McDonald’s and even after
their retirement from the company. McDonald’s as a service industry its life cycle is also studies.
The present strength and weakness of the company and the future opportunities and its future
threats are also study for better analysis of McDonald’s marketing in India.
CONCLUSION:
Studying McDonald’s and its marketing system has helped me a lot in understanding the
marketing subject in a better manner. And it will be helpful for me in near future.
McDonald’s
INDEX
TITLE PAGE NO.
I. DECLARATION
II. CERTIFICATE
III. ACKNOWLEDGEMENT
1IV. EXECUTIVE SUMMARY
1. INTRODUCTION 01-02
2. HISTORY 03-04
3. FRANCHISEES 05
CHAPTER V: - MC EMPLOYEE
1. EMPLOYEE BENEFITS 27-30
2. FACILITIES
30-31
3. EMPLOYEE RECOGNITION
32
4. RETIREMENT BENEFITS 33
34-35
McDonald’s
CONCLUSION 57
BIBLOGRAPHY 58
CHAPTER
01
INTRODUCTION
McDonald’s
INTRODUCTION
The McDonald’s Corporation is one of the most successful global restaurant chains
around the world. They have used effective management and global expansion strategies to enter
new markets and gain a share of the foreign fast food market. McDonald’s has achieved this
enormous success, its best practices in the global food industry, international growth trends and
challenges, and various lessons that have been learned from their expansion in foreign countries.
This shows how McDonald’s creates both customer and brand loyalty for their products and
services.
In 1937 Brothers Dick and Mac McDonald open a hot dog stand called the Airdrome at
the airport in Monrovia, California & in 1940 the brothers move the Airdrome building to San
Bernardino, California, where they open the first McDonald's restaurant. Although McDonald's
did not invent the hamburger or fast food, its name has become nearly synonymous with both.
The McDonald's Golden Arches logo was introduced in 1962. It was created by Jim
Schindler to resemble new arch shaped signs on the sides of the restaurants. He merged the two
golden arches together to form the famous 'M' now recognized throughout the world. Schindler's
work was a development of the stylized 'v' logo sketched by Fred Turner, which was conceived
as a more stylish corporate symbol than the Speedee chef character that had previously been
used. The McDonald's name was added to the logo in 1968.
McDonald's has its familiar golden arches logo; McDonald's has 31,886 restaurants
worldwide serving Big Macs, Chicken McNuggets, salads and French fries. Most restaurants
offer drive-thru service and some suburban locations offer outdoor playgrounds for children.
Approximately 70% of McDonald's restaurants are operated by independent franchisors. The
number of restaurants in the U.S. has reached saturation and most new McDonald's are now
being opened in Europe, Middle East and Asia.
1
McDonald’s
HISTORY
The first McDonald's restaurant was located in San Bernardino, CA in 1954 and operated
by two brothers Dick and Mac McDonald. Ray Kroc, a milk shake machine salesman, thought
the restaurant was great and purchased the rights from the brothers. Kroc opened his first
McDonald's restaurant in Des Plaines, IL in 1955 and preached cleanliness in restaurants.
McDonald's would grow quickly as it signed on franchisees to open restaurants around the
country. McDonald's would go public in 1965.
The Big Mac was introduced system wide in 1968 and was the brainchild of Jim
Delligatti, one of Ray Kroc's earliest franchisees, who by the late 1960s operated a dozen stores
in Pittsburgh. The Egg McMuffin was developed by owner operator Herb Peterson in 1973.
The site of the McDonald brothers' original restaurant is now a monument. 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 also made it a
Frequent topic of public debates about obesity, corporate ethics and consumer responsibility.
In 2007, the company had record revenues of $22.8 billion, a 9% increase from the
previous year. Net income was $2.39 billion. McDonald's sold the Boston Market restaurant
chain in 2007 and owns a stake in Chipotle Mexican Grill. In 2007, the Company completed the
sale of its businesses in Brazil, Argentina, Mexico, Puerto Rico, Venezuela and 13 other
Countries in Latin America and the Caribbean to a developmental licensee organization. An
estimated 10% of all workers have once worked at McDonald's in their lifetime.
3
McDonald’s
FRANCHISEES
4
McDonald’s
FRANCHISEES
Franchising refers to the methods of practicing and using another person's philosophy
Of business. The franchisor grants the independent operator the right to distribute its products,
techniques, and trademarks for a percentage of gross monthly sales and a royalty fee. Various
tangibles and intangibles such as national or international advertising, training and other support
services are commonly made available by the franchisor. Agreements typically last five to
twenty years, with premature cancellations or terminations of most contracts bearing serious
consequences for franchisees.
McDonald’s does business in more than 30,000 restaurants in 119 countries around the
world serving 47 million customers each day. In many countries around the world it does not
have a presence and its current strategy is to focus on the markets where it does not do business.
No firm date has been established for the opening of new markets. In certain markets
McDonald’s have a presence but it is not seeking franchisees and it has included instructions
regarding those markets. McDonald’s sincerely appreciate the customers expressed interest in
McDonald’s and their continued patronage of our restaurants.
MCDONALD’S INDIA
The Indian beginning
5
CHAPTER 02
MCDONALDS IN INDIA
McDonald’s
A 50-50 joint venture partnership between McDonald’s Corporation [USA] and two
Indian businesses, McDonald’s began its journey in India in October 1996. Connaught Plaza
Restaurants Pvt. Ltd headed by Vikram Bakshi owns and operates the northern and eastern
operation which includes restaurants in New Delhi, Uttar Pradesh, Rajasthan, Punjab, Haryana,
West Bengal etc.
Amit Jatia’s company Hardcastle Pvt. Ltd. Owns and operates McDonald’s restaurants
in West and South India. HRPL has restaurants in Maharashtra, Madhya Pradesh, Karnataka and
Andhra Pradesh, Chennai and its growing rapidly.
It is involves in all construction and design related work for the stores as per
McDonald’s standards. It prepares project plans for new stores to be put to the management and
implements the same after approval.
Country Purchase
All the purchases of raw material for restaurants products are done by the country
purchase department team for both the Delhi and Mumbai markets. It works as a national supply
chain. The main aim is to purchase the best quality material from the authorized supplier and at
lowest possible cost. Once the material is ordered by a country
Purchase it first goes to the distribution centre and then to the restaurants according to their
requirement.
6
McDonald’s
This department works closely with the country purchase department. It looks after the
quality of both raw material and of finished product. It develops new product for the menu based
on customer preference.
It looks after all the day to day financing accounting transaction and taxation related
activities of the application of Information Technology to the company processes.
Corporate Affairs
It associates with brand building and protection of the brands. It works closely with
real estate in doing feasibility studies for sites from a legal angle. It looks after license and
liaison activities of the company with outside agencies, i.e. regarding media
It helps the company sign legal deals for the new restaurants sites. It safeguards the
interest of the company and act as guardians of the company as regards to its legal functions. It
provides advisory support to the other departments as regards legal issues and ensures
compliance with applicable laws.
People Resources / Human Resources.
7
Training, Learning & Development.
This department is responsible for the day to day functioning of the restaurants in a
profitable manner.
It is responsible for brand positioning increasing brand awareness and thus resulting in
increased sales. It is also responsible for advertising, media relation and implementing various
product promotion schemes like Happy Meals, Value Meals, etc.
8
McDonald’s
Vision
Our vision is to be the world’s best quick service restaurant experience. That means that
our restaurant will be the best place for our customers to enjoy fast, friendly services …… fresh
food favorites…… a clean welcoming environment…… and a fun experience at a fair price.
OUR VALUES
· We are committed to our people because we know that a diverse team of well-trained
individuals working together is the key to our continued success.
We celebrate our achievements, yet we are never satisfied with our results.
9
McDonald’s
McDonald’s was known for its hamburgers, beef and pork burgers. Most Indians are
barred by religion not to consume beef or pork.
➢ The vegetarian customer – India has a huge population of vegetarians. To cater to this
customer segment, the company came up with a completely new line of vegetarian items
like McVeggie burger and McAlooTikki. The separation of vegetarian and non-
vegetarian sections is maintained throughout the various stages.
10
McDonald’s
McDonald’s uses demographic segmentation strategy with age as the parameter. The main target
80% 71%
70% 59%
60% 52%
50%
40%
30%
20%
10%
0%
Biscuits Burgers & Pizzas Fruit Juices
As shown above, kids reign supreme in FMCG purchase related to food products. So 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.
11
McDonald’s
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 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.
12
McDonald’s
Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their
values. The customer’s expect the brand to enhance their self-image. Customer responses
obtained at the Vile Parle, Mumbai outlet confirmed the fact that they connect strongly with the
brand. However, fulfilling some of the customer expectations like a broader product variety
provide McDonald’s a great scope for improvement.
13
McDonald’s
SUPPLY CHAIN
Supply Chain is one of the critical factors for the smooth functioning of any business.
And when we are talking about fast food business with McDonald’s as the subject of the study it
can expected a Supply Chain model of one of the highest precisions. It is this unmatched Supply
Chain Structure, which not just ensures on time delivery of raw materials and supplies to
McDonalds but also enables it to cut down on its cost and maximize profitability along with
maintaining highest quality standards of its products. The level of commitment of McDonalds
can be gauged from the fact that even before it set up its first restaurant in the country it infused
Rs 400 Crore to set up its delivery mechanism. McDonald’s initiative to set up an efficient
Supply chain and deploy state-of-art technology changed the entire Indian fast food industry
and raised the standards of performance to international levels.
As already mentioned, McDonalds had been working on its supply chain even before
it opened its first joint in the country. McDonalds, an international brand which was trying
to make inroads into the country, developed its Indian partners in such a manner that they
stayed with the company from the beginning. The success of McDonalds India was achieved
by sourcing all its required products from within the country. To ensure this, McDonalds
developed local businesses, which can supply it highest quality products. Today, McDonalds
India works with 38 different suppliers on a long term basis and several other stand alone
restaurants for its various other requirements. McDonald’s distribution centers in India came
in the following order: Noida and Kalamboli (Mumbai) in 1996, Bangalore in 2004, and the
latest one in Kolkata (2007). McDonald’s entered its first distribution partnership agreement
with Radha Krishna Foodland, a part of the Radha Krishna Group engaged in food-related
service businesses.
14
McDonald’s
The association goes back to July 1993, when it studied the nuances of McDonald’s
operations and requirements for the Indian market. As distribution centers, the company was
responsible for procurement, the quality inspection programme, storage, inventory
management, deliveries to the restaurants and data collection, recording and reporting.
Cold Chain was one of the unique concepts of McDonalds supply chain in India, on
which it had spent more than six years to get the system into place. This system brought
about a veritable revolution, immensely benefiting the farmers at one end and enabling
customers at retail counters get the highest quality food products, absolutely fresh and at
great value. Through its unique cold chain, McDonalds has been able to both cut down on its
operational wastage, as well as maintain the freshness and nutritional value of raw and
processed food products. This has involved procurement, warehousing, transportation and
retailing of perishable food products, all under controlled temperatures. The following list of
suppliers, who build up the major supply chain of McDonalds, reveal how this ‘Cold Chain’
works and contributes towards the efficiency of McDonalds.
15
McDonald’s
Dynamix Dairy Industries (Supplier of Cheese
· Capability to convert milk into cheese, butter/ghee, skimmed milk powder, lactose,
casein & whey protein and humanized baby food.
From farm two degrees Celsius in 90 minutes is the first step to quality. For example, the Rs
262-crore Dynamix Dairy Industries, located in Baramati in Pune district of Maharashtra,
manufactures cheese slices for McDonald’s at 10 metric tone per month
. Dynamix has helped set up 15 bulk cooling centers throughout the district from which it
purchases milk. Each cooling centre, which is equipped with modern measuring and Testing
equipment and a large cooling tank, is not more than a few kilometers away from local dairy
farms. A farmer can deliver milk even twice a day on his bicycle and get a printed receipt on the
spot, which also lists the quality of the milk supplied by him as per fat content, colour and solids
content.
If the milk is sub-standard or adulterated, it is rejected on the spot. A batch of milk can
vary from one litre to 10 liters, or more. Each batch is mixed in one large stainless steel cooler
and chilled immediately to two degrees Celsius to stop bacterial growth and preserve freshness.
16
McDonald’s
From this point onwards, until just before the burger is actually served in a McDonald’s
restaurant hundreds of kilometers away, the temperature is never allowed to increase.
When the refrigerated milk arrives at the Dynamix plant at Baramati, the milk in every
single tanker is thoroughly tested and rejected if found sub-standard, adulterated or
contaminated. The sophisticated testing lab can check fat content with an accuracy of 0.1 per
cent. It can even detect minute traces of pesticides or antibiotics administered to cows.
This instant feedback and the rejection of the entire tanker-load forces farmers to follow
the best practices in terms of animal husbandry, use proper feeds, cut down on the indiscriminate
use of pesticides and animal medicines and completely stop even the slightest attempts at
adulteration.
17
Trikaya Agriculture (Supplier of Iceberg Lettuce)
· Drip and sprinkler irrigation in raised farm beds with fertilizer mixing plant.
Trikaya Agriculture, a major supplier of iceberg lettuce to McDonald's India, is one such
enterprise that is an intrinsic part of the cold chain. Exposure to better agricultural management
practices and sharing of advanced agricultural technology by McDonald's has made Trikaya
Agriculture extremely conscious of delivering its products with utmost care and quality.
Initially lettuce could only be grown during the winter months but with McDonald's expertise
in the area of agriculture, Trikaya Farms in Talegaon, Maharashtra, is now able to grow this crop
all the year round. McDonald's has provided assistance in the selection of high quality seeds,
exposed the farms to advanced drip-irrigation technology, and helped develop a refrigerated
transportation system allowing a small agri-business in Maharashtra to provide fresh, high-
quality lettuce to McDonald's urban restaurant locations thousands of kilometers away. Post-
harvest facilities at Trikaya include a cold chain consisting of a pre-cooling room to remove field
heat, a large cold room and a refrigerated van for transportation where the temperature and the
relative humidity of the crop is maintained between 1º C and 4º C and 95% respectively.
18
McDonald’s
Vegetables are moved into the pre-cooling room within half an hour of harvesting. The pre-
cooling room ensures rapid vacuum cooling to 2º C within 90 minutes.
The pack house, pre-cooling and cold room are located at the farms itself, ensuring no delay
between harvesting, pre-cooling, packaging and cold storage. With this cold chain infrastructure
in place, Trikaya Agriculture has also a plan to export this high value product to other
international markets, especially to McDonald's Middle East and Asia Pacific operations.
In addition to export, McDonald's assistance has enabled Trikaya Agriculture to supply this
crop to a number of star-rated hotels, clubs, flight kitchens and offshore catering companies all
over India.
19
McDonald’s
Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and Vegetable range of
products including Fruit Pies)
A joint venture with OSI Industries Inc., USA, McDonald's India Pvt. Ltd. and Vista
Processed Foods Pvt. Ltd., produces a range of frozen chicken and vegetable foods. A world
class infrastructure at their plant at Taloja, Maharashtra, has:
· Separate processing lines for chicken and vegetable foods.
· Capability to produce frozen foods at temperature as low as -35 Degree Celsius. To retain
total freshness.
Vista Processed Foods Pvt. Ltd., McDonald's suppliers for the chicken and vegetable
range of products, is another important player in this cold chain. Technical and financial support
extended by OSI Industries Inc., USA and McDonald’s India Private Limited have enabled Vista
to set up world-class infrastructure and support services. This includes hi-tech refrigeration
plants for manufacture of frozen food at temperatures as low as - 35° C. This is vital to ensure
that the frozen food retains it freshness for a long time and the 'cold chain' is maintained. The
frozen product is immediately moved to cold storage rooms. With continued assistance from its
international partners, Vista has installed hi-tech equipment for both the chicken and vegetable
processing lines, which reflect the latest food processing technology (de-boning, blending,
forming, coating, frying and freezing). For the vegetable range, the latest vegetable mixers and
blenders are in operation. Also, keeping cultural sensitivities in mind, both processing lines are
absolutely segregated and utmost care is taken to ensure that the vegetable products do not mix
with the non-vegetarian products. Now, at Vista, a very wide range of frozen and nutritious
chicken and vegetable products is available. Ongoing R&D, both locally and in the parent
companies, work towards innovation in taste, nutritional value and convenience. These products,
besides being supplied to McDonald's, are also offered to institutions like star-rated hotels,
hospitals, project sites, caterers, corp, corporate canteens, schools and colleges, restaurants, food
service establishments and coffee shops. Today, production of better quality frozen foods that are
both nutritious and fresh has made Vista Processed Foods Pvt. Ltd. a name to reckon within the
industry.
20
McDonald’s
An integral part of the Radhakrishna Group, Foodland specializes in handling large volumes,
providing the entire range of services including procurement, quality inspection, storage,
inventory management, deliveries, data collection, recording and reporting. Salient strengths are:
Amrit Food (Supplier of long life UHT Milk and Milk Products for Frozen
Desserts)
Amrit Food, an ISO 9000 company, manufactures widely popular brands –
Gagan Milk and Nandan Ghee at its factory at Ghaziabad, Uttar Pradesh.
The factory has:
· State-of-the-art fully automatic machinery requiring no human contact with product, for
total hygiene.
· Installed capacity of 6000 ltrs/hr for producing homogenized UHT (Ultra High
Temperature) processed milk and milk products.
· Strict quality control supported by a fully equipped quality control laboratory.
21
McDonald’s
All suppliers adhere to Indian government regulations on food, health and hygiene while
continuously maintaining McDonald's recognized standards. As the ingredients move from farms
to processing plants to the restaurant, McDonald's Quality Inspection Programme (QIP) carries
out quality checks at over 20 different points in the Cold Chain system. Setting up of the Cold
Chain has also enabled it to cut down on operational wastage
Hazard Analysis Critical Control Point (HACCP) is a systematic approach to food safety
that emphasizes prevention within its suppliers' facility and restaurants rather than detection
through inspection of illness or presence of microbiological data. Based on HACCP guidelines,
control points and critical control points for all McDonald's major food processing plants and
restaurants in India have been identified. The limits have been established for those followed by
monitoring, recording and correcting any deviations. The HACCP verification is done at least
twice in a year and certified.
The relationship between McDonald's and its Indian suppliers is mutually beneficial. As
McDonald's expands in India, the supplier gets the opportunity to expand his business, have
access to the latest in food technology, exposure to advanced agricultural practices and the
ability to grow or to export. There are many cases of local suppliers operating out of small towns
who have benefited from their association with McDonald's India
22
McDonald’s
CHAPTER
04
MARETING MIX
McDonald’s
MCDONALDS MARKETING MIX (5 P’S)
After segmenting the market, finding the target segment and positioning itself, each
company needs to come up with an offer. The 5 P’s used by McDonalds are:
1. Product
2. Place
3. Price
4. Promotion
5. People
Product: How should the company design, manufacture the product so that it enhances the
customer experience?
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
23
McDonald’s
McDonalds has intentionally kept its product depth and product width limited.
McDonalds studied the behavior 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.
McDonald's success worldwide has been attributed to the ‘“Think Global, Act Local and Sell
like a Retailer” philosophy. McDonald’s followed this international mantra while opening doors
to the Indian subcontinent. With respect to the cultural and traditional sentiments, not only did
McDonalds not serve it’s most popular product The BIGMAC (a beef burger) but also developed
an egg-less mayonnaise for the first time in the worldwide system.
To suit the Indian palette, the McAloo Tikki™ burger, Veg. Pizza McPuff™ and Chicken
McGrill™ burger were among other offerings that were formulated and introduced using spices
favored by Indians. Furthermore, each restaurant kitchen was designed to maintain separate
Vegetarian and Non-Vegetarian food counters.
· Beef which was a taboo in the Indian market was planned to replace by filling of Aloo
Tikki to match up with the Indian culture.
· Salad sandwich was introduced targeting the people who are more conscious about
health.
· The introduction of jain salad in the outlet keeping the Jain people rituals of not eating
ginger, onion, potatoes etc.
· Seeing to the Indian mentality of having wheat chapattis led to the idea to introduce
paneer salsa wrap and chicken Mexican wrap.
· Filet-o-fish was introduced keeping in mind the demand of the sea food lovers having no
competitors in the segment before.
24
McDonald’s
Place: where should be the product 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. Nearly 50%
of U.S.A is within a 3 minute drive from a McDonald’s outlet.
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 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?
Pricing includes the list price, the discount functions available, the financing options available
etc. It 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.
McDonalds has certain value pricing and bundling strategies such as happy meal, combo meal,
family meal etc. to increase overall sales volumes.
25
McDonald’s
Time to add new people to the fold. The Indian consumers continued to perceive McDonald’s as
an expensive eating out option. The challenge was to overcome this perception and be accepted
as an affordable brand. While the patented products like McVeggie™ and McChicken™
continued to cater to the patrons, the company needed to broaden the audience base to further
entrench into the market.
Promotion: What is the suitable strategy and channels for promotion of the product?
26
McDonald’s
There are three main objectives of advertising for McDonald’s 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. McDonald’s does its promotion
through television, hoardings and bus shelters. They use print ads and the television programs are
also an important marketing medium for promotion.
The first step for the brand was to establish itself as a familiar,
comfortable place. Taking a cue from the Indian family values, the
year 2000 saw the first ever McDonald’s ad aired in the country. A
child, who is unable to recite a poem and suffers stage fright, but
when he enters McDonald’s, he easily recites it when in the
comfortable familiar environment of McDonalds.
Working on the insight – similarly when his family moves into a new place, the child
misses all that has always been so familiar and dear. He then has the comfort of something that is
dear and familiar to bring a smile to his face. McDonald’s was successful in creating an image of
a warm and comfortable ambience through its
Ads. ‘McDonald’s Mein Hai Kuch Baat’: Making McDonalds the consumers’ favorite place and
way to eat. While kids and families were key, it was also important to talk to the generation that
had not grown up on McDonald’s burgers and fries. An adult who works with logic and
27
McDonald’s
Reasoning would need a reason tempting enough. And what better way to talk to them than talk
about McDonald’s core competence – food!
Even in Dreams:
McDonald’s realized that the way to draw more consumers would be to increase the
visibility of the brand and its products. The more a person saw food, the greater his urge would
be to try it out. The company came up with its next round of campaign to address and reflect this.
The campaign showed different people dreaming about McDonald’s. It depicted how the
consumers were totally involved with McDonald’s and the food. New product stories delivered
in a memorable and engaging approach. It was imperative for the success of the brand to be
‘Indianized’ – to continuously speak to consumers in their ‘language’ without taking away from
its core American parentage. ‘From tears to smiles’ - campaigns were produced to introduce
new, scrumptious products.
The general brand perception of McDonald’s in India was that of a place for kids. While
the campaigns had worked in the past, targeting kids, McDonald’s recognized the fact that it
could not always depend on the kids’ niche. When kids move up the consumption chain, there is
a possibility of losing out on consumers. Moreover, the family outings with children only happen
over the weekends and holidays. It was imperative to rope in adults who would patronize the
brand over the weekends. Consequently, the next series of campaigns were targeted to drive in
adult traffic to break away from the perception. The ad depicted a father being invited to a
birthday party at McDonald’s. He is not at ease with the idea of visiting McDonald’s since he
perceives it as a kids place. His child reminds him of the McCurry Pan™, Filet-o-Fish™ that he
would be able to relish at the birthday party. The food boosts the father to go to the party, where
to his astonishment is his boss’ party. The ad asserted that people celebrate birthdays and
occasions at places they are comfortable in!
McDonald’s 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.
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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
The punch line “I’m 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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CHAPTER
O5
MC EMPLOYEES
McDonald’s
MC EMPLOYEES
Employee benefits
RAP SESSION:-
Rap session are small informal discuss between crew and management for the purpose of
discussing ideas, suggestions and problems. These sessions will be held about once every three
months or whenever needed by the store manager or a member of the management team. Rap
sessions are an opportunity for the crew to make their views known to the company. You will be
paid for attending a rap session.
Opinion survey:-
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Facilities
Crew room
This room is provided for the employee for recreation and rest during the break time. The
employee can study, listen to music, and get trained in this room.
Breaks
It is not easy to maintain quality, service, and cleanliness. It take hard work and hustle. To keep
energy level high, all the crew member working above five consecutive hour are eligible for an
unpaid break of an hour.
Employee Meal
One of the best things about working for McDonald’s is for food. Employees can enjoy quality
nutritious food at world standard hygiene levels. It is free to managers and crew. All the meals
consumed must be recorded and consumed in the restaurants itself.
Locker Facility
Lockers are available for the employees use at the restaurants for keeping the personal
belongings in a safe and secure place during the shift.
Other Facilities
In addition to the above facilities the employee also enjoys with the team member during the
yearly store outing and various inter-store activities arranged system-wise and patch wise. These
activities are fun and provide opportunity to have a good time and know fellow employees better
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Employee recognition
Incentives
All the crew at McDonald’s have the opportunity to get McDonald’s branded
merchandise. Each restaurant is allotted “Mahabucks” every month based on monthly store
allocation and various inter-store competitions. Mahabucks is a crew incentive programme where
the Mahabucks coupons can be redeemed for the set of utility items available for that year.
The employee have the opportunity to earn the Mahabucks by becoming face of the
month, face of the quarter, various rewards organized by the stores and through various inter
store competitions.
The employee can refer any friend who is interested in working at McDonald’s for a crew
member’s job at any of the McDonald’s store. The employee receives an incentive after the
referred crew member completes 3 months in the organization.
McDonald’s believe that investing in the people is one of the best ways to build the brand
and assure customer loyalty. Crew Member who completes their graduation are recognized for
their academic growth by putting them on training programme which help them to become
manager faster.
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Retirement Benefits
All the employee are eligible for the provident fund scheme as per the company’s rule.
Provident fund is a retire benefit provided to every employee of McDonald’s. Every employee
contribute 12% of his basic salary to his/her PF account. There is an equal contribution by the
Employer.
However 8.33% of the employer’s contribution is deposited to the Employee’s Pension
Fund and the rest goes to the Provident Fund.
All the crew member are eligible for the Employee State Insurance as per the ESI rule.
This benefit is provided to the employee for free medical treatment in case of sickness,
maternity, and employment injury. The employee contribute 1.75% of his gross salary whereas
the employer contributes 4.75%
Bonus
Depending upon the law applicable at the relevant time the employee will receive an
amount of 8.33%of the basic salary earned during the financial year.
Gratuity
All the full time employee who have completed 5 years of continuous employment with
the company are eligible for gratuity. The employee will receive an amount of 15 days basic
salary for every week worked. The amount is given at the time of separation or retirement from
the company.
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All the crew member are eligible for the Employee State Insurance as per the ESI rule.
This benefit is provided to the employee for free medical treatment in case of sickness,
maternity, and employment injury. The employee contribute 1.75% of his gross salary whereas
the employer contributes 4.75%
Bonus
Depending upon the law applicable at the relevant time the employee will receive an
amount of 8.33%of the basic salary earned during the financial year.
Gratuity
All the full time employee who have completed 5 years of continuous employment with
the company are eligible for gratuity. The employee will receive an amount of 15 days basic
salary for every week worked. The amount is given at the time of separation or retirement from
the company.
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CHAPTER
06
MCDONALD’ S IN
SERVICE INDUSTRY
MCDONALD’ S IN SERVICE INDUSTRY
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
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McDonald’s
During the Service Delivery Process, each moment of interaction between the firm and
the customer, called “Moments of Truth”, helps understand the opportunities that a firm has to
win or lose the customer. For example, these “moments of truth” are created for McDonald’s
every time the guard at the McDonald’s 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 tables etc.
Process and the various stages in the process that are exposed to the customers.
Transparency in the processes at its outlet has helped McDonald’s bring the back office in its
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Outlet at the front so that the customer is able to know the operations and provide feedback on
service design improvements.
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McDonald’s
The requirements of customers change over time and thus the product offering has to be
changed accordingly. What is the fashion today may be out of market within few weeks. Thus
continuous innovation is required.
To counter these changes McDonalds has continuously introduced new products and has phased
out the old ones which were at the decline stage of their PLC. The introduction is timed such that
the new product does not cannibalize the product already in the maturity or growth stage. Thus
the secret lies in getting profits with different products in the different stages of the PLC.
The French Fries have been an important part of the McDonalds menu worldwide. But
now it was in the stage of decline and was actually not generating proper return. In an attempt to
revitalize it, a new variant was introduced namely Shake Shake Fries. This is being served with
chatpata spice mix which has resulted in increase in the sales of French Fries and has elevated it
from to the decline stage. This is used to delay the decline of a well-established product which
has the potential of generating further revenue.
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CHAPTER
07
ANALYSIS
ANALYSIS
Competitors Analysis
McDonald’s has been a leading fast-foods outlet in Vile Parle. But the outlet understudy has
other competitors eating away into its market share. In addition to its traditional rivals—KFC,
Dominos, Pizza Hut—the firm encounters new challenges. Jumbo King competes using a back-
to-basics approach of quickly serving up burgers for time-pressed consumers. On the higher end,
the KFC has become potent competitor in the quick service field, taking away customers from
McDonald’s. Perhaps in the new environment, fast, convenient service is no longer enough to
distinguish the firm. At this time, a new critical success factor may be emerging: the need to
create a rich, satisfying experience for consumers. This brings us to service and experience
based competition which McDonald’s can use for competitive advantage against Jumbo King.
Keeping in mind the demographics of the area, McDonald’s has Wi-Fi enabled the outlet to cater
to the student community. It is for this overall “Food, Fun & Folks” experience that customers
pay a premium over the other competitors.
Competition also reduces product lifecycle; inducing firms to revise their products
portfolios and to revisit their product market to understand changing needs, expectations and
perception of different market segments. The new McBreakfast would be introduced between 6
to 11 am as a pilot project. This would open up a whole new revenue stream for McDonald’s by
tapping into the student and working population by providing a healthy and wholesome
breakfast. This shows how demographic shift can affect the demand for products and services.
McDonald’s has anticipated these changes to maintain its competitive edge.
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McDonald’s
SWOT Analysis
➢ Rolling out McBreakfast across all outlets – In India, the company has recently
launched its entry into the breakfast food category. This is now launched on a pilot basis
on select stores. In Mumbai, it available at the Vile Parle outlet. The company views this
category as a key growth driver in future.
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CHAPTER
07
EXHIBTS
Exhibits
Survey Questionnaire
Q. Which is your favorite product at McDonald’s?
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Q. What is the first thing that strikes your mind about McDonald’s?
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CHAPTER
09
Mc DELIVERY
McDonald’s
McDELIVERY
, The chain which entered India with its maiden store in 1996 in Delhi saw its store count grown
from around 100 in 2006 to over 300 at the end of FY13. McDonald’s W & S which had a little
less than half of the stores in FY07 overtook McDonald’s N & E in the number of outlets in
FY12 when it added around 23 outlets, the highest in a single year till then and almost double of
what McDonald’s N & E did in that year, according to sources
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McDonald’s
To be fair, McDonald’s N & E reached break-even faster than its other Indian peer. Connaught
Plaza Restaurants clocked positive EBITDA way back in FY08, one year ahead of Hardcastle
Restaurants. It also clocked net profit one year before Hardcastle, in FY10. While faster rollout
of new stores in FY11 and FY12 allowed Jatias to gain speed, McDonald’s N & E matched the
new addition to stores last year with around 30 new outlets the same as McDonald’s W & S. Few
weeks ago it also set up the single largest McDonald’s outlet in the country in Noida.
Amit Jatia, vice-chairman of Westlife Development, did not comment specifically about the
financial revenues but shared that McDonald’s W & S added 60 restaurants over the past two
years, taking the count up from 107 restaurants in FY11 to the current 166 restaurants (as of June
30, 2013) as the company moved into an acceleration phase and the business has grown
significantly.
A consultant with one of the Big Four firm, on condition of anonymity said, he believe that
going forward, Hardcastle (McDonald’s W & S) will do a better job and there will be rapid
expansion by them due to the funds that the company has recently raised.”
Westlife recently raised Rs 180 crore from Arisaig Partners, an asset management firm which
chases investments in public-listed consumer-facing companies.
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McDonald’
The consultant further added that real estate cost has gone up for quick service restaurants
(QSRs) and one needs to be well funded to expand and thus Jatias are in a better position to scale
up.
In February this year, according to Amit Jatia, that the firm is planning to increase the number of
outlets in McDonald’s W & S to 250 by 2014. “Typically, we invest Rs 3 crore per restaurant
plus there is the cost of real estate. Hence, we plan to spend around Rs 400-500 crore in the next
two years,” said Jatia.
A stock analyst who tracks consumer sector said, “The last two years have definitely been a
game changer of McDonald’s in India with the brand (franchisees) started making profits despite
heavy competition in the QSR space. In such a scenario, having an organizational structure like
Hardcastle has definitely helped. The franchisee now has solely Indian top management which
has led to faster decision making and scaling up. The restructuring to bring it under a listed firm,
which is as good as a reverse listing, too has helped the company to raise funds.”
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McDONALD’s KIOSK
At McDonalds we have made effort to cover every possible area for serving to the Customer
needs. After serving the meals we have made Kiosk as a means of fulfilling the custom of
something sweet following the main course.
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· It is a way of extending our Brand with overall less Initial and Operating investments.
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McDonald's is rolling out self-service kiosks in restaurants across the US that allow
customers to order and pay for their food without ever having to interact with a human
The touch-screen technology is meant to speed up the ordering process and give people
more control over customizing their food, while reducing opportunities for human error
according to the company
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Global quick service restaurant Major McDonald’s, which launched its store-in-store format
McCafe in India 18 months ago, is planning to cash in on the growing popularity of coffee
drinking in the country. McCafe is the third line of McDonald's business in India, after
breakfast (the home delivery), and kiosk formats.
McCafe has now been launched in South India with the first outlet being opened in
Bengaluru. As of now there are over 15,000 restaurants that sell the McCafe products
globally.
“The in-store format enables a quick roll-out of a McCafé with an investment of Rs 30-35
lakh per outlet across key trading areas in metro cities of West and South India. Within a
span of 18 months we have expanded our McCafé network across 41 restaurants in six cities
— Mumbai, Ahmedabad, Nashik, Aurangabad, Pune and Bengaluru. Today, we are well on
track to launch over 100 McCafés over the next four years,” said Smita Jatia, managing
director — Hardcastle Restaurants Pvt Ltd, in Bengaluru on Monday. Hardcastle Restaurants
is McDonald's master franchise in the western and southern markets.
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CHAPTER
10
CONCLUSION
CONCLUSION
“The in-store format enables a quick roll-out of a McCafé with an investment of Rs 30-
35 lakh per outlet across key trading areas in metro cities of West and South India. Within a
span of 18 months McDonald’s have expanded the McCafé network across 41 restaurants in six
cities Mumbai, Ahmedabad, Nashik, Aurangabad, Pune and Bengaluru. Today, we are well on
track to launch over 100 McCafés over the next four years,” said Smita Jatia, managing director
— Hardcastle Restaurants Pvt Ltd, in Bengaluru on Monday.
Hardcastle Restaurants is McDonald's master franchise in the western and southern
markets. McCafe has now been launched in South India with the first outlet being opened in
Bengaluru.
Indian growth
McDonald's has invested about 7bn rupees in India since it entered the market in 1996
and reported growth of about 40%. India has a population of over 1 billion and an emerging
and affluent middle class. The food chain has tailored a number of its products to the Indian
market, including the Paneer Salsa Wrap, Mcspicy and Indi-Mcspicy, McAloo Tikki and the
mutton specialty for a country which does not eat beef, the Chicken Maharaja Mac. "In the next
two years, we should finally have a menu that is entirely relevant to the Indian household," Mr.
Bakshi said.
From the above information it is very clear that Mc Donalds is aggressive about its Indian
operations and this fast food chain is here to stay feeding millions of Indians the Jai ho way think
global act local.
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BIBLOGRAPHY
2. www.mcdonalds.com
http://www.mcdonalds.com/us/en/home.html
http://www.mcdonalds.com/us/en/our_story/our_history.html
3.https://en.wikipedia.org/wiki/History_of_McDonald%27s
4http://www.business-standard.com/article/companies/mcdonalds-to-open-100-outlets-
of-mccafe-in-india-115042000958_1.html
5 http://www.slideshare.net/pridhavale/mcdonalds-marketing-strategies
(slideshare)
6 https://www.surveymonkey.com/r/?sm=IxqTttG%2Buh0kXJRGO9zaZw%3D%3D
7 https://en.wikipedia.org/wiki/McDonald%27s
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