PROJECT REPORT ON CUSTOMER SATISFACTION IN MCDONALDS

is submitted in partial fulfillment for the award of the degree of BACHELOR OF BUSINESS ADMINISTRATION (BANKING AND INSURANCE)

SUBMITTED BY
NIKITA JAIN 02819301809

UNDER THE GUIDANCE OF:

MS. SONALI (FACULTY, KRCHE)

PROJECT COORDINATOR
MS. VANDANA GUPTA (FACULTY, KRCHE)

(BATCH 2009-2012) KASTURI RAM COLLEGE OF HIGHER EDUCATION (AFFILATED TO GGSIPU)

NARELA, DELHI 110040

AKNOWLEDGEMENT

There is always a sense of gratitude which one express to other for the helpful so needy services they are render during all phases of life. I would like to express my gratitude towards all those who have been helpful to me in getting this mighty task of training to a successful end. I would also like to be thankful to our faculty teachers who has given me the right way to prepare my project report. I would take this opportunity to thank all my teachers for their helps and suggestions during the course of project work.

Nikita Jain BBA (B&I) 02819301809

CERTIFICATE

This is to certify that Nikita Jain, has accomplished the project titled CUSTOMER SATISFACTION IN MCDONALDS under my guidance and supervision. She has submitted this project submitted in partial fulfilment of the requirement for the award of the degree of BBA (B&I) GGSIP University. The work has not been submitted else anywhere for any other award. All source of information has been duly mentioned.

Vandana Gupta (Lecturer KRCHE)

CHAPTER PLAN

Chapter 1 Chapter 2 2.1 2.2 Chapter 3 3.1

Introduction About McDonalds History of McDonalds Objectives of McDonald Vision/ Mission of McDonalds How to become a McDonalds Franchisee Objectives of Study Research Methodology Customer Satisfaction Meaning Need of Customer Satisfaction Products & Services of McDonalds Products 3.1.1 Vegetarian menu 3.1.2 Non Vegetarian menu

3.1.3 Beverages 3.1.4 Frozen deserts 3.2 Services 3.2.1 Home Delivery 3.2.2 Drive Thru 3.2.3 Kiosk 3.2.4 VIP Drive 3.2.5 Event Catering Chapter 4 Marketing Strategy At McDonalds 4.1 4.2 4.3 4.4 4.5 4.6 Marketing Mix strategy plan: Plan to win Current Campaign Product Life Cycle SWOT Analysis Marketing Communication Programmers

Chapter 5 Awareness of Customers 5.1 5.2 Awareness of Customers customer perception and customer expectation

Chapter 6 Data Analysis and Interpretation

Chapter 7 Suggestion Chapter 8 Conclusion and Recommendation Chapter 9 Limitations Bibliography Annexure

Chapter 1

INTRODUCTION

1.1 About McDonalds

McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by the eponymous Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald's consumer tastes, primarily the sells hamburgers, cheeseburgers, chicken, French In response to its changing to company has expanded menu

fries, breakfast items, soft

drinks, shakes and desserts.

include salads, wraps, smoothes and fruit. McDonald's restaurants are found in 119 countries and territories around the world and serve 58 million customers each day. McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people. The company also operates other restaurant brands, such as Piles Caf. Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until October 2006, when McDonald's fully divested from Chipotle through a
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stock exchange. Until December 2003, it also owned Donates Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

1.2

History of McDonalds
The business began in 1940, with a restaurant opened by brothers Richard and

Maurice McDonald in San Bernardino, California. Their introduction of the "Speeded Service System" in 1948 furthered the principles of the modern fast-food restaurant that the White Castle hamburger chain had already put into practice more than two decades earlier. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speeded." Speeded was eventually replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man having puffed out costume legs. McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961, with the description "Drive-In Restaurant Services," which continues to be renewed through the end of December 2009. In the same year, on September 13, 1961, the company filed a logo trademark on an overlapping, double arched "M" symbol. The overlapping double arched "M" symbol logo was temporarily disfavoured by September 6, 1962, when a trademark was filed for a single arch, shaped over many of the early McDonald's restaurants in the early years. Although the "Golden Arches" appeared in various forms, the present form as a letter "M" did not appear until November 18, 1968, when the company applied for a U.S. trademark. McDonald's corporate logo used from 1968 to 2006. It still exists at some restaurants. The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the
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company and led its worldwide expansion, and the company became listed on the public stock markets in 1965. Kroc was also noted for aggressive business practices, compelling the McDonald brothers to leave the fast food industry. The McDonald brothers and Kroc feuded over control of the business, as documented in both Kroc's autobiography and in the McDonald brothers' autobiography. 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

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1.3 Objectives of McDonald

Customer driven, global oriented Achieving sustainable ,profitable growth Designed to increase restaurant visits and grow brand loyalty among new & existing customers McDonalds is committed to maintaining and developing the best food products in the quick service restaurant market. In order to deliver this, the company has made a number of commitments to food safety and nutrition. Further build financial strength

Complete commitment to quality,service,cleanliness and value.

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1.4 MISSION AND VISION OF MCDONALDS MISSION

The mission of Ronald McDonald House Charities (RMHC) is to create, find and support programs that directly improve the health and well being of children. Guiding us in our mission are our core values: Focusing on the critical needs of children. Celebrating the diversity of the programs we offer and the staff, volunteers and donors who make them possible. Staying true to our heritage of more than 36 years of responsible stewardship. Operating with accountability and transparency.

VISION
We believe that when you change a childs life, you change a familys, which can change a community, and ultimately the world. We strive to be part of that change and part of the solution in improving the lives of children and their families by providing programs that strengthen families during their most difficult or challenging times. We extend our reach and impact by leveraging our 36 years of experience and strong relationships with local communities and people in the field to continually establish Chapters across the globe. We continually work to improve and expand our core programs, while also developing new services to address the unique needs of the communities we serve.

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We dont do it alone. We rely on our Chapters to identify needs and carry out our mission on the ground. We rely on our strong relationships with the medical community to provide access to health care. We rely on strategic alliances with organizations that have the knowledge and infrastructure to extend our reach. We rely on you our donors, volunteers, staff and friends.

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1.5 How to become a McDonalds Franchisee

McDonald's is the biggest fast-food chain in the world that it boasts more than 30,000 restaurants in 119 countries. With this unrivalled popularity, entrepreneurs who will franchise on McDonald's will most likely succeed in the business; meanwhile this is how to start McDonald's franchising. The corporation allows interested franchisees to open chains only to places approved by them to make sure that entrepreneurs can reap the biggest financial benefits. According to McDonalds website, there are simple steps to become a franchisee. The first one is by completing the training provided by the corporation so the entrepreneurs will know how to handle their own businesses. Interested franchisees are also required to pay the franchising fee worth $45,000 which is relatively more expensive compared to other fast-food chains . According to the corporation, total investment of a franchisee would typically range from $950,200 to $1.8 million. After setting the business, entrepreneurs are still required to pay an annual royalty tax which is 12.5 percent of their gross profits. For 20 years, the binding contract will still be followed and after this period, franchisees can renew this if they would want to. Meanwhile, the fast food giant requires its franchisees to have cash liquidity worth $250,000. Another requirement for them is to have a business experience that will allow them to handle their chains effectively. After qualifying as a franchisee, McDonalds will train entrepreneurs for one week that will teach them more skills on how to manage their business. After becoming a franchisee, the owners of McDonalds fast food chain will still receive support from the corporation. There will be customer care support (online, toll-

15

free phone line) which can help them in case they have encountered some problems in their business.

1.6 OBJECTIVES OF STUDY

To know about the products and services provided by McDonalds. To study the future aspects of McDonalds in respect of its customers.

To study on the responsibility for enhancing and protecting the McDonalds brand. To analyze the opportunities which is used to lead and innovate the industry

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1.7

RESEARCH METHODOLOGY
It is a way to systematically solve the research problem. Research methodology

helps many dimensions and scope is wide. When we talk about Research methodology, we not only talk about research methods but also consider the logic behind the methods we use and explain why we are using a particular method or technique and why we are not using the others so that research results are capable of being evaluated either by research himself or by others. There are four types of Research methodology which are as follows:

Descriptive:
It is also called statistical research. The main goal of this type of research is to describe the data and characteristics about what is being used. The idea behind this type of research is to study frequencies, averages and other statistical calculations. Although this research is highly accurate. This is mainly done when a research wants to gain a better understanding of a topic.

Explanatory:
This research is conducted in order to explain any behavior in the market. It could be done through using precautionary, group discussions, interviews, random sampling etc.

Exploratory:
It is conducted into an issue or problem where there are few or no earlier studies to refer to focus is on going inside and formulate for later investigation. It is used to identify and obtain information on a particular problem.

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 Conclusive:
It is meant to provide information that is useful in research conclusions or decision making. It tends to be quantitative in nature i.e., to say in the form of numbers that can be quantify and summarized. It release on both secondary and primary data. Purpose of it is to provide reliable or representative picture of population through the use of value research instrument.

The present research is of descriptive nature Data Collection

It refers to collection of information for a research to succeed raw facts must be collected in a form which helps in effective production of result and meeting the objective of study. There are two types of data collection which are as follows:

Primary data:
Data observe or collected directly from first hand experience. This type of data is collected by researcher directly from own observation and experience. There are many method of collection of primary data: Questionnaire Interview Observation Group interview etc.

Secondary data:

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Published data is a data collected in the past from other party for secondary data. It can be used to get a new perspective study to supplement or compare the work or to use the part of its another study may too costly and time consuming. There are many methods for collection of secondary data is: Books Magazines Government company Annual company report

The present study is based on primary and secondary data both.

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Chapter 2

CUSTOMER SATISFACTION

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2.1

Meaning
Customer satisfaction, a term frequently used in marketing, is a measure of

how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services exceeds specified satisfaction goals." In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses. It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. "Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. . . . These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective." Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. "In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a

21

budget moteleven though its facilities and service would be deemed superior in 'absolute' terms." The importance of customer power. For satisfaction diminishes when a firm has such

increased bargaining

example, cell

phone plan

providers,

as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction would be way too low, and customers would easily have the option of leaving for a better contract offer. There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.

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2.2 Purpose of Customer Satisfaction

Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty. Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the companys goods and services. Although sales or market share can indicate how well a firm is performing currently, satisfaction is perhaps the best indicator of how likely it is that the firms customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes." On a five-point scale, individuals who rate their satisfaction level as '5' are likely to become return customers and might even evangelize for the firm. Individuals who rate their satisfaction level as '1,' by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction.

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2.3 Construction of Customer Satisfaction

Organizations need to retain existing customers while targeting noncustomers. Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is measured at the individual level, but it is almost always reported at an aggregate level. It can be, and often is, measured along various dimensions. A hotel, for example, might ask customers to rate their experience with its front desk and check-in service, with the room, with the amenities in the room, with the restaurants, and so on. Additionally, in a holistic sense, the hotel might ask about overall satisfaction 'with your stay. As research on consumption experiences grows, evidence suggests that consumers purchase goods and services for a combination of two types of benefits: hedonic and utilitarian. Hedonic benefits are associated with the sensory and experiential attributes of the product. Utilitarian benefits of a product are associated with the more instrumental and functional attributes of the product. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. The measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature.

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The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured. Their satisfaction is generally measured on a five-point scale.

Customer satisfaction data can also be collected on a 10-point scale. Regardless of the scale used, the objective is to measure customers perceived satisfaction with their experience of a firms offerings. It is essential for firms to effectively manage customer satisfaction. To be able do this, we need accurate measurement of satisfaction. Good quality measures need to have high satisfaction loadings, good reliability, and low error variances. In an empirical study comparing commonly used satisfaction measures it was found that two multi-item semantic differential scales performed best across both hedonic and utilitarian service consumption contexts. They identified a six-item 7point semantic differential scale, which is a six-item 7-point bipolar scale, that consistently performed best across both hedonic and utilitarian services. It loaded most highly on satisfaction, had the highest item reliability, and had by far the lowest error variance across both studies. In the study, the six items asked respondents evaluation of their most recent experience with ATM services and ice cream restaurant, along seven points within these six items: please me to displeased me, contented with to disgusted with, very satisfied with to very dissatisfied with, did a good job for me to did a poor job for me, wise choice to poor choice and happy with to unhappy with.
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A semantic differential scale, which is a four-item 7-point bipolar scale, was the second best performing measure, which was again consistent across both contexts. In the study, respondents were asked to evaluate their experience with both products, along seven points within these four items: satisfied to dissatisfied, favorable to unfavorable, pleasant to unpleasant and I like it very much to I didnt like it at all. The third best scale was single-item percentage measure, a one-item 7-point bipolar scale. Again, the respondents were asked to evaluate their experience on both ATM services and ice cream restaurants, along seven points within delighted to terrible. It seems that dependent on a trade-off between length of the questionnaire and quality of satisfaction measure, these scales seem to be good options for measuring customer satisfaction in academic and applied studies research alike. All other measures tested consistently performed worse than the top three measures, and/or their performance varied significantly across the two service contexts in their study. These results suggest that more careful protesting would be prudent should these measures be used. Finally, all measures captured both affective and cognitive aspects of satisfaction, independent of their scale anchors. Affective measures capture a consumers attitude (liking/disliking) towards a product, which can result from any product information or experience. On the other hand, cognitive element is defined as an appraisal or conclusion on how the products performance compared against expectations (or exceeded or fell short of expectations), was useful (or not useful), fit the situation (or did not fit), exceeded the requirements of the situation (or did not exceed).

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Chapter 3 PRODUCTS & SERVICES OF MCDONALDS

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3.1

Products
The reputation of the various products each season has made it possible for the

company to attract customers having different tastes and to try out the season specialties. A major strength is the various deals that McDonalds offers so that it could be made affordable. Recently McDonalds offered a deal for Rs.85 only, containing a beef burger along with a drink. McDonalds offers many flavors of Mcflurry ice cream from a mix of M&Ms to Oreo cookies. The M&Ms flavor was introduced about a year back and is still popular among the M&Ms lovers. McDonalds has also customized its meal according to the tastes of Pakistan. People in Pakistan do not eat bacon so McDonalds does not offer such sort of meals in the country. McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. On a seasonal basis, McDonald's offers the McRib sandwich. Some speculate the seasonality of the McRib adds to its appeal.[57] Various countries, especially in Asia, are currently serving soup. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia).

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This diagram shows the product offered by McDonalds. McDonalds offered number of products i.e. vegetarian, non vegetarian, beverages and frozen product.

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3.2

SERVICES

1. Home delivery
If you cant come to McDonalds, mcdonalds will come to you McDonalds India is one of the few countries that provide a home delivery service. In west and south India this service is currently available in select cities. Call us on 66000666 and place your order. There is no restriction on the minimum order for home delivery: however there is a fee of the Rs 25/- per order as delivery charges, irrespective of the size order.

2. Drive thru 4 easy steps to become your car a dining room STEP 1: Enter the McDonalds drive thru restaurant STEP 2: Check the menu board STEP 3: Drive a head to place your order at first counter STEP 4: Go to the second counter, pick your order and race off.

3. VIP Drive Be a VIP Drive Thru member and enjoy any one of the these (coke, fries, soft serve, sandwich, veg mcmuffin) products free on purchase of Rs. 150/- or more.

4. Event Catering
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Mcdonalds cater to your happiness. McDonald organize Christmas parties, new year celebrations, company meetings, get together, annual days etc.

5. kiosks Mcdonalds provide the service of kiosks. McDonalds have the facility of various flavors of icreams at its kiosks.

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Chapter 4

MARKETING STRATEGY AT MCDONALDS

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4.1 Marketing Mix

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

Product: How should the company design, manufacture the

product so that it enhances the customer experience?

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Product is the physical product or service offered to the consumer. Product includes certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the non-tangible aspects of the product and service. McDonalds has intentionally kept its product depth and product width limited. McDonalds studied the behaviour of the Indian customer and provided a totally different menu as compared to its International offering. It dropped ham, beef and mutton burgers from the menu. India is the only country where McDonalds serve vegetarian menu. Even the sauces and cheese used in India are 100% vegetarian. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Chicken Maharaja Mac. McDonalds bring with it a globally reputed brand, world class food quality and excellent customer specific product features.

Place: Where should be the product be available and the role of distribution
channels? The place mainly consists of the distribution channels. It is important so that the product is available to the customer at the right place, at the right time and in the right quantity. Nearly 50% of U.S.A is within a 3 minute drive from a McDonalds 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.

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

Promotion: What is the suitable strategy and channels for promotion of the
product?

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The various promotion channels being used by McDonalds to effectively communicate the product information are given above. A clear understanding of the customer value helps decide whether the cost of promotion is worth spending. There are three main objectives of advertising for McDonalds are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonalds does its promotion through television, hoardings and bus shelters. They use print ads and the television programmes are also an important marketing medium for promotion.

Some of the most famous marketing campaigns of McDonalds are: You Deserve a break today, so get up and get away- To McDonalds Aap ke zamane mein, baap ke zamane ke daam. Food, Folks, and Fun Im loving it.

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People: How to converge the benefits of internal and external marketing? McDonalds understands the value of both its employees and its customers. It understands the fact that a happy employee can serve well and result in a happy customer. McDonald continuously does Internal Marketing. This is important as it must precede external marketing. This includes hiring, training and motivating able employees. This way they serve customers well and the final result is a happy customer. The level of importance has changed to be in the following order (the more important people are at the top): Customers Front line employees Middle level managers Front line managers The punch line Im loving it is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.

4.2

Strategy Plan: Plan To Win

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1. Service Marketing: Moments of Truth: each process of interaction between McDonalds and customers. 2. Brand Transparency: Be transparent to get trust and influence marketing efforts. 3. Ethnic Insights: Also concentration on minorities and differences. Can become trendsetters for white America 4. Social Media Strategy: Presence in social media to raise awareness 5. Customer and supplier integration: Integrating in product development to create relationship, satisfaction, and loyalty 6. Different products for different life cycles: To increase profits (e.g. French Fries at decline stage Shake Fries (spicy) at maturity stage)
7. McDonald zing of suppliers: To get a huge AND controlled network for

guaranteeing McDonalds standards

4.3

Current Campaign

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 Press releases: Many press releases about different topics (new campaigns, events, economical performance, job offers, awards, product information, health, engagement (environment, Ronald McDonald Houses, special offers). McDonalds tries to be strongly present in the media to keep brand awareness. Annual report: About corporate strategy, business facts, jobs, franchise system, product origin, health, childrens donation, sports, employees. Seems to be very professional and transparent Internet presence: about food, health, promotions, company, and links to different websites (e.g. CRM, childrens donation). Concentrates on McDonalds engagement an health issues.

Image Campaign Several image campaigns Main: Im loving it (started in 2003) Additional campaign: corporate responsibility (companys engagement in community and other critical issues like environmental protection , which shows new trend of customer demands for responsible companies) Seasonal campaigns: relate to special seasonal conditions (e.g. Httngaudi in Germany with skiing environment in winter)

Product Placement To raise brand awareness

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 1988 restaurant as setting for scene in Mac and Me Movies like Spider Man, Bridget Jones, The day the earth stood still, Spy Kids, The fifth element Other formats like American Idol, late night shows, reality shows, and even news formats (serious coffee cubs).

Sales Promotion Games: additionally to campaigns, well-known Monopoly Coupons: in newspapers, backside of cinema tickets

Sponsoring Many sports: Olympic games, German Football Association Other events like Fashion Week New York Local franchise companies: local clubs and events

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4.4

Importance of PLC in McDonalds

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.

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A perfect example of revitalising a product in decline phase

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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4.5

SWOT ANALYSIS

1. Strength
McDonalds has been able to maintain its market share in the QSR market of Pakistan since 1998 and this is actually the major strength of McDonalds that has made it so popular. Other major strengths are listed below:

Products:

The reputation of the various products each season has made it possible for the company to attract customers having different tastes and to try out the season specialties. A major strength is the various deals that McDonalds offers so that it could be made affordable. Recently McDonalds offered a deal for Rs.85 only, containing a beef burger along with a drink. McDonalds offers many flavours of Mcflurry ice cream from a mix of M&Ms to Oreo cookies. The M&Ms flavour was introduced about a year back and is still popular among the M&Ms lovers. McDonalds has also customized its meal according to the tastes of Pakistan. People in Pakistan do not eat bacon so McDonalds does not offer such sort of meals in the country. Social Responsibility: The social responsibility acts of McDonalds are commendable. It has been able to maintain a reputation as a socially responsible and aware enterprise all over the world. Its practice of going green and serving in an environment friendly way has made it possible for McDonalds to gain fame. On 27th March 2008, McDonald's announced that it is giving further backing to Rainforest Alliance certification by offering a cup of tea with a conscience in all of its 1,200 restaurants in the UK.

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In Pakistan however, McDonalds has not yet come up with an effort that can show the companys goodwill towards the masses here. Like KFC, McDonalds should also involve itself in educational and social activities so that people should know that McDonalds isnt yet another business oriented corporation aimed at just making money but it actually cares. Employment Opportunities: The equal employment opportunities regardless of race, color, sex, national region, age, disability etc are offered to people. People looking for jobs can also upload their CVs online. Brand Recognition: McDonalds has gained recognition worldwide. The chain is present all over the world in more than 122 countries. In Pakistan a large number of franchises are present, majority of them in Karachi and Lahore and McDonalds is regarded as a symbol of value and quality for your money. Good communication and friendly environment: McDonalds has always ensured a friendly environment to offer to its customers. Children love going there, having a happy meal and the toys that they get as a gift. Play places also serve as a significant attraction where children can go and make friends and play. Employees are also very polite and they are always ready to serve you in every best possible way that they can. Party celebrations: McDonalds offers its clients, especially children to celebrate their birthdays there. One can invite friends, they decorate the party area, various party games are organized along

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with face painting activity etc. Children are provided with an opportunity to celebrate their day in the way that they want. Partnership with Coca Cola: McDonalds and Coca Cola are official global partners. Coca cola is a big brand name serving people all over the world with beverages. Partnership with telecom companies: McDonalds offered special deals to its clients with up size meals who are the users of a particular company such as Warid and Ufone.

2. Weakness
Product Variety: McDonalds needs to develop more and more products to stay in the competition. After the opening of international QSRs in Pakistan, many local QSRs have also been opened in various cities. The tastes are a bit different but they too are offering chicken and cheese burgers, drinks and fries at competitive prices. This situation requires McDonalds to be more innovative and price competitive. More advertising: In Pakistan, McDonalds rarely advertises at TV, however billboards often show off juicy McDonalds burgers but this could affect its popularity in future. It definitely needs to advertise more to reach the target and the potential customers. Drive-ins:

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The service at McDonalds drive-ins has been subject to criticism all over the world and a lot of people complaint that the orders are either missing some of the items or are entirely wrong. The service time at the drive ins is also subject to great variations and needs to be improved.

3. Opportunity
Reasonable Prices: McDonalds can broaden its market by offering meals at more competitive prices in comparison to other local QSRs such as AFC, Al Maida etc. This way it could get hold of the potential customers too. Opportunity to be innovative: McDonalds could make itself more innovative by offering deals that appeal more to Pakistani consumers e-g it can introduce desi flavors in the present products such as Barbeque, Tandoori, Masala and other spicy tastes which are staple of the country.

Breakfast and special noon meals:

Now in Pakistan most the trend of women going to work and opting for profession is increasing as a result of which they are running short of time to carry out all the home chores along with their work. McDonalds can offer deals to such market by catering them in the morning for breakfast. During the office hours people mostly go out for their lunch to restaurants. McDonalds can avail this potential market too.

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 Growing dinning out Market: In Pakistan the dining out trend is increasing especially in youngsters and upper middle class. McDonalds has the opportunity to grasp this market quite well. It is already doing well by serving them but it could arrange various activities for the people of this age. Dine in Cafes: McDonalds can open up with small-sized cafes for the teenagers in their universities and colleges.

McCafes:

McDonalds has opened coffee shops by the name of McCafes in UK. Pakistan can serve as a new potential market for these cafes.

4. Threat
More health conscious customers: With increasing awareness about food and the importance of a balanced diet, people are opting for low calorie food e-g salads and food with high fiber content. To remain in the scope, McDonalds needs to serve this market as well as the present customers, this could be posed as a threat to McDonalds. Subway is offering its low fat veggie and chicken sandwiches at prices almost the same as McDonalds. For McDonalds diet meals could be a way out of this situation. Until now, McDonalds in Pakistan has nothing to offer to health conscious customers. Foreign as well as local competitors:

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In the growing market QSR market of Pakistan McDonalds competitors are entering not only from other countries but from within the country too. Their competitive prices could be a reason due to which McDonalds can lose its share in the Pakistani market. Changing customer styles: Pakistani culture has been changing for years now with new technologies and trends. People who are not brand loyal move with the changing times. Some competitor can easily enter into the market and make better offers to its consumers by focusing on their needs and the satisfaction that they want. To remain competitive, McDonalds needs to be innovative and should change along with the Pakistani consumer styles.

4.6 Marketing Communication Program

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1. Advertising:Advertising does help in building brand recall, but advertising alone does not sustain a brand. The product that they serve are of international standards and they believe that their brand has grown because they deliver their promise, sustain the quality experience promised to the consumers in the advertisements in the restaurants. McDonalds has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio and newspaper), the company makes significant use of bill boards and signage, sponsors sporting events ranging from little league to the Olympic Games, and makes cooler of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central in the company advertising strategy. To date, McDonalds has used 23 different slogans in United States advertising, as well as a few other slogans for select country and regions. At times, it has run into trouble with its campaigns. This image or reputation advertising has become a trademark of the country and created many memorable television moments and themes including:

McDonalds is the kind of place You deserve a break today We do it all for you You, you are the one Nobody can do it like McDonald can do The above campaign is for people whore looking for an alternative to having idlis, dosas of vada pavs for breakfast, McDonalds has launched its breakfast menu in Mumbai. The communication for the same has been created by Leo Burnett, and the

49

media chosen are OOH, radio and digital. The plan is to roll out the offering in other cities as well over the next 2-3 years.

2. Sales promotion:This tool is used through coupons, contests, sample, premium, demonstrations. Displays or incentives. It is used to accelerate short term sales, by building brand awareness and encouraging repeat buying. McDonalds plan to use incentives as they reward or give consumer extra incentives for encouraging in certain form of behaviours. The incentives that will be used include the use of coupons and premiums. The free standing insert allow them to deliver the coupons with high quality, four coloured image that draw the attention of the consumer. Direct mail is their main focus area for distributing the coupons.

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Chapter 5 CUSTOMER PERCEPTION AND EXPECTATION

Perception
The process by which selects, organize and interprets stimuli into a meaningful coherent picture of word.

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 Customer perception
Consumer perceptions of most leading quick-serve burger chains are relatively poor, but perceptions have improved in the past year, according to tracking data from BrandIndex. Wendy's has continued to significantly outperform the others on all of the measures tracked: quality, value, satisfaction, reputation and the overall brand health scores derived from those four perception measures. However, the others -- and McDonald's in particular -- have seen gains in most or all of these measures.

Customer Expectation

1. Customers

Expect value When they For them they receive and feel respect that

Solid their they're ability to

Information. make they're ask sound more probing set

Providing your customers with tangible information lets them know that you decisions. to ensure respected, is to

open and willing to do more business with your company. One way beneficial ask the information about problems the questions during your conversations to uncover needs they may not have for them. voiced. their instance, and objectives they've company, associated with attaining

2. Customers Expect Options. Customers don't want to be told that there's only one

way or one solution. They'll respond positively when they're given options. Options are essential because they create dialogue and discussion. Open dialogue can lead to more sales.

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3. Customers

Expect don't want to be

Single transferred to

Source every unit

Service. of your

Customers

business to have their problems solved. They want to be able to do business with you with the slightest amount of discomfort. You must be easy to do business with. This means taking ownership of your needs customers are requests, problem, etc., to and ensuring that their met their satisfaction.

4.

Customers They may not be

Expect the best

Superior communicators, but

Communication. they expect

communication excellence from you. So, if you tell them that you will call them back at a certain time, make sure that you do. Your responsiveness will create a bond of trust, and a communication comfort level.

5.

Customers

Expect

Consulting.

As the expert on your business' products and services, you are your customer only contact to determining how to use your product and/or service to get the best RETURN ON INVESTMENT (ROI). You must take the time to ask pertinent questions aimed at finding how your customer is using your product and/or service. This will demonstrate your ability and knowledge as well as your intent to spend the necessary time with them to meet their specific needs.

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5.2 Customer Perception and Customer Expectation

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Customer perception is a key factor affecting a products success. Many potentially revolutionary products have failed simply because of their inability to build a healthy perception about themselves in the customers minds. McDonalds being an internationally renowned brand brings with it certain expectations for the customers.

Target Segment A Family with children

What is McDonalds for me? A treat to children, a fun place to be for the children.

Urban customer on the Great taste, quick service without affecting the work move Teenager schedule Hangout with friends, but keep it affordable.

Customers expect it to be an ambient, hygienic and a little sophisticated brand that respects their values. The customers 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 McDonalds a great scope for improvement.

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Chapter 6

DATA ANALYSIS AND INTERPRETATION

Q.1

Which is your favorite product at McDonalds?

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Products Mc Aloo Tikki Mc Grill French Fries Soft Serve Others

Number of respondents 16 7 13 8 6

Interpretation:It is observed that most of the customers like mc aloo tikki and French fries in McDonalds. Other products are liked by less number of customers.

Q.2

Is the product line in McDonalds adequate?

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Product Line Yes No

Number Respondents 29 21

Of

Interpretation:Through the survey, it is observed that the product line of the McDonalds is adequate.

Q.3

What is the main problem you faced at McDonalds?

Main Problems

Number

Of

58

Long queue Rude behaviour employees Congestion Any other No problem

Respondents 16 of 3 19 4 8

Interpretation:It is observed that McDonalds face number of problems like long queue, rude behavior of employee, congestion any other problem. But the main problems faced by the customers are long queue and congestion.

Q.4

Which area do you think needs the most improvements?

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Most Improvement Number Area Delivery Time Product Variety Offers And Discount Sitting Arrangement Others Respondents 14 6 5 17 8

Of

Interpretation:It seems that McDonalds have to be improved itself in various fields like delivery time, product variety, offers and discount, sitting arrangement.

Q.5

What is the first thing that strikes your mind about McDonalds?

First Thing That Number

Of

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Strikes Burger French Fries Fun Value For Money Services

Respondents 21 11 7 5 6

Interpretation:On the basis of survey it is concluded that the first thing that strikes in the mind of customer when they think about McDonalds is burger then any other things like French fries or fun.

Q.6

Would you say that McDonalds is healthy?

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Is

McDonalds Number Respondents 47 3

Of

Healthy Yes No

Interpretation:In respect that whether McDonalds is healthy or not: 47 customers say that McDonalds is healthy and only 3 customers says that McDonalds is not healthy.

Q.7

What factor do you consider important when visiting McDonalds?

Important

Number

Of

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Factors Good Quality Price Convenience Offers Discount

Respondents 12 15 18 And 5

Interpretation:Important factor that should be considered are: First factor that should be considered is convenience then good quality, price and offers and discount.

Q.8

How would you rate the services at McDonalds?

Rating

Of Number

Of

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Services Poor Good Excellent Average

Respondents 2 19 5 24

Interpretation:It is observed that the services at McDonalds are average. Less number of customers thinks that the services at McDonalds are poor.

Q.9

What do you think of the product price?

Product Price

Number

Of

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Respondents Consumer Friendly Average Highly Expensive 23 22 5

Interpretation:It seems that 23 customers say that the price at McDonalds is consumer friendly, 22 customers say that it is average and only 5 customers say that it is highly expensive.

Q.10 Are you satisfied by the current product line or the menu at McDonalds?

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Current Product Number Line Yes No Respondents 28 22

Of

Interpretation:Through the survey it is observed that 28 customers are satisfied with the current product line at McDonalds.

Q.11 What time of the day do you prefer to eat there?

Most

Preferable Number

Of

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Time Breakfast Lunch Snacks Dinner

Respondents 9 16 19 6

Interpretation:Most of the customers prefer to eat at McDonalds in snacks and lunch time.

Q.12 Which fast food joint do you prefer the most?

Most

Preferable

Fast Number Respondents 29

Of

Food Joint McDonalds

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KFC Pizza Hut Dominos

5 7 9

Interpretation:It seems to be observed that most preferable fast food joint is McDonalds.

Q.13 Would you like to recommend McDonalds others?

Do

You

Recommend Number Respondents 37

Of

McDonalds Yes

68

No

13

Interpretation:Large number of customers would like to recommend McDonalds to others and very less number of customer do not recommend it to others.

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Chapter 7

FINDINGS

Findings
McDonald's stands by its investigation into a customer complaint around claims a fly larva was found on packaging after visiting one of the company's restaurants on 2 January.

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Managing Director Mark Hawthorne says: "We are sorry that Ms MacDonald had an unpleasant experience but we can't ignore the independent investigation results that point to the larva coming from an alternative source." He adds that the franchisees of the restaurant have met with the customer on two occasions in January, including visiting her workplace on the day of complaint. After a lengthy and comprehensive investigation of the customer's concerns, McDonald's confirmed with her on 18 January that the point of contamination was hard to determine, and that it was unlikely to have come from the McDonald's restaurant given the expert advice received from the independent laboratory. This was supported by a visit from an Auckland City Council environmental health officer, at the request of the restaurant. An independent laboratory confirmed the larva was from a syrphid fly - a fly that feeds on aphids and other small insects on a wide range of host plants, including citrus, subtropical fruit trees and produce. The lab confirmed that the larva was dead, was not exposed to heat, and was not associated with the Angus patty. "We pride ourselves on our stringent hygiene and quality standards and it was not surprising to learn that the independent investigation into this incident found that the point of contamination was unlikely to have come from our restaurant," says Mr Hawthorne. "We believe Mrs MacDonald is genuine in her concerns, however it is obviously very difficult to confirm what has happened here. We have not spoken with the customer since our last communication on 18 January, so were unaware that she was unhappy with this outcome, and we'll be contacting her today."

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72

Chapter 8

SUGGESTIONS

Suggestions

In the end of our report we have following suggestions: McDonalds should revise its product prices.

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 Company should work on all of its products There is still a lot of opportunities for McDonalds to increase number of outlets McDonalds in Pakistan should follow its international trend of sponsoring mega Events e.g. Domestic Cricket Tournaments.

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Chapter 9

CONCLUSION & RECOMMENDATION

Conclusion:
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

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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.

Recommendation
No doubt McDonald's is a huge giant size organization but it also need some improvements which are

McDonald's must start its services for customers as well as product. Job enlargement and job enrichment should be applied for retention of employees. There should be more than one feedback session for improvement of Performance of employees. Recruitment must be conducted for higher posts also to select more Skilled persons. There should be proper and flexible arrangements for training of Managerial level employees.

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 Job enlargement and job enrichment should be applied for retention of employees. There should be more than one feedback session for improvement of performance of employees.

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Chapter 10 LIMITATION

Limitations
While economists widely cite the Big Mac index as a reasonable real-world measurement of purchasing power parity, the burger methodology has some limitations. In many countries, eating at international fast-food chain restaurants such as McDonald's is relatively expensive in comparison to eating at a local restaurant and the demand for Big Macs is not as large in countries like India as in the United States. Social status of eating at fast food restaurants like McDonald's in a local market, what proportion of sales might be to expatriates, local taxes, levels of competition, and

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import duties on selected items may not be representative of the country's economy as a whole. In addition, there is no theoretical reason why non-tradable goods and services such as property costs should be equal in different countries: this is the theoretical reason for PPPs being different from market exchange rates over time. The relative cost of highmargin products, such as essential pharmaceutical products, or cellular telephony might compare local capacity and willingness to pay, as much as relative currency values. Nevertheless, McDonald's is also using different commercial strategies which can result in huge differences for a product. Overall, the price of a Big Mac will be a reflection of its local production and delivery cost, the cost of advertising (considerable in some areas), and most importantly what the local market will bear - quite different from country to country, and not all a reflection of relative currency values. In some markets, a high-volume and low-margin approach makes most sense to maximize profit, while in others a higher margin will generate more profit. Thus the relative prices reflect more than currency values. For example, a hamburger sandwich costs only 1 in France, and 1.50 in Belgium, but overall, McDonald's restaurants are cheaper in Belgium. Prices of Big Macs can also vary greatly between different areas within a country. For example, a Big Mac sold in New York City will be more expensive than one sold at a McDonald's located in a rural area of a neighboring state.

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80

BIBLIOGRAPHY

BIBLIOGRAPHY
Lists of books: Kulkarni M.V. Marketing Research Everest Publishing House, Mumbai, Millenium Edition 2001. Kotler Philip, Marketing Management Prentice Hall of India, New Delhi, 10th Edition 2001. Websites:

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www.mcdonaldsindia.com/ www.scribd.com/doc/11520753/Marketing-Strategies-of-McDonalds www.slideshare.net/gagandsaluja/mcdonalds-case-study www.marketing91.com/marketing-mix-mcdonalds/

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ANNEXURE

QUESTIONNAIRE

Name Gender Age Address Occupation

: _________________ : ( ) Male : ______________ : ____________________________________ : ( ) Private Employee

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( ) Female

( ) Govt Employee

( ) Businessman Monthly Income : ( ) Below 5000

( ) Professional ( ) Between 5000 to 10000 ( ) Above 25000

( ) Between 15000 to 25000

Q.1

Which is your favourite product at McDonalds? ( ) Mc Aloo Tikki ( ) French Fries ( ) others ( ) Mc Grill ( ) Soft Serve

Q.2

Is the product line in McDonalds adequate? ( ) Yes ( ) No

Q.3

What is the main problem you faced at McDonalds? ( ) Long Queue ( ) Congestion ( ) No Problem ( ) Rude Behaviour Of Employee ( ) Any other

Q.4

Which area do you think needs the most improvements? ( ) Delivery Time ( ) Offers And Discount ( ) Product Variety ( ) Sitting Arrangement

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( ) Others

Q.5

What is the first thing that strikes your mind about McDonalds? ( ) Burger ( ) Fun ( ) Services ( ) French fries ( ) Value for Money

Q.6

Would you say that McDonalds is healthy? ( ) Yes ( ) No

Q.7

What factor do you consider important when visiting McDonalds? ( ) Good Quality ( ) Convenience ( ) Price ( ) Discounts and Offers

Q.8

How would you rate the services at McDonalds? ( ) Poor ( ) Average ( ) Good ( ) Excellent

Q.9

What do you think of the product price? ( ) Consumer Friendly ( ) Highly Expensive ( ) Average

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Q.10 Are you satisfied by the current product line or the menu at McDonalds? ( ) Yes ( ) No, wed like to see some addition

Q.11 What time of the day do you prefer to eat there? ( ) Breakfast ( ) Snacks ( ) Lunch ( ) Dinner

Q.12 Which fast food joint do you prefer the most? ( ) McDonalds ( ) Pizza Hut ( ) KFC ( ) Dominos

Q.13 Would you like to recommend McDonalds others? ( ) Yes ( ) No

Q.14 Any comments / suggestions do you want to give. ................................................................................ ................................................................................

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