McDonalds The Complete Story

PRESENTED BY: Adil Ahmed Sabunwala Hasan Dalal Arwa Kankroliwala

The McDonalds Story Genesis

The story of McDonalds started in 1954. Today McDonalds is the worlds largest fast food chain serving 47 million customers daily. McDonalds is now one of the most valuable brands globally, worth more than $25 billion. The company has roots in the US, McDonalds today has become an accepted citizen of the world.

McDonalds Mission
Be the best quick service restaurant experience by providing quality, service, cleanliness and value that make every customer in every restaurant smile.

3 World wide strategies

Best

employer Operational Excellence Continue to grow and be profitable

Business Model

Franchise Model Only 15% of the total number of restaurants are owned by the Company. The remaining 85% is operated by franchises. The company follows a comprehensive framework of training and monitoring of its franchises to ensure that they adhere to the Quality, Service, Cleanliness and Value propositions offered by the company to its customers. Product Consistency By developing a sophisticated supplier networked operation and distribution system, the company has been able to achieve consistent product taste and quality across geographies. Act like a retailer and think like a brand McDonalds focuses not only on delivering sales for the immediate present, but also protecting its long term brand reputation.

McDonalds in India
McDonalds entered India in 1996. McDonalds India has a joint venture with Connaught

Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza Restaurants manages operations in North India whereas Hard Castle Restaurants operates restaurants in Western India.

Challenges in Entering Indian Markets

Regiocentricism: Re-engineering the menu - McDonalds has continually adapted to the customers tastes, value systems, lifestyle, language and perception. Globally McDonalds was known for its hamburgers, beef and pork burgers. Most Indians are barred by religion not to consume beef or pork. To survive, the company had to be responsive to the Indian sensitivities. So McDonalds came up with chicken, lamb and fish burgers to suite the Indian palate. 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 nonvegetarian sections is maintained throughout the various stages.

Segmentation, Targeting and Positioning

McDonalds uses demographic segmentation strategy with age as the parameter. The main target segments are children, youth and the young urban family.

Segmentation, Targeting and Positioning

So to attract children McDonalds has : 1. Happy Meal with toys ranging from hot wheels to various Walt Disney characters are given (the latest in this range is the toys of the movie Madagascar). 2. Play Place special facility - where children can play arcade games, air hockey, etc. This strategy is aimed at making McDonalds a fun place to eat. This also helps McDonalds to attract the young urban families wanting to spend some quality time while their children have fun at the outlet. 3. To target the teenagers, McDonalds 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.

Customer Perception and Customer Expectation

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 Urban customer on the move Teenager What is McDonalds for me? A treat to children, a fun place to be for the children. Great taste, quick service without affecting the work schedule Hangout with friends, but keep it affordable.

McDonalds Marketing Mix (4 Ps)

After segmenting the market, finding the target segment and positioning itself, each company needs to come up with an offer. The 4 Ps used by McDonalds are:

1. Product 2. Place 3. Price 4. Promotion

PRODUCT
How should the company design, manufacture the product so that it enhances the customer experience?

PRODUCT
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.

PRICE
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 generating expenses. 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?

PROMOTION
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 1.To make people aware of an item 2. Feel positive about it 3. 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: 1.You Deserve a break today, so get up and get away- To McDonalds 2.Aap ke zamane mein ,baap ke zamane ke daam. 3.Food, Folks, and Fun 4.Im loving it.

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.

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.

SWOT Analysis

The Road Ahead

Entry to Tier 2 and Tier 3 cities The main target customer for McDonalds is the new urban Indian family. With the customer demographics constantly changing and tectonic social and cultural shifts being observed in Tier 2 and Tier 3 cities due to globalization, the company is now expanding to Tier 2 cities like Pune and Jaipur. 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.

Exhibits
Vegetarian McVeggie McAlooTikki Paneer Salsa Wrap Crispy Chinese McCurry Pan Pizza McPuff Non Vegetarian Chicken Maharaja Mac McChicken Burger Shahi Chicken McCurry Wrap Chicken Mexican Fillet-O-Fish

Vegetarian Menu

Non-Vegetarian Menu

Making A Difference
We have an obligation to give back to the communities that give us so much." - Founder Ray Kroc, 1955

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