The McDonald’s Story
McDonald’s started in 1954, when its founder
Raymond Kroc saw a hamburger stand in San
Bernardino, California and envisioned a
nationwide fast food chain.
Today:
world’s largest fast food chain
serving 47 million customers daily.
one of the most valuable brands globally
worth more than $25 billion
though the company has roots in the US,
McDonald’s today has become an accepted citizen
of the world.
Business Model
Franchise Model –
Only 15% of the total number of restaurants are
owned by the company.
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
McDonald’s focuses not only on delivering
sales for the immediate present, but also
protecting its long term brand reputation.
McDonald’s in India
McDonald’s entered India in 1996.
McDonald’s India has a 50-50 joint venture with
Connaught Plaza Restaurants and Hard Castle
Restaurants.
Connaught Plaza Restaurants manages operations in
North India while Hard Castle Restaurants in Western
India.
The company is now expanding to Tier2 cities like
Pune and Jaipur.
Challenges in Entering Indian
Markets
Re-engineering the
Menu
The vegetarian
customer
Re-engineering the menu
McDonald’s has continually adapted to the customer’s
tastes, value systems, lifestyle, language and
perception.
Globally 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 it came up with chicken, lamb and fish burgers.
The Veg challenge
India huge population of vegetarians.
To cater to this customer segment, the
company came up with a completely new
line of vegetarian items
McVeggie burger
McAlooTikki.
The separation of vegetarian and non-
vegetarian sections is maintained
throughout the various stages.
Segmentation, Targeting and
Positioning
McDonald’s uses demographic
segmentation strategy with age as the
parameter.
The main target segments :
Children
Youth
Young urban family.
To attract children
Happy Meal (toys ranging from hot wheels
to various Walt Disney characters)
Play Place (children can play arcade
games, air hockey, etc.)
Birthday Parties
Fun Days
To target the teenagers
Aggressive pricing, Target AD’s, Facilities
like Wi-Fi, Ambience, etc.
Family restaurant
When McDonald’s entered in India it was mainly
perceived as targeting the urban upper class people.
Always projected itself as the Family Restaurant
Today it positions itself as an affordable place to eat
without compromising on the
quality of food
service
hygiene.
Family
value meal
Marketing Mix: 7P’s
Product
Price
Place
Promotion
People
Physical evidence
Process
Product
Veg menus
Non-veg Menus
Beverages
Desserts
kept its product depth and product width
limited.
totally different menu as compared to its
International offering
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
Continuously innovates its
products according to the
changing preferences and
tastes
The recent example is the
introduction of the Chatpata
McAlooTikki burger
A new product range to
target the customers in
the morning
Breakfast Menu
Product strategy:
Fast-serviced meal
○ Can be considered as the driving force
Healthy food
○ Fat free food
○ Nutritional value displayed
Quality
Very efficient supply chain management
products and suppliers are used on a “first-in, first-out” basis to
ensure freshness.
On an average 20 different quality checks are carried out before
any product is served to our customers.
Respect for the Indian Customs and Culture
Introduction of vegetarian line
only vegetable oil is used as a cooking medium
The cheese and cold sauces used are 100% vegetarian.
Price
McDonald’s leverages economies of scale to
minimize costs while maximizing value to
customers.
Targeted to Middle Class
Earlier perception
Upper Middle Class
Now with aggressive
Pricing it has targeted
Whole Middle Class
value pricing and
bundling strategies
happy meal,
combo meal,
family meal etc
Specifically priced
product for every
segment it targets
Place
Strategic location
○ Nearly 50% of U.S.A is within a 3 minute drive
from a McDonald’s outlet.
Offers
Hygienic environment,
Good ambience
Great service.
Internet facility
Play Areas
McDelivery
Started free home delivery to penetrate
further
Making IT reach the customer rather
than customer coming to it
Promotion
Uses every Medium
○ TV, Print, Hoardings
○ Bus Stops
○ Internet
Spends 30% of its budget
on ads
Rs 400-500 mn in 2009
Focuses its ad campaigns
on its overall experience
and active life style.
Its ads show happiness.
And relates its product with happiness that it brings
through low price, hygiene, quality, fast service.
Some of the most famous marketing campaigns of
McDonald’s are:
You Deserve a break today, so get up and get away- To
McDonald’s
Aap ke zamane mein ,baap ke
zamane ke daam
Food, Folks, and Fun
I’m loving it
Nowadays its into
Social Marketing
Twitter Strategy
Establish online hub for ongoing and consistent
communication to customers, media & influencers
Demonstrate that McDonalds listens to its
customers & is open to feedback
Use insight to share timely customer feedback on
important marketing initiatives
McDonalds- Social Brand
Ranks 32 out of a list of “100 Most
Social” brands
Promotional activities keep on
happening
Tray mats ensure that no new
scheme gets unnoticed
80:20 Menu Board
People
McDonald continuously does
Internal Marketing.
It includes hiring, training and motivating able employees.
Gives stars as per their performance
It understands the fact that a happy employee can serve well and
result in a happy customer
Gives employees larger role in decisions.
Fast & friendly service
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.
Physical Appearance
Every care given for:
Cleanliness
Efficient Menu display
Ambience
Transparency
Speed
Quality
Packaging
Process
Food manufacturing transparent to customers.
Training to the licensees.
Invented the most efficient cooking equipment.
New methods of food packaging and
distribution.
McDonald’s in India followed the same tradition.
Spent Rs. 50 crores on market research.
PLC in McDonalds
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.
For eg. French Fries
A perfect example of revitalizing a product
in decline phase
French Fries
an important part of the McDonalds
menu worldwide
But it was in the stage of decline and
was actually not generating proper
return.
To revitalize it, a new variant was
introduced namely Shake Shake Fries
Being served with chatpata spice mix
resulted in increase in the sales of
French Fries
elevated it from to the decline stage.
Swot Analysis
Swot Analysis
CSR
Instituted a special fund to support
green movements in Delhi.
In Mumbai, it sponsors various community-
related activities—such as “keep your city
clean”
Organizes McDonald’s Spotlight, which is an
annual interschool performing arts competition
Celebrates World Children’s Week from
November 14-20 & raise funds for children
CSR
Blue Dot initiative that supports
educational programs for the girl-child
Sponsors Pulse Polio program
Sponsors & promotes various programs
for children
Thank You
