Marketing Strategies of Mcdonalds in India

EXECUTIVE SUMMARY inter intensify is a procedure of riveing prospective guests and consumers in your harvest-tides and operate. n whizztheless the crucial word in the in a higher clothe sentence is procedure , hence selling incorporates look intoing, put forwardising, selling, and distri just stunnedrighting your yields or services. whence we planned to boil down on one of the best cognize check offs worldwide, McDonalds tidy sum. The following executive synopsis presents the key merchandiseing aspects of McDonalds sight and should be read as a complement to the contents of this report. Summarized content scalawag No. Key facts abtaboo the besotted. impertinent environment forces and consumer demeanour. The supposition of selling commixture and its various aspects. Decision fashioning offshoot and carry image. 2 2 3 The reaping flavor round of golf and what stairs the familiarity is taking to revitalise its alert opens. The contrastive co mmunication strategies utilize by the fellowship in signifyising its products and the vary styles of television advertising carried knocked out(p) since McDonalds launch in India. The dispersal and the oblige chain network of the substantial in India. The SWOT analytic thinking of the flying on with inference and round recommendations. 8 9 10 1. 0 INTRODUCTION merchandising is unsounded by majority of crinkle groups as theatre of operationsly to mean simply to promote, sell and advertise. notwithstanding this is not whole true as selling incorporates wholly techniques from human behaviour and cultures through research, novel product launch, product life cycle, advertising, frequent relations and fin aloney the sales function. The leased Institute of merchandising (CIM) describes marketing as the management rule account fitted for discoering, anticipating, and substantive consumer requirement valuably. Hence the intimately earthshaking concept of market ing lies in acute and construeing your customer. This report aims at investigation how McDonalds Corporation, a planetary eatery has achieved this coarse conquest in worldwide growth and ch aloneenges delinquent to its marketing strategies. 2. 0 BACKGROUND AND DISCUSSION Out of the enormous market of fast(a) viands industry, McDonalds Corporation is the globes fastest growing star sign, with more(prenominal) than 20,000 eating places in 100 countries (Vignali, 2001). In the UK, McDonalds operates a stupefying 900 restaurants (www. bc. co. uk ). Initi in ally it was started as a sultry dog stand by ray and mack McDonald at California, USA in 1937. The pipe livestock began in 1955 when Ray Kroc and the McDonalds br another(prenominal)s opened a restaurant to the northeastward of Chicago. From then on, McDonalds grew rapidly and right away is cognize as an international denounce. thus far, the cuisine card has been changed to meet the take away and lifestyles of the customers. India has been a sticky market for any everywhereseas soused to do business confacering its diversity and heathen differences.However McDonalds established its root Indian discharge in Vasant Vihar, peeled Delhi in October 1996. McDonalds India has a 50-50 joint post involving McDonalds Corporation, US and 2 Indian business men, Amit Jatias (Hard castle Restaurants Private Limited) and Vikram Bakshi (Connaught center field Restaurants Private Limited). About major sh ar of the carte available in McDonalds in India is Indianized and exclusively designed to move in Indian consumers (Dash, 2005). notwithstanding the success earn not come at ease, the firm had to meet a lot of obstacles and difficultys in attaining its high standards. . 0 EXTERNAL trade ENVIRONMENTAL FORCES McDonalds faces many another(prenominal) impertinent marketing environmental forces, which the firm has to acquaint with and deal accordingly. With respect to environment forces, the firm has to adapt highly fragmented grocery marketplace and exploitation transportation. Considering the fact that Indias pabulum expenditure is on the rise, McDonalds likewise has to compete with the millions of road side stable, dhabas (Regional Food Stalls) and carts which introduce popular nourishmentstuffs across India (Dash, 2005).Hence the party has come up with a mannequin of reasonable products at reasonable worths. In view of the ethnical force, the firm has to conquer the major regional languages and the educational barrier among the concourse. Hence McDonalds adapts to the local anaesthetic language and uses signs as a unfaltering display of firms assurance to the localities (Chauhan, 2008). On the political front, the firm withal has to check on the presidential bound intervention and pressure from various regional environmentalists and health camps (check http//www. hinduonnet. com ).Even on the efficient front, some pressure exists as swadeshi ( regional) brain exists. The guild as well has to focus on the diverse distribution of income across the country. tally to Mr Jatia, M. D, South and West Region, India, Indian people be increasing their visits to McDonalds as it has fabricate more than an occasion meal oddly to the middle class. (http//on flexure. wsj. com ). Hence looking at the success, the fact can buoy be wasted that twain local management directors (Mr. Bakshi and Mr. Jatia) bugger off played important roles in mold McDonalds to the prospects of the Indian market. . 0 market MIX The concept of merchandising go consisting of the 4P was formulated by McCarthy in 1975. This was utilise as principal foundation for many years. In the year 1996 Fifield and Gilligan kick ined 3Ps ( community, suffice and Physical) to the real 4Ps of merchandise Mix. These 3Ps atomic upshot 18 an integral bulge of services marketing. The 7Ps utilize to analyse the Marketing Mix of McDonalds in India argon 1) mer chandise (Features, Quality, Quantity) McDonalds aims to create standardized mickle of incidents, that try same everywhere.But a gigantic with this it revolve abouts on localization by adapting to local tastes, customs, customer preferences etc. For example, McDonalds changed the ingredients of its french Fries subsequently it protested that it was do out of the oil from screak. This was make as Cow is considered sacred among Hindus in India. McDonalds has a variety of products specially made for the Indian market. near of them atomic number 18 vegetable McNuggets, Mutton based Maharaja mackintosh (as Hindus do not eat beef and Muslims do not eat pork). apart(predicate) from all these its circuit board includes beverages, frozen desserts and breakfasts combos. ) bottom (Location, Number of Outlets) McDonalds follows concept of standardization in component of place also. The ambience and candidate all restaurants are the same. The reasons why most of its outlets in Ind ia are in Malls, obtain complexes, famous street markets is its locating strategies. It has over 130 outlets in 34 cities all over India. 3) Price (Strategy, Determinants, Levels) In India McDonalds has set prices on the basis of the prices of its nearest create competitors. For example, initially it set price in wise Delhi on the basis of the price of Nirulas, its biggest competitor in that area. Vignali, 2001) This way it attracted the customers, as they were getting an international grunge at the price of a local brand. The determine scheme of McDonalds with respect to rivalry is explained in the later awards of the report. 4) Promotion (Advertising, Sales Promotion, cosmos Relation) Brand globally, advertise topically is McDonalds furtherance strategy. (Vignali, 2001 Sander & Shani, 1991). For years it has retained extensive promotion strategy. It focuses on pip-squeakren, general eating experience and portrays it egotism as a Family Restaurant. Its global sheet li ne is Im Lovin It.Tag line to attract Indian customers is Aap Ke Zamaane Mein Baap Ke Zamaane Ke Daam, which doer demoralise at a price, which your father used to get in his days 5) People (Quantity, Quality, Training, and Promotion) The Company is strongly committed to moduleing locally and promoting from within. This intend that McDonalds has managers who understand both the corporate and the local cultures (Vignali, 2001). Particularly in India it is important to experience local people, as language differs from state to state and staff from some other state powerfulness not be able to understand the local peoples language. ) treat (Blueprinting, Automation, Control Procedures) In McDonalds the procedure for making nutrition is identical everywhere. For example, one out of two fries must pulsation 75mm, meat for Big Macs weighs 45g and is 20 per cent fat. (Vignali, 2001). The following is the solve in McDonalds 7) Physical (Cleanliness, Decor, and Ambience of the val ue) This is one of the most important components of the Marketing Mix. If the place where the diet is served is not brisk and salutary then there go out be no result from the components.Keeping this in mind, McDonalds aims at cleanliness, speed, prize and transparency of outgrowth. exact standards of cleanliness are maintained at all times. 5. 0 CONSUMER BEHAVIOUR In damage of consumer behaviour, McDonalds associates its products with routine response behaviour and in some strips peculiar(a) conclusion making for some classes. For example, enjoying a cheerful meal for some people whitethorn unless be a case of hunger while some for some eating at McDonalds whitethorn be luxury and hence they whitethorn just now turn up on occasions. majority of the decision starts with investigateal buying.Personal factors which touch on the firm in relation to the consumer are demographic factors like age, gender and race. However the firm can also germinate some situational factor s like crack surrender sport coupons and offering 2 meals at one price (Deng, 2009). McDonalds also enhances the psyche level of involvement by offering hygienic meal packages for adults and toys for children. Bearing in mind the social factors, the firm has understood various cultures and classes across India. As distinct people shake off different local tastes, the firm produces products with a mix of regional taste (Dash, 2005).In terms of thought process leaders, celebrities are cosmos increasingly used in marketing communication by marketers to lend personality to their products. 5. 1 pinch THE INDIAN CONSUMER Understanding an Indian consumer was highly important for overcoming the challenges of expansion in India. Some facts of Indian consumer are that they take on a high degree of family orientation. In termination to this? In India, McDonalds has placed itself as a family restaurant. The foundation of its approach is to attract families and friends (Dash, 2005).Se condly Indian consumer is influenced by discounts and freebies. Hence the firm has constantly distributed free schemes on its products with its pricing strategies. Notable fact is that Indian consumers choose expensive products as they palpate that price is an indicator of feeling and they are likely to buy environmentally answerable products and packs as the environmental awareness has started touching India. In response to this McDonalds attracts the consumers with good reference products and its ethical and ecological responsible products and encase help in clean environment. . 2 DECISION MAKING PROCESS after(prenominal) investigating the behaviour of Indian Consumer, McDonalds has produced an good decision making process which involves five puts. The firm initially tries to notice the want need of the customer with its research on regional consumers. Secondly McDonalds provides learning of the products through internet, reports, media and driveways which helps the b uyer to specialise and understand the product better. Information tie in to pricing, offers and health are provided to the consumer.Thirdly McDonalds provides a range of alternative products and its benefits to different consumers and helps them to evaluate accordingly. In the quaternionth stage the company uses its price strategy and benefits the company aims to attract customers and their decisions to purchase their products. And finally, through quality and service, McDonalds tries to improve its service with customers providing Post-purchase evaluation. 6. 0 BRANDING In terms of brand experience, McDonalds is not just a product but a fast, clean and easy way for families to enjoy together.In view of the firms branding, McDonalds emphasizes on Customer driven and goal orientated techniques. According to Arvind Singhal, Head of Marketing at McDonalds India, McDonalds chooses to familiarize the customer with the brand in terms of a marketing communications. Since the brand ima ge symbolizes how customers view the organisation, the company launched a clown named Ronald. Sitting on the Ronald McDonald judicatory and pumping sauce from the sauce machine became brand rituals for children. Hence the company ensured that it as to be aware of fundamental unavoidably by identifying, predicting and serving their consumers rather than just selling the product (http//www. businessweek. com ). Hence the firm concentrates not totally on delivering products for the instant demand but also defending the long term brand status. Family values being important in India, McDonalds promotion assured that its is not just a fast-food joint but a degenerate, healthy and easy way for families to bladderwrack together. thence McDonalds focuses not only on delivering sales for the immediate present but also protecting the long term brand reputation. . 0 COMPETITION AND quoin In terms of pricing strategies, which is a part of marketing, McDonalds faces tough competition on se veral fronts. Traditional rivals such(prenominal) as pizza pie Hut, KFC and most importantly the local dhabas and road side stalls are eating reasonable margins of McDonalds sales. Considering the prices, a nearly-chosen meal in Pizza Hut which consists of 2 pizzas would most cost ? 4. 5 (Rs 350) and standardizedly a burger and drink at a KFC outlet would cost around ? 1. 5 (Rs 120).But with its consumer value strategies, McDonalds offers a happy meal at only (Rs 90) ? 1. 12 (www. businessworld. in ) Recession may come across organisations to change their marketing policies because as nook occurs, the consumer spends less money on the product or switches to alternatives of low cost. But recess seems to be an advantage for McDonalds as Consumers will cut back on high-end dining, and McDonalds is the beneficiary as they provide food at reasonable prices. (www. europe. wsj. com ). The company also introduces novel offers accordingly to the situation.McDonalds has benefiting fr om its worldwide creative activity during the present recession, by the launch of untested products like McAloo Tikki (prepared with potato and vegetables) and the Maharaja Mac in India (http//money. cnn. com/2009 ). According to Vikram Bakshi, M. D of McDonalds trading operations in India, McDonalds will be doubling-up its returns in three years, and tripling our restaurants in the conterminous five years. Currently the fast-food chain has 123 outlets in India (http//in. reuters. com ). 8. 0 PRODUCT LIFE circle Underpinning the product life cycle concept is the belief that products move through a sequential, predetermined pattern of development similar to the biological path that life forms follow. This passageway is cognize as the Product Life Cycle (PLC) (Baines et al. , 2008). According to Kotler & Keller (2009), a companys positioning and differentiation strategy must change as the product, market and the competitors change over its PLC. pic Figure 1 As it can be seen f rom the to a higher place figure a product fundamentally has five stages, with four of them directly cogitate to the consumers who in many terms rate different aspects or the whole of product. therefrom all products have a limited life for the consumer as substantially as the product. Since McDonalds is a company that deals in food items, its products will have a definitive period within which they have to get acquainted to the customers tastes, grow in value and earn profits for the company. in any case since the McDonalds products are perishable they have a short life cycle (see www. bbc. co. uk). Thus regular innovation of the food items is required by McDonalds. For instance, McDonalds French Fries have been an important part of the companys bill of fare worldwide.But in India, at one stage their sales were on nightfall. To counter this problem the management tried to implement authoritative feels. They introduced the fries with a mix of authoritative Indian spices. Th e product came to be known as Shake Shake Fries. This was well received by the consumers and it once once again revitalised the sales of the fries. Thus without cannibalising the existing product a advanced product was created by the firm to delay the decline of a well established product which had the potential to generate income (Ghosh et al. , 2009). 9. 0 trade COMMUNICATIONSThe managerial system that ensures punctual and comprehensive input to the corporate information and the decision making process and government issue production and expression of credible, persuasive representations of in effect(p) exchange opportunities with actual and prospective customers and other stake holders. (Varey, 2002). On a more a simple terms it is the method of communicating the skillful message, through the expert medium, to the correct audience (see www. thetimes. biz). If a firm fails to comprehend these steps, it may result in its product failure. The communication methods adopted by McDonalds in India are as follows, bleakspapers, Journals and other forms of Print Media Television advertisements express of Sale Display Merchandising groom Mail Door drops Demonstrations Tele-Marketing(see www. thetimes. biz) Thus effective communication is, when the company develops a campaign which makes use of the above methods to get the desired results. Considering only the Television Advertisements of McDonalds in India, these were not on the companys radar until the turn of the century (see www. thetimes. biz). This was scorn its entry into the Indian market in the latter part of 1996.This step was undertaken by the company so that it could concentrate more on the development of its stores, improve the quality of its products and tailor its global menu to typesetters case the Indian tastes. It was only after 2000 that the startle advert of the firm was telecast. The first advert of the firm featured a child who suffers stage fright and is unable to recite a poem. On entering McDonalds, he easily recites it in the stores familiar environment. This advert of the company basically focussed on McDonalds being a loose and a familiar place (Chaturvedi, 2008).The attached ad was based on a family moving to a new place. The put one across in the family feels lonely in the new surroundings until he finds a McDonalds. This ad was basically the friendliness of the McDonalds personnel. likewise the management of the firm in India note that the local people were price sensitive. Thus they took out and ad with a tag of Yesteryears Prices. It features Bollywood stars from past decades together with their sons and a message that prices have not risen in line with the passage of time (Chaturvedi, 2008). Thus McDonalds with a trenchant agenda timed their ads to perfection which gave them good returns.McDonalds also with its advertisements gave its tagline uttermost(a) importance. This is evident from the fact that its initial ads were delivered with a punch line McDonalds Mein Hai Kuch Baat which translates to at that place is something special in McDonalds. When McDonalds had been favoredly established, its tagline changed to To Aaj McDonalds Ho Jaye which means Why not celebrate with McDonalds today (Vikram Bakshi, MD, McDonalds India). He also adds that the main focus of the company with its advertisements was to change the perception of the Indians that McDonalds was an American brand with typical American values.As Arvind Singhal, Head of Marketing at McDonalds India says From a marketing communications standpoint, we chose to focus on familiarizing the customer with the brand. Presently all of the McDonalds communication strategies are cerebrate to move the consumers to some kind of action. This may either be to visit the restaurant, buy the product or recommend it to a friend. It is also framed so that the consumers immortalise the product. Thus the mantra of the firm is that the more it knows some the people it is serving the more it will be able to communicate messages that magic spell to them. 0. 0 DISTRUBUTION AND SUPPLY CHAIN McDonalds uses an outsourcing model al all its markets, in some places it actively imports but in India gets materials from different places in India (Dash, 2005) it has suppliers all over India, go forthing different inputs. This is done on order to procure best quality of input at the best affirmable price. Selecting a supplier involves a four step process. In each step the prospective supplier is evaluated carefully. Only item imported is the equipment to dish out burgers. The major suppliers in India are Input Product Supplier Company Location Iceburg Lettuce Trikaya gardening Talegacon(Maharashtra) Ooty Farms Ooty Meena Argitech Delhi Cheese Dynamix Dairy Baramati (Maharashtra) take out & Milk Products for Frozen Desserts Amrit Food Delhi and Mumbai Buns & Sauces 1)Cremica Industries Philluar (Punjab) 2) Shah Bector and Sons Khopoli ( Mahar ashtra) Patties, Pies & Pizza puffs Vista Processed Foods Taloja (Dash, 2005) The entire distribution process is carried on by AFL Logistics Ltd, McDonalds official partner in logistics and supply chain. 10. 1 DISTRIBUTIONMcDonalds in India uses what is called as a Cold Chain. This means that the vegetables are stored in cold stock from the moment it is harvested. These are then transported to restaurants in refrigerated vans. Semi finished products are also stored a particular temperature. This ensures glowing and maintains the moisture level of the food. In the restaurant also the products are refrigerated. In the restaurant the deliveries are made to the customer within 60 seconds and the mode of service is self service. This is done to maintain speedy and quick service. 11. 0 SWOT ANALYSIS McDonalds in India has been for around for around 13 years.Till now it has complimented the values and the cultures of the locals in an super ethical way. But let off it has some we aknesses and threats, which if not countered, may well become grave. Thus the SWOT analysis shows the areas where the firm can build up on its existing strong image. ? Strengths pixilated Brand The McDonalds Corporation in India has been able to live up to its global image of being able to direct any type of market. It has shown that by adopting the right approach and methods, any market can yield positive results. This has not only consolidated its powerful image and strong brand values but also has made the job difficult for the new entrants. Customer Intimacy The firm in India with its correct mix of communication has been able to tap majority of the audience it pore on and has also developed middle from the openhanded children populace of the country with its Children central ads. Product Innovation the Company with its seasonably product innovation has regularly unbroken the consumers interested in its menu which caters to their tastes. grade in add-in, Reasonab le Prices and Great Service Also with wide options in the menu McDonalds also offers gravid prices with burgers scratch line from Rs20 ( Around 15p) plus with 1 irregular Service customers do not return disappointed from the place. ? Weakness Product on the scale of Health McDonalds in India is noneffervescent not selling products which are good for health or which are made keeping consumers fitness.They are severe to fine tune their menu by adding more baked products rather than heat patties, but apart from McCurry Pan (launched 2003) it has not been able to introduce more healthy products (Dash, 2005). This fact forces many health conscious(p) people to avoid the place altogether. ? Opportunities Expanding in Tier 2 and Tier 3 Cities Despite the firms success in the urban and the metropolitan cities of India, McDonalds has gloss over not explored the whole of the country. This is due to the fact that the punyer cities in India are more inclined towards the home cooke d food and eating fast food out is generally limited to local food joints that specialize in Indian cuisine. This presents a good prospect for the company to experiment with its menu, as McDonalds has already localise its menu to a very great extent in the country. Entry into eat Category One of the other things that the company has still not made a complete foray into is the Breakfast Menu. McDonalds have started only a couple of outlets in Mumbai and Delhi on data-based basis that serve Breakfast menu in December 2008. The options in this menu are available from 7 am to 11am in the morning. But the company is still to operate it on a large scale. Strong Beverage Brand McDonalds in India have till now only concentrated on to the food items they serve. The beverages they offer are just plain change state available in small and large and coffee, tea and hot coffee bean with no proper advertising.But it still has the opportunity to advertise and bring in its own brand of bevera ge as compared to something like Star Bucks The beverage may hot or cold and would give McDonalds its own identity in the market which is dominated by Coke and Pepsi. ? Threats changing Customer Lifestyle Today, India has changed easily as compared to 10 years back. at the same time the customer tastes are changing at a very fast pace. McDonalds needs to keep this thing in mind since the customer taste for a particular product in todays environment is very short-lived. append Competition Today with the increasing number of malls and shopping centers in India, the number of fast food joints and restaurants has increased significantly that offer similar kind of food at comparable prices.This can turn out to be a disadvantage to the company since it mainly concentrates on opening its franchises in these malls. 12. 0 CONCLUSIONS & RECOMMENDATIONS From the above report it is clear that McDonalds marketing strategies in India have been successful. With complete understanding of th e consumer and considering the various marketing environments, executing very reasonable prices to apropos product innovation and lastly extremely effective communication techniques have include India in their long list of successful countries. The only thing that the company needs to focus on is to try and add more menu choice and variety to promote healthier lifestyles. Also it should inspect its already existing operations forrader continuing expansion in rder to increase their profit margin and since India is a developing country the firm should try and concentrate on penetrating, at timely intervals, into more budding cities. 13. 0 REFERENCES Baines, P. , Fill, C. , Page, K. (2008) Marketing Oxford University Press, New York. Chaturvedi, P. (2008) Super-localize me how McDonalds evolved its marketing in India, Warc Exclusive. Chauhan, G. (2008) Language in India, Languages Group, Vol 8, Birla Institute of Technology and Science, India. Deng, T. (2009) McDonalds New Communica tion Strategy on Changing Attitudes and Lifestyle, internationalist Journal Of Marketing studies, Vol 1, SolBridge International work of Business, South Korea. Fifield, P. and Gilligan, C. 1996) Strategic Marketing Management, Butterworth- Heinemann, Oxford. Ghosh, R. , Balaji, D. , Shah, J. , Sherlekar, N. , Sidana, D. , (2009) McDonalds Behind Golden Arches. Kotler, P. & Keller, K. L. (2009) Marketing Management, 13th Edn, Pearson Prentice Hall, USA. McCarthy. (1975) Basic Marketing A Management Approach, Irwin, Homewood, pg 98. Media Trust, The Institute For Volunteering investigate (1997) Introduction To Marketing, Volunteering England and the Centre for Institutional Studies at the University of East London, UK. Prof. Dash, K. (2005) McDonalds in India, The Garvin School of International Management, USA. Sander. D. M. & Shani. D (1991) Brand globally but Advertise Locally?An data-based Investigation, International Marketing Review, Vol 9, No 4, pg 18 29. Varey, R. J. ( 2002) Marketing Communication Principles and Practice, Route ledge, London,pp 127-129. Vignali. 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DELIVERY UNIVERSAL keeping CABINET ASSEMBLER INITIATOR cold FOOD MATERIAL