ABV- Indian Institute of Information Technology and

Management, Gwalior

MARKETING
STRATEGY
of McDonald's
in

INDIA
 INTRODUCTI
ON
“The world’s best quick service restaurant experience.”

• world'slargestchainofhamburgerfastfoodrestaurants,
• servingaround68million customersdaily 119countriesacrossmorethan36,000outlets.in
• FoundedintheUnitedStatesin1940,thecompanybeganasabarbecuerestaurantoperated
byRichardandMauriceMcDonald.
• McDonald'sprimarilysellshamburgers,cheeseburgers,chicken,Frenchfries,breakfastitems,soft drinks,milkshakes,
anddesserts.Inconsumertastes,
Source – Business
Facts About
McDonald`s
Insider
 McDonald's History in
INDIA
• Entered in India 1996
• McDonald's India is a 50 –
50 JV partnership
between
Mcdonald’s Corporation
(U.S.A) and two Indian
businessman Amit Jatia
and Vikram Bakshi
• Trained extensively with
their Indian management
team in Indonesia and US
before launch
• The entire menu was
changed
 Consumer
Analysis
Customer Characteristic:
• India is the second most populated country in the world. It has 28 states and almost 4
times the
population of USA. India has more than one billion population.
• Three fourth of Indian population lives in Urban areas. Though per capita income is
very low in India but still people like to spend on costly products and eating out.
• Consumers in India are highly family oriented. McDonald's targets high income earner,
middle income earner and lower middle income earner in India.
• Indian consumer are getting brand awareness through internet, TV, Newspapers,
Radio, Magazine etc.
• Middle income group is getting bigger in size day by day as a result of economic
boost in India and that is very good news for McDonald's.
• Indian consumers are now getting environmental awareness and like to use
Ecofriendly products
 Consumer
•
Analysis
Family system gives a big chance for McDonalds
Income
Distribution
Upper
to get Middle
their sale rise as Indians are buying food in bulks. 5
IncomeHigh
% Inco
• Indian consumers are becoming very open
Middl
me
4%
minded which is a positive sign for McDonalds. e
Inco
• For McDonalds to succeed as they are now, me Low
Income
they should go to expand in urban areas as 12%
49%
well as rural areas and target middle and lower
income earners and beside this they should Lower
Middle
introduce certain products which can be Income
afforded by low income earners. 30%

• Customers like spicy foods and McDonald has

introduced many products which are spicy and Low Lower Middle
tasting according to the preference of Indians.
Income Income Upper
Middle Middle Income
Income
 McDonalds
USP
• McDonald's mein
hai kuch baat. (Oct.
13, 1996–1999)
• Toh aaj,
Mmmmmmmmmm!
McDonald's ho jaye.
Har choti khushi ki
celebration (1999–
2003)
• I'm lovin' it (2003–
present)
 MARKETING
MIX Produ Pric
ct e
In India McDonalds In India
has a diversified classifies
McDonalds its
Other Factors product range into 2 categories
products
which also focusing more on the namely the branded
affects are : vegetarian products affordability (BA)
• People as most consumers and branded core
in India are primarily value products
• Process vegetarian. (BCV).

• Physical
evidence
Plac Promoti
e on
McDonald’s outlets At McDonalds the
very spread focus
prime is on
are
througho
evenly children. In happy
targeting
the
ut the meals too which are
cit
making m targeted at children
ie given along with
accessibl small toys are
s the meal.
e. . ve
ry
 MARKETING
• The marketing mix is
apart of the
MIX • Functional
• Appearance
ity
• List price
• Discounts
• Quality • Allowances
organizations planning • Packaging • Financing
process and consists of • Brand • Leasing

• analyzing thedesign,
How will you defined: • Warranty options
• Service/Supp
package and add value
to the product?
ort Produ Pric
Product strategies. ct e
• What pricing
strategy is
appropriate to
use? Price Placeme Promoti
strategies. nt on
• Advertising • Locations
• Where will the firm • Personal • Logistics
locate? selling • Service levels
• Public • Channel
Place strategies.
relations members
• How will the firm • Message
• Media
• Channel
motivation
promote its
• •
 Marketing Mix :
Product
• McDonald’s places considerable emphasis on developing a menu which customers
want. Market research establishes exactly what this is.
• However, customers’ requirements change over time. In order to meet these changes,
McDonald’s has introduced new products and phased out old ones, and will continue to
do so. Care is taken not to adversely affect the sales of one choice by introducing a new
choice, which will cannibalize sales from the existing one (trade off).
• McDonald’s knows that items on its menu will vary in popularity. Their ability to
generate profits will
vary at different points in their cycle.
• In India McDonalds has a diversified product range focusing more on the vegetarian
products as most consumers in India are primarily vegetarian.
• The happy meal for the children is a great seller among others.
 Marketing Mix :
Product
• McDonald's commitment to its Indian customers is evident even in development of
special sauces that use local spices and chilies.
• The mayonnaise and all other sauces are egg-less. McDonald's also pioneered the
establishment of Cold Chain across India which helps maintain freshness and nutrition
in every product.
• McDonald's regular scrumptious menu includes wide range of products like McAloo
Tikki, Filet-O- Fish, Spicy Range, Chicken McGrill, McVeggie, Veg Pizz a McPuff,
Chicken Mcnuggets, Fries, Wraps, an assortment of Sundaes, Soft Serve and
refreshing beverages such as Ice Tea & Cold Coffee with outstanding service in a
vibrant and lively ambience, for which McDonald's is known worldwide.
• McDonald's had further reinforced the branded affordability mantra via the
introduction of the Happy Price Menu which starts at Rs 25 only.
Marketing Mix : Product &
Price
 Marketing Mix :
Price
• Pricing strategy is one of the most significant aspects when it comes to
marketing. This includes price breakdown, when any discount service or
payment available.
Pricing strategy was developed in order to attract middle and lower class
individual and the result can
clearly be seen the customer base which McDonalds has at present.
• McDonald’s restaurant has specific value pricing as well as bundling strategy
like combo meal, happy meal, family meal and happy price menu in order
to improve total sales of the service and product.
• In India McDonalds classifies its products into 2 categories namely the
branded affordability (BA) and branded core value products (BCV).
• The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-
60 and the BA products include McAloo tikki and Chicken McGrill burgers which cost
Rs20-30. This has been done to satisfy consumers which different price perceptions.
 Marketing Mix :
• Promotion
The promotions aspect of the marketing mix covers all types of marketing
communications.
• One of the methods employed is advertising, Advertising is conducted on TV, radio, in
cinema, online,
using poster sites and in the press for example in newspapers and magazines.
• Other promotional methods include sales promotions, point of sale display,
merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing
communications is to develop a campaign which uses several of these methods in a
way that provides the most effective results. For example, TV advertising makes people
aware of a food item and press advertising provides more detail. This may be
supported by instore promotions to get people to try the product and a collectable
promotional device to encourage them to keep on buying the item.
• At McDonalds the prime focus is on targeting children.
• In happy meals too which are targeted at children small toys are given along with the
meal. Apart from this, various schemes for winning prices by way of lucky draws and
also scratch cards are given when an order is placed on the various mean combos
 Marketing Mix :
•
Place
Place, as an element of the marketing mix, is not just about the
physical location or distribution points for products. It encompasses the
management of a range of processes involved in bringing products to the
end consumer. McDonald’s outlets are very evenly
spread throughout the cities making them very accessible. Drive in and drive
through options make McDonald’s products further convenient to the
consumers.
• Place plays very important role in launching a product and making it successful.
McDonald's has expanded through out in India Urban areas.
• McDonald is currently targeting urban areas as we know that big part of population is
living in urban areas. Place doesn’t only include physical location but it is includes all
the processes that eventually leads to product ending in customers hand.
• Place plays very important role in getting priority over the rivals and place should be
selected after research on the local demography, income level and customers
preferences.
McDonalds in India chooses a particular place after long research and checking
 Marketing Mix : Other
Factors
• People :The employees in McDonalds have a standard uniform and McDonalds
specially
focuses on friendly and prompt service to its customers from their employees.

• Process :The food manufacturing process at McDonalds is completely

transparent i.e. the whole process is visible to the customers. In fact, the fast
food joint allows its customers to view and judge the hygienic standards at
McDonalds by allowing them to enter the area where the process takes
place. The customers are invited to check the ingredients used in food.
• Physical evidence : McDonalds focuses on clean and hygienic interiors of is
outlets and at the same time the interiors are attractive and the fast food joint
maintains a proper decorum at its joints.
 Micro Environmental
Issues: Porter`s Five
Force Model
Threat of New Entrants or New Threat of Substitutes or
Entry Substitution
(Moderate Force) (Strong
Low switching costs (strong Competitive Rivalry or Force) High substitute availability
force) Moderate capital cost Competition with (strong force) Low switching
(moderate force) McDonald’s (Strong costs (strong force)
High cost of brand development Force) High
(weak force) High number of Performance-to-cost ratio
Firms (strong (strong
Bargaining Power of Bargaining Power of McDonald’s
force) force)
McDonald’s Customers/Buyers
High aggressiveness
Suppliers (Weak Force) (Strong Force)
of Firms
Large number of suppliers (weak Low switching costs
(strong
force) (strong force)
High availability Large number of
of substitutes
force)
Low forward vertical (strong force) providers (strong force)
Low switching
integration (weak force)
costs
High overall supply (weak
(strong
force)
force)
 Micro Environmental
Issues: Porter`s Five
Threats of New Forces Threats
Model of Rivalr
Entrance: Substitute: y
• Fast food restaurant
• The substitutes industry is very
• Entry to a in this industry competitive.
restaurant are very high. • The competition is so
Business is very • People can choose high as all the
difficult. It is variety of products organizations want to
hard to make a they can either get hold of customer
prominent choose Burger King, • McDonald's knows
brand name. KFC, Indian Cuisine, about the customers
• There is high Indian local shops, taste and preferences
research and Indian Vegetarian all over the world.
development restaurants etc. • McDonald's is
costs and high providing quality
cost of entry. food from early
• Strong brands morning till late
already in night in order to
competition make get competitive
it more difficult edge In the
 Micro Environmental
Issues: Porter`s Five
Forces Model
Bargaining power of customers Bargaining power of
supplier
• Bargaining power of customers
refers to pressure a customer can • Bargaining power of buyer
exert on a business to get good in this industry is low.
quality of food, good customer Situation can change if
service and low price. the main ingredients are
• Bargaining power not available.
. of customer
in this industry is low. As • But with McDon:ald's
M:cDonalds provide a standard simple menu and working
service, one price strategy and with many supplier ,they
quality of food. are not facing a big
• Customers have low threat.so the bargaining
bargaining power through out power is relatively low.
the food industry
 Competitive Scenario in
• The industry India
of fast food business in India is quite competitive and these competitors
offer direct and indirect competition to McDonalds.
• In India McDonalds face a tough scenario because there are certain other international
chains that also offer tough competition to McDonalds . These international
competitors are Pizza Hut, KFC, Dominos Pizza, and Subway. However, Indians
prefer their local manufactures and that is the reason why the local fast food chains
are growing in numbers that are also giving competition to McDonalds.
• The local fast food chains in India are Hyderabad House, Ohri’s, Jumbo King,
Narula’s etc. The competitors that are present in India are quite diverse in many
aspects as this can be considered as one of the biggest issue for McDonalds.
• In the similar manner it can also be said that in India the competitors are so diverse
that they compete in aggressively and in certain scenarios they also compete in
nonprice dimensions like innovation, marketing, etc.
 Competitor`s
Analysis MCD vs
Source – Yahoo
Finance JUBLFOOD
 Competitor`s
Analysis
Source – Yahoo
Finance MCD vs YUM
 ST
P
Segments Targeting Positioning
• Demographic : • Children and Youth • Happy Price menus
Kids, Families, • Young Urban • Toys along with
Teenagers Families meal
• Psychographics: • Vegetarian Fast • WiFi facilities are
Convenience of life food Eaters being provided
style • No beef , No Pork
 Strategies of McDonald :An
Overview
Entrance Strategies:
• In order to capitalize on the highly price sensitive economy, and the Indian
mentality of liking anything that is foreign, McDonald’s strategy was market
penetration and the three circles strategy. This led to localization & branding
of the company.
• They had to suit their burgers to Indian taste and Indian market which was a
hyper price sensitive
market.
Training Strategies
• .Induction training was conducted at the time of an employee’s joining the
organization.
• This was done through interactions as well as through exposure with the
customer through operation training within the restaurants for a fixed
period of time.
 Strategies of McDonald :An
Overview
Supply Chain Strategies
• In the process, McDonald’s actually encouraged entrepreneurship, by
introducing the local suppliers to its global suppliers. This association
involved transfer of state-of-the-art food processing technology, thereby
leading to an improvement in quality standards and helping create world
class manufacturing facilities in India
• In the five-and-a-half years until start-up, McDonald’s spent as much as Rs 500
million (US$12.8 million) to set up a supply network, distribution centres and
logistics support. By mid-2000, some estimates placed the total investment in the
supply chain at almost Rs 3 billion.
 Major Reasons for McDonalds
Success
1. The System
This is the first thing that makes McDonald's so successful, by having an effective and efficient
system in place, which exploits the minimum wage labor available, in the form of young
teenagers who are just looking to make some cash or pick up fundamental job skills.
2. Convenience
The second reason why McDonald's is so popular is because it's everywhere. There a McDonald's
at every corner of the map, at every major shopping centre, district, highway, freeway, every
place which attracts even, remotely more than 10 people, will have a McDonald's restaurant not
too far from them.
3. Likability and Familiarity
The Golden Arches, the Big M. Ronald McDonald, happiness and fun; all these are the
associations with McDonald’s
which makes it so familiar
4. The Menu
McDonald's has one of the most diverse menus, targeting all ages from little kids to old
pensioners, and everyone else in between.
 Conclusi
• on
McDonald’s recognized the unique problems and opportunities of the Indian market.
The company then took its time, adapting its products and just as importantly its
corporate strategy, and has been hugely successful since.
• At the same time, the company cannot afford to become complacent and rest on its
laurels. Any
future missteps, however small, could ruin McDonald’s efforts and hard fought gains
in the country, allowing the company’s rivals to catapult past them and onto even
greater success.
• In order to sustain in a very competitive market McDonald’s has to continuously think
of bringing in new concepts into all its operations especially in marketing.
• The result of a spontaneous thought led to the introduction of breakfast outlets and a
chance encounter with a technology specialist ended up with online booking orders
and birthday parties and signature outlets.
• The success of McDonalds in India could be measured by its continuous growth in
Indian fast-food market with 210 branches across India