Marketing Strategies of Mcdonalds in India

EXECUTIVE SUMMARY selling is a number of delineateing likely clients and consumers in your intersection points and goods. til now the crucial give voice in the above sentence is procedure , hence commercialise incorporates researching, tingeising, selling, and distri neverthelessing your point of intersections or services. thence we planned to decoct on atomic number 53 of the beaver cognize crisscrosss worldwide, McDonalds fraternity. The following exe racecourseive summary presents the key marketing aspects of McDonalds Corporation and should be read as a complement to the contents of this report. Summarized content Page No. Key concomitants ab aside the solid. External milieu forces and consumer behaviour. The concept of marketing mix and its several(a) aspects. Decision making attend and grunge image. 2 2 3 The product Life musical rhythm and what steps the comp headspring-nigh(prenominal) is taking to revitalise its live products. The vari ed conversation strategies use by the smart set in advertising its products and the varying styles of television set advertising carried out since McDonalds launch in India. The scattering and the come forth chain network of the blood immobile in India. The mug up analysis of the steady a longsighted with inference and somewhat recommendations. 8 9 10 1. 0 INTRODUCTION Marketing is understood by majority of contrast groups as simply to mean simply to promote, sell and advertise. bargonly this is not only if true as marketing incorporates all techniques from human behaviour and cultures done research, new product launch, product behavior cycle, advertising, public relations and in conclusion the sales function. The Chartered Institute of Marketing (CIM) describes marketing as the anxiety method account fit for discovering, anticipating, and satisfying consumer requirement valuably. and then the closely pregnant concept of marketing lies in knowing and under band standing your customer. This report aims at investigating how McDonalds Corporation, a global eatery has achieved this enormous achiever in international growth and challenges due to its marketing strategies. 2. 0 ground AND DISCUSSION Out of the enormous market of fast nourishment industry, McDonalds Corporation is the globes fastest growing planetary house, with more than 20,000 restaurants in 100 countries (Vignali, 2001). In the UK, McDonalds operates a staggering 900 restaurants (www. bc. co. uk ). Initially it was started as a hot dog stand by Dick and Mac McDonald at California, USA in 1937. The business began in 1955 when Ray Kroc and the McDonalds br some others opened a restaurant to the uniting of Chicago. From then on, McDonalds grew rapidly and today is kn give birth as an international brand. However, the cuisine add-in has been changed to meet the demand and lifestyles of the customers. India has been a difficult market for any overseas stanch to do business co nsidering its diversity and h feasthenish differences.However McDonalds established its first Indian outlet in Vasant Vihar, saucily Delhi in October 1996. McDonalds India has a 50-50 joint venture involving McDonalds Corporation, US and 2 Indian business men, Amit Jatias (Hard castle Restaurants Private Limited) and Vikram Bakshi (Connaught Plaza Restaurants Private Limited). serious or so major percent of the card available in McDonalds in India is Indianized and exclusively designed to attract Indian consumers (Dash, 2005). But the success contract not come at ease, the firm had to meet a dish up of obstacles and problems in attaining its high standards. . 0 EXTERNAL MARKETING ENVIRONMENTAL FORCES McDonalds faces many external marketing purlieual forces, which the firm has to familiarize with and plug accordingly. With honour to environment forces, the firm has to adapt highly fragmented feed product market egress and developing transportation. Considering the fact t hat Indias food expenditure is on the rise, McDonalds as well has to compete with the millions of bridle- class side stalls, dhabas (Regional Food Stalls) and carts which liberty chit popular foodstuffs across India (Dash, 2005).Hence the guild has come up with a variation of reasonable products at reasonable bells. In view of the cultural force, the firm has to conquer the major regional languages and the educational barrier among the people. Hence McDonalds adapts to the topical anesthetic language and uses signs as a strong boasting of firms assurance to the local anaestheticities (Chauhan, 2008). On the political front, the firm in any case has to check on the government intervention and pressure from various regional environmentalists and health camps (check http//www. hinduonnet. com ).Even on the economical front, some pressure exists as swadeshi (regional) mindset exists. The caller-up likewise has to focus on the diverse distribution of income across the country . According to Mr Jatia, M. D, South and West Region, India, Indian people atomic number 18 increasing their visits to McDonalds as it has become more than an occasion repast specially to the middle class. (http//online. wsj. com ). Hence looking at the success, the fact can be drawn that both local management directors (Mr. Bakshi and Mr. Jatia) necessitate played valuable roles in shaping McDonalds to the prospects of the Indian market. . 0 MARKETING fluff The concept of Marketing cockle consisting of the 4P was formulated by McCarthy in 1975. This was used as principal institution for many years. In the year 1996 Fifield and Gilligan added 3Ps ( wad, Process and Physical) to the subsisting 4Ps of Marketing Mix. These 3Ps argon an inherent part of services marketing. The 7Ps used to analyse the Marketing Mix of McDonalds in India atomic number 18 1) Product (Features, Quality, Quantity) McDonalds aims to create standardized set of items, that judge same everywhere.But along with this it concentrates on localization by adapting to local sagaciousnesss, 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 beef. This was done as Cow is considered sacred among Hindus in India. McDonalds has a variety of products specially made for the Indian market. close to of them atomic number 18 ve snuff itable McNuggets, Mutton ground maharajah Mac (as Hindus do not eat beef and Muslims do not eat pork). Apart from all these its menu includes beverages, frozen desserts and breakfasts combos. ) Place (Location, Number of Outlets) McDonalds follows concept of standardization in component part of place as well. The ambience and outlook all restaurants are the same. The reasons why most of its outlets in India are in Malls, shop complexes, famous street markets is its localization principle strategies. It has over 130 outlets in 34 cities all over I ndia. 3) cost (Strategy, Determinants, Levels) In India McDonalds has set prices on the basis of the prices of its nearest organized competitors. For example, ab initio it set price in sweet Delhi on the basis of the price of Nirulas, its biggest competitor in that area. Vignali, 2001) This appearance it attracted the customers, as they were getting an international brand at the price of a local brand. The pricing scheme of McDonalds with respect to competition is explained in the later ramifications of the report. 4) Promotion (Advertising, Sales Promotion, Public Relation) blur globally, advertise locally is McDonalds promotion strategy. (Vignali, 2001 Sander & Shani, 1991). For years it has maintained extensive promotion strategy. It focuses on children, overall eating experience and portrays itself as a Family Restaurant. Its global tag line is Im Lovin It.Tag line to attract Indian customers is Aap Ke Zamaane Mein Baap Ke Zamaane Ke Daam, which convey buy at a price, w hich your father used to buy in his days 5) People (Quantity, Quality, Training, and Promotion) The Company is strongly committed to staffing locally and promoting from within. This means that McDonalds has managers who determine both the corporate and the local cultures (Vignali, 2001). Particularly in India it is historic to have local people, as language differs from state to state and staff from some other state might not be able to sympathize the local peoples language. ) Process (Blueprinting, Automation, Control Procedures) In McDonalds the procedure for making food is identical everywhere. For example, one out of two heat must measure 75mm, meat for Big Macs weighs 45g and is 20 per cent fat. (Vignali, 2001). The following is the process in McDonalds 7) Physical (Cleanliness, Decor, and Ambience of the Service) This is one of the most important components of the Marketing Mix. If the place where the food is served is not jolly and hygienic then there leave be no contr ibute from the components.Keeping this in mind, McDonalds aims at cleanliness, speed, select and transparency of process. Strict standards of cleanliness are maintained at all times. 5. 0 CONSUMER BEHAVIOUR In toll of consumer behaviour, McDonalds associates its products with routine response behaviour and in some cases hold decision making for some classes. For example, enjoying a happy meal for some people may simply be a case of hurt while some for some eating at McDonalds may be luxury and hence they may only turn over up on occasions. Majority of the decision starts with experimental buying.Personal factors which affect the firm in relation to the consumer are demographic factors like age, gender and race. However the firm can also produce some situational factors like quiping ingenuous sport coupons and offering 2 meals at one price (Deng, 2009). McDonalds also enhances the individual level of involvement by offering healthful meal packages for adults and toys for ch ildren. Bearing in mind the social factors, the firm has understood various cultures and classes across India. As different people have different local tastes, the firm produces products with a mix of regional taste (Dash, 2005).In scathe of opinion leaders, celebrities are being increasingly used in marketing communion by marketers to lend personality to their products. 5. 1 UNDERSTANDING THE Indian CONSUMER Understanding an Indian consumer was extremely important for overcoming the challenges of expansion in India. Some facts of Indian consumer are that they have a high degree of family orientation. In solution 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).Secondly 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 pro ducts as they feel that price is an indicator of reference and they are likely to buy environmentally responsible products and packs as the environmental awareness has started affecting India. In response to this McDonalds attracts the consumers with good quality products and its estimable and ecological responsible products and packaging help in clean environment. . 2 DECISION MAKING PROCESS After investigating the behaviour of Indian Consumer, McDonalds has produced an effective decision making process which involves cardinal stages. The firm initially tries to recognize the want need of the customer with its research on regional consumers. Secondly McDonalds provides information of the products by internet, reports, media and campaigns which helps the buyer to fall apart and understand the product better. Information related to pricing, offers and health are provided to the consumer.third McDonalds provides a range of alternative products and its benefits to different consu mers and helps them to evaluate accordingly. In the fourth 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 of life for families to enjoy together.In view of the firms branding, McDonalds emphasizes on client driven and goal oriented techniques. According to Arvind Singhal, dubiousness of Marketing at McDonalds India, McDonalds chooses to familiarize the customer with the brand in terms of a marketing communications. Since the brand image symbolizes how customers view the organisation, the company launched a clown named Ronald. seance on the Ronald McDonald bench and pumping sauce from the sauce machine became brand rituals for children. Hence the company ensured that it as to be aware of fundamental needs by identifying, predicting and serving their consumers rather than just selling the product (http//www. businessweek. com ). Hence the firm concentrates not only 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 quick, healthy and easy way for families to relish together. thus McDonalds focuses not only on delivering sales for the flying present but also protecting the long term brand reputation. . 0 COMPETITION AND RECESSION In terms of pricing strategies, which is a part of marketing, McDonalds faces tough competition on several fronts. conventional rivals such as Pizza Hut, KFC and most importantly the local dhabas and road side stalls are eating reasonable banks of McDonalds sales. Considering the prices, a happy meal in Pizza Hut which consists of 2 pizzas would almos t cost ? 4. 5 (Rs 350) and similarly 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 affect organisations to change their marketing policies because as box occurs, the consumer spends less money on the product or switches to alternatives of low cost. But recession seems to be an advantage for McDonalds as Consumers depart 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 new offers accordingly to the situation.McDonalds has benefiting from its worldwide creative activity during the present recession, by the launch of new 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 operations in India, McDonalds will be doubling-up its returns in three years, and tripling our restaurants in the next five years. Currently the fast-food chain has 123 outlets in India (http//in. reuters. com ). 8. 0 PRODUCT LIFE calendar method of birth control 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 pathway is known as the Product Life bike (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 picture 1 As it can be seen from the above figure a product basically has five stages, with four of them directly related to the consumers who in many terms dictate different aspects or the whole of product.Thus all products have a limited life for the consumer as well as the product. Since McDonalds is a company that dea ls 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. overly 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 menu worldwide.But in India, at one stage their sales were on decline. To counter this problem the management tried to utensil certain steps. They introduced the fries with a mix of certain Indian spices. The product came to be known as Shake Shake Fries. This was well veritable by the consumers and it once again revitalised the sales of the fries. Thus without cannibalising the existing product a new product was created by the firm to interrupt the decline of a well established product which had the potential to drive income (Ghosh et al. , 2009). 9. 0 MARK ETING COMMUNICATIONSThe managerial system that ensures timely and universal input to the corporate information and the decision making process and answer production and expression of credible, persuasive representations of beneficial exchange opportunities with actual and prospective customers and other stake holders. (Varey, 2002). On a more a straightforward terms it is the method of communicating the right message, through the right medium, to the rig consultation (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, Newspapers, diarys and other forms of Print Media Television advertisements Point of Sale disclose Merchandising Direct 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. Conside ring 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 despite 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 suit the Indian tastes. It was only after 2000 that the first advert of the firm was telecast. The first advert of the firm feature 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 comfortable and a familiar place (Chaturvedi, 2008).The next ad was based on a family moving to a new place. The kid in the family feels lonely in the new surroundings until he finds a McDonalds. This ad was basically the friendliness of the Mc Donalds personnel. Also the management of the firm in India noted 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 public life of time (Chaturvedi, 2008). Thus McDonalds with a clear agenda clock their ads to perfection which gave them good returns.McDonalds also with its advertisements gave its tagline utmost 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 There is something special in McDonalds. When McDonalds had been successfully 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 McDona lds 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 focused 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 remember the product. Thus the mantra of the firm is that the more it knows about the people it is serving the more it will be able to drop dead messages that appeal 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, supplying different inputs. This is done on order to procure best quality of input at the best possible price. Selecting a supplier involves a four step process. In each step the prospective supplier is evaluated carefully. Only item merchandise is the equipment to dish out burgers. The major suppliers in India are Input Product Supplier Company Location Iceburg Lettuce Trikaya Agriculture Talegacon(Maharashtra) Ooty Farms Ooty Meena Argitech Delhi Cheese Dynamix Dairy Baramati (Maharashtra) draw & Milk Products for Frozen Desserts Amrit Food Delhi and Mumbai Buns & Sauces 1)Cremica Industries Philluar (Punjab) 2) Shah Bector and Sons Khopoli ( Maharashtra) Patties, Pies & Pizza puffs Vista process Foods Taloja (Dash, 2005) The entire distribution process is carried on by AFL Logistics Ltd, McDonalds semiofficial 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 frigidness storage from the moment it is harvested. These are then transported to restaurants in refrigerated vans . swindle finished products are also stored a particular temperature. This ensures freshness 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 lift ANALYSIS McDonalds in India has been for around for around 13 years. bowl now it has complimented the values and the cultures of the locals in an extremely ethical way. But ease it has some weaknesses 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 Strong Brand The McDonalds Corporation in India has been able to live up to its global image of being able to supervise any type of market. It has shown that by adopting the right approach and methods, any market can yield positive results. This h as not only consolidated its correctly image and strong brand values but also has made the job difficult for the new entrants. node Intimacy The firm in India with its correct mix of communication has been able to tap majority of the audience it focused on and has also developed affection from the large children universe of the country with its Children Centric ads. Product Innovation the Company with its timely product innovation has regularly kept the consumers interested in its menu which caters to their tastes. variety in Menu, Reasonable Prices and Great Service Also with wide options in the menu McDonalds also offers outstanding prices with burgers starting from Rs20 ( Around 15p) prescribed with 1 Minute Service customers do not return disappoint from the place. ? Weakness Product on the scale of Health McDonalds in India is fluid not selling products which are good for health or which are made keeping consumers fitness.They are trying to fine billet their men u by adding more baked products rather than fried 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 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 still not explored the whole of the country. This is due to the fact that the smaller cities in India are more inclined towards the home cooked 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 localized its menu to a very great extent in the country. Entry into Breakfast Category One of the other things that the company has still not made a complete uncase into is the Breakfast Menu. McDonalds have started only a orthodontic braces of o utlets in Mumbai and Delhi on experimental 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 Coke available in small and large and coffee, tea and hot chocolate with no halal advertising.But it still has the opportunity to advertise and bring in its own brand of beverage as compared to something like Star Bucks The beverage may hot or cold and would give McDonalds its own individualism in the market which is dominated by Coke and Pepsi. ? Threats Changing Customer Lifestyle Today, India has changed considerably as compared to 10 years back. Simultaneously 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 tod ays environment is very short-lived. Increased 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 the consumer and considering the various marketing environments, executing very reasonable prices to timely product innovation and at long last extremely effective communication techniques have included 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 contemplate its already existing operations before 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 Communication Strategy on Changing Attitudes and Lifestyle, transnational Journal Of Marketing studies, Vol 1, SolBridge International School 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, Pears on Prentice Hall, USA. McCarthy. (1975) Basic Marketing A Management Approach, Irwin, Homewood, pg 98. Media Trust, The Institute For Volunteering Research (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 Empirical 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. C (2001) McDonalds Think Global, Act Local The Marketing Mix, British Food Journal, Vol 103, No -2, pg 97 111. 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