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Introduction
McDonalds is the Eighth Most Poweful Brand in theWorld. ----Source: Millward Brown Optimor (including data
from brandz, Datamonitor, and Bloomberg)
Total Revenue for 2006-07 was $740.2 million.
Estimated CAGR of 40 percent.
Rs 400 crore being put in for expansion plans into
Tier II cities within next three years.
Doubling of turnover within three years.
Market share of 18 percent in north India.(includes
restaurants, cafes, fast food joints, local vendors etc.)
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Brief History
McDonald's was started as a drive-in restaurant by twobrothers, Richard and Maurice McDonald in California,US in the year 1937.
By mid-1950s, the restaurant's revenues had reached
$350,000. Ray Kroc, distributor for milkshake machines, expressed
interest in the business, and he finalized a deal forfranchising with the McDonald brothers in 1954.
He established a franchising company, the McDonaldSystem Inc. and appointed franchisees.
In 1961, he bought out the McDonald brothers' share for$2.7 million and changed the name of the company toMcDonald's Corporation. In 1965, McDonald's went
public
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McDonalds Vision, Mission and Value
Vision
To be the best & leading fast food providersaround the globe
Mission To be the world's best quick service
restaurant experience. Being the best meansproviding outstanding quality, service,cleanliness, and value, so that we makeevery customer in every restaurant smile."
Values
Our values summarized in Q.S.C & V.Provide good quality, services to customer .Have cleanliness environment whencustomer enjoys their meal .The value of foodproduct makes every customer is smiling.
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Every customer has some expectation from fast food restaurants and the
restaurants try to make their environment according to their expectation.
MCDONALDS has a programmer of CHAMPS, which are the six expectations of
costumers from fast food restaurants.
C ----- Cleanliness.
H ----- Hospitality.
A ----- Accuracy.
M ---- Maintains of facility.
P ---- Product quality.
S ---- Speed of Services
McDonalds - PROGRAMME
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Some of the world-wide sold Products are :-
BURGER.
Such as big Mac is the most important product of Mc Donalds menu some
other important type of burger, are flag ship burger, hamburger and cheese
burger etc. Mc Donalds is also providing chicken, fish and pork sand witches.
CHICKEN MC NUGGETS.
They are introduced in 1983, these are small chicken chunks served with adipping sauce available in 4,6,10,20 pieces they are made by white chicken
strips introduced in 1955 for a limited time and offer again in 2003.
McDonalds - PRODUCTS
all over the WORLD
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OTHER PRODUCTS :
Fish Mac dipper. , Mc Rib. , Mc Muffins (for break fast) , Biscuits cookies
, Beverages.
--Mc Donalds primary soft drinks supplies is coco Cola Company Mc
Donalds is offering also
-Cold and hot iced coffee.
-Hot and iced tea.
-Hot chocolate.
-Various juices.
-Milk shakes.
-Ice cream & Desserts
McDonalds - PRODUCTS all over the WORLD (contd.)
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McDonalds In India
In 1996, first McDonalds restaurant
opened on Oct. 13, at Basant Lok,Vasant Vihar, New Delhi.
McDonald's India is a 50 50 JV
partnership between McDonalds
Corporation (U.S.A) and two Indian
businessman Amit Jatia (HardcastleRestaurants Private Limited, Mumbai)
and Vikram Bakshi (Connaught Plaza
Restaurants Private Limited, Delhi).
Approximately 75% of the menu
available in McDonalds in India is
Indianized and specifically designed to
woo Indian customers.
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Marketing Mix
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Promotion
Reconnecting with customersthrocontemporary global marketing
direction ,
Im loving it
Marketing Mix
Promotional Mix
Advertising
Public Relation
Sales Promotion
Personal Selling
Direct Mail
Internet/
E-Commerce
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Place
Direct Distribution Indirect Distribution
Marketing Mix
Manufacturer
ConsumerConsumer
Retailer
Manufacturer
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Product
Our clear strategy is to bring the
customers in initially and provide a range
of entry-level products so that they can try
new items and graduate to the higher
rungs.---
Vikram Bakshi,Mana in Director,
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Product Mix
ProductMix
Veg Menu
McVeggie
McAloo Tikki Paneer Salsa Wrap
Crispy Chinese
Veg McCurry Pan
Pizza McPuff
Non-VegMenu
Chicken MaharajaMac
McChicken
Fiet-O-Fish
Chicken MexicanWrap
Beverages
Cold Coffee
Ice Tea Soft Drinks
Mc Shakes
Hot Serves
FrozenDeserts
Soft Serve Cone
Mc Swirl
Soft Serve
Flavor Burst
Floats
Chicken McGrill
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Veg Menu
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Non-Veg Menu
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Pricing
Initial focus on metros Mumbai and Delhi.
Relatively high income.
Move to smaller satellite towns.(Gurgaon and Pune)
Jaipur and Agra to attract foreign tourists.
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Pricing Strategy
Value Ladder strategy :-
a) Started offering value meals in a range of prices.
b) Ensure affordability and attract widest section of
customers.
c) Brought the customer and provided a range of entry-
level products.
d) Try those new items and graduate to higher-rungs.
e) E.g- if a customer starts with McAloo Tikki, he will
finally graduate to McVeggie and so in Non veg.
f) Helped its Volume business.
g) AAP KE ZAMANEY MEINBAAP KE ZAMANE KE DAAM
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Competitive Pricing
Food McD SUBWAY KFC PIZZAHUT DOMINO
items S
Burgers &Pizzas
Rs 20- Rs70
Rs 65- Rs135
Rs 25Rs175
Rs 55- Rs175
Rs 35- Rs140
(regular) (regular)
ComboMeals
Beverages
Desserts
Rs 49-Rs119
Rs 25- Rs50
Small-
300ml
Rs 12-Rs
25
Rs 45- Rs175
Rs 35- Rs45
Small-
300ml
Rs 20-Rs
50
Rs 55-Rs150
Rs 30-Rs55
Small-
300ml
Rs 15-Rs
65
Rs 120- Rs250
Petbeverage
MRP
(600 ml)
Rs 40- Rs
60
Rs 120- Rs230
Rs 30(600 ml)
Rs 25
(100ml
cup ofBaskin
Robbins)
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SWOT Analysis
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Strengths
Strong Brand name, Image and Reputation
Strong Global Presence
Large Market Share
Proven Production method and countless innovation
Strong financial performance and position
Strong distribution network
Customer focus
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Weaknesses
Unhealthy food image
High employee turnover
Cut throat competition
Legal cases in no. of countries
Lack of product offerings
Fluctuation in operating profits and net profits
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Opportunities
Change in consumer consumption across the global
Embracement of fast food product as any other normalfood product
Growth of fast food industry
Low cost menu that will attract customerExpansion of menu to meet healthier consumer
preference
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Threats
More health conscious consumer
A fierce campaign against the McDonalds by healthprofessional and consumer activist
Growing strength of competition ranging domesticcompanies to foreign players
Heavy investment on promotional campaign
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Challenges in Indian Market:
Political
Cultural/ Social
Distribution (Supply chain management).
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Political scenario
Worlds largest democracy
Fairly stable governments
Armed Forces- Neutral
Bureaucratic red tape omnipresent
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Political challenges
Health and safety guidelines: weight gain,
elevate diabetes risk
Ecological/ environmental issues:
Largest consumer of paper
Food packaging litters roadways, clogs landfills
Home pressure market groups
International pressure groups- regulations
increasing
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Legal Cases
October 16th- World Anti McDonalds day
French fries not 100% vegetarian-contained beef
products which is sacred in India
Promoting obesity by targeting ads towards kids
On cruelty against animals
On labor and union laws
Coffee too hot and hence caused third degree
burns to a woman who accidentally spilled it
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Environmental Issues
Destruction of tropical forests for cattle
ranching.
Is their record on recycling and recycled
products as green as they make out?
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Distribution challenge
Challenges faced by Mc Donalds while entering in India were:
Socially and geographically diverse.
Bad roads and basic infrastructure bottlenecks. Power situation even in metros
Deliver the lowest cost with the highest quality
Maintaining McDonald's "cold, clean, on-time" delivery
standards in India.
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How to overcome these challenges ?
McDonalds infused Rs 400 Crore to set up its delivery
mechanism before entering in India.
McDonalds, an international brand which was trying to make
inroads into the country, developed its Indian partners in such
a manner that they stayed with the company from thebeginning.
McDonalds distribution centres in India came in the following
order: Noida and Kalamboli (Mumbai) in 1996, Bangalore in
2004, and the latest one in Kolkata (2007). McDonalds tied up with various suppliers and distributors in
India.
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Radhakrishna Foodland Private
Limited (RFPL) In 1996, when McDonald's entered India, it was looking for a
distribution agent who would act as a hub for all its vendors.
The association goes back to July 1993, when it studied the
nuances of McDonald's operations and requirements for the
Indian market.
RFPL stored the products in controlled conditions in Mumbai
and New Delhi and supplied them to McDonald's outlets on a
daily basis.
. FJ Walker of Australia, a McDonald's partner, helped RFPLbuild a cold storage in Thane, Another cold storage with
equipment worth about Rs.75 lakh was built in Delhi in 1998.
RFPL also handled.
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AFL Logistics Ltd (ALL), a joint venture between and Coughlin
of the US, and RFPL was responsible for ensuring these
standards.
RFPL also handled McDonald's inventory management.
RFPL also handled in-city distribution to restaurants.
RFPL also ensure that the integrity of the product is
maintained throughout the cold chain.
Cold Chain was one of the unique concepts of McDonalds
supply chain in India, on which it had spent more than six
years to get the system into place.
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The following list of suppliers, who build up the
major supply chain of McDonalds
Dynamix Dairy Industries (Supplier of Cheese)
Trikaya Agriculture (Supplier of Iceberg Lettuce)
Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and
Vegetable range of products including Fruit Pies)
Amrit Food (Supplier of long life UHT Milk and Milk Productsfor Frozen Desserts)
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Other suppliers
Cheese Dynamix Dairy Industries Ltd., Pune
Dehydrated onions Jain Foods, Jalgaon
Iceberg lettuce Trikaya Agriculture, Pune
Chicken patty Vista Foods, Taloja
Veg. Patty, Veg. nuggets, Pineapple/Apple
pieKitran Foods, Taloja
Chicken (dressed) Riverdale, Talegaon
Buns Cremica Industries, Phillaur
Eggless mayonnaise Quaker Cremica Pvt. Ltd., Phillaur
Sesame seeds Ghaziabad
Iceberg lettuce Meena Agritech, DelhiFish fillet patties Amalgam Foods Ltd., Kochi.
Iceberg lettuce Ooty Farms & Orchards, Ooty
Vegetables for the pattiesFinns Frozen Foods & Jain Foods (Nasik,
Jalgaon)
Mutton and mutton patties Al Kabeer, Hyderabad
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McDonald's philosophy had been 'one world, one burger' i.e.
the McDonald's burger should be consistent in terms of cost
and quality throughout the world.
To ensure this, all of McDonald's suppliers followed the
internationally acclaimed HACCP systems wherein both inputsand finished goods were subjected to chemical and
microbiological tests.
The relationship between McDonald's and its Indian suppliers
is mutually beneficial.