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Mc Donalds Competitor Analysis:

KFC -One of the major competitors for McDonald in the burger segment. It first came to India in 1995, whereit was one of the first multinational food chains to have entered India.

It proved not to be a very good time to have come to India where people were still not able to come to termswith multinationals coming to India, and it was targeted by many and remained a not so known food outlet,while the ones which came later became more popular.

KFC India had to shut shop in the late 1990s after it faced heavy protests not only from anti-multinationalgroups but also animal rights protector, PETA.

But unlike McDonald, KFC has not been able to establish itself and shun its image of being a beef burger shop.

McDonalds is clearly poised well in terms of appeal to the majority of the Indian population, 40% of which isvegetarian. While KFC has not been able to do that, and it is still seen as a chicken only restaurant.

McDonalds has a wider variety here with products starting from as low as Rs 20, while KFC has not been ableto match that. KFC is still priced a little higher for the general Indian population and its strong customersegment is the cosmopolitan population which is mall going and earning or have spare money to spend, 18-30years. While people from even small income range and lower middle class have been able to associate

themselves with McDonalds. McDonalds has set up its own supply chain investing huge amount which leadsto lower costs and prices.

When it comes to chicken burgers McDonalds needs to provide more variety on its menu as it is claimed thatKFC is coming up with 15-20 new Indianised products.

McDonalds has more than 140 restaurants in India and is adding at a fast pace, while KFC has presence only inlimited areas especially the southern part of the country.

KFC claims that even without much promotion it has the strongest brand recall for chicken products. KFCeven sponsored a contest during a cricket match, and is a well known brand in the southern parts of IndiaFollowing is the marketing mix of KFC: Product Zinger is its flagship product Famous for its chicken recipeworld over Brought high selling products from international markets Indianized menu with products like tikka

wrap n; roll, chana snacker, thali, succulent chicken Vegetables, one-of-a-kind kids meal comes in severaldifferent laptop box designs featuring awesome puzzles and games.

The veg products are juicy from inside and crispy on outside which differentiates KFC Distinguishedmanufacturing for beg and non veg products Planning to add 15-20 new products to menu Price Low priced totarget the huge middle class as well as upper class population of India Has sub 50 snackbox, and chana snackerat Rs. 25 Offers Veg and non veg thali at Rs 50 Twirl priced at Rs. 7Place There are around 40 restaurants inthe country Strong hold in Mubai, Hyderabad, Bangalore Planning to add 10 restaurants per year and reach 50by 2008 Targeting non veg eating states e.g. West Bengal, Punjab, Andhra Pradesh, Tamilnadu besides thecities where it is already present.

Has switched to franchisee model Expanding and opening stores in malls Promotion Has started a TV

campaign, following which sales surged by 30% Promotion is centered around Finger Licking Good Targetsmall going population i.e. youth in the age group 18-30 Food courts are sporting the logo of KFC Alsosponsors cricket matches and related contests LOCAL FOOD JOINTS Another major competitor forMcDonald are the local food joints offering burgers. The local food joints include the following: 1.Jointswhich are limited to a city and have around 2 -3 outlets in a city. For instance Om Sweets in Gurgaon willcome in this category.

Canteens in colleges. For instance Sharmaji at MDI.

Following is the marketing mix for the local food joints: Product the burgers are made of local buns withcheese slices and vegetables like onion, cucumber and tomato slices and a potato or chicken cutlet.

There are two or three variations on the basis of amount of cheese the burgers are wrapped in local papernapkins The ingredients used are Indian for instance burger has no mayonnaise. These cater to Indian tastes.

The offering is generally one of the several other offerings at the joint the time taken to deliver varies from 1015 minutes Price the price ranges from as less as Rs 12 to a max around 50. Om Sweets offers the burger forRs 45Place these joints are generally located in market places or college campus where crowd is heavy.

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They are the most famous and one of the few outlets available in area and footfalls are generally heavy due tothese The places are usually visited very frequently by local people, students, etc Promotion The joints rely onword of mouth publicity There is no promotion done through ads for these joints. The promotion at maximumis limited to local newspaper

SUGGESTIONS: McDonalds could increase the number of items served on its menu. Currently there are only6 vegetarian and 6 non-vegetarian items served on the menu. It is also evident from the survey that manypeople feel that the variety of menu available is average and could be improved. Some of the customers prefersomething new every time they visit. These potential customers could be targeted by increasing the number ofitems in the menu.

In the recent times McDonalds has been blamed for the high fat content in its products and many consumersperceive that the food served at their outlets is not healthy. Also, the consumers are becoming increasinglyhealth conscious these days. McDonalds could introduce new items for such people containing lower fatcontent and lower calories, like calorie free burgers and salads. This could attract a whole new segment ofhealth conscious people to its outlets.

They could introduce items containing egg in their menu which could target people who eat egg and do not eatchicken. It would also add more variety to their current menu.

McDonalds currently has a number of outlets in northern and western India. The number of outlets in southernand eastern parts of the country is significantly very low. They need to increase their presence in southern andeastern India where their competitors like KFC, Pizza Hut and Dominoes enjoy a larger market presence. Theyalso need to modify their Indian menu for these parts of the country as the names of the current menu items are

more synonymous to food available in northern and western India.

Considering the low cost of food available at McDonalds it could even look at expanding into tier-2 and tier-3cities which are largely unexploited by other fast food companies. There may be stiff competition from thelocal food joints in these places which McDonalds can overcome by offering localized food at competitiveprices.

The option for home delivery is currently not available in all areas. There is also an additional Rs. 15 that islevied for the delivery in the areas where it is available. In comparison some of its competitors offer free homedelivery in specified time and also in all their outlets. McDonalds could learn from its competitors and providefree home delivery in all its outlets at no additional cost in order to attract people who prefer to have food atthe comfort of their home or office. This could also reduce overcrowding at their certain outlets where many

people wait for their turn for dine in or takeaway.

FUTURE OUTLOOKMcDonalds India has been able to establish itself in the market with 137 restaurants inthe country and plans for expansions to smaller cities and further in metros. Planning 15 new outlets in Kolkataalone is indicative of its expansion plans. McDonalds plans to invest $3 billion over next five years and doubleits revenue. The expansion plans are in sync with the booming economy.

The future outlook is bright considering the rising middle class and development going across the country. Thenumber of multiplexes in the country is growing day by day through which McDonalds can expand. Moreover,the working population is also increasing. Most of them are looking for alternatives to home cooked foodwhich could save them a lot of time between working hours. Therefore McDonalds will find a great

opportunity to leverage its brand popularity to increase its sales even further.

The challenge which McDonalds may face in future will be the expansion to tier 2 and tier 3 cities. McDonaldsbrand, which is very strong across big cities, may not be as strong there. The concept of fast food will also berelatively new to smaller cities which have slower life than metros. Fast food in smaller cities is synonymousto Chinese served by small vendors. The primary competition will also be very different in smaller cities. Thecompetition will be from local food to a much larger extent. The pricing which is a critical strength in metrosmay not remain strength. The opportunity lies hidden in the challenge and being a pioneer in fast food segmentin smaller cities, McDonalds can achieve greater heights.

In the larger cities and metros McDonalds is well established and should experience a steady growth if itcontinues to fulfil the changing needs of its consumers which it has been doing over the past.