MC DONALDS

McDonald’s Launch in India

Chandni Tulika

MC DONALDSHistory

• The business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald in San Bernardino, California.

• Ray Kroc later purchased the McDonald brothers' equity in

the company and led its worldwide expansion, and the company became listed on the public stock markets in 1965.

• With the expansion of McDonald's into many international markets, the company has become a symbol ofglobalization and the spread of the American way of life.

MC DONALDSPhilosophy & Vision

McDonald's complete commitment to Quality, Service, Cleanliness and Value . “We take the burger business more seriously than anyone else”“If you've got time to lean, you've got time to clean “

MC DONALDSIn India

• McDonald’s is a joint venture company managed by two Indians:

-Amit Jatia (west & south India) and- Vikram Bakshi (in north & east India).• Celebrates 12 years of leadership.• 160 restaurants across country• First launch in 1996

MC DONALDSGlobal Strategy

• Customer driven, goal oriented• Achieving sustainable, profitable growth• Designed to increase restaurant visits and grow

brand loyalty among new & existing customers• Further build financial strength

MC DONALDSStrategic issues (in India)

Market entry in a developing country with low PCI levels

Evaluating market attractiveness Compatibility between product adaptation

& local responsiveness (on the one hand) & a global strategy on the other hand

Critical assessment of future strategic options, namely aggressive expansion when the operations are yet to attain profitability

Framework for assessing Industry / Market attractiveness

MC DONALDSThe Indian Challenge

• Much higher degree of adaptability• 40% Vegetarians – Vegetarian selections to suit

Indian taste• Maharaja Mac replaced Big Mac, Chicken Patty

instead of Beef• Respect for local culture- Special Indian menu, No

beef or pork items in India• McAloo burger, Veg Salad Sandwich, McMasala &

McImli sauces

MC DONALDSThe Indian Challenge

• Common Menu- Chicken Nuggets, Fillet-O- Fish, fries, sodas, shakes

• Garlic free sauces to get in “hard core” vegetarian customers

• Re-formulated own products using spices favoured by Indians

• Eggless sandwich sauces, Soft serves & McShakes• Freshest chicken, fish and vegetable products• Only vegetable oil used as a cooking medium

MC DONALDSIndian Market

• Huge Sub-continent• 4 times the population of the US• Middle Class estimated at 300 Million• Asia’s 3rd largest economy-Behind China &

Japan in terms of purchasing power parity.

MC DONALDSIndian Marketing Strategy

• Promotional strategy to the convey world, Indian

adaptations, freshness, nutrition & value

Segment- The Young family (<30 years)

Target- The young family who eats out

Focus- Attracting children, so family follows

Positioning- ‘ McDonalds mein hai kuch baat’ –

a place for the entire family to enjoy

Differentiation- highlighting brand, food & variety

Happy meal film on Cartoon Network, Zee

Special promotions during festivals

MC DONALDSIndian Marketing strategy continuedPromotional scheme: Collaboration with Coke, MTV,

Hungama.com, Sony Music & GM Scratch cards on Large combo meals

Prizes- caps, t-shirts, CDs, internet cards, free tickets to a Lucky Ali contest

MC DONALDSTargeting Markets

• Initial focus on metros- Mumbai, Delhi• Relatively high incomes• Exposure to western food & culture• Move to smaller satellite towns (Gurgaon, Pune)• Positive spillover effects of reputation• Jaipur & Agra- To attract foreign tourists

MC DONALDSSupply Chain

• Local network for supply chain & distribution• Local suppliers, distributors to match

international quality• Operations & training to match international

quality and hygiene standards• Invested Rs 50 crore in setting up, before opening

1 st outlet• By 2000- Investment in supply chain – Rs 300

Crore

MC DONALDSDistribution

• Matching supplier production with deliveries to meet schedules & restaurant needs

• 2 centralized distribution centers at Mumbai & Kochi, each capable of catering to 25 outlets

• Aim to enhance quality of storage operations• Emphasis on economies of scale-storage volumes

high

MC DONALDSInnovation

• Evolving to remain relevant to consumers• Variety of value, premium & wholesome menus• Giving customers more reasons to visit• Expanded Happy Meal choices to attract & retain customers• Educating people about healthy, active lifestyles, premium

Salads < 10 gm fat• Wi-Fi accessibility when enjoying a Big Mac XP• 400 McCafés in 23 countries serving premium & specialty

coffees, cakes, pastries inside existing McDonald's restaurants

MC DONALDSMenu Development

• 1998- Menu development team• Consumer feedback & research findings• Do not entirely localize menu• Wider product range• More Hot food• Low entry level prices• Veg Pizza McPuff• India-75% localized menu, 33% in Asian countries,

Other countries < 5%

MC DONALDSRestaurant Management System in India• 2 separate menus; green- veg, purple- nonveg• Separate veg, non-veg kitchens with dedicated staff ,

preparation and wrapping areas• Different uniforms for kitchen crew to distinguish

roles• Clear segregation: Kitchen staff• Printed brochures of RMS to customers• Customer kitchen tours to assure

MC DONALDSValue Pricing

• Happy Meal- Small Burger, fries, coke+ toy• Medium Meal Combo- Burger, fries, coke- Veg Rs 75,

Maharaja Mac meal- Rs 94

MC DONALDSHome Delivery

• Home delivery in Mumbai & Delhi outlets to areas within 15 minutes.

• Traffic, parking issues deter consumers due to heavy traffic where McDonald’s are located as a matter of strategy.

MC DONALDSOther Strategies

• Quicker service• Quicker delivery • More outlets

MC DONALDSStrategies conti….

• Increasing seating capacity• Adding Birthday party areas• Enter new ‘A’ cities- Ludhiana, Ahmedabad, Baroda-

lower spending power , population density• Airport & Railway station- Mumbai & Jaipur• Highways & Petrol Pumps• Malls & Multiplexes- Lower outlet investment than

traditional

MC DONALDSAchievements

- Ranked as the 8th best employer- Ranked the best fast food chain of restaurants - Ranked the 8th healthiest fast food eateries - Ranked 2nd for customer satisfaction

BYE BYE SEE YOU AT McDonald's