mcdonaldsindia-140419014126-phpapp02

8/10/2019 mcdonaldsindia-140419014126-phpapp02

http://slidepdf.com/reader/full/mcdonaldsindia-140419014126-phpapp02 1/51



McDonald’s India



Introduction

• The McDonald’s Corporation is the world’s largest chain of

hamburger fast food restaurants, serving around 68 millioncustomers daily in 119 countries.

• Headquarters in the United States, the company began in1940 as a barbecue restaurant opened by Richard andMaurice McDonald. In 1948 they reorganized theirbusiness as a hamburger stand using production line

principles.

• McDonald’s operates over 34,000 restaurants worldwide,

employing more than 1.7 million people.



McDonald’s India

Grand Opening: McDonald's opened its doors in India, the95th country, in 1996 and was the first country to serve non-beef and non-pork items. Its authority on non-beef and non-pork products still remains unchallenged.

Ownership: McDonald’s India is a locally owned companymanaged by Indians;

- Vikram Bakshi, under Connaught Plaza Restaurants Pvt. Ltd

in Northern and Eastern Region (Headquartered in New Delhi)through a joint venture

- Smita Jatia, under Hard castle Restaurants Pvt. Ltd. in theWestern and Southern Region(Headquartered in Mumbai)

which is a DL (Development Licensee)



McDonald’s India

McDonald’s Philosophy: McDonald’s philosophy of QSCV(Quality, Service, Cleanliness and Value) is the guiding forcebehind it’s service to the customers in India

The Scorecard: The first McDonald's restaurant in Indiaopened on October 13, 1996 at Basant Lok, New Delhi.

Today, McDonald’s has 242 restaurants operating in Indiaserving over 5, 00,000 customers’ everyday and has

completed more than 10 years of unparalleled in the country.Vendor Development; McDonald’s spent more than 5 years(from 1990 onwards) on developing the first beef-less andpork-less menu in McDonald’s history.



Key Landmarks - McDonald’s

India Journey

1996:

• The first McDonald’s restaurant opened on Oct. 13, at

Basant Lok, Vasant Vihar, New Delhi. It was also the firstMcDonald’s restaurant in the world not serving beef on itsmenu.

1997:

• The first Drive –Thru restaurant at Noida (UP)

• The first disabled friendly store at Noida (UP)

1999: The first Mall location restaurant at Ansal Plaza (Delhi)



Key Landmarks - McDonald’s

India Journey2000 : The first highway restaurant at Mathura (UP)

2001: The first thematic restaurant at Connaught Place (Delhi)

2002 :

• The first restaurant in a food court at 3C’s, Lajpat Nagar

(New Delhi)

• The first restaurant at the Delhi Metro Station at Inter StateBus Terminus

• The first fundraiser in association with ORBIS and Dr.Shroff’s Charity Eye hospital.(Delhi)



Key Landmarks -

McDonald’s India Journey2003: The first Dessert Kiosk – Faridabad (Haryana)

2004: McDonald’s Delivery Service (McDelivery) introduced in

New Delhi.

2003-04: Indigenous products like McAloo Tikki, McVeggieand Pizza McPuff exported to Middle East countries.

2006:

• McDelivery on Bicycles flagged off at Chandni Chowk(Delhi)- another first initiative by McDonald’s India

• 100th McDonalds Restaurant in India, 10th year Anniversary.



Key Landmarks -

McDonald’s India Journey2007:

• The first McDonald’s open in Eastern Region at Park Street,Kolkata.

• The first restaurant opened at Airport (Domestic Airport,New Delhi).

• The first MFY restaurant opened at Greater Noida, UttarPradesh

2008:

• The first restaurant to start Breakfast Menu at Janpath, NewDelhi



Key Landmarks -

McDonald’s India Journey2008: The First restaurant to start extended hours procedure atCyber Greens, Gurgaon and Saket, New Delhi

2009: The first McDonald’s Restaurant opens at Old Delhi

Railway Station.

2010: The first reimaged new look restaurant opened at Ambiance mall, Vasant Kunj.

2011:

• Introduces premium products in it is menu – McSpicy rangeof products



Key Landmarks -

McDonald’s India Journey2011:

• Introduces Mcflurry (premium desserts) in Oreo andchocolate crispy flavors.

• Wi-Fi services in its restaurants.

2012:

• Spicy Fest – Introducing new spicy variants for a limited timeperiod

• New product launch in the Happy Price Menu – McEgg – Rs. 25.



Key Landmarks -

McDonald’s India Journey

2012:

• Launch of employee engagement program – Voice ofMcDonald’s & Olympic Crew Championship.

• MDS through web in Delhi.

McDonald’s currently has 300 restaurants in India of which 145

are in North & East India and 155 in West & South India.



Fast Food Industry In India

• As per new research report “Indian Fast Food Market

Analysis”, India is blessed with one of the fastest growing

fast-food markets in the world. The Indian fast food market is

growing at an annual growth rate of 30-35%.• Although the market has witnessed robust growth in the past

couple of years, it remains largely under penetrated andconcentrated in the metropolitan cities.

• In 2013, the global fast food market is forecasted to have avalue of $200 billion, an increase of 29.3% and a volume of94.7 billion transactions, an increase of 10.4% since 2008.



Fast Food Industry In India

• It is estimated through credit Suisse Emerging ConsumerSurvey, that the average Indian spends just $11 ascompared to his Chinese counterpart who would ideallyspend $20 on fast food. Yet, if we see the Indian spendingon food in totality, they spend 23% of their earnings on thesame while the Chinese spending is 20%.

• Almost all big fast food brands of the world have succeeded

in making their presence felt in the country and most of themare posting appreciable growth.



McDonalds Business Model

Franchise Model :- Only 15% of the total number ofrestaurants are owned by the Company. The remaining 85%is operated by franchises. The company follows acomprehensive framework of training and monitoring of itsfranchises to ensure that they adhere to the Quality, Service,Cleanliness and Value propositions offered by the companyto its customers.

Product Consistency :- by developing a sophisticatedsupplier networked operation and distribution system, thecompany has been able to achieve consistent product tasteand quality across geographies.



McDonalds Business Model

Act like a retailer and think like a brand :- McDonaldsfocuses not only on delivering sales for the immediatepresent, but also protecting its long-term brand reputation.



Target Market Segment

McDonald’s has segmented their products according to 3

different bases. They have segmented their products andpositioned their products according to kids, students andfamily. But they haven’t segmented their products according to

the Adult target group.

The 3 bases for segmentation are :

• Demographic Segmentation

• Psychographic Segmentation

• Behavioral Segmentation



Target Market Segment

• Demographic Segmentation :- (Kids, family and students.)McDonalds offers different products like Happy Meal whichincludes a free toy for kids. For family it has made differentoutlets and meals which are suitable for takeaways and

drive-thru. McDonalds has made its environment suitable forschool/college students to hangout with their friends andgrab their lunch at McDonalds.

• Psychographic Segmentation :- (Convenience and

lifestyle )McDonalds has adapted itself according to theconvenience and lifestyle of the Indian consumers, as Indiahas a huge vegetarian population so McDonald’s came upwith a different and new product line which includes itemslike Mc Veggie burger and Mc Aloo tikki Burger.







Challenges in Entering Indian

Markets• Regiocentricism : Re-engineering the menu –

McDonald’s has continually adapted to the customer’s

tastes, value systems, lifestyle, language and perception.Globally McDonald’s was known for its hamburgers, beef

and pork burgers. Most Indians are barred by religion not toconsume beef or pork. To survive, the company had to beresponsive to the Indian sensitivities. So McDonald’s came

up with chicken, lamb and fish burger to suite the Indian

palate.

• The Vegetarian customer – India has a huge population ofvegetarians. To cater to this customer segment, thecompany came up with a completely new line of vegetarianitems like Mc Veggie burger and Mc Aloo tikki.



McDonald’s Marketing Mix

The 5 P’s used by McDonald’s are :-

1. Product

2. Place

3. Price

4. Promotion

5. People



Product

McDonalds has intentionally kept its product depth andproduct width limited. McDonalds studied the behavior of theIndian customer and provided a totally different menu ascompared to its International offerings.

It dropped ham, beef and mutton burgers from the menu. Indiais the only country where McDonalds serves vegetarian menu.Even the sauces and cheese used in India are 100%vegetarian.

McDonalds continuously innovates its products according tochanging preferences and tastes of it customers. The recentexample is the introduction of the Chicken Maharaja Mac.McDonalds bring with it a globally reputed brand, world class

food quality and excellent customer specific product features.



Product Mix



Place

The place mainly consists of the distribution channels. It isimportant so that the product is available to the customer atthe right place, at the right time and in right quantity.

There is a certain degree of fun and happiness that acustomer feels each time he dines at McDonalds. There arecertain value propositions that McDonalds offer to itscustomers based on their need. McDonalds offers hygienic

environment, good ambience and great service.



McDonald’s Supply Chain

An Overview

• McDonald's unique 'cold chain', on which the QSR majorhas spent more than six years setting up in India, has

brought about a veritable revolution, immensely benefitingthe farmers at one end and enabling customers at retailcounters to get the highest quality food products, absolutelyfresh and at great value.

• McDonald's, through its unique cold chain, has been able to,both cut down on its operational wastage, as well asmaintain the freshness and nutritional value of raw andprocessed food products. This has involved procurement,warehousing, transportation and retailing of perishable food

products, all under controlled temperatures.




Supply Chain Process

• A McDonald's burger is not just a burger but an outcome ofdedicated efforts by farmers, its suppliers, distribution center

and a firm promise by McDonald's.• McDonald's contributes a great back end process which

enables you to enjoy your favorite burger fresh & hot, andfor that, the supply chain truly acts as a backbone of the

business.• The supply chain begins at the grass root level, with the

suppliers receiving the crop from the farmers. The crop isthen processed and dispatched to the Distribution centers in

special temperature controlled trucks, which ensures thatthe quality of the items is not compromised.






Sourcing and Storage

Setting up this extensive cold chain distribution system hasinvolved the transfer of state-of- the-art food processing

technology by McDonald's and its international suppliers topioneering Indian enterprises who, today, are an integralpart of the McDonald's cold chain.

McDonald's Supply Chain's distribution partner ensures thatall requirements ranging from liquid products coming fromPunjab, to lettuce from Pune, is received from different partsof the country.




Sourcing and Storage

McDonald's India has around 40 suppliers and all thesuppliers are HACCP certified, ensuring highest level of

quality. They work cohesively to ensure that the final productreaches the customer consistently each time and every time

McDonald's India has ensured that this dedicated supplychain enables the Indian supplier an accesses to latest infood processing technology, management practices andadvanced agricultural inputs with significant investment atthe back end. This has proved to be a great advantage inserving the customers better.




Supply Chain: Cost Management

The tremendous value benefit is enabled by McDonald'srenowned supply chain management system and by

leveraging economies, which helps minimize costs whilemaximizing value to customers.

McDonald's strong back ward integration connects it directlywith various aspects of the business right up to the farm level,

which helps in increasing the productivity in terms of yieldsand helps the brand manage costs.

A well entrenched process driven production system ensureshigh levels of standardization and quality, which also keeps

wastage and costs in check




Supply Chain: Menu Management

• Menu innovations are a constant practice at McDonald's.McDonald's introduced global core products like McNuggets

and have also re-engineered the product range to suit theIndian palate. This menu innovation has been possible dueto robust supply chain network right up to farm level.

• Every new product requires a special treatment and thebackend process needs to be upgraded to meet therequirements.



McDonald’s India; Suppliers



Pricing Strategy

Success of McDonalds has been mainly due to its value formoney offering to the Indian Consumers. The prices offeredare in the range of lower middle section of the society.Moreover it customization in accordance with the taste ofIndian consumers has also worked in its favor. McDonaldsPricing Strategies are as follows:-

• Value Pricing.

• Product line Pricing.

• Promotional Pricing.

• Penetration Pricing.



Pricing Strategy

Value Pricing

McDonalds came with the concept of value pricing for Indianconsumers where in it came out with various combos in form of

• Happy meals comprising of small burgers, coke + toy.

• Medium meal combo that consisted of burger, medium friesand medium coke with the price of Rs. 75

• Maharaja Mac Meal – Rs. 94

• Famil Dines under Rs. 300.



Pricing Strategy

Product line Pricing

McDonalds has a unique price strategy which falls soley onmany of their product lines. Their Value Meals fall into the

category of Product Line Pricing. “where there is a range ofproduct or services the pricing reflect the benefits of parts ofthe rang”. For example, you can order Two Cheeseburger

Value Meal that comes with a medium drink and fries for

around Rs. 75 (prices may vary). You can Super size this mealto get a large drink and fries for a little money or you can gowith another value meal that might include different items fordifferent price.



Pricing Strategy

Promotional Pricing

If you have driven past a McDonald’s, you will notice thatsomewhere on their property, whether it is a banner on their

building or spelled out on their sign, they are always offeringsome sort of promotional pricing. This promotion can be seenas a large banner draped across the building on manyrestaurants. This promotion changes weekly and may consist

of different menu items packaged together







Promotion

There are 3 main objectives of advertising for McDonalds -tomake people aware of an item, feel positive about it andremember it. The right message has to be communicated to

the right audience through the right media. McDonalds doesits promotion through television, hoardings and bus shelters.Some of the most famous marketing campaigns of McDonaldsare:

• “You deserve a break today, so get up and get away- ToMcDonalds”

• “ Aap ke zamane mein, baap ke zamane ke daam”

• “Food, folks and fun.”



People

McDonalds understands the value of both its employees andits customers. It understands the fact that a happy employeecan serve well and result in a happy customer.

McDonald has been one of the most prominent in the globalhospitality for many years. The continuous growth of thecompany in a global market addressing various issuesregarding the Human resources hailing from countries with

different culture is really an interesting matter of study.Generally a HR strategy involves the careful development ofvarious components of the HRM.



Human Resource Strategy

A general discussion of the HR strategy of McDonald hasbeen made as follows:

1. Organizational Structure.

2. Job Analysis and Job Evaluation.

3. Recruitment and Selection Process.

4. Management development (Training and Development).

5. Motivation Performance management and Appraisal.

6. Reward and Employee Benefits.




1) Organizational Structure

McDonald has 3 different categories in their structure:

• The corporate staff controls the company and manages thefranchises worldwide.

• The Franchisees are given restaurants to manage themfollowing the standard of practices set by McDonald.

• Restaurant workers are the lower-level wage basedemployees who are paid in hourly basis.




2) Job Analysis and Job Evaluation

• Job Analysis method of the McDonald is developed by thehuman resource department in consultation with various

other departments. After job description, job restructuring isperformed on the basis of observations of the senioremployees.

• In McDonald’s, Job evaluation involves deciding the wagesand salaries of the employees on the basis of job analysis.Job evaluation is also referred as compensation inMcDonald. The organization has its predefined standardsfor the evaluation of its employees based on their skills,

knowledge and experiences.




3) Recruitment and Selection Process

McDonald screens the applications submitted by the individualapplicants. A well devised recruitment policy is formulated for

the selection process. The screening of the applicants is basedon the merit, institute of previous employment, experience andso on. Candidates passing through this are further processedfor selection.




4) Management Development

Training and development of employees is of vital concern fora globalized company like McDonald. McDonald has a

Management Development Program (MDP) designed todevelop the potential leaders. For example, each year,McDonald trains about 55,000 employees. It also invests morethan $10 million to ongoing employee trainings, providing

valuable skills and knowledge to its franchisees all over theglobe. It has a designated Hamburger University as amanagement training center for its valued employees.




5) Performance Appraisal

The performance of the employees is appraised on a regularbasis. Absence of appropriate performance appraisal leads to

employee dissatisfaction and frustration. McDonald makes useof various performance appraisal methods like Graphical ratingscale and 360 degree feedback.




6) Compensation and Employee Benefits

Compensation in McDonald includes:

• Direct financial payments: wages, salaries, bonuses andcommission.

• Indirect payments: financial benefits like paid insurance

Employee Benefits in McDonald includes perks and benefits

like:

• Free life insurance after 3 years of employment,

• Medical and hospital facilities,

• Provident fund, etc.



Competitors Analysis

McDonalds has been a leading fast-food outlet. But the outletunderstudy has other competitors eating away into the marketshare. In addition to its traditional rivals – KFC, Dominos, PizzaHut- the firm encounters new challenges. Jumbo Kingcompetes using a back to basics approach of quickly servingup burgers for time-pressed consumer. On the higher end, theKFC has become potent competitor in the quick service field,taking away customers from McDonalds.

At this time, a new critical success factor maybe emerging; theneed to create rich, satisfying experience for the consumers.This brings us to service and experience based competitionwhich McDonalds can use against Jumbo King.



Competitors Analysis

Keeping in mind the demographics of the area, McDonaldshas Wi-Fi enabled the outlet to cater to the student community.It is for this overall “Food, Fun & Folks” experience customers

pay premium price over the other competitors.

Competition also reduces product lifecycle; inducing firms torevise their product portfolios and to revisit their productmarket to understand changing needs, expectations and

perception of different market segments. The newMcBreakfast woud be introduced between 6 to 11 am as apilot project. This would open up a whole new revenue streamfor McDonalds by tapping into student an working population.



SWOT Analysis

Documents

mcdonaldsindia-140419014126-phpapp02