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Introduction:

The story of McDonalds started in 1954, when its founder Raymond


Kroc saw a hamburger stand in San Bernardino, California and envisioned a
nationwide fast food chain. Kroc proved himself as a pioneer who revolutionized the
American restaurant industry. Today McDonalds is the worlds largest fast food
chain serving approximately 47 million customers daily. McDonalds is now one of
the most valuable brands globally, worth more than $25 billion. The Golden Arches
and its mascot Ronald McDonald have gained universal recognition. Now
McDonalds Corporation USA is the ninth most valuable brand in the world.
In October 1996, McDonalds opened its first Indian outlet in Vasant Vihar, an
affluent residential colony in Indias capital, New Delhi. McDonalds India has a joint
venture with Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught
Plaza Restaurants manages operations in North India whereas Hard Castle
Restaurants operates restaurants in Western India. Apart from opening outlets in the
major metros, the company is now expanding to Tier 2 cities like Pune and Jaipur.
The fundamental secret to McDonalds success is the way it achieves uniformity and
allegiance to an operating regimen with proper marketing strategy. McDonalds
India has to adhere to many rules and regulations laid down by the parent company,
and it still has to cater to the Indian customer and his needs.
Six years prior to the opening of the first McDonald's restaurant in India, McDonald's
and its international supplier partners worked together with local Indian Companies
to develop products that meet McDonald's rigorous quality standards. Part of this
development involves the transfer of state-of-the-art food processing technology,
which has enabled Indian businesses to grow by improving their ability to compete
in todays international markets. McDonald's constructs its restaurants using local
architects, contractors, labor and - where possible local materials. McDonald's
hires local personnel for all positions within the restaurants and contributes a
portion of its success to communities in the form of municipal taxes and
reinvestment.

McDonalds Vision Statement:


Every company has a Vision or Mission Statement. A vision statement should be
short, clear, vivid, inspiring and concise without using jargon, complicated words or
concepts. It represents the corporation guiding principles. It subtly indicates the
businesses the firm will pursue and the customer needs it will seek to satisfy. The
vision statement also allows the employees to clearly adhere to the standards set
up by the business unit and work in as per the guidelines framed by the company.
"McDonald's vision is to be the world's best quick service restaurant experience.
Being the best means providing outstanding quality, service, cleanliness, and value,
so that we make every customer in every restaurant smile."

Business Model
Franchise Model Only 15% of the total number of restaurants are owned
by the Company. The remaining 85% is operated by franchisees. The
company follows a comprehensive framework of training and monitoring of its
franchises to ensure that they adhere to the Quality, Service, Cleanliness and
Value propositions offered by the company to its customers.
Product Consistency By developing a sophisticated supplier networked
operation and distribution system, the company has been able to achieve
consistent product taste and quality across geographies.
Act like a retailer and think like a brand McDonalds focuses not
only on delivering sales for the immediate present, but also protecting its
long term brand reputation.

I.

Pricing
Food pricing was a sensitive issue in India. An ideal strategy was
to focus on customers ability to pay and tap the rich and upper middleclass
population in India. Although McDonalds strategy was to increase sales
volumes by making products available at affordable price, its products were
perceived to be expensive. The company outlets in Delhi and Mumbai initially
were opened due to the increased affordability of people with western
exposure and brand recognition factors in metros. Additionally, people in the
metros were open to experiment with variety of foods. Absorption of newer
cultures was faster in the Metros than other areas.
SWOT ANALYSIS:
SWOT stands for strengths, weaknesses, opportunities, and
threats. To meet the needs of the key market it is important to analyze the internal
marketing strengths of the organization. Strengths and weaknesses must be
identified, so that a marketing strategy which is right for the business can be
decided upon. Once the strengths and weaknesses are determined, they are
combined with the opportunities and threats in the market place. SWOT analysis is
the first stage of planning and helps businesses to focus on key issues. Once key
issues have been identified, they feed into marketing objectives .

Strengths
MacDonald has built up huge brand equity. It is the No. 1 fast-food
company by sales, with more than 31,000 restaurants serving burgers
and fries in almost 120 countries.
Good innovation and product development. It continually innovates to
retain customers in the business.

The McDonalds brand offers consumers choice, reasonable value and


great service
Large amounts of investment have gone into supporting its franchise
network, 75% of stores are franchises.
Loyal staff and strong management team.
Advertisements and promotion to market the McDonalds as a brand
carves a strong image on customers mind. Business Model
Franchise Model Only 15% of the total number of restaurants are
owned by the Company. The remaining 85% is operated by
franchisees. The company follows a comprehensive framework of
training and monitoring of its franchises to ensure that they adhere to
the Quality, Service, Cleanliness and Value propositions offered by the
company to its customers.
Product Consistency By developing a sophisticated supplier
networked operation and distribution system, the company has been
able to achieve consistent product taste and quality across
geographies.
Act like a retailer and think like a brand McDonalds focuses not
only on delivering sales for the immediate present, but also protecting
its long term brand reputation.

Weaknesses
Locations of outlets are sometimes not to closer to storage centers
resulting in loss of quality.
Quality issues across the franchise network.
Opportunities
Joint ventures with retailers (e.g. supermarkets).
Consolidation of retailers likely, so better locations for franchisees.
Strengthen its value proposition and offering, to encourage customers
who visit coffee shops into McDonalds.
Expansion into emerging markets of cities present in India.
Focus on middle-class income group customers with low-priced quality
goods will enhance the profit margin.
Threats
Social changes - Government, consumer groups encouraging balanced
meals, 5 a day fruit and vegetables.
Focus by consumers on nutrition and healthier lifestyles.
Recession in economy may affect the retailer sales.
Pressure groups - environmental.

Since McDonalds is a symbol of American cultural imperialism, it continues


to face continue opposition from religious fundamentalists, protectionists,
animal rights activists, and anti-globalization protestors
MARKETING STRATEGY
McDonalds Road Map for India
Emphasis on Local Management
McDonalds has given the adage of think global, act local a concrete
shape in India. The companys localization strategy is clearly manifest
in the critical area of management. McDonalds decided to set up two
joint ventures on a 50:50 basis with two local entrepreneurs in Mumbai
and Delhi. In Mumbai, Amit Jatias company Hardcastle Restaurants
Private Limited, was selected to own and manage McDonalds
restaurants in the western region. In Delhi, Vikram Bakshis Connaught
Plaza Restaurants Private Limited was chosen to own and manage
McDonalds restaurants in the northern region.
Politically Correct Strategy
McDonalds managers were well aware of the fact that political
activists can create trouble for foreign-based fast food chains. The two
local managing directors Bakshi and Jatia of McDonalds took a series
of politically correct strategies to deal with the initial challenges of the
Indian market. McDonalds in India is Indianized and specifically
designed to woo Indian customers.
Employment Opportunity
McDonalds typically employs local people, and the average
McDonalds restaurant in India employs more than 100 people in all
kinds of positions- cashiers, cooks, managers, etc
Every expansion also brings additional income and employment
opportunities to Indias agricultural work force, which is very pleasing
to government officials.
Formulating the Marketing Strategy
Selecting the Target Market
A target market consists of a set of buyers who share common needs
that the company decides to serve. McDonalds targeted young
families who are able to eat out, but the main focus was on to attract
small children so that the whole young family follows after it.
McDonalds followed niche marketing, a market-coverage strategy in
which a firm goes after a large share of one or a few phases. Different
phases to move into target markets was scheduled on,

a. Focus on cities of relatively high incomes.


b. Move to smaller satellite towns.
c. Move on to crowd pulling centers like malls, multiplexes,
highways, railway stations and airports.
d. Introduce new low-priced products with same quality and service
for middle class income groups of people.
Segmentation
Each company identifies the parts of the market that it can serve best
and most profitably, which is called the segment of the market it wants
to serve. Market segmentation allows dividing a market into smaller
groups of buyers with distinct needs, characteristics, or behaviors who
might require separate product. McDonalds identified certain segment
based on its geographical and demographic segments.
i. Geographic Segmentation
Geographic segmentation calls for dividing the market into
different geographical units such as nations, regions, states,
countries, cities, or neighborhoods. McDonalds India divided the
country into different zones based on directions and
concentrated particularly on North and West zone as its first
market segment to attract on.
ii.
Demographic Segmentation
Demographic segmentation divides the market into groups based
on variables such as age, gender, family size, family life cycle,
income, occupation, education, religion, race, generation, and
nationality. McDonalds targeted different age groups from
children and teens to adults up to age less than 30 years. Like
its other worldwide locations, McDonalds targeted children as
their main clientele in India.
Positioning the Offer
Mc Donalds mein hai kuch baat
a place for entire family to
enjoy.
Positioning is about communicating the unique selling advantage to
the target audience in everything the firm does i.e.
Marketing
Sales
Customer service.
Assembling the Marketing Mix
Assembling the marketing mix means assembling the four Ps of
marketing viz. product, price, place, and promotion, in the best
possible combination. The marketing mix principles are used by
business as tools to assist them in pursuing their objectives.

Future:
In 2007, a report by McKinsey Global Institute revealed that India
would join the premier league of the worlds consumer markets by 2025.
With the middleclass growing by 12 times from 50 million to 583 million, the
market potential was huge. Companies with long term plans for the Indian
markets needed to understand the hidden potential and prepare themselves
to accept the challenge.
McDonalds was very positive on the Indian market scenario. With the parent
company making huge investments in supply chain and media
communication, the company was 17 helping the back-end supplier through
direct investments in the joint ventures with them.
McDonalds India operated around 100 restaurants across the country which
included 11 drive thru restaurants, a new concept to the Indian market.
With 5000 employees working, the company intended to hire another 10,000
to 15,000 people in the next few years. On an average it employed 50
people per outlet, depending upon the seating capacity.
McDonalds can use following promotional techniques which should be
appropriate to be used for increasing the sales:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Increase its product line.


To expand their Happy Meal choices to attract and retain customers.
To provide better and quick service.
Lower the supply chain cost so that it helps in cost reducing.
Focus on gifts for all generations i.e. youth, kids especially senior
citizen which is a completely new concept.
Special promotions during festivals as Indians tend to spend more at
such events.
Increasing the space for provision of birthday party areas.
Try to sponsor college festivals.
Work for social welfare of the society.

Conclusion:
McDonald's marketing mix is strategic because of the diverse
approaches that are used. First, in identifying the "four P's" of marketing
addressed earlier (product, price, promotion, and placement), research
shows that McDonald's is very careful in making decisions that effect each
area and how each area effects the other. McDonald's is concerned about
how the firm will fulfill the needs and wants of its customers and in the
activities associated with maintaining the relationships with its stakeholders.
McDonald's stakeholders include customers, franchisees, suppliers,
employees, and the local communities. McDonald's has shown care for
customers through the decisions to add more healthful foods to the menus,
by changing how products are packaged or how foods are prepared.
McDonald's faces some difficult challenges in moving away from the fast
food king to a more health conscious provider for customers who care about
what they eat. Though there are many opportunities for this fast food giant,
McDonald's must keep the strategic nature of its marketing efforts to stay on
top and provide what customers want.