Market Mix and Strategy of Mcdonalds India

McDonalds History:

McDonald’s was started as a drive-in restaurant by two brothers, 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 for franchising with the McDonald brothers in 1954.

He established a franchising company, the McDonald System Inc. and appointed franchisees.

In 1961, he bought out the McDonald brothers’ share for $2.7 million and changed the name of the company to McDonald’s Corporation. In 1965, McDonald’s went public.

McDonalds in India:

In 1996, first McDonald’s restaurant opened on Oct. 13, at Basant Lok, Vasant Vihar, New Delhi.

McDonald’s India is a 50 – 50 JV partnership between McDonald’s Corporation (U.S.A) and two Indian businessman Amit Jatia (Hardcastle Restaurants Private Limited, Mumbai) and Vikram Bakshi (Connaught Plaza Restaurants Private Limited, Delhi).

Approximately 75% of the menu available in McDonald’s in India is Indianized and specifically designed to woo Indian customers.

The McDonald’s philosophy of QSC&V is the guiding force behind its service to the customers.

MARKETING MIX OF McDonalds:

The marketing mix of a company consists of the various elements as follows which form the core of a company’s marketing system and hence helps to achieve marketing objectives.

McDonald’s is a leading international fast food restaurant chain with 30,000 restaurants spread across the globe. In India, it launched its operations in 1996, with two stores. It now has 54 restaurants with a daily inflow of 500,000 customers.

It plans to add 15 more outlets by the end of 2004. As per the Informal Eating out (IEO) survey involving the survey of branded food chains in India, conducted by ACNielsen, McDonald’s was found to be the leader in fast food chains. Many factors can be attributed to the success of McDonalds Indian operations.

A marketing strategy must be created in order to determine the means by which a set of clear objectives may be met. Objectives communicate what marketers want to achieve, guide marketing actions and are used to measure how well a plan is working. They can be related to market share, sales, reaching the target audience and creating awareness in the marketplace. Long-term objectives are broken down into shorter-term measurable targets, which McDonald’s uses as milestones along the way.

Results can be analyzed regularly to see whether objectives are being met. This type of feedback allows the company to change plans and allows flexibility.

Once marketing objectives have been established, the next stage is to define how they will be achieved. The marketing strategy is the statement of how objectives will be delivered. It explains what marketing actions and resources will be used and how they will work together.

4Ps of Marketing Mix:

Product:

McDonald’s places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers’ requirements change over time. In order to meet these changes, McDonald’s has introduced new products and phased out old ones, and will continue to do so. Care is taken not to adversely affect the sales of one choice by introducing a new choice, which will cannibalize sales from the existing one (trade off). McDonald’s knows that items on its menu will vary in popularity. Their ability to generate profits will vary at different points in their cycle. In India McDonalds has a diversified product range focusing more on the vegetarian products as most consumers in India are primarily vegetarian. The happy meal for the children is a great seller among others.

McDonalds have to be very careful in India while growing their business. In India you go out and you will get a ready to eat snacks and that too in a cheap price. So McDonalds has a direct competition with Indian street fast food which has a many varieties and it is very popular amongst the people. As Fast food industry has been very successful in India, both in financial terms as well as in popularizing its quick service culture among the population. .India’s fast food industry is growing at 40% per annum and generates over Rs. 4800 cores in sales. The multinational segment of the industry generates over Rs. 7000 crores. There are many varieties of fast food in different states of India. The popular fasts of the individual states are as given below.

South India:

Idlis- Made from Rice Idli, Rava Idli

Vadas- Made from Uddina Vada, Rava Vada, Masala Vada, Maddur Vada

Dosas- Made from Masala Dosas, Set Dosa, Rava Dosa

Upma- Made from Kesaribath

Ponagal, etc.

West India:

Vada Pav-which is also known as an Indian Burger and made up of flour, potatoes, spices .

Dahi Vada-Made up of lentils, yogurt

Pohe-Made up of flattened rice

Locha- Made from grinding of chanadal, masala

Sev Kjhamni-Made from chana dal , green chillies, ginger, lemon juice and olive oil

East India:

Kebabs

Pani Puri

Aloo Chat

Pakoras

North India:

Chaat: made up of potato, tomato and tangy in a taste

Pani Puri: deep fried made up from flour and serve with tangy water

Bhel Puri: made up of besan flour and garnishing with tomato, onions and tangy chutney

Papadi Chaat- made up of flour, butter, onion, and different Indian spices.

McDonalds Menu Options:

Comparision between Indian Burger ( Vada Pav ) & McDonalds Burger :

Price:

The customer’s perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item; it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrity.

In India the most authentic cuisine of India is the Indian street food, which can be bought only for few rupees from the portable stalls found in the Indian cities and town. The street vendors offer hot fresh, lip smacking snacks, which is very feeling. These foods are popular mainly because they are available at half of the price of any restaurant food. Take-out food, junk food, snacks and fast food are available easily and it doesn’t take much time to prepare so it is very quick in eating.

The Indian Street Food varies from region to region .The typical North Indian street food is Chaat -a generic name for all tangy spicy not very nutritious delicacies. The tangy flavor comes from the use of lemon, pomegranate seeds, black salt, tamarind, and various chutneys. Chaat can be prepared with fruits like guava,banana ,papaya,apple etc.Use of paapri ,which is crisp pancakes made from fried flour with some out of yoghurt ,potatoes sauteed with black cumin powder with some amount of “meetha and khatta chutney” (sweet and sour pickle) with a dash of coriander becomes the lip smacking Paapri Chaat.The Pani Puri also called golgappa in some places in India is another street delicacy. Pani puris are hollow crisp balls made from dough, and filled as-you-eat with a spicy concoction of water and potatoes, topped by a choice of sweet or spicy chutney and so on. In India in different region has their own different specialties and which are easy to get it and cheap in price. So in India to compete with the Indian local street fast food, McDonalds has to work hard to build its position and keep on competing and growing each day.

In India McDonalds classifies its products into 2 categories namely the branded affordability (BA) and branded core value products (BCV). The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50-60  and the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs 20-3 This has been done to satisfy consumers which different price perceptions.

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.

Aap ke zamane mein,

baap ke zamane ka daam… (In English that means in your

Value Pricing: (Price in INR)

Promotion: The promotions aspect of the marketing mix covers all types of marketing communications One of the methods employed is advertising, Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and magazines. Other promotional methods include sales promotions, point of sale display, merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item.

At McDonalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos.

An activity, such as a sale or advertising campaign, designed to increase visibility or sales of a product.

McDonalds, for years has maintained an extensive promotion strategy with highest spending on marketing amongst all its competitors.

While advertising; focus on overall experience.

• “Brand globally and act locally”.

• Overall it is doing what it does the best – marketing.

• Intensive advertising aimed at children.

• Paper mats on trays ensure that no new scheme goes unnoticed.

“I’m loving’ it” is an international branding campaign which was launched in 2003 and has proved to be its biggest success.

“aap ke zamaane mein baap ke zamaane ke daam” is a highly localized campaign which aimed at attracting the masses through its happy price menu.

Place: Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer. McDonald’s outlets are very evenly spread throughout the cities making them very accessible. Drive in and drive through options make McDonald’s products further convenient to the consumers.

Conclusion

Once the marketing strategy is in place, various responsibilities are given to different individuals so that the plan can be implemented. Systems are put in place to obtain market feedback which measure success against short-term targets. McDonald’s has to ensure that this is done within the confines of a tightly controlled, finite marketing budget.

The fast food industry in India has evolved with the changing lifestyles of the young Indian population. The sheer variety of gastronomic preferences across the regions, hereditary or acquired, has brought about different modules across the country. It may take some time for the local enterprise to mature to the level of international players in the field.

McDonald is the world’s leading food service retailer with more than 30,000 restaurants in 119 countries serving 46 million customers each day. Approximately 85 percent of McDonald’s restaurants worldwide are owned and operated by independent, local businessmen and women.