Mc' Donald - Marketing Strategy

International Business Management

THESISTHESIS

ONON

MARKETING STRATEGIES ADOPTED BY “MC DONALD’S”

Submitted In Partial Fulfillment of the Requirement for the Award ofMaster of Business Administration (IB)

(2006-2008)

SUBMITTED BY:

Chandan Kumar

MAHARSHI DAYANAND UNIVERSITYROHTAK

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ACKNOWLEDGEMENT

I am sincerely thankful to all those people who have given me any kind of assistance

in the making of this project report.

I express my gratitude to “Mr. XYZ'' who has through his vast experience and

knowledge has been able to guide me, both ably and successfully towards the

completion of the project.

I express my gratitude to Mr. ABC. I would hereby, make most of the opportunity by

expressing my sincerest thanks to all my faculties whose teachings gave me

conceptual understanding and clarity of comprehension, which ultimately made my

job more easy. Credit also goes to all my friends whose encouragement kept me in

good stead. I am also thankful to authority of McDonald’s for providing me the

information.

Last but not the least I would like to acknowledge my gratitude to the respondents

without whom this survey would have been incomplete.

(Chandan Kumar)

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PROJECT OUTLINE FOR THESIS

TitleA study on “Marketing strategies adopted by

McDonald’s” (with particular reference to franchisee

restaurant,)

Name of the CompanyMcDonald’s

ChairmanMr. JACK M.GREENBERG

Address

HARDCASTLE RESTAURANTS PVT. LTD,

ASHIANA, 69-C, BHULABHAI DESAI ROAD,

MUMBAI-400026.

Specific Areas of Study MARKETING & INTERNATIONAL BUSINESS

STRATEGIES.

RESEARCH METHODOLOGY

(a) Primary DataPersonal Interview and Structured Questionnaires

(b) Secondary DataAnnual Reports & Brochures, Business Magazines &

articles from internet

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INDEX

Sl. No. Topic Page No.

1 Synopsis 1-2

2INTRODUCTION

“The Indian Fast Food Market - An Overview”3-4

3 INTRODUCTION TO PROBLEM 5-6

4 Objectives & scope of the study

Research Objective

Scope Of Study

7-8

5 Research methodology

Research Design

Sample Design

Data Collection

9

6 THEORETICAL CONCEPT

Industrialization Of Services Business Model

Gap Analysis

Gap Analysis And New Products

Usage Gap

Product Gap

Competitive Gap

Market Gap Analysis

10-18

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7DATA ANALYSIS & INTERPRETATION

Mcdonald's Corporation

Mcdonald's Worldwide

Mcdonald's India

Marketing Strategy

Use Of Sub-Strategies At Mcdonald's

Job Structure

Training And Education

Mcdonalds India Supply Chain

Corporate Social Responsibility

Present Position Of Fast Food Industry

Major Players In This Field

Domino’s Diversity Mission Statement

A Brand With Bite

Economical

Porters Five Forces Model With Reference To Fast Food

Joints

Marketing Scenario At Mcdonald’s

Segmentation

Customer Relationship Management

International Business Strategies of Mcdonald’s

Policy And Functional Strategies

Financial Analysis/Ratio Analysis

Cost Analysis

Environmental Analysis Of “Mcdonald’s”

External Environmental Analysis

19-82

8 Data Analysis, Findings And Observations From

Questionnaire

83-99

9 Conclusions 100

9 Recommendations 101-105

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10 Limitations 106

11 Bibliography 107

12 Annexure 108-111

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SYNOPSIS

Over the past few years the Indian economy has undergone drastic changes- changes

that have had the market flooded with multinationals and a variety of products. There

has been a sudden upsurge in the Indian industry and exponential growth in specific

industries. Today’s companies work in a war zone of rapidly changing competitors,

technological advances, new laws, managed trade policies and diminishing customer

loyalty.

In today’s world of cutthroat fierce competition, customer satisfaction is very

essential to not only exist but also to excel in the market. Today’s market is

enormously more complex. Henceforth, to survive in the market, the company not

only needs to maximize its profit but also needs to satisfy its customers and should try

to build upon from there.

The project title “Marketing strategies and International Business strategies adopted

by McDonald’s” is the analysis of the service Quality level of fast food industry. This

project involves the service level provided by McDonald’s and its competitors. The

survey was conducted so as to analyze the service quality prevailing in the current

industry and the improvement that can be made upon it.

Market research study has been conducted in order to bring out the picture of service

quality that exists in this industry and the difference in service quality that exists in

the market. Like what are the customer’s preferences about the hospitality provided

by the fast food industry.

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After this a comprehensive and comparative analysis has been made and conclusion

has been made keeping in mind the detailed analysis of the findings, which has been

collected through the market research.

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INTRODUCTION

“The Indian Fast Food Market - An Overview”

Up to the year 1995, Indian fast food market was predominantly dominated by the

traditional dhabas, potential restaurants in the customer’s locality and some

restaurants in a five star hotels. Having fast food i.e., burgers, pizzas etc., was

considered to be an option for eating out. It was not at all synonymous with the

American concept of fast food as a quick takeaway bite or a substitute for lunch.

Apart from this fast food being available at the local restaurants and at some five star

restaurants, Nirulas was the only fast food chain existing in the country with its

restaurants expanding with every passing year since its inception. It has been almost

50 years now since its set up and there is hardly any one who doesn’t know about

Nirulas existence. Nirulas was the first one to bring fast food to India back in the 50’s

since then it has evolved into an eating-place with tremendous brand equity and brand

recognition. It proved to be a perfect eating-place for an average middle class who

wants to eat out at an affordable price that can’t afford the five-star restaurants and

would not want to go to the local dhabas.

Nirulas almost had a monopoly for decades due to the way it has been positioned. It is

a place where a person from an average middle class group to upper class group can

go to eat out. Its popularity has increased over the decades. With the trends changing

and the incomes rising almost anybody who can afford to eat out could go for snacks

at Nirulas.

However the year 1995-96 witnessed a drastic change. 1996 is considered to be the

year of India’s entry into the world food market. International giants such as

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McDonalds, KFC, TGIF, Dominos, and Pizza Hut all bombarded the Indian fast food

market. Before these, UK-based joint called Wimpy’s had established its chain in the

country in 1990. By year 1996 it had about three to four joints established in Delhi.

However it did not pose much of a threat to Nirulas reason being lack of variety and

that Wimpy’s was looked at more of a hangout place rather than eating out with the

family. Each of the foreign food joints that have come into the country have their own

strategy lined up to differ from the rest. Each of these studied the Indian tastes and

style and thereby targeted the Indian customer. An average Indian restaurant goes is

no convenience eater, unlike the Americans.

Customer is paying for food that tastes good (Spicy, soft, savory etc.), not for how

pleasantly the stuff is served or how spotless the windows are, and wants good food

for that can make him come back to the restaurant. An Indian food joint owner would

definitely understand this but an American company, which comes and places itself

directly without knowing the customer, is definitely in for trouble. Customer loyalty

in a restaurant business is essentially low. A customer when comes to a restaurant

usually looks at the quality of food, variety, ambience, speed of delivery and the

location. The variety would influence the frequency of visits since taste is a

dominating factor to the Indian customers.

Almost all the fast food chains both Indian i.e., Nirulas and foreign i.e., McDonalds

etc., are targeting the families. This serves to be an advantage because the turnaround

time is short and family has higher propensity to spend because different members

order larger variety of dishes. Each of these restaurants delivers quality, value and

services in its own way through its line of strategies. The emphasis is on the value that

the restaurant is delivering to the customers.

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INTRODUCTION TO PROBLEM

In today’s era of Privatization and Globalization, as the economy is opening up the

disposable income available per person is also increasing which in turn is increasing

the use of fast good restaurants to get quick and hassle free meal. The fast food

segment has witnessed a sea change over a past few years; virtually every big

corporation in the world is busy tying a knot with the Indian partner. Hordes of

multinationals and a couple of new Indian entrants are rushing headlong into markets.

As a service is any act or performance that are party can offer to another that is

essentially intangible and does not result in the ownership of anything its production

may or may not be tied to a physical product. In Indian Fast food segment there is a

Service gap in Ultimate consumer satisfaction and Fast food service providers.

Service gap is a factor that causes the unsuccessful delivery. These are five gaps that

cause the unsuccessful delivery:

Gap between consumer expectation and management perception.

Gap between management perception and service quality specification and service

delivery.

Gap between service delivery and external communication

Gap between perceived service and expected service.

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PRESENT POSITION OF THIS INDUSTRY IN RESPECT TO

SERVICE GAP

Gap between consumer expectation a management perception: -

While the management of pizza hut perceives that the consumers need better

quality food, but the consumers may a clinically want better ambience, (Like,

light, music) or work floor area.

Gap between management perception Service-quality specification:-

The “fast” service provided by McDonald goes very well with its customer

perceptions. Here the negotiation has perceived well what the customer wants but

the main area where it lacks is that it has not specified its customer “how to serve”

or “what quality to be served”.

Gap Between service quality specifications & service delivery:-

The delivery personnel in McDonald are mainly fresh graduates without a

personal degree in “hotel management”. If prospective customer visits except who

recognize restaurant will find what have shown in media and what visible here is

not same causing a difference.

Gap between perceived service and expected service:-

The customer of McDonald and Nirula’s want free home delivery but presently

they are not providing, whereas Pizza Hut is providing home delivery to these

customers.

After this analysis we will come to know that there is service gap in this industry

and there is ample scope for improvement.

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OBJECTIVE & SCOPE OF STUDY

RESEARCH OBJECTIVE

The primary objective of study was Marketing Strategies adopted by “Mc Donald’s”.

This objective is supported by four secondary objectives, achieving them will lead to

the fulfillment of primary objective. They include:

To find the service quality prevailing at McDonalds:

To find out the service quality of McDonalds in the various areas and finding out

the deficiencies prevalent in expected level of service.

To Compare Service quality of Competitors vis-à-vis McDonalds:

Comparing the service quality of McDonald along with that of Nirulas’, Pizza Hut

and other competitors.

To find out the areas of improvement for McDonald’s:

To find out the ways by which McDonald’s can improve upon its service quality

and bring more satisfaction to customers and thus add value to its bottom line.

To study the marketing strategies of McDonald’s.

To study how McDonald’s sell their product & what they do in achieving their

goals.

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SCOPE OF STUDY

This will lead to certain implications for the company as company can formulate its

future strategies in order to increase their sales. Researcher had tried going in detail

and studying the use of fast foods from different angles so as to analyze the issue from

360 degrees. The research tries to develop an understanding on the aspect on the

whole which will help in understanding the market potential McDonalds in a holistic

view.

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RESEARCH METHODOLOGY

RESEARCH DESIGN

The research process is carried out according to a designated series of steps required

to be taken in a chronological order. Fundamental to the success of any research

project is sound research design. It is the framework or plan for a study that guides the

collection and analysis of data.

The research design used for this project is exploratory in nature. The major emphasis

is on the discovery of ideas. The exploratory study is also used to increase the analyst

familiarity with the problem under investigation.

SAMPLE DESIGN

Target population: Customers who regularly visit the fast food restaurants.

Sampling unit: Delhi market is treated as sampling unit.

Sample size: 50 Customers

DATA COLLECTION

Primary Data: It will be collected from the customer’s visiting the restaurants

(McDonald’s) with the help of questionnaire, personal interviews of the staff

(McDonald’s).

Secondary data: It will be collected from the Newspaper Secondary data has been

collected from the company’s information brochure and Internet.

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THEORETICAL CONCEPTS

Marketing is the flow of goods and services from the producer to consumer. It is

based on relationship and value. In common parlance it is the distribution and sale of

goods and services. Marketing can be differentiated as:

1. Marketing of products

2. Marketing of services

Marketing includes the services of all those indulged may it be then the wholesaler

retailer, Warehouse keeper, transport etc. In this modern age of competition marketing

of a product or service plays a key role. It is estimated that almost 50% of the price

paid for a commodity goes to the marketing of the product in US. Marketing is now

said to be a term which has no particular definition as the definitions change

everyday.

Services marketing is marketing based on relationship and value. It may be used to

market a service or a product. Marketing a service-base business is different from

marketing a product-base business. There are several major differences, including:

The buyer purchases are intangible

The service may be based on the reputation of a single person

It's more difficult to compare the quality of similar services

The buyer cannot return the service

Service Marketing mix adds 3 more p's, i.e. people, physical environment, process

service and follow-through are keys to a successful venture.

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The major difference in services marketing versus regular marketing is that instead of

the traditional "4 P's," Product, Price, Place, Promotion, there are three additional

"P's" consisting of People, Physical evidence, and Process. Service marketing also

includes the servicescape referring to but not limited to the aesthetic appearance of the

business from the outside, the inside, and the general appearance of the employees

themselves. Service Marketing has been relatively gaining ground in the overall

spectrum of educational marketing as developed economies move farther away from

industrial importance to service oriented economies.

"Managing the evidence" refers to the act of informing customers that the service

encounter has been performed successfully. It is best done in subtle ways like

providing examples or descriptions of good and poor service that can be used as a

basis of comparison. The underlying rationale is that a customer might not appreciate

the full worth of the service if they do not have a good benchmark for comparisons.

Developing a marketing strategy is much the same for products and services, in that it

involves selecting target markets and formulating a marketing mix. Thus, Theodore

Levitt suggested that "instead of talking of 'goods' and of 'services', it is better to talk

of “tangibles and 'intangibles”. Levitt also went on to suggest that marketing a

physical product is often more concerned with intangible aspects than with its

physical properties. Charles Revson made a famous comment regarding the business

of Revlon Inc.: “In the factory we make cosmetics. In the store we sell hope”.

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INDUSTRIALIZATION OF SERVICES BUSINESS MODEL

The industrialization of services business model is a business model used in strategic

management and services marketing that treats service provision as an industrial

process, subject to industrial optimization procedures. It originated in the early 1970s,

at a time when various quality control techniques were being successfully

implemented on production assembly lines.

Theodore Levitt (1972) argued that the reason the service sector suffered from

inefficiency and wide variations in quality were that it was based on the craft model.

Each service encounter was treated as an isolated event. He felt that service

encounters could be systematized through planning, optimal processes, consistency,

and capital-intensive investments. This model was the foundation of the success of

McDonalds and many other mass service providers in the 1970s, 80s, and 90s.

Unfortunately, the application of assembly line techniques to service provision had

several undesirable consequences. Employees found working under these conditions

disempowering, resulting in low morale, high staff turnover, and reduced service

quality. One of the most difficult aspects of this model for employees to deal with was

the "smile incentives". Employees were instructed to put a smile on their face during

the service encounter. This manufacturing and commercialization of apparent

happiness has been criticised by many commentators, particularly Mundie (1987).

Also many customers prefer the "personal touch".

By the early 1990s most service providers turned their attention back to the human

element and personalized their services. Employees were empowered to customize the

service encounter to the individual characteristics of customers.

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GAP ANALYSIS

In business and economics, gap analysis is a business resource assessment tool

enabling a company to compare its actual performance with its potential performance.

At it's core are two questions:

Where are we?

Where do we want to be?

If a company or organization is under-utilizing resources it currently owns or is

forgoing investment in capital or technology then it may be producing or performing

at a level below its potential. This concept is similar to the base case of being below

one's production possibilities frontier. This goal of the gap analysis is to identify the

gap between the optimized allocation and integration of the inputs and the current

level of allocation. This helps provide the company with insight into areas that have

room for improvement. The gap analysis process involves determining, documenting

and approving the variance between business requirements and current capabilities.

Gap analysis naturally flows from benchmarking and other assessments. Once the

general expectation of performance in the industry is understood it is possible to

compare that expectation with the level of performance at which the company

currently functions. This comparison becomes the gap analysis. Such analysis can be

performed at the strategic or operational level of an organization.

“Gap analysis' is a formal study of what a business is doing currently and where it

wants to go in the future”. It can be conducted, in different perspectives, as follows:

Organization (e.g., human resources), Business direction, Business processes,

Information technology. Gap analysis provides a foundation for measuring investment

of time, money and human resources required to achieve a particular outcome (e.g. to

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turn the salary payment process from paper based to paperless with the use of a

system).

Note that GAP analysis has also been used as a means for classification of how well a

product or solution meets a targeted need or set of requirements. In this case, 'GAP'

can be used as a ranking of 'Good', 'Average' or 'Poor'.

GAP ANALYSIS AND NEW PRODUCTS

The need for new products or additions to existing lines may have emerged from the

portfolio analyses, in particular from the use of the Boston Growth-share matrix or the

need will have emerged from the regular process of following trends in the

requirements of consumers. At some point a gap will have emerged between what the

existing products offer the consumer and what the consumer demands. That gap has to

be filled if the organization is to survive and grow.

To identify the gap in the market, the technique of gap analysis can be used. Thus an

examination of what profits are forecast to be for the organization as a whole

compared with where the organization (in particular its shareholders) 'wants' those

profits to represent what is called the planning gap this shows what is needed of new

activities in general and of new products in particular. The planning gap may be

divided into four main elements:

USAGE GAP

This is the gap between the total potential for the market and the actual current usage

by all the consumers in the market. Clearly two figures are needed for this calculation:

Market potential

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Existing usage

Market potential: The most difficult estimate to make is that of the total potential

available to the whole market, including all segments covered by all competitive

brands. It is often achieved by determining the maximum potential individual usage,

and extrapolating this by the maximum number of potential consumers. This is

inevitably a judgment rather than a scientific extrapolation, but some of the macro-

forecasting techniques may assist in making this estimate more soundly based. The

maximum number of consumers available will usually be determined by market

research, but it may sometimes be calculated from demographic data or government

statistics. Ultimately there will, of course, be limitations on the number of consumers.

For guidance one can look to the numbers using similar products. Alternatively, one

can look to what has happened in other countries. The maximum potential individual

usage, or at least the maximum attainable average usage (there will always be a

spread of usage across a range of customers), will usually be determined from market

research figures. It is important, however, to consider what lies behind such usage.

Existing usage: The existing usage by consumers makes up the total current market,

from which market shares, for example, are calculated. It is usually derived from

marketing research, most accurately from panel research such as that undertaken by

A.C. Nielsen but also from 'ad hoc' work. Sometimes it may be available from figures

collected by government departments or industry bodies; however, these are often

based on categories which may make sense in bureaucratic terms but are less helpful

in marketing terms. The 'usage gap' is thus:

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USAGE GAP = MARKET POTENTIAL – EXISTING USAGE

Many, if not most marketers, accept the 'existing' market size, suitably projected over

the timescales of their forecasts, as the boundary for their expansion plans. Although

this is often the most realistic assumption, it may sometimes impose an unnecessary

limitation on their horizons. The original market for video-recorders was limited to

the professional users who could afford the high prices involved. It was only after

some time that the technology was extended to the mass market.

In the public sector, where the service providers usually enjoy a `monopoly', the usage

gap will probably be the most important factor in the development of the activities.

But persuading more `consumers' to take up family benefits, for example, will

probably be more important to the relevant government department than opening

more local offices. The usage gap is most important for the brand leaders. If any of

these has a significant share of the whole market, say in excess of 30 per cent, it may

become worthwhile for the firm to invest in expanding the total market. The same

option is not generally open to the minor players, although they may still be able to

target profitably specific offerings as market extensions. All other `gaps' relate to the

difference between the organization's existing sales (its market share) and the total

sales of the market as a whole. This difference is the share held by competitors. These

`gaps' will, therefore, relate to competitive activity.

PRODUCT GAP

The product gap, which could also be described as the segment or positioning gap,

represents that part of the market from which the individual organization is excluded

because of product or service characteristics. This may have come about because the

market has been segmented and the organization does not have offerings in some

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segments, or it may be because the positioning of its offering effectively excludes it

from certain groups of potential consumers, because there are competitive offerings

much better placed in relation to these groups. This segmentation may well be the

result of deliberate policy. Segmentation and positioning are very powerful marketing

techniques; but the trade-off, to be set against the improved focus, is that some parts

of the market may effectively be put beyond reach. On the other hand, it may

frequently be by default; the organization has not thought about its positioning, and

has simply let its offerings drift to where they now are. The product gap is probably

the main element of the planning gap in which the organization can have a productive

input; hence the emphasis is on the importance of correct positioning.

COMPETITIVE GAP

What is left represents the gap resulting from the competitive performance. This

competitive gap is the share of business achieved among similar products, sold in the

same market segment and with similar distribution patterns - or at least, in any

comparison, after such effects has been discounted. Needless to say, it is not a factor

in the case of the monopoly provision of services by the public sector. The

competitive gap represents the effects of factors such as price and promotion, both the

absolute level and the effectiveness of its messages. It is what marketing is popularly

supposed to be about.

MARKET GAP ANALYSIS

In the type of analysis described above, gaps in the product range are looked for.

Another perspective (essentially taking the `product gap' to its logical conclusion) is

to look for gaps in the 'market' (in a variation on `product positioning', and using the

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multidimensional `mapping'), which the company could profitably address, regardless

of where its current products stand.

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DATA ANALYSIS & INTERPRETATION

McDonald's CORPORATION

McDonald's is the largest and best-known global foodservice retailer with more than

30,000 restaurants in 121 countries. Yet on any day, even as the market leader,

McDonald's serves about one billion people, which is less than one percent of the

world's population. It claims to open on an average of three outlets every 24 hours at

some place or the other in the world. Their outstanding brand recognition,

experienced management, high-quality food, site development expertise, advanced

operational systems and unique global infrastructure position the company to

capitalize on global opportunities. More than 70% of McDonald's restaurants

worldwide are owned and operated by independent local men and women. Is one of

the worlds most well-known and valuable brands and holds a leading share in the

globally branded quick service restaurant segment of the informal eating-out market

in virtually every country in which they do business. Serves the world some of its

favorite foods - World Famous French Fries, Big Mac, Quarter Pounder, Chicken

McNuggets and Egg McMuffin.

McDonald's WORLDWIDE

History: Two brothers V Richard and Maurice McDonald pioneered McDonald's in

the year 1948 at California, USA. They converted their bar-be-cue drive in with

carhops into limited menu, self-service drive in. Later on seeing the success, the two

brothers were having in running the outlet, Raymond Albert Kroc (1902-1984), also

known as Ray Kroc, at the age of 52 years bought the exclusive franchising rights for

USA in the year 1954 and hence came the McDonald's Corporation into existence.

Ray Kroc opened the first McDonald's restaurant in Des Plaines, Illinois in 1955 now

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no longer a functioning restaurant, but the building is now a museum containing

McDonald's memorabilia and artifacts. The company, since then, has been built

worldwide on the concept of franchisee having about 70 percent of its outlets owned

and managed by people who are its franchisees. About 14 percent of McDonald's

$14.2 billion worldwide sales for the year 2006 came from Asia alone. Presently, the

company plans to expand their leadership position through great tasting food, superior

service, everyday value and convenience. This is gauged by the fact that the

company's efforts to increase market share, profitability and customer satisfaction

have produced good return to shareholders - a total compounded annual return of 12

percent for the ten years ended December 31, 2006.

CORPORATE VISION 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 every customer in its every restaurant smiles. To

achieve this vision, the company is focused on three worldwide strategies:

Be the Best Employer: The Company believes that to give its customers, the best

quick service restaurant experience it is necessary for them to first give its employees

the best experience. So to pursue its belief, McDonald's has put down in writing its

people's vision and peoples belief:

1. People's Vision to be the best employer for our people in each community around

the world. Peoples Promise we value you, your growth and your contribution.

2. Deliver Operational Excellence: Deliver operational excellence to our customers

in each of our restaurants.

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3. Achieve Enduring Profitable Growth: Achieve enduring profitable growth by

expanding the brand and leveraging the strengths of the McDonald's system

through innovation and technology. This helps in expanding the range of

opportunities for all the people - employees, owner operators and suppliers - to

freely invest human capital, ideas, energies, expertise and time.

CORPORATE MISSION: To leverage the unique talents, strengths and assets of

our diversity in order to be the World's best quick service restaurant experience.

McDonald's INDIA

1. A locally owned Company: McDonald's started its Indian operation in the year

1996 under the franchisee ship method. It has two joint venture partners in India:

Connaught Plaza Restaurants Pvt. Ltd. a Delhi based 50:50 joint venture with

McDonald's for its operations in North India. It is headed by Mr. Vikram Bakshi.

Till date it has 100 outlets in and around Delhi, including one each in Noida,

Delhi-Mathura highway, and Delhi-Jaipur highway.

Hardcastle Restaurants Pvt. Ltd. a Mumbai based 50:50 joint venture with

McDonald's for its operations in West India. It is headed by Mr. Amit Jatia. The

company sources all its food products from the local suppliers. It also has a

research and development department, which tries to incorporate the new and

innovative food product into its menu after intensive research catering wholly to

the taste of the local customers. Like in India, the company has renamed its world

famous Big Mac burger to Maharaja Mac and incorporated major changes to its

contents by using mutton instead of beef for its Indian customers.

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2. Local Sourcing is Key for Truly Indian Products: Around the world,

McDonald’s traditionally operates with local partners or local management. In

India too, McDonald’s purchases inputs from local suppliers. McDonald’s

constructs its restaurants using local architects, contractors, labour 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. Nearly 98% of the inputs are

sourced from the domestic market. McDonald’s sources food products from local

companies. Mutton patties are supplied by Al-Kabeer Hyderabad, fresh lettuce

comes from Pune, Ooty, Maharashtra and Dehradun; cheese from Dynamic

Dairies, Baramati, Maharashtra; sesame seed buns and sauces from Cremica

Industries Phillaur, Punjab, and pickles from VST Natural Foods, Hyderabad,

Andhra Pradesh.

3. Setting Up of an Extensive Food Chain: For three years before 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 vigorous quality standards. These standards also strictly adhere

to Indian Government regulation on food, health and hygiene. Part of this

development involves the transfer of state-of-the-art food processing technology,

which has enabled Indian business to grow by improving their ability to compete

in today’s international markets. For instance, Cremica Industries worked with

another McDonald’s supplier from Europe to develop technology and expertise,

which allowed Cremica to expand its business from baking to also providing

bread and batters to McDonald’s India and other companies. Another benefit is

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expertise in the areas of agriculture, which allowed McDonald’s and its suppliers

to work with farmers sharing, advanced agricultural technology and expertise like

utilization of drip irrigation systems, which reduce overall water consumption, and

agricultural management practices which result in greater yields.

4. Respect for the Indian Customers and Culture: McDonald’s worldwide is well

known for the high degree of respect to the local culture. McDonald’s has

developed a menu especially for India with vegetarian selections to suit Indian

tastes and culture. Keeping in line with this McDonald’s does not offer any beef

or pork items in India. McDonald’s has also re-engineered its operations to

address the special requirements of a vegetarian menu. Vegetable products are

prepared separately, using dedicated equipment and utensils. This separation of

vegetarian and non-vegetarian food products is maintained throughout the various

stages of procurement, cooking and serving.

5. Community Partnership: McDonald’s believes in giving back to the

communities it serves. Wherever McDonald’s goes it becomes a part of the

community it operates in and contributes towards the development of the locality.

McDonald’s has introduced the concept of ‘Litter Patrol’ - McDonalds’s

employees go around the immediate vicinity of the restaurant every day, packing

up garbage left behind not only by customers from McDonald’s restaurants but

also by other visitors to the area resulting in a cleaner neighborhood.

6. Quality, Service, Cleanliness and Value: The McDonald’s philosophy of QSCV

is the guiding force behind its service to the customers. All its suppliers adhere to

Indian government regulations on food, health and hygiene while continuously

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maintaining McDonald’s own recognized standards. All McDonald’s products are

prepared using the most current, state-of-the-art cooking equipment to ensure

optimal level of quality and safety. Working on “Customer first” policy

McDonald’s India provides fast and friendly service - the hallmark of McDonald’s

which sets its restaurants apart from others. McDonald’s restaurants provide a

clean, comfortable environment especially suited for families via McDonald’s

stringent cleaning standards, carefully adhered to. McDonald’s menu is priced at a

value that the largest segment of Indian consumers can afford. McDonald’s does

not sacrifice quality for price - rather McDonald’s leverages economies of scale to

minimize costs while maximizing value to customers.

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MARKETING STRATEGY

The first step in developing a marketing strategy is to understand your customers,

enabling reaction to their changing needs and the changing dynamics of the market.

To this end, McDonalds conducts several stages of in-depth customer research and

audits of its brand. The research involves both quantitative and qualitative research

methods. This research tells us a lot about how McDonald's is perceived and about

trends that are taking place in the market. They also conduct research into the local

area of their restaurants, into the general market environment, and into specific areas

of their business (children for example).

1. Competitive Pricing: Being in touch with the pricing of its competitors allows

McDonald's to price its products correctly, balancing quality with value.

2. Competitive Promotion: Before McDonald's communicates with it's customers it

must be aware of what its competitors are communicating so that it can create a

beneficial difference between itself and them.

3. Competitive Place: Distribution is key to any retailer or brand.

4. Competitive Product: Quick Service Restaurants are constantly expanding their

menus. This can be done on a short-term promotional basis or as a long-term

expansion strategy. Innovative marketing strategies clearly drive a business such

as McDonald's. But the marketing program is not simply about food. They use it

to enhance the customers experience, build the overall perception of McDonald's

in the market place as the eat out restaurant of first choice and to let people, who

perhaps have not yet experienced McDonald's, know what the company can do for

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them and how the McDonald's experience continues to evolve to satisfy what the

customers are asking them for.

5. Operational Mission: To provide product and service to the customers,

maintaining the:

Quality: Only the best ingredients

Service: Friendly, pleasant, fast and efficient

Cleanliness: The highest standard for all the family

Value: Great food at great prices, combined with the unique

McDonald's

For this McDonald's Corporation has provided each franchisee with a detailed

operations manual and the latter are supposed to adhere them strictly. The

operations manual consists of:

1. Pre-opening procedures

2. Supplies and inventory

3. Supplier

4. Administration

5. Quality

Besides this the franchisees are supposed to go through the course at Hamburger

University, USA that helps them prepare for the operation in their part of the

world. Every minute detail is given in the menu items, exacting measures for all

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recipes and the way it is to be served is also mentioned in the manual. McDonald's

puts a great stress on the cleanliness and the quality of the food and takes care that

the franchisee is strictly following to the operations manual. For this purpose, a

team of people from McDonald's international meets all the outlets once in 4

months.

6. Back end operations at the outlet: The back end operations at the McDonald’s

restaurant are similar to the shop floor of a factory with separate spaces allocated

to the various operations. It is basically divided into two parts - the basement level

and the floor level.

The Basement level: the floor space at the basement level is divided into a walk-in

chiller used for storing ice creams; a walk-in freezer maintained at 0 to -10F is used

for storing vegetarian and non-vegetarian food items; a coke dispensing machine

consisting of the cylinder spaces for the syrup and the gas cylinders; a dry store used

for storing the items such as cup, glasses, coffee syrup, and sauces, etc.; and the

locker rooms for the employees. The raw materials are replenished every three days

from its distribution center in Noida after rigorous quality checks. At every outlet, an

inventory stock of three plus one day buffer stock is maintained to meet all

exigencies.

The Floor Level: the company has designed its kitchen like a shop floor of a factory

where the different products made on different lines and one operation is conducted at

one place. At the floor level, separate lines are followed for vegetarian and non-

vegetarian food products to the extent that separate equipment's are placed at separate

locations to avoid any contact between the two products.

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People working on the two lines are identified by the different colored aprons they

wear, like green apron for vegetarian products and black apron for non-vegetarian

products.

Every work in the kitchen is according to the clockwork and the time machine tells

when to keep the burgers on the pan and when to pick them up. These and many more

procedures are well laid down in a kitchen code book and followed at the outlets with

same belief. No wonder that the burgers in every outlet of the McDonald's taste the

same. The employees’ trash a burger not sold in ten minutes. Bin level charts are

made for every day of the month, which is based on the actual sales on the same day

of the same week in the previous month. The expected customers to arrive at the

outlet are divided into hourly time slots starting from 1000 hours to 2300 hours and

depending on the volume of the customers, the burgers are made. Also the volume of

the customers are divided into six categories:

Low: 0 - 30 persons

Medium: 30 - 60 persons

High: 60 - 90 persons

Ultra : 90 - 120 persons

Ultra 1: 120 - 150 persons

Ultra 2 : 150 - 180 persons

Almost 95 percent raw materials are sourced from around the country. Since some

products have very short life like peas loose half their sweetness in 24 hours after

harvesting, so to maintain the same taste and freshness, the products are frozen

34


straightaway. The company uses cold trucks for transporting the raw materials to the

distribution center in Noida, where they are stocked until distributed to the whole of

North India wherever the outlets are after a rigorous quality checks to ensure the

quality of the raw materials. Other than this every outlet has three sub divisions

training, ordering, and scheduling, which takes care of the various needs of the

production volume, capacity and the sales target at each outlet.

USE OF SUB-STRATEGIES AT McDonald's

1. Technology Strategy: McDonald's on the technology front has been a forerunner.

The equipments used by the company at its outlets are latest state of the art and

specifically designed for the perfect use. Take the example of ketchup dispensers;

these are designed to fill the plate adequately in just one stroke downwards. Other

than this the filling of the cheese and other ingredients is done by especially

designed dispensers so that each time the layering on the burger spreads the same

amount as has been calibrated.

There are set procedures laid down in a code book of the McDonald's, the booklet

contains the details of how to prepare the food products, to the methods of quality

checks, to the manner in which the employees are supposed to behave in front of

the customer, and various other such procedures.

The people at McDonald's go through a rigorous training schedule before they are

inducted in the company as crewmembers. The trainees are taught how to prepare

food products, to the general kitchen manners and also service delivery

techniques.

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Use of Electronic Data Interchange (EDI) to link to the distribution center,

inventory management systems, and various other production and sales

forecasting techniques are just some of the things the outlets use to serve the

customers better.

2. Capacity Strategy: Since McDonald's is into the business of fast food restaurants

located in the market places and expects to cater to the customer's orders in flat

60-90secs. The capacity planning of each outlet should be designed in such a way

to cater to the crowds coming in the outlet. Each of the outlets has to be

independent on its own for serving the customers coming in, and hence the

production capacity should be large enough to meet all the situations.

3. Facility Location Strategy: McDonald's restaurants buy vegetable supplies

directly from the farmers and other supplies from the suppliers, who sell them at

incredibly low prices. This difference in prices is something in the range of 40-55

percent cheaper than the market price. This is possible because McDonald's have

reached an understanding with the suppliers about the future business prospects

and because since each product is produced at a single place or factory the

economies of scale permit the suppliers to sell the produce at the lower rates. On

the front of the company, it is very encouraging to have the raw materials at such

cheaper rates as this helps the company to price its products at lower rates. This

helps the company in following its slow cost, high volume strategy and hence gain

customers.

4. Process Strategy: At McDonald's there are different production lines for the

vegetarian and the non-vegetarian food products. The production of these food

36


products is decided upon, based on the data collected on the previous days. The

chart used for this purpose is the Bin Level Chart, which contains the data

collected on the same day of the same week of the previous month, and contains

details of the burgers to be produced depending upon the crowd rush and the time

of the day. Besides different production lines for different classes of burgers, each

operation is done only at one point. Hence the design of the production line is a

mix of product layout and process layout.

Further more the flexibility of the company to adapt to the local conditions and

hence produce the products which are according to the taste and preferences of the

customers. For this the company follows a mantra Think Global, Act Local and is

able to position itself in the minds of the customers as a brand. Example: In India

majority of population do not eat beef products, the company identified this much

earlier and hence changed all the products containing beef products to products

containing either mutton or chicken. In India, McDonald's after thorough research

and development came out with its first egg less mayonnaise and it even offers

complete vegetarian food products during the navratri festival.

5. Quality Strategy: McDonald's on the quality aspect is very strict. This can also

been seen in the quality handbook which McDonald's has given to the franchisee.

McDonald's claims that any typical burger undergoes about 54 different types of

quality checks before served to customer. Nowhere, not even in the raw state, is

any of the food touched by hand. Even after the raw food is harvested from the

fields, it is taken care that none of the nutrition value of the food is lost due to the

time factor and for this reason the company has employed Airfreight limited to

take care of its logistics. Before the perishable products are sent to the outlets

37


another set of quality checks are conducted to make sure the quality of the raw

materials.

6. Human Resource Strategy: For McDonald's its employees are its internal

customers. To make sure that its external customers are satisfied to the fullest, it is

imperative on the part of the company to see that its internal customers are

motivated and encouraged to serve the customers well. For this the company

employees full time trainers to make their employees competitive.

Job Structure

Employees of McDonald's fall into three groups: restaurant workers, corporate staff,

and franchise owners. The first group is the biggest - a local McDonald's restaurant

usually employs between 20-40 people. In the restaurants, crewmembers constitute

the entry-level position and are by far the most numerous. A large majority are part-

time workers, roughly three-quarters whose wages are low. Swing Managers

constitute the first managerial position in the hierarchy, although their hourly wages

are only slightly higher than crewmember wages. Assistant Managers and higher

hierarchy are salaried. There is one Restaurant Manager per McDonald's restaurant.

Wages are low partly because the company plays a major role in the recruitment of

the newly or first-time employed. Turnover at the crew level is thus high. But it is

important to point out that only about half of crew-level employees are teenagers. The

remaining includes seniors, working mothers, and "transitional" workers in the 20-25-

age range. The prevailing image of promotion/appraisals at McDonald's is negative -

get a job as a crew person, and you are in a dead-end job. Company emphasizes that a

majority of McDonald's restaurant management started as crew: 95% of swing

38


managers, 70% of assistant managers, and 67% of restaurant managers. As well,

nearly 50% of franchisees started as employees in the restaurants. Appraisal rates to

higher positions are likely to be much lower than movement into store-level

managerial positions.

Training and Education

Employee training at McDonald's is highly structured. Entry-level workers are first

taken through the basic Crew Training System. The program consists of on-the-job

training and is largely vocational. Each stage of advancement beyond the crew level

then entails a new training program, with the skills becoming more complex and

generalized.

Training at McDonald’s begins immediately with a one-hour orientation on the

company. Each restaurant has 25 stations from the grill area to the front counter.

Trainers use a series of checklists as new crewmembers move through the restaurant.

A level of competency is demonstrated and the activity is checked off on the SOC -

Station Observation Checklist. There is a follow-up SOC to get certified on the

station. The goal for each crew person is a 3/30 plan: in the first 30 days, a crew

person learns 3 stations, and so on until all the stations are mastered.

Large or complex organizations usually need to break the planning process down into

manageable units. McDonald's developed its future scenarios around three strategies-

customer convenience, customer value, and optimal operations. For each of these

strategies, there was already a full-time team that included both operations and

systems development personnel from Carl Dill's organization. The digital strategy

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project team worked through these teams to generate the bold new ideas that Dill

instinctively knew were there to be discovered.

7. Information in Operation Strategy: For various uses and to disseminate

information at various levels the company uses a number of forms, charts and

computer-aided systems. For billing and inventory management level check, the

company uses point of sale systems. This system consists of:

Cash Drawer

Central Monitoring Unit

Printer

PAR

The various reports generated are: Daily Sales Report, Monthly Sales Report,

Daily Product wise Report, Monthly Product wise Report, Hourly Sales Report. Other

than this Bin Level Chart, as already explained above, is produced daily to inform the

production in-charge of the production schedule. Another report, Daily Product Safety

Checklist, is produced three times a day for checking the quality of the food served

duly signed by the restaurant manager.

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McDonalds INDIA SUPPLY CHAIN

A taste of freshness from all over India: Did you know that every year, Rs. 50,000

crore worth of food produce is wasted in India? This is mainly because of the lack of

proper infrastructure for storage and transportation under controlled conditions.

McDonald's is committed to providing quality products while supporting other Indian

businesses. And so, McDonald's spent a few years setting up a unique Cold Chain.

The cold chain is necessary to maintain the integrity of food products and retain their

freshness and nutritional value. It refers to the procurement, warehousing,

transportation and retailing of food products under controlled temperatures. Setting up

the cold chain has involved the transfer of state-of-the-art food processing technology

by McDonald’s and its international suppliers to pioneering Indian entrepreneurs, who

have now become an integral part of the cold chain.

CORPORATE SOCIAL RESPONSIBILITY

A Socially Responsible Company: McDonald’s founder Ray Kroc built the company

on the principle of giving back to the communities in which they do business which

holds true at McDonald’s today. A McDonald’s franchisee and his/her team can be

found supporting various local schools, youth athletic teams, senior citizens’ groups,

safety awareness campaigns, literacy programs, environmental projects and other

local fundraising initiatives in their communities.

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PRESENT POSITION OF FAST FOOD INDUSTRY

GLOBAL: - Globally this industry is witnessing erosion of customer base. This is

due to the fact fast food contain and surplus amount of fats, oil, cholesterol, which

increase the health related problems and the customers are becoming more and more

Health Conscious and are becoming more conscious in there food habits.

IN INDIA: - The consumer ignore the above mention factors provided if you added

to this people tendency to adopt westernized culture, customers have helped fast food

MNCs to increase there markets.

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MAJOR PLAYERS IN THIS FIELD

These day working executives are busy a lot they don’t have the spare time to cook

food, due to their high income and ever increasing aspiration levels they prefer to it

out at this fast food outlets (McDonald’s, Nirulas, Pizza Hut) where they find the

match according to there aspirational level.

SUBWAY DOMINO’S

NIRULA’S WIMPY

KFC PIZZA HUT

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1. PIZZA HUT

Pizza Hut is the largest pizza restaurant company in the world. It has 12700 outlets in

90 countries. Pizza Hut has an aggressive expansion plan for India. Pizza Hut is one

of the flagship brands of Yum! Brands, Inc., which also has KFC, Taco Bell, A&W

and Long John Silver’s under its umbrella. Pizza Hut is the world’s largest pizza

chain with over 12,500 restaurants across 91 countries.

In India, Pizza Hut has 139 restaurants across 36 cities, including Delhi, Mumbai,

Bangalore, Chennai, Kolkata, Hyderabad, Pune, and Chandigarh amongst others.

Yum! is in the process of opening Pizza Hut restaurants at many more locations to

service a larger customer base across the country. Pizza Hut will consolidate its

presence in cities where it is already existing as an endeavor to create a major share of

these profitable markets first before spreading to other markets. Pizza Hut is one of

the largest pizza brands. Further, all new outlets in India would be franchisee owned

resulting from the smooth functioning of the existing stores which are all franchisee

owned. Hence, the same arrangement will be followed in the future to ensure growth-

oriented results. The data written below represent what Pizza Hut is all about and

gives a brief profile of the company. Their main quote:

"Customers are the reason that we are here."

No customers

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No Pizzas

The 5 secret principles:

Employees are our secret ingredients

Show your "care"

Say "yes" to customers

Satisfied, capable teams create satisfied customers

Satisfied customers create profit and growth

Today, Pizza Hut serves over a million pizzas a day in more than 12,689 restaurants

in 88 countries making it the No.1 pizza brand in the world. The reason behind Pizza

Hut's success all over the world is its steadfast belief and uncompromising drive in

providing customers the best in terms of product quality, service, cleanliness and

value.

Pizza Hut pizzas are made with fresh dough baked daily and smothered with our very

own Pizza Hut special tomato sauce, tender meat toppings, crunchy vegetables and a

double layer of 100% pure imported Mozzarella cheese.

Service is an attitude in Pizza Hut. Crew members are trained to make customers feel

appreciated. Customers are treated with courtesy, attentiveness, respect, and

enthusiasm. Cleanliness is a must in Pizza Hut as much as giving customers the best

value for their money.

Today, Pizza Hut has a total of 22 DELCO, 39 RBD, 61 Restaurants, 1 Bistro and 1

Express. Another creation of Pizza Hut is the slice unit that caters to customers who

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want to avail of quick food service. This was conceptualized precisely for people on

the go, individuals who want to eat pizza without the usual waiting time.

2. NIRULA'S

Nirula’s today is a well-known name in the hospitality industry. Nirula family was the

first to offer western style fast food in India. It came to Delhi in 1928. They realised

the paucity of good eating places in and around New Delhi, and started ‘Hotel India’

in 1934 with 12 rooms and a restaurant with a bar license. They also specialised in

catering to parties and soon Nirulas’ catering became famous. Meanwhile, Nirula’s

had set up the ‘India Coffee Shop’ in Janpath on request of the Coffee board. A few

years later, the Coffee Board of India seeing the success of the international decided

to run the business itself.

It 1939, when the Second World war had started, Nirula’s rented more space in

Connaught Circus (what is currently the ground floor of Nirulas, L-block) and opened

a Restaurant with music and serving a six course dinner for only Rs. 1. The restaurant

proved to be popular with both Indian and foreign guests. It also started serving

Indian food and introduced ballroom dancing and cabaret. However, business

fluctuated widely since it was dependent on the quality and reputation of that

evenings performer. Hence, in 1950 the restaurant with the cabaret was given up in

favour of the Brasserie.

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The Brasserie was a popular self-service restaurant serving beer and liquor with a

limited menu of Indian and Western food. The Brasserie gave way to the ‘Cafeteria’,

the first of its kind in India with a variety of Dishes and the guests could help

themselves to whatever they fancied.

Before 1947, Nirula’s had also opened the first fruit preservation unit in Delhi. The

jams and squash and other preserves were marketed under the name of Nirula’s and

had an all India distribution. With the partition of India in 1947, the supply of raw

material was disrupted and this unit was stopped. In 1950, Nirula’s started the

‘Chinese Room’ which was the first restaurant of its kind in India. Nirula’s created

history by being the first Indians of non-Chinese origin to have a Chinese food

restaurant in India. In 1954, Nirula’s were the first ones to introduce espresso coffee

in India. Gaggia, the inceptors of espresso coffee machines gave Nirula’s sole

distribution rights for their machines and Nirula’s sold these to the luxury hotels and

first class restaurants. Nirula’s Hotel was started in 1958 and was the first modern 3-

star hotel in India. In 1960 two specialty restaurants were opened.

Nirula's Production Facilities: The fact that on an average over 40,000 people visit

Nirula's 3 hotels, 31 Family Style Restaurants, 4 Fine-Dine Restaurants, 1 speciality

restaurant, 14 pastry shops and 4 bars every day is a matter of pride for everyone at

Nirula's. It also proves that their efforts to maintain high quality standards at their

production facilities have been recognized and commended.

The logistics are staggering - 6.5 lakh kg of flour, 20 lakh litres of milk, 12 lakh eggs,

85 tonnes of meat, 210 tonnes of chicken, 200 tonnes of cream, 230 tonnes of sugar,

47 tonnes of milk powder, 55 tonnes of butter and 2 lakh litres of oil are used in a year

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at Nirula's. Despite these huge quantities, quality has never been compromised.

Working round the clock are 20 food and dairy technologists and other management

personnel who ensure that only the best reaches the consumers.

Quality Assurance Department: The Quality Assurance Department (QAD) has 18

qualified and experienced Food Technologists/Chemists and Microbiologists for

monitoring the quality systems at Nirula's. The QAD reports to the Managing Director

for his personal review. The department has a well-established laboratory with

modern testing facilities at each Production Centre (Okhla and Noida). Various tests

of raw materials, under-process material and finished products on the lines of ISO

9000 and HACCP standards are carried out to ensure that all the products fulfill the

desired standards.

Raw Material Specifications: Nirula's QAD has formulated stringent quality

standards for all raw materials conforming to the regulatory requirements. The

products are checked at every stage:

Analysis of Raw Material

Analysis of Under-Process Material

Analysis of Finished Product

Monitoring During Production

Recipes and Manufacturing Procedures

The Quality Assurance Staff monitors production and ensures adherence to the

approved recipes and procedures. This is done through regular Recipe Audits at all the

Production levels.

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B. Hygiene and Sanitation

Periodic Audits are conducted at all production centres, the report of which is sent to

the production heads for compliance. The hygiene of individual workers is examined

on a daily basis, apart from their regular medical check-up. Quaity Assurance

Department (QAD) conducts fortnightly audits at the service outlets covering

following parameters:

Restaurant Sanitation Audit

Storage Temperature

Food Safety Audit

Regulatory Requirements

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3. SUBWAY

In the year 2008, the SUBWAY chain entered its 43rd year of operation. It is the

world’s largest submarine sandwich chain with more than 28,121 restaurants in 86

countries. As a matter of fact, the SUBWAY chain operates more units in the US,

Canada and Australia than McDonald’s does. Countless awards and accolades have

been bestowed upon Fred DeLuca and the SUBWAY chain over the past 40 years.

The SUBWAY name and its products have even appeared in numerous television and

motion picture productions.

Subways mission is to provide the tools and knowledge to allow entrepreneurs to

successfully compete in the QSR industry worldwide by consistently offering value to

consumers through providing great tasting food that is good for them and made the

way they like it.

This pamphlet is meant to serve as an ingredient guide to help consumers make better

informed food choices. This information includes the use of what are currently the

most commonly used products, approved by Doctor's Associates Inc., for SUBWAY

sandwich shops in cases where there is more than one brand of approved products

available to the franchisee. Therefore, formulas may vary from region to region.

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4. DOMINO'S

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Vision: “Exceptional people on a mission, to be the best pizza delivery company in

the world”

Domino's Pizza India Ltd. was incorporated in March 1995 as the master franchisee

for India and Nepal, of Domino's Pizza International Inc., of USA. Moreover, the

company holds the master franchisee rights for Sri Lanka and Bangladesh through its

wholly owned subsidiary. Mr. Shyam S. Bhartia and Mr. Hari S. Bhartia of the

Jubilant Organosys Group were the promoters of the company. Since inception,

Domino's Pizza India Ltd. has proceeded to become one of the largest and fastest

growing international food chains in South Asia. The first Domino's Pizza store in

India opened in January 1996, at New Delhi. Today, Domino's Pizza India has grown

into a countrywide network of over 180 outlets in 34 cities and is the leader in the fast

food delivery segment.

Domino’s Diversity Mission Statement

Domino's Pizza is committed to an inclusive culture, which values the contributions

of their customers, team members, suppliers, and neighbors. Domino's Pizza uses only

the freshest, highest quality ingredients available.

In 2004, Super Bowl Sunday was one of the busiest day of the year. Domino's sold

close to 1.2 million pizzas, which is about 42 percent more pizzas compared to a

normal Sunday. Super Bowl Sunday ranks among the top five days for pizza

deliveries annually. The three dots in logo represent the first three Domino's Pizza

stores. The plan was to add a dot for every new store, however, with Domino's current

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store count more than 8000 in 54 countries (as of 2007) that would have been quite

impossible to continue.

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5. WIMPY

Wimpy is the brand name of a chain of hamburger restaurants based in the United

Kingdom. The restaurants were originally called Wimpy Bars and many people still

refer to them by this name, despite the fact that the name "Wimpy Bar" was dropped

in favour of "Wimpy" many years ago. The current owners of the Wimpy brand

operate in several countries under the name of Wimpy International. The Wimpy

brand was created by in the 1930s. In 1977 the business was acquired by United

Biscuits. Wimpy was beginning to lose ground to McDonalds, who had opened their

first UK restaurant in 1974 and so the new management of Wimpy began to

streamline the business by converting some of the traditional "table service"

restaurants to the "counter service" operation style of McDonalds. Another difference

between Wimpy and McDonalds was that Wimpy had lacked branches that had a

drive through format.

Wimpy Awarded In Best Breakfast Category, Wimpy, one of South Africa’s leading

Quick Service Restaurant brands was recently voted number One in the Best

Breakfast category in the Pretoria News - Best of the Best competition.

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According to Hele, Wimpy’s success can be attributed to a number of factors

including friendly and comfortable atmosphere, tasty food, good service and

accessibility. With over 400 Wimpy stores nationwide, diners are sure to find a

Wimpy nearby. Innovation and product development have also been cornerstones in

the successful track record of the group. “Product development is not seen as making

change for the sake of change but rather enhancing the quality of the menu. We listen

to our customers,” says Hele. “We truly believe that Wimpy is a ‘people’s restaurant’

where diverse communities enjoy the Wimpy experience and benefit from our

commitment to freshly prepared food”.

A Brand With Bite

What does it take to make a name stand out from the rest? Why does the WIMPY

name leap out with a sizzling promise of a delicious and fresh food experience? It's all

in the branding. WIMPY has established a powerful image that, along with its values

of quality, cleanliness, service, value and friendliness, reflects the brand's innovative

and welcoming personality. WIMPY continues to build on the brand's strengths by

retaining its core values and enhancing its image with inventive changes and

evolutions. It's this energy that constantly uplifts and refreshes the brand, positioning

it way ahead of the rest.

Awake. Aware. Alive

Contemporary trends. Shifts in food, décor and lifestyle tastes. WIMPY is always

aware of exactly what's going on out there.

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THE MARKET ENVIRONMENT PEST ANALYSIS OF FAST

FOOD MARKET POLITICAL / LEGAL

In India, there are a number of political parties having their own set of policies

that has introduced a level of uncertainty and unstable government. As a result of

this, the peoples and organizations are hesitant towards promoting FDI in India.

The increase in prices of Petrol & Diesel (because of crude oil crossing

$100/barrel mark) will increase transportation costs and net effect will be

reduction in the profit margin of the organization.

The unexpected change in government policies has always been of great concern

for the industry.

Also with the Swadeshi message spreading all around. It is acting as a sword that

is hanging over the head of the management of the players in fast food segment.

Case of pesticides level more than permitted in Cola brands poses threat to

MNC’s credibility.

Legislation related to manufacturing and taxation should be made more

investment friendly.

The industry suffers from multiple taxes like excise, sales tax and in certain cases

even a mandi tax, leads to a cascading impact.

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ECONOMICAL

U.S economy going towards recession is affecting the multinational firms

anywhere associated with United states.

Expected rise in Global Food prices will affect the cost-benefit equation of food

products.

With the rise in inflation, the cost of production rises due to increase in the prices

of raw materials, which have an adverse effect on the profits of the organization, if

they don’t increase the price or reduce their overheads.

SOCIAL

The relevances of the social environment to a particular business will depend on

the nature of business. The impact of the social environment on a consumer

products company is much more than any other company.

Over 40% of all packaged goods consumed in urban India are foods and

beverages, while that in rural India is over 20%. This trend will deepen because of

the changing profile of the consumer. Education, employment and media will

make the consumer more discerning and demanding.

TECHNOLOGY

Technology developments come out of the R&D effort.

Players in fast food segment are continuously trying to come out with new

products and variants and flavours that will fit in the Indian palate. The companies

are trying to offer better value to their customers and are also trying to deliver

superior product at competitive price.

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PORTERS FIVE FORCES MODEL WITH REFERENCE TO

FAST FOOD JOINTS

Threat of New Entrants high

Unorganized sector has low

entry barriers and low initial

investment

Threat of FMCG majors

entering fast food with

established distribution

Success dependent on

maintaining low costs

Power of suppliers – High

Expensive, hard to procure

ingredients

Pries determined by

suppliers to maintain quality

Lack of single supplier on a

contract basis to ensure

fixed rates

Fluctuation in supply of

seasonal products offerings

Intensity of rivalry high with

both national (Dominos,

Pizza hut, McDonalds with

deep pockets and rapid

expansion plans

Regional level chains

(Nirulas, Pizza Corner, US.

Pizza)

Industry dominated by the

unorganized sector with low

entry and exit barriers

Consumer-Low switching

costs

Highly unpredictable

consumer perceptions

Higher purchasing power

Large number of fast food

options

Low brand loyalty

Demand quality at a low

price

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studied, making Highly deal prone cust.

Fast food suffers competition

from the well established

ready to eat snack food

segment

Indians most comfortable

with home made food

Ready to cook foods

category growing at a rapid

pace in India

Dine in joints dominate as

pizza is still not considered.

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Marketing Scenario at Mcdonald’s

The first step in developing a marketing strategy is to understand the customers,

reacting to their changing needs and the changing dynamics of the market. To this end

McDonald’s conducts several stages of in-depth customer research and audits of the

McDonald's brand. The research involves both quantitative and qualitative research

methods. This research describes how McDonald's is perceived and about changes

that are taking place in the market. Research is also conducted into the local area of

their restaurants, into the general market environment, and into specific areas of their

business. They also believe in having a thorough understanding of their competition,

which is considered, at three distinct levels:

Total Eating out Market gives the broadest competitive context and includes all

restaurants, hotels, pubs, and any other outlet where people eat. This category

contains the entire gamut of eating outlets ranging from the “mom-&-pop outlet”

to the most exclusive five star hotels.

Quick Service Restaurant sector includes any outlet where food is served quickly

and the process is usually self-service. Example: Domino’s, Nirula’s.

Burger House Sector includes those restaurants that serve different varieties of

burgers as their primary menu item. This is the narrowest sector in consideration.

Having an in-depth understanding of all aspects related to the competition allows

McDonald’s, to monitor the competitive environment to exploit the opportunities

and check threats in time.

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This is achieved through the following:

Competitive Pricing: Being in touch with the pricing of their competitors allows

them to price their products correctly, balancing quality with value.

Competitive Promotion: At McDonald’s it is believed that before they

communicate with their customers, they must be aware of what the competitors

are communicating so that they can create a beneficial advantage.

Competitive Place: Distribution is the key to any retailer or brand; McDonald's

prides itself on its superior delivery process.

Competitive Product: Quick Service Restaurants are constantly expanding their

menus. This can be done on a short-term promotional basis or as a long-term

expansion strategy.

MARKETING MIXES

McDonald’s over the past seven years has been successful to place itself in the

mindset of the Indian customer as an affordable outing compared to the initial

impression of “Americanized Indian Richies”. With their Flag Ship product “Big

Mac” absent from India it seems the Maharaja Mac comes to be the Indian Flag Ship

Product. They consider service as one of their key selling points and focus on four

dimensions with a lot of thrust. These are Quality, Value, Service and Cleanliness. It

has tried to reach out to the entire Indian market of middle as well as the upper class.

McDonald’s has been co-branding with some very well known brands. Apart from

serving Coca-Cola at all its outlets the McSwirl was introduced as a co-branded Ice

cream with Cadbury’s.

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Looking through the marketing mixes context through which McDonalds has tried to

position itself in the Indian market:

1. PRODUCT

McDonald's menu internationally is based on five main ingredients: beef, chicken,

bread, potatoes and milk. Their main products are hamburgers, chicken sandwiches,

French fries and beverages. In addition it serves a variety of breakfast items and

desserts.

The original McDonald's menu was simplicity itself -hamburgers, cheeseburgers,

fries, soft drinks, coffee and shakes. This limited menu concept triggered the "fast

food" concept, because focusing on just a few items that were prepared with

standardized procedures made food service a model of efficiency. And buying food

supplies in quantity As the restaurant chain grew larger enabled it to keep prices low.

Finally, because the menu was limited, it was able to deliver a consistent product, no

matter which restaurant a customer visited. And this consistency has remained a

hallmark of McDonald's even as its menu has expanded over the years. Customers

know they can count on being served the same Big Mac whether they're at a

McDonald's in Moscow, Idaho, or Mumbai, i.e. the same world famous fries whether

they're in Dallas or Delhi.

Mc Donald's India representative says, "We take the hamburger business more

seriously than anyone else." Surprisingly, in India McDonald's has been particularly

successful at catering to local tastes. The global giant is often criticized for

standardizing tastes by serving the same burger the same way everywhere in the

world. Though the core menu--hamburgers, Big Macs, fries, etc.--is available in all

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McDonald's restaurants, it's complimented with an array of localized choices. Usually

in Asia, about a third of the menu is made up of dishes you won't find anywhere else,

like Pizza McPuffs in India. In fact, the McDonald's in India feature a menu that is

over 75% locally-developed.

India has been the biggest inspiration for McDonald's fusion chefs. With a population

that is mostly Hindu, the restaurant chain can't serve its mainstay-beef. So most of the

standard menu had to be thrown out, down to the "special sauce" that goes into Big

Macs elsewhere. Many Hindus, who are strict vegetarians, eschew mayonnaise, the

sauce's main ingredient. McDonald's India developed a special egg less mayonnaise

for the burgers; instead of eggs it used a large amount of mint. In place of the Big

Mac, McDonald's India developed the Maharaja Mac--a mutton burger. All these

extra steps have been taken to assure Indian customers of the wholesomeness of both

products and their correct preparation. So intense is the idea of Indianization that

McDonald's has opened an all- vegetarian outlet in Ahmedabad, which is

predominantly a vegetarian city.

2. PRICE

Aimed at luring the Indian middle class, the ice cream cone was started with zero

margins to pull in crowds. McDonald's has always strived to offer quality products at

an affordable price. Its bulk purchasing capabilities have given it the cost advantage.

It thus strives to be an optimum-cost producer -not the lowest cost -since quality

comes first for this restaurant chain. The products are priced keeping in mind the

target group. Since the people targeted belong to the Socio Economic Classification

Grid A & B, the company refrained from excessive or premium pricing. An

interesting piece is that the company claims to have a margin of 40 percent on its soft

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cone, which is a big hit among the people. Most of the meal combinations i.e.

including burger, French fries and a coke, prices are nominal. This could also be the

tactics of psychological pricing. McDonald’s has also introduced McHappy Hours, to

increase customer visits during the lean time (3 pm to 6 pm). This is also in tune with

the school and college goers.

3. PLACE

McDonalds is ever expanding and due to this its presence is felt by 3.5 million

customers in India alone and more than a billion people worldwide every day. It has

excellent networking capabilities with its suppliers and ensures quality from them.

McDonalds India's outlets are generally located near community centers (some also

have small parks adjacent to them) to provide the complete family experience.

4. PROMOTION

The emphasis is on projecting McDonald's as a global brand relevant to the local

community. The positioning of McDonald's as a family restaurant is being carefully

put across to the consumers.

1. Advertising: McDonalds advertising in India is being handled by Mudra

Communications. McDonald's spends over 5.5crores each year on advertising: the

Golden Arches are now more recognized by kids in metros than their favorite super

hero. McDonald's is recognized as one of the best marketers of the world, investing

some hundreds of millions of dollars every year for advertising and promotion of its

image. “Get them in. Trade them up. Get them back.” These are the three basic steps

of McDonald's marketing strategy, as defined internally at Mudra Communications,

the agency handling the account. Shorn of jargon, this simply means objective number

one is to make consumers' step into McDonald's outlets, the second objective is to

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shift the consumer to McDonald's core products (the Vegetarian Burger with cheese,

the McChicken Burger with cheese and Fillet-o- Fish) by increasing sampling and

showcasing the value aspect of McDonald's. Thirdly, increase the frequency of visits

by making the McDonald's brand experience unique and memorable. The Indianised

items like McAloo tikki burger and pizza McPuff are instrumental in bringing in the

traffic into the store.

Mc Donald’s marketing efforts go far beyond advertising, including special food

promotions, games, videos, cassettes, tapes, videos, CDs that customers couldn't get

anywhere else for the value. Because of the diversity of customers that go to

McDonald's, they have developed segmented marketing programs as various key

audiences.

2. Public Relations: McDonald's public relations in India are being handled by

Corporate Voice Shandwick, a subsidiary of Weber Shandwick Worldwide. This

begins with franchisee involvement in their communities and extends to other national

passions like cricket (McDonalds invites young and successful cricketers like Yuvraj

Singh to inaugurate their restaurants). This means a well organized psychological

bombing aimed at all kind of people, from every race and social class where the

golden arches result to be the overall winner.

3. Promotions: Using collectable toys, television adverts, promotional schemes in

schools and figures such as Ronald McDonald the company bombards their main

target group: children. Happy meal combine wholesome food with a toy; Ronald

McDonald is a special friend; play places (like in McDonalds, Priya Complex)

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provide safe and fun recreation and the alliance with Walt Disney Company let the

children's shout even more.

4. Market Research: McDonald's strategy for communication relies heavily on

research to fine-tune its significance and effectiveness. An ear closer to the ground

because that's where the action is! An organization has to be on the look out for any

slight signals in the market that, suggest some kind of change. This is where the role

of market research comes in. It can help an organization identify underlying needs and

make changes to capitalize on them accordingly. From being classified by consumers

as being 'bland' in 1997 to being sought after in 2000 for its 'unique' taste, McDonald's

India has been the 'biggest experiment' for the worldwide chain, what with the Indian

outfit having to consistently launch products to tickle Indian taste buds. Even though

the Indian outfit stuck to its core taste that grew on consumers from 'bland' to 'unique'

in three years, with no change factored in by the fast-food chain, McDonald's India's

menu is about 75 per cent different from its global menu. All this can be attributed to

the menu development team set up my McDonald's to explore and exploit the Indian

taste buds.

Country Fast Food Soft Drink

Australia McDonald's Coca-Cola

China McDonald's Pepsi

Hong Kong McDonald's Coca-Cola

India Local chains Pepsi

Indonesia McDonald's Fanta

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Japan McDonald's Coca-Cola

Malaysia KFC Coca-Cola

New Zealand McDonald's Coca-Cola

Philippines Jollibee Coca-Cola

Singapore McDonald's Coca-Cola

South Korea Lotteria Coca-Cola

Taiwan McDonald's Coca-Cola

Thailand KFC Pepsi

Vietnam No favorite Coca-Cola

McDonald's was the most popular fast food for children across the Asia Pacific

region. Children from 8 of the 14 countries claimed that McDonald's is their favorite

fast food. Coca-Cola was seen as the most popular soft drink preferred by children

from 10 of the 14 countries. But taste is not the only thing that can draw people to

McDonald's. There is the snob appeal of foreign food, which confers status on

middle-class Indians flush with cash. And there is the irresistible attraction of junk

food for children the world over, who are drawn to the high-octane marketing pitch of

the fabled Ronald McDonald character.

5. PEOPLE

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McDonald's relies upon a blend of US human resource practices and host country

norms. The firm has over a million employees, a figure that is estimated to double in

the next few years. The organization has a strong commitment to staffing locally and

promoting from within. McDonald's India employs around 1,500 people in Delhi and

Bombay. In Bombay alone, its team comprises a 100-member management and 800-

strong crew. McDonalds India invites applicants having a minimum qualification of

higher secondary, very good communication skills, ability to work in teams and a

friendly nature. But probably the most attractive side of McDonald's' activity is the

training that stands as background in every single employee. McDonald's corporation

started its fortune-trailing people on how to be kind, fast, precise and effective: it has

been an absolute pioneer in this field.

6. PHYSICAL EVIDENCE

A standard and differentiating aspect of McDonald’s menu is that it displays two

different menu boards in each restaurant -green for vegetarian products and purple for

non-vegetarian, making it easier for customers to see their options and make their

choices. Behind the counter, restaurant kitchens have separate, dedicated preparation

areas for the meat and non-meat products -and even crew assigned to the products'

cooking have different uniforms to distinguish their roles.

The company struck a better chord with the consumers when after the consumers felt

that the counters at the outlets were "too high", making the McDonald's staff

"unapproachable" it immediately swung into action and reduced the height of the

counters. To reinforce its positioning as a family restaurant with the prime focus on

kids, it designed a counter specifically for kids keeping the height in mind. Again,

keeping kids in mind, McDonald's has done away with somber colors in favor of rich,

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vibrant ones. Even the paintings that once tended to be abstract have been replaced

with things children could relate to. It has high stools to make the tables more

accessible for small kids. McDonald's offer the same message in every franchise

throughout the world. "McDonald's Mein Hai Kuch Baat" is an attempt to adopt a

more personal approach towards its customers, talking "to" them and not "at" them.

This is yet another example of adding to their image as a global brand.

7. PROCESS

A precise way of considering McDonald's' role of operations is through Porter's value

chain analysis. The Value chain breaks down the firm into its strategically relevant

activities, in order to understand the behavior of costs and the existing or potential

sources of differentiation. A firm gains competitive advantage by performing these

strategically important activities more cheaply or better than its rivals.

For a company which feeds some 38 millions clients every day, finding a reliable

quality supplies is a major factor for success. McDonald's has solved the problem by

making food supplies part of their success.

McDonald's distributors are strategically associated to be accessible to the each

restaurant and carry practically everything, from meat and potatoes to light bulbs.

Coca-Cola, the well-known beverage, has been with McDonald's from the beginning

supplying beverages. McDonald's is increasingly using its leverage to capitalize upon

global purchasing practices. The most important part of McDonalds India's operations

was developing a cold chain which is the process of procurement, warehousing,

transportation and retailing of food products under controlled temperatures. Although

McDonalds sources most of it's raw materials locally, several products such as French

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fries, specialty cheeses, some meats and fishery products, flavors, condiments and

ingredients are often imported.

McDonald's India is banking on quality and hygiene as its unique selling proposition

(USP) to capture a sizeable portion of the fast- food market in India. This explains the

company's attempts to select its chain of local food suppliers. For three years, before

it opened its first restaurant in India, McDonald's and its international supplier

partners worked together with local Indian companies to develop products that met

McDonald's quality standards. These standards are also in accordance with Indian

Government regulations on food, health and hygiene segmentation, Targeting &

Positioning

SEGMENTATION

McDonald’s has decided on certain criteria to divide the market into relatively

homogenous clusters, which it can target for commercial gain. These criteria are as

follows:

1. Based on stage in Family Life Cycle

People buy different goods and services over a lifetime due to the different needs

associated with the distinct stages in life. Thus the consumption pattern is shaped by

the stage in the family life-cycle.

2. SEC based

The education along with occupation is an accepted way to segment a new market.

McDonald’s also segmented the Indian consumers on such a basis. Only urban

segments were considered even within this criterion, as the demand for a fast-food

restaurant was felt in the urban markets only.

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3. Lifestyle

Lifestyle of a customer dictates his/her spending habits, i.e. where he spends his

disposable income. This was relevant for McDonald’s as they wanted to integrate

their product-service hybrid offer with the customer’s lifestyle.

TARGETING

SEC target: A look at the new products that have been launched by McDonald’s

recently shows that their focus is on the middle class. This is because they believe that

is where the profitability is going to come from. McDonald’s plan to continue to focus

on this category as of now.

Family Life Cycle target- McDonald’s target the following segments in this

category:

Full nest I: People in this stage of family life cycle have their youngest child less than

6 years, their home purchasing is at peak, and they are interested in new and

advertised products. Children influence their buying decisions.

Full nest II: People in this segment have their youngest child 6 years or over, their

financial position is a little better than those in full nests I and they are less influenced

by advertised products. They are interested in special offers, as taken out by

McDonald’s from time to time and children too influence their decisions.

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Positioning

McDonald’s position themselves as a welcoming and affordable family restaurant

committed to values of quality, fun and excitement. It is also positioned as a

restaurant that makes the customer feels special and makes the customer smile. So it

has a clear positioning as a family restaurant to which the customer goes for a quick

bite. Such customer convenience is integrated into their seven Ps and through Quality,

Service, Cleanliness and Value.

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CUSTOMER RELATIONSHIP MANAGEMENT

McDonalds is probably one of the most famous examples of the philosophy and

practice of Customer Relationship Management. Each employee who has contact with

a customer must conduct himself or herself in a certain prescribed way. So, no matter

where one buys a McDonalds hamburger from, it will always be the same hamburger,

for the same price, served within the same time line, with the same smile. Always.

Through careful analysis, McDonalds knows exactly what expectations their client-to-

be have of them and how to fulfill them or, exceed those expectations. In fact, they

are not overly concerned with exceeding people's expectations: just meeting them,

time after time.

CRM is the business of managing people during the buying cycle. We define CRM as,

"The profitable integration of People, Processes and Technology." McDonald’s

conducts regular satisfaction surveys of the customer experience, manages high value

information in an organized customer database, makes it easy for the customers to buy

from McDonald’s, and constantly anticipates customer’s need and their expectations.

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INTERNATIONAL BUSINESS STRATEGIES OF

MCDONALD’S

McDonald's relying more on international stores:

Faced with increasingly intense competition in the United States, McDonald's Corp. is

increasingly relying on its international operations for the majority of its profits and

the bulk of its new-store openings. “I think there definitely will come a time when 80

percent of our profits come from outside the United States,'' James Cantalupo,

president and chief executive of McDonald's international operations, said in a

telephone interview. ``I would describe our international business as one of huge

opportunity.''For McDonald's, the International market, where it has more than 24,500

restaurants, represents an open field compared with the United States.

While McDonald's dominates the U.S. fast-food market with more than 12,000

restaurants, the domestic industry is considered by many analysts to be saturated.

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Thus for players like McDonald's, Grand Metropolitan's (GMET.L) Burger King and

Wendy's International Inc. (WEN), the U.S. strategy is one of stealing market share.

McDonald's, which from mid-1995 to the end of 1996 saw six straight quarters of

declining U. S. same-store sales, has scaled back on its domestic expansion. Of 2,400

restaurants expected to be opened this year, 80 percent will be overseas. In the past,

about two-thirds of McDonald's new openings have been overseas. International

operations account for 60 percent of McDonald's profits, 80-plus percent of new units

and are expected to grow at about four times the rate of its business in the United

States, Merrill Lynch analyst Peter Oakes said in a recent report.

McDonald's international presence goes back more than 25 years to a time when the

company was starting to sell hamburgers abroad while its U.S. business was carrying

the profit load. The U.S. business carried our international operation for many years,

while we were building an infrastructure that is paying dividends today,'' Cantalupo

said. With McDonald's opening some 2,000 restaurants outside the United States each

year, it will open more units overseas in the next five years than it did in the past 30

years, Cantalupo said.

About 40 percent of McDonald's international restaurants are company-owned, with

another 40 percent operated by franchisees and another 20 percent in joint ventures.

After establishing a presence in many international markets including a foothold in

places like India, where it sells lamb and vegetarian sandwiches, and China

McDonald's has taken the lead from its global competition.

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Since, McDonald's serves less than 1 percent of the world's population on a daily

basis it presents a ``huge'' opportunity to sell hamburger and french fries to a growing

world population with an increasing appetite for Western products.

McDonald's India In A Fix Over Franchisee Fee To Us Parent:

McDonald's India. Pvt. Ltd. (MIPL), the wholly-owned subsidiary of US-based

fast food giant, McDonald's Corporation, is in a fix over paying franchisee fees to

its US parent.

The company wants to remit an amount of $13,05,000 to its parent immediately

but is unable to do so because the Government feels that it did not inform about

such arrangements at the time of opening operations in India in October 1996,

when it launched its first restaurant here. When McDonald's opened its operations

in India, the company was permitted to set up shop in the country subject to the

condition that no dividend would be repatriated during the first seven years of

operation. The company would, however, pay a service fee of five per cent on

sales during this period but there was no mention about any franchisee fees.

Now, the company has informed the Foreign Investment Promotion Board that as

early as in January 1996, much before opening its first restaurant in India, MIPL

has entered into a Master License Agreement with the parent company according

to which McDonald's India should pay McDonald's an initial franchisee fee of

$45,000 prior to opening each restaurant in India along with the monthly royalty

of five per cent on gross sales. MPIL wants to remit the amount now.

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While the Ministry of Tourism has not objected the Ministry of Food Processing

is strongly against giving such permission to the company following which the

Ministry of Industry has put it on hold, sources said.

According to Government sources, there are difference of opinion within the

Government on whether it should take a lenient stand in such cases where a

wholly-owned subsidiary of a foreign company hides information about its pact

with the parent company regarding payments in foreign currency.

Going by the company's declared plans of opening 80 restaurants by 2008, the

total amount the company would remit back home stands at $36,00,000 as

franchisee fees. This is over and above the company's monthly remittances of five

per cent of its total sales turnover as service fees to its parent.

McDonald's currently has 56 restaurants in India of which 16 are in Delhi, 13 in

Mumbai, 3 in Pune, 4 in Ahmedabad, 2 each in Bangalore Hyderabad Indore &

Baroda 1 each in Surat Nasik & and Jaipur and another on the Delhi-Agra national

highway. McDonald's India Pvt. Ltd. has a paid-up capital of a little more than Rs

111.37 crore divided into 111,37,74,72 equity shares of Rs 10 each. Currently, one

share of Rs 10 is held by McDonald's Corporation, USA, and the remaining

111,37,74,71 equity shares of Rs 10 each, which was earlier held by McDonalds's

Restaurant Operations Inc., has been acquired by McDonald's International

Branch Holdings Ltd.

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POLICY AND FUNCTIONAL STRATEGIES

McDonald’s has been an industry leader within the fast food industry for years. In the

introductory phase of their business operations they focused on following a generic

low cost strategy consisting of offering consumers low priced food products in order

to, “make eating out on a regular basis affordable for families”. Faced with changing

consumer trends and competitors pursuing aggressive competitive strategies focused

on product differentiation and quality; McDonald’s then CEO, Jim Cantalupo,

determined in order to address the companies recent profit losses and challenges a

different stand on generic strategy must be taken. Through the implementation of

McDonald’s Plan to Win strategy, Cantalupo shifted the company’s generic strategy

to differentiation by focusing on marketing to turnaround the negative publicity

recently experienced through offering customers a better overall fast food experience

as compared to their competitors.

McDonald’s financial strategy focused on decreasing capital expenditures by 40%

while using their cash from 2007 operations to pay off debt and return cash to

stockholders. These financial strategies have allowed the company to implement the

Plan to Win strategy while also improving stock performance and sales. Through a

growth strategy that involves renovating, rebuilding, and relocating buildings;

McDonald’s hopes to create a, “fresh, sophisticated, but family-friendly atmosphere”.

However in order to sustain growth and success, additional investments may be

needed in the future.

McDonald’s personnel strategy promotes their desire to market an exceptional

customer experience. Hospitality training and e-learning programs offer McDonald’s

the most cost effective method of training for restaurant staffs, while ensuring

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employees are dedicated to customer service through the attitudes and skills they

bring to the workplace. This directly supports the managerial functional goal of

creating a stimulating work environment.

Production strategies promote an overall quality experience by offering new products

to customers in order to address growing changes in demand for healthier foods and

premium products. Technological improvements, including wireless hot spots,

improves the relevancy of the overall quality experience McDonald’s is trying to

market to consumers.

With these improvements in each functional area, McDonald’s marketing strategy

aims to build trust and brand loyalty among current and future customers in order to

gain significant competitive advantage in the marketplace.

Currently McDonald’s functional strategies are all successfully co-aligned with their

new generic strategy of marketing differentiation focusing on quality customer

experiences. Although Jim Cantalupo is credited to McDonald’s improved

performance only the future can tell if such strategies will provide McDonald’s with

the core competencies needed to remain competitive in an overly saturated industry.

At which time McDonald’s functional strategies may need to be re-evaluated in order

to maintain sustainable marketing differentiation.

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FINANCIAL ANALYSIS/RATIO ANALYSIS

With regards to liquidity McDonald’s is among the industry standard. McDonald’s

has a current ratio of 0.76 in year 2007 consistent with the industry. This indicates

that McDonald’s should increase their current assets in order to increase the

likelihood that they will be able to meet current liabilities and cover short term debt.

Additional liquidity will provide McDonald’s a greater degree of financial flexibility,

which will be necessary to continue with their current strategy. According to past

data this low ratio suggests that this is a typical trend experienced within the industry

and this should not be a large concern for the company. Concerning the acid test ratio

again McDonald’s is among the industry average with an acid test ratio of .4937.

Among major competitors Sonic has one of the largest acid test ratios at .77.

Regarding activity ratios, with respect to operating cycle, 2007 data indicates that

McDonald’s is currently operating on a 21 day cycle compared to the industry

average of 19 days. This again shows that McDonald’s fares about average among

their competitors. According to the 5-Year Financial Summary (Appendix A)

McDonald’s has improved their operating cycle in the last few years

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by slowly decreasing the number of days involved. According to financial data,

McDonald’s has maintained a relatively consistent fixed asset turnover in the last 5

years with a ratio of 0.9 in 2007 compared to an industry average of 1.5 casting a

positive light on the company.

Regarding leverage ratio’s McDonald’s is at a slight disadvantage to their

competitors. Their debt to total equity ratio in 2007 was 0.81 compared to an industry

average of 0.58. Although this is a relatively small incremental difference between

the two ratios, McDonald’s should focus on lowering this ratio. Times interest earned

for McDonald’s are 4.8 while the industry operates at a 6.1 ratio. This casts

McDonald’s in a negative light indicating higher interest rates for the firm compared

to competitors. This can be attributed to the company’s high degree of leverage

within the industry.

Profitability ratios must also be considered when analyzing McDonald’s financial

strength. They have reported a return on assets ratio of 6.09, with the industry

operating at a ratio of 7.90. Although this indicates they are at a slight disadvantage

compared to their competitors, the 5-year financial summary indicates that they have

significantly improved from 2006 when return on assets was only 4.27. With regards

to return on equity, McDonald’s operates on a 13.55 ratio while industry competitors

operate on a 16.37 ratio. This again shows that they are at a slight disadvantage

compared to their competitors.

Ultimately after consideration of all of McDonald’s financial ratios, their profit

margin in 2007 was reported as 8.80 with an industry reported ratio of 6.93.

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When analyzing the profit margin of McDonald’s in past years this percentage

increase shows that McDonald’s turnaround strategy implemented by Cantalupo is

directing the company into the right direction.

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COST ANALYSIS

Analysis suggests that McDonald’s needs improvement in cost control. Their

depreciation and extraordinary expenses rank below average compared to

competitors; indicating cost financial areas McDonald’s must address in order to

remain competitive within the industry. As a result of their better than average

selling, general, and administrative costs this helps improve their overall cost

situation. Interest and cost of goods sold are among average in the industry however

they are located on the low end of the spectrum. This again indicates areas of

improvement with regards to cost management by the company. Despite their below

average ratings an under weighted trend of 0.4 and a weighted trend of 0.02 suggest

that among all cost ratios McDonald’s is on the road to improvement.

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ENVIRONMENTAL ANALYSIS OF “McDonald’s”

STRENGTHS

According to the Company Capability Profile McDonald’s greatest strength can be

found in competitively taking advantage of market growth. McDonald’s has had one

of the strongest international presences among fast food competitors. McDonald’s

has successfully integrated local eating trends and traditions worldwide by varying

local menus in different regions of the world. Although all fast food chains have

experienced consistent expansion overseas, McDonalds has had the strongest presence

since the beginning. As the domestic market began experiencing over-saturation,

more than half of McDonald’s locations were located throughout the world. This

increased McDonald’s competitive edge over other fast food chains with industry

predictions stating that international countries may be the only source of growth for

the fast food industry in future years. This market growth attributes to another

competitive strength found in McDonald’s which is its market share. Although

McDonald’s market share has been somewhat declining in recent years, the company

announced system wide sales of $20,305.7 million in 2007. Among the largest chains

in the restaurant industry Burger King ranked number two with only $8,350.0 million

in sales demonstrating the significant sales differential among McDonald’s and their

competitors.

Although managerial factor scores indicate a weak managerial functional area relative

to the industry, CEO Jim Cantalupo can be characterized as a balanced leader

Cantalupo is largely credited for his Plan to. Win turnaround strategy which helped

McDonalds achieve, “double-digit percentage sales gains”. As a result of Cantalupo’s

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success much of the negative managerial blame can be placed on management

initiatives taken prior to his post-retirement tenure.

Brand Equity worldwide: McDonald's has a brand name and brand value associated

with it world wide. With its corporate vision and mission spelled out in clear terms

world wide McDonald's commands respect and belief in the minds of the people

through out the world wherever its operations are present.

Consistency of food products: McDonald's has well laid out procedures for

preparing food, checking the quality of the food items at various stages, the

equipments used are also pre calibrated to add the quantity of ingredient, etc. making

the taste the food consistent at any of its outlets.

Global Access: Besides USA, McDonald's has its operation in 121 countries giving it

the largest overseas market and tremendous growth opportunities.

Successful items on menu: On its menu, the company has successful food products

such as Burgers, French fries, Happy meals, McPuff, etc. and to add to this

McDonald's marketing strategy has various promotional schemes to make it more

attractive during the lean time periods, generally known as Happy hours.

WEAKNESS

Prior to the return of Cantalupo, Jack Greenberg served as CEO. Much of

McDonald’s poor performance in 2002 can be attributed to Greenburg’s strategic

direction. Although he had many ideas that focused on improving customer service

rankings many business analysts criticize Greenberg in that he “launched too many

initiatives simultaneously and had failed to properly implement any of them” (Marino

630). Such traits indicate that Greenberg can be described as a novice leader.

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McDonald’s focused too heavily on increased expansion and diversification to new

food segments within the industry. This weakened McDonald’s while draining them

of financial resources. Product innovations developed included the, “Made for You”

cooking system costing the corporation $420 million, while franchisees were forced to

invest between $18,000 and $100,000 in kitchen upgrades. Such a financial

investment led to additional problems between McDonald’s and their franchisees, a

relationship that was on shaky grounds to begin with. These unsuccessful initiatives

put McDonald’s at an extreme disadvantage to their competitors; many of who gained

competitive advantage while McDonald’s remained slow to respond to changing

market conditions. This lack of proper strategic planning implemented during

Greenberg’s tenure has resulted in the lowest performance ranking in the fast food

industry based on such factors as poor customer service, extremely high employee

turnover, and slow order processing time. Such factors hindered McDonald’s and

forced them to play catch up in an already overly saturated market. Such poor

rankings can ultimately jeopardize the firm’s new strategy of market differentiation in

the future by forever casting a negative light on the company.

One order at a time: Employees take one order at a time, making the other

customers to wait in line. This allows for accuracy and quality of the service to a high

degree but decreases the speed of the service.

Business focus: The employees seem to be more focused on the business rather than

on the customers. Therefore the element of human touch is missing in the restaurants.

Formal Communication: Only communication between the customer and the

employee is during the placement of the order.

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Inflexible products: Though the variety of food items provided is large but there is

still inflexibility in terms of food products, like some people may want to have onion

in their burgers while others may not.

Serving in the Same tray: Even while McDonald's has separate production lines for

the vegetarian and non-vegetarian food products, still when it comes to serving, the

employees serves the two different products in the same tray, which is sometimes

objected by the strict vegetarians.

EXTERNAL ENVIRONMENTAL ANALYSIS

The fast food industry is a mature, but highly competitive industry dominated by a

few major restaurants including: Burger King Corporation, Wendy’s International,

Inc., CKE Restaurants, Jack in the Box, and Sonic. These fast food chains must rely

on their strengths to take advantage of opportunities present in the industry while

overcoming their weaknesses and avoiding their threats.

OPPORTUNITIES

Utilizing an environmental threat and opportunity profile (ETOP); demonstrates that

McDonald’s has the greatest chance of opportunity concerning geographic and

technological environmental forces. Industry predictions indicate that much of the

future growth present in the fast food industry will come from overseas expansion.

Success will come first to those companies who are able to market themselves

successfully within international geographic environments. This opportunity

successfully aligns with McDonald’s current competitive strength with regards to

international market growth.

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In this mature industry market differentiation can be enhanced through quality

improvements and innovations. The ETOP profile indicates that technological

advancements can bring such success to McDonald’s. By providing wireless Internet

services in restaurants across the globe McDonald’s is adding value to the desired

customer experience they are attempting to elicit.

Serving only 1 percent: McDonald's with its huge presence in more than 121 countries

and serving about 45 million people every day worldwide still serves less than 1

percent. So there is huge opportunity of growth.

International Exposure: McDonald's has a vast exposure and experience of operating

in different cultures and it is because of its flexibility of adopting the cultures that it

has been able to lead the fast food industry from the front.

Growing Dining-out market: with the increase in the dining out culture and trend in

the market, it is expected that the sales of McDonald’s should increase.

THREATS

Overwhelmingly social forces are the largest threat to McDonald’s. Consumer

preferences are now geared more towards healthier food alternatives and McDonald’s

has traditionally had a negative image in regards to providing health benefits to

consumers. Although McDonald’s is attempting to overcome such an environmental

threat, they are an easy target for negative publicity. Being the industry leader for

decades naturally makes them the first to be targeted. Competitors present in the

industry often serve as a major environment threat to the fast food chain. Fast food

chains such as Burger King and Wendy’s have been more successful than

McDonald’s in addressing current consumer health trends. Wendy’s has successfully

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adapted to this change in lifestyle with the introduction of their gourmet salad

line. Although McDonald’s is now offering more products to such health conscious

consumers, new sandwich chains such as Subway will serve as an alternative to the

typical “greasy” fast food hamburger chains.

Competition: With opening up of newer fast food joints providing more options to

choose from and better service, the market has started to feel the heat because of the

competition.

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DATA ANALYSIS, FINDINGS AND OBSERVATIONS

FROM QUESTIONNAIRE

1. How frequently do you go to restaurants?

Frequency Respondents

Holidays 31

Special occasion 44

Weekends 15

Everyday 6

Findings: We can see from the graph that out of 96 respondent majorities near about

46% visit a restaurant only on special occasion. 32% respondents prefer to visit during

holidays.

2. Which restaurants do you visit?

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Name of Fast Food Chain Respondents

McDonalds 32

Nirula’s 37

Pizza hut 17

Others 10

Findings: Inside Delhi 39% People still preferring Nirulas whereas 33% are

preferring McDonalds 18% are preferring Pizza Hut and rest of the 10% prefer others

like Agarwals, Dominos, are preferred by the people.

3. What drives you to go to this restaurant?

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Driving Factors No. of Respondents

Quality 57

Better service 26

Homely atmosphere 13

Findings: Majority of the respondent visit the fast food joints due to good quality of

food and the percentage is near about 59% .and 27% of people prefer better service in

the fast food restaurants .

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4. What is the time taken at the counter to book your order?

Order placing time Respondents

<2 minutes 8

2-5 minutes 22

5-7 minutes 1

7-10 minutes 1

Order taking time by McDonalds

Findings: In McDonalds the order placing time recommended by the respondent is

near about to 2-5 minutes. Some of the people also said that it is less then 2 minutes.

So from here we can say that order procession time is very less in McDonalds and

also a reason for attracting and serving more and more customers in minimum time.

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5. How much time do they take to deliver your order?

Delivery time Respondents

<5 mins 19

5-10 mins 11

10-15 mins 1

>15 mins 1

Findings: Order Delivery Time in McDonalds is <5 minutes and few of them also

said that it takes 5-10 minutes. It is definitely quicker then other fast food restaurants.

And as we all know saving time is saving money, so customers definitely want to save

both.

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6. What is your view about the hospitality provided by Mc Donald’s?

hospitality Respondents

Average 2

Good 17

Very good 10

Excellent 3

Findings: 54% said that In McDonalds the hospitality shown by the employees of

McDonalds is good. 9 % of the respondent said that the hospitality in McDonald's is

excellent.31% is said that the hospitality is very good. So customers come and go with

a good image of McDonald's in mind.

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7. What is your satisfaction level with McDonald's?

Attributes No. of Respondents Percentage

Extremely Satisfied 38 38.50%

Moderately satisfied 31 31.20%

Moderately dissatisfied 23 23.90%

Extremely dissatisfied 10 10.40%

Up to Mark 6 6.25%

Findings: 38.5% of customers are extremely satisfied with McDonald's others are

moderately satisfied and there are very few who are dissatisfied with McDonald's.

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8. What is the level of understanding of service problems of the customers by

employees?

Attributes Respondents Percentage

Excellent 18 18.75%

Very good 40 41.60%

Average 24 25%

Poor 14 14.50%

Findings: The employees and authorities of McDonald's understand the service

problems as describes by customers. That is the reason why customers have given

"very good" remark for this reason.

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9. Which combination of the factors do you thing very vital while you select a

particular fast food restaurant?

Comb. Of factors Respondents

Service, price, location 48

Service, price, promotion, location 37

Price, location, promotion 11

Findings: out of the 96 responded 50% of the people said that they prefer service

price and location as the combination of factors, which is very vital while selecting a

restaurant. 39% also said that service price promotional scheme and location are the

factors which are very essential. This means that service and price are the major

factors people get attracted to.

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10. Why do you prefer McDonald's?

Reason of Preference Respondents

Service differentiation 4

Product differentiation 7

Price 17

Promotion 4

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Findings: Out of 32 respondent 17 said they prefer McDonalds because of the price

differentiation and 7 said that due to the product differentiation they come to

McDonald’s. Price is a factor which attracts all categories of people towards it.

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11. How frequently do you visit any other restaurant except McDonald's?

Regularly 7

Frequently 47

Occasionally 29

Rarely 13

Findings: 16% frequently visit other restaurants whereas 64% occasionally visit the

other restaurants. 20% rarely visit other restaurants.

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12. Which fast food chain you evaluate as the best in terms of ambience among

McDonald's, Nirulas and Pizza Hut?

Fast Food Chain Respondents

McDonalds 330

Nirulas' 262

Pizza Hut 371

Others 204

Findings: Out of 96 respondent From Ambience Point of view Majority 33% said

Pizza Hut has better then others the others Fastfoods Ambience Score are respectively

22% Nirula’s , 28% McDonald’s.

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13. Which fast food chain you evaluate as the best in terms of cleanliness among

McDonald's, Nirulas and Pizza Hut?

Fast food chain Respondents

McDonalds 374

Nirulas' 325

Pizza Hut 364

Others 251

Findings: Out of 96 respondents Majority 28% prefer Pizza Hut and McDonalds in

Cleanliness and say that both of these have better cleanliness then others Fast foods

joints. Cleanliness Scores are respectively 25% and 19% for Nirula’s and others.

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14. Employee Behaviour Score (Cumulative)


McDonalds 379

Nirulas' 312

Pizza Hut 361

Others 247

Findings: From the employee Behavior Point of View 29% people said that

McDonalds is better then the others. 28% said Pizza Hut is a better. This shows that

McDonald’s and pizza hut are equally good.

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15. Space Management Score (Cumulative)

McDonalds 340

Nirulas' 372

Pizza Hut 328

Others 226

Findings: from this graph it is suggested that in space management Nirulas is getting

29% and is better then McDonalds which is at 27% .even pizza hut is competing, so

space management is good at all places.

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16. Menu Composition Score (Cumulative)


McDonalds 331

Nirulas' 359

Pizza Hut 306

Others 374

Findings: Menu composition wise the other restaurant like Aggarwals and the local

restaurants are having more flexibility then the other fast food joints like the

McDonalds Nirulas and Pizza Hut.

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17. Would you recommend McDonald's to your friends and relatives?

Attributes No. of respondents Percentage

Definitely Yes 60 60.40%

Probably Yes 22 22.90%

Probably No 14 14.50%

Definitely No 2 2.08%

Findings: As we can say looking at the graph that maximum customers have said

"definitely yes" for recommending McDonald's to their friend and relatives. This

means that they are very happy with services provided by McDonald’s.

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CONCLUSIONS

McDonald takes the share on this attribute by providing the customer with fast and

friendly services.

At McDonald we get your order usually within 60-90 seconds from the time it is

placed. Providing the customer fast and friendly services is the philosophy of

McDonald's. This is the big advantage McDonald's is having over the other

restaurants.

The customer satisfaction levels are better than the other competitors McDonald's is

having. If we compare the space management Nirula’s is having better space

management than McDonald and Pizza Hut.

The advantage McDonald having over the other restaurant is I) Ambiance ii)

Employee behavior iii) Cleanliness and iv) Price.

There is a price and service quality factor today, which the customer is looking for. It

is giving an edge to McDonald's over Nirulas and Pizza Hut.

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RECOMMENDATIONS

Being not a part of decision-making team at Mc Donald’s, the recommendations

mentioned below are my personal views. McDonald’s pursue an aggressive strategic

direction in order to further increase their initial increase in sales and profits after the

implementation of Cantaloupe’s turnaround strategy.

Action Plan for Short Term: It is essential for McDonald’s to address promotional

issues relating to their desire for quality. New promotions must be developed if

McDonald’s hopes to regain the trust and loyalty that was shattered by their negative

image. Promotions should demonstrate McDonald’s willingness to respond to

consumer desires while focusing on social responsibility issues that have plagued the

company with negativity publicity including health related problems such as obesity.

Mc Donald’s should continue with cost reduction to continue paying off prior debt

obligations while increasing shareholder wealth.

Action plan for Long Term: In order to remain competitive in an overly saturated

mature industry, McDonald’s should continue to increase international expansion

efforts. International expansion efforts currently serve as one of McDonald’s core

competencies and as a result they should enhance their strategic presence in the

marketplace by enhancing this capability. The domestic market is already overly

saturated and in order to decrease the risk of cannibalizing existing franchisees

McDonald’s should seek to expand in those countries where they have minimal

market presence.

Following a concentric diversification strategy is another long-term plan the company

should implement. Such diversification allows a company to offer products or

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services within different SIC codes, but remain relatively similar to the present

product line.

To address changing consumer preferences McDonald’s should offer more foods

geared towards healthier consumer eating trends, while also offering more premium

products to follow their desire for marketing a quality customer experience. To

guarantee service focused on quality customer experiences hire only those managers

and employees who demonstrate understanding of the importance of following and

supporting McDonald’s future strategic direction.

The international scene is where the real growth potential lies for McDonald's and

also where perhaps the greatest challenges lurk. But in the midst of recessions,

currency devaluations, and economic strife, the chain has stuck resolutely to

international expansion plans. McDonald's has signed a new licensing agreement that

will continue McDonald's restaurant expansion in Japan through the year 2030. In

February the chain opened its newest overseas unit in the Republic of Georgia,

bringing its global presence to 115 countries and some twenty-five thousand

restaurants.

After the detailed findings and analysis of various responses I would like to put

some suggestive points.

McDonald’s should increase the space available inside their fast food joint.

McDonald’s should also restructure their menu composition to attract all kinds of

customers with different preferences.

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For the employees McDonald's should also introduce some new ideas to satisfy

the customers and give them customized services to fulfill their social needs.

Seeing that the choice and selection of the children by and large dominate buying

behavior of the family, therefore I suggest that McDonalds should try and capture

more of this section. From the past few years McDonald’s is doing the same by

introducing meal combos, toys, and special children day program, McDonald

India has to make it presence felt, for long time as giving a Scholarship program

for students. A lasting impression in the student community would help a long

way in the Brand Recognition.

They also need to have a thorough understanding of their competition.

McDonald's presently considers three basic areas:

1. The Total Eating out Market gives the broadest competitive context and includes

all restaurants, hotels, pubs, and any other outlet where people eat.

2. They also focus on the Quick Service Restaurant sector, this includes all the

obvious competition and also fish and chip shops, and sandwich shops - any outlet

where food is served quickly.

3. The final sector that they focus on is defined as the Burger House Sector. This

looks only at restaurants serving hamburgers including Burger King, Wimpy and

all independent burger bars.

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4. A useful way to gaining knowledge of all aspects of the competition is the

examination of the four Ps of the marketing mix: Product , Price, Place,

Promotion.

5. Combo Options with various movie halls like PVR, Priya etc. can help to increase

volumes.

6. Order placing compatibility on the Internet for home delivery and verification

done through a phone call from McDonald’s to the customer.

McDonald's has started the free home delivery service but few important

suggestions to make full use of the scheme are as follows: -

Customer Identification for the customer database.

Order Details along with order time and promised order delivery time range.

Verification with customer for the same imperative.

Identification of nearest McDonald’s outlet.

Check for traffic and cost of delivery vis-à-vis the identified outlet.

On delivery conformation received against the order number and the outlet

identification number.

McDonald’s should continuously develop a marketing strategy to understand the

customers, enabling reaction to their changing needs and the changing dynamics of

the market. McDonald's should always conduct in-depth customer research and audits

of it's brand.

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The research should involve both quantitative and qualitative research methods.

…When low price, delicious and differentiated product associated with finest quality

and service in the industry is sure to say, "sky is the limit".

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LIMITATIONS OF STUDY

1. Certain limitations were inherent with this project work.

2. 100% response rate was not found from the respondents. Some extent of biasness

was found because of Brand loyalty while answering the questions.

3. Potential biases such as reluctance of consumers, executives etc.

4. Lack of interest of the respondent was one of the major problem.

5. The Geographic extent of this study was limited to the Delhi market only.

6. The research only tries to present a bird eye view of the entire gamut of Indian

Small appliances Market.

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BIBLIOGRAPHY

BOOKS & NEWSPAPER

Marketing Management by Philip Kotler & Kevin Lane Keller, XII edition.

Marketing Management (Global perspective Indian Context) by

V. S. Ramaswami & S. Namakumari, III edition.

Research Methodology by C.R. Kothari.

Zeithmal Marketing of Services.

Businessworld, Biweekly magazine, February-March edition 2008.

The Economic Times, February & March daily editions.

Times of India, February & March daily editions.

INTERNET WEBSITE LINKS

www.mcdonalds.com

www.hindubusinessonline.com

www.wikipedia.org

www.livemint.com

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ANNEXURE

QUESTIONNAIRE FOR CONSUMERS

1. How frequently do you go to restaurants?

Only on holidays On special occasions

Weekends Everyday

2. Which restaurants do you go to?

Mc’Donalds Pizza Hut

Nirulas’ Others (specify) ---------------------

3. What drives you to go to this restaurant?

The quality of food Better service

Homely atmosphere

4. Are you satisfied with the present service provided by the Restaurant?

Yes

No

5. What is the time taken at the counter by you to book your order?

Within 2 minutes 2 - 5 minutes

5 - 7 minutes 7 - 10 minutes

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6. How much time do they take to deliver your order?

Within 5 minutes 5 - 10 minutes

10 - 15 minutes More than 15 mins.

7. What is your view about the hospitality provided by this Restaurant?

Average Good

Very Good Excellent

8. What is your satisfaction level with McDonald's?

Attributes No. of Respondents Percentage

Extremely Satisfied

Moderately satisfied

Moderately dissatisfied

Extremely dissatisfied

OK

9. What is the level of understanding of service problems of the customers?


Excellent

Very good

Average

Poor

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10. Which of the combination of the factors do you thing very vital while you

select a particular fast foods

Service price and location

Service, Price, Promotional Scheme, Location

Price, Location, Promotional Scheme

11. Why do you prefer McDonald's?

Service differentiation Price differentiation

Product differentiation Promotional Scheme

12. How frequently do you visit other restaurants except McDonald's?

Regularity Frequently

Occasionally Rarely

13. How do you evaluate at the various aspects McDonald's, Niruals and Pizza

Hut?

Scale 1-5 (1 is the minimum, 5 is the maximum)

McDonald’s Nirulas Pizza Huts

Ambience

Cleanliness

Behaviour of employees

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Space management

Menu composition

Quality of food

Service quality

14. What do you have to say for happy hours concepts in McDonalds?

Excellent Good idea

Does not matter Poor

15. Please give suggestions (If any) for improvement in service quality.

16. Which similar restaurant you think has the best service quality and why?

17. Would you recommend McDonald's to your friends and relatives?


Definitely Yes

Probably Yes

Probably No

Definitely No

18. Any Suggestions for overall improvement of fast food joints?

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Documents

Mc' Donald - Marketing Strategy