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CHAPTER-1
INTRODUCTION
1.1 OVERVIEW OF FAST FOOD INDUSTRIES
The food industry is on a high as Indians continue to have a feast. Fuelled by what can
be termed as a perfect ingredient for any industry - large disposable incomes - the
food sector has been witnessing a marked change in consumption patterns, especially
in terms of food. An increasing number of international fast food chains rushing to
India is because all of them see tremendous potential in for this type of business. The
large upwardly mobile population in the urban areas tend to eat out more often or
business or for leisure.
The various players operating in India are the well established Indian chains like
Nirula's, Haldiram's and multinational companies like McDonalds, Pizza hut,
Domino's pizza, etc.
In addition to these, apparently some of the best known international food chains are
looking at India. Among them are Great American Disaster, The Burger King,
Mexican food chain Tacogrill, Move-n-pick, etc. are some of them to name.
At present all these players are fighting for a small pie, as fast food is really not a big
habit with Indians, but they see a big potential.
The players are fighting on products, pricing, positioning and trying to convert their
first trials into regular purchase by providing delightful service quality. The focus is
on product quality and standardization on taste. Consistency is the key, as its
standardization in fast food as the consumer is short on time and wants to satisfy his
taste buds with a consistent taste experience.Beyond this each player has its own strategy to expand consumer base.
Some feel that pricing is not the deciding factor since fast food is not pricesensitive market because it is not a single diet of Indians.
Some others are competing on positioning which is surprisingly varied, givingthe
small size of the market.
For most, targeting children seems the right strategy. Advertising is popular.
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However, with competition hooting up most chains are increasing reach as well as
working on establishing a national presence.
The wind of change is blowing through the empire of fast food. The vision of endless
growth through new markets across the planet for fast food companies now looks
unsustainable when its time to adapt or die. As the fast food companies have
expanded around the world, they have had to adapt to local sensitivities.
There were disturbances in India when it was learned that McDonalds's were pre-
cooked in beef fat in the USA, because Hindus revere cows and cannot eat beef.
According to a market research company, Euromonitor International, amount of
money Indians spend in eating out has more than doubled in past decade, to about
US$ 5 billion a year and is expected to double again in about half that time.
1.2 TRENDS IN THE FAST FOOD INDUSTRY
The industry is estimated to grow at 9-12 per cent, on the basis of an estimated GDP
growth rate of 6-8 per cent, during the Tenth Five year plan period. Value addition of
food is expected to increase from the current 8 per cent to 35 per cent by the end of
2025. Fruit and vegetable processing, which is currently around 2 per cent of total
production will increase to 10 per cent by 2010 and to 25 per cent by 2025.
The popularity of food and agro products is not surprising when the sector is now
offering a growth of more than 150 per cent in sales. With such promise in the sector,
a number of foreign companies have joined the fray. While US brands such as
McDonald's, Pizza hut and Kentucky Fried Chicken have become household names,
more are on their way.
1.3 THE MARKET SCENARIO
India among top 10 market for weekly fast food consumption, an online survey has
found. Most of the countries are from the Asia-pacific region, with the US being the
exemption.
According to an A C Neilson study of 28 markets across the US, Europe and the Asia-
Pacific, carried out through the internet in interviews with more than 14000
consumers, Asians are the world's greatest fast food fans.
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1.4 MAJOR PLAYERS
In India the major players which constitute the Indian fast food industry includes
Indian as well as Multinational companies.
These are:
Nirula's
Established in 1934, Nirula's today is a diversified group having a chain of elegant
Business hotels, Waiter service restaurants, Family style restaurants, Ice Cream
parlours, pastry shops and food processing plants in India.
The chain with over 60 outlets operating in 5 states successfully caters to the Indianpalate of over 50000 guests every day or over 70 years.
The restaurants serves a wide variety of multi-cuisine foods, both western and Indian
including pizzas, burgers, chana kulcha, saag-roti and much more!
Ice cream parlours offers an extensive range of exciting and innovative ice cream
flavors with one new flavor added every month
Nirula's pastry shops are a one-stop shop for bakery and confectionary items.
Pizza hut
In 1996 Pizza hut came to India with a dine in restaurant in Bangalore that has special
vegetarian pizzas. In addition to traditional Italian topping, it incorporates Indian
favorites such as chicken tikkas, lamb korma, etc. In its list of innovative toppings,
along with pizzas the menu features appetizers like garlic bread and soups, fresh
salads, oven baked pastas and choice f/of ice-cream sundaes.
In 1997 pizza hut opened a restaurant in the capital's building bustling M-Block
market in Greater Kailash-I, unlike the existing pizza hut at shanti niketan which is
delivery counter for just pizzas, this is dine-in whise the entire menu is available.
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Domino's pizza
It was incorporated in 1995 as the master franchise o Domino's pizza international
inc., of USA. the first Domino's pizza store in India opened in January 1996 at new
Delhi. Today it has grown into a countrywide network of over 104 outlets in 30 cities.
Ever since it was established, Domino's Pizza India has maintained its position of
market leadership with its constant product innovation and maintenance of stringent
service standards. It has established a reputation for being a home delivery specialist
capable of delivering pizzas within 30 minutes. It was the first one to start this facility
to customers.
Domino's constantly strives to develop products that suits the tastes of its customers.
Thus time and again Domino's has been innovating toppings suitable to taste buds of
the local populace and these have been very well accepted by the Indian market.
1.5 COMPANY PROFILE
McDonald's Corporation is the world's largest chain of hamburger fast food
restaurants, serving around 68 million customers daily in 119 countries.
Headquartered in the United States, the company began in 1940 as a barbecue
restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized
their business as a hamburger stand using production line principles. Businessman
Ray Kroc joined the company as a franchise agent in 1955. He subsequently
purchased the chain from the McDonald brothers and oversaw its worldwide growth.
A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation
itself. The corporation's revenues come from the rent, royalties and fees paid by the
franchises, as well as sales in company-operated restaurants. McDonald's revenues
grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent
growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers,
cheeseburgers, chicken, frenchfries, breakfastitems, soft drinks, milkshakes and
desserts. In response to changing consumer tastes, the company has expanded its
menu to include salads, wraps, smoothies and fruit.
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1.6 HISTORY
The business began in 1940, with a restaurant opened by brothers Richard and
Maurice McDonald at 1398 North E Street at West 14th Street in San Bernardino,
California . Their introduction of the "Speedee Service System" in 1948 furthered the
principles of the modern fast-food restaurant that the White hamburger chain had
already put into practice more than two decades earlier. The original mascot of
McDonald's was a man with a chef's hat on top of a hamburger shaped head whose
name was "Speedee". Speedee was eventually replaced with Ronald McDonald by
1967 when the company first filed a U.S. trademark on a clown shaped man having
puffed out costume legs.
McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4,
1961, with the description "Drive-In Restaurant Services", which continues to be
renewed through the end of December 2009. In the same year, on September 13,
1961, the company filed a logo trademark on an overlapping, double arched "M"
symbol. The overlapping double arched "M" symbol logo was temporarily disfavored
by September 6, 1962, when a trademark was filed for a single arch, shaped over
many of the early McDonald's restaurants in the early years. Although the "Golden
Arches" appeared in various forms, the present form as a letter "M" did not appear
until November 18, 1968, when the company applied for a U.S. trademark. The
present corporation dates its founding to the opening of affranchised restaurant by
Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth McDonald's restaurant
overall. Kroc later purchased the McDonald brothers' equity in the company and led
its worldwide expansion, and the company became listed on the public stock markets
in 1965. Kroc was also noted for aggressive business practices, compelling the
McDonald brothers to leave the fast food industry. The McDonald brothers and Kroc
feuded over control of the business, as documented in both Kroc's autobiography and
in the McDonald brothers' autobiography. The San Bernardino store was demolished
in 1976 (or 1971, according to Juan Pollo) and the site was sold to the Juan Pollo
restaurant chain. It now serves as headquarters for the Juan Pollo chain, as well as a
McDonald's and Route 66 museum. With the expansion of McDonald's into many
international markets, the company has become a symbol of globalization and the
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spread of the American way of life. Its prominence has also made it a frequent topic
of public debates about obesity, corporate ethics and consumer responsibility.
1.7 KEY DATES
1948: Richard and Maurice McDonald open the first McDonald's restaurant in San
Bernardino, California.
1954: Ray Kroc gains the rights to set up McDonald's restaurants in most of the
country.
1955: Kroc opens his first McDonald's restaurant in Des Plaines, Illinois; he
incorporates his company as McDonald's Corporation.
1960: The slogan, "Look for the Golden Arches," is used in an advertising campaign.
1961: Kroc buys out the McDonald brothers for $2.7 million.
1963: Ronald McDonald makes his debut.
1965: McDonald's goes public.
1967: The company opens its first foreign restaurant in British Columbia, Canada.
1968: The Big Mac is added to the menu.
1973: Breakfast items begin to appear on the menu, with the debut of the Egg Mc
Muffin.
1974: The first Ronald McDonald House opens in Philadelphia.
1975: The first McDonald's drive-thru window appears.
1979: The children's Happy Meal makes its debut.
1983: Chicken Mc Nuggets are introduced.
1985: McDonald's becomes one of the 30 companies that make up the Dow Jones
Industrial Average.
1998: The company takes its first stake in another fast-food chain, buying a minority
interest in Colorado-based Chipotle Mexican Grill.
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1999: Donatos Pizza Inc. is acquired.
2000: McDonald's buys the bankrupt Boston Market chain.
2002: Restructuring charges of $853 million result in the firm's first quarterly loss
since going public.
2003: McDonald's sells Donatos in order to refocus on its core hamburger business.
1.8 GLOBAL OPERATIONS
McDonald's has become emblematic ofglobalization, sometimes referred to as the
"McDonaldization" of society. The newspaper uses the "Big Mac Index": the
comparison of aBig Mac's cost in various worldcurrencies can be used to informally
judge these currencies'purchasing power parity.Norway has the most expensive Big
Mac in the world as of July 2011, while the country with the least expensive Big Mac
isIndia (albeit for aMaharaja Macthe next cheapest Big Mac isHong Kong).
Thomas Friedman once said that no country with a McDonald's had gone to war with
another. However, the "Golden Arches Theory of Conflict Prevention"is not strictly
true. Exceptions are the 1989United States invasion of Panama,NATO's bombing of
Serbia in 1999,the2006 Lebanon War,and the2008 South Ossetia war.
Some observers have suggested that the company should be given credit for
increasing the standard of service in markets that it enters. A group of anthropologists
in a study entitled Golden Arches East looked at the impact McDonald's had on East
Asia, and Hong Kong in particular. When it opened in Hong Kong in 1975,
McDonald's was the first restaurant to consistently offer clean restrooms, driving
customers to demand the same of other restaurants and institutions. McDonald's has
taken to partnering up withSinopec, the second largest oil company in the People'sRepublic of China, as it takes advantage of the country's growing use of personal
vehicles by opening numerous drive-thru restaurants. McDonalds has opened a
McDonald's restaurant and McCaf on the underground premises of the Frenchfine
arts museum, theLouvre.The company stated it will open vegetarian-only restaurants
in India by mid-2013.
http://en.wikipedia.org/wiki/Globalizationhttp://en.wikipedia.org/wiki/McDonaldizationhttp://en.wikipedia.org/wiki/Big_Mac_Indexhttp://en.wikipedia.org/wiki/Big_Machttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Maharaja_Machttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Thomas_Friedmanhttp://en.wikipedia.org/wiki/McDonalds_Rulehttp://en.wikipedia.org/wiki/United_States_invasion_of_Panamahttp://en.wikipedia.org/wiki/Kosovo_War#The_NATO_bombing_campaignhttp://en.wikipedia.org/wiki/Kosovo_War#The_NATO_bombing_campaignhttp://en.wikipedia.org/wiki/2006_Lebanon_Warhttp://en.wikipedia.org/wiki/2008_South_Ossetia_warhttp://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/Sinopechttp://en.wikipedia.org/wiki/Fine_artshttp://en.wikipedia.org/wiki/Fine_artshttp://en.wikipedia.org/wiki/Louvrehttp://en.wikipedia.org/wiki/Louvrehttp://en.wikipedia.org/wiki/Fine_artshttp://en.wikipedia.org/wiki/Fine_artshttp://en.wikipedia.org/wiki/Sinopechttp://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/East_Asiahttp://en.wikipedia.org/wiki/2008_South_Ossetia_warhttp://en.wikipedia.org/wiki/2006_Lebanon_Warhttp://en.wikipedia.org/wiki/Kosovo_War#The_NATO_bombing_campaignhttp://en.wikipedia.org/wiki/Kosovo_War#The_NATO_bombing_campaignhttp://en.wikipedia.org/wiki/United_States_invasion_of_Panamahttp://en.wikipedia.org/wiki/McDonalds_Rulehttp://en.wikipedia.org/wiki/Thomas_Friedmanhttp://en.wikipedia.org/wiki/Hong_Konghttp://en.wikipedia.org/wiki/Maharaja_Machttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Big_Machttp://en.wikipedia.org/wiki/Big_Mac_Indexhttp://en.wikipedia.org/wiki/McDonaldizationhttp://en.wikipedia.org/wiki/Globalization8/14/2019 MCDONALDS PROJECT.docx
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The vegetarian customer India has a huge population of vegetarians. To caterto this customer segment, the company came up with a completely new line of
vegetarian items like McVeggie burger and McAlooTikki. The separation of
vegetarian and non-vegetarian sections is maintained throughout the various
stages.
1.11 SEGMENTATION, TARGETING AND POSITIONING
McDonalds uses demographic segmentation strategy with age as the parameter. The
main target segments are children, youth and the young urban family.
As shown above, kids reign supreme in FMCG purchase related to food products. So
to attract children McDonalds has Happy Meal with which toys ranging from hot
wheels to various Walt Disney characters are given (the latest in this range is the toys
of the movie Madagascar). For this, they have a tie-up with Walt Disney. At several
outlets, it also provides special facilities like Play Place where children can play
arcade games, air hockey, etc. This strategy is aimed at making McDonalds a fun
place to eat. This also helps McDonalds to attract the young urban families wanting
to spend some quality time while their children have fun at the outlet. To target the
teenagers, McDonalds has priced several products aggressively, keeping in mind the
price sensitivity of this target customer. In addition, facilities like Wi-Fi are also
provided to attract students to the outlets like the one at Vile Parle in Mumbai.
71%
59%52%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Biscuits Burgers & Pizzas Fruit Juices
% of kids who influence what FMCG brand their
family buys
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Mc Donalds mein hai kuch baatprojects McDonalds as a place for the whole
family to enjoy. When McDonalds entered in India it was mainly perceived as
targeting the urban upper class people. Today it positions itself as an affordable place
to eat without compromising on the quality of food, service and hygiene. The outlet
ambience and mild background music highlight the comfort that McDonalds
promises in slogans like You deserve a Break Today & Feed your inner child.
This commitment of quality of food and service in a clean, hygienic and relaxing
atmosphere has ensured that McDonalds maintains a positive relationship with the
customers.
1.12 CUSTOMER PERCEPTION AND CUSTOMER EXPECTATION
Customer perception is a key factor affecting a products success. Many potentially
revolutionary products have failed simply because of their inability to build a healthy
perception about themselves in the customers minds. McDonalds being an
internationally renowned brand brings with it certain expectations for the customers.
Customers expect it to be an ambient, hygienic and a little sophisticated brand that
respects their values. The customers expect the brand to enhance their self-image.
Customer responses obtained at the Vile Parle, Mumbai outlet confirmed the fact that
they connect strongly with the brand. However, fulfilling some of the customer
expectations like a broader product variety provide McDonalds a great scope for
improvement.
Target Segment What is McDonalds for me?
A Family with children A treat to children, a fun place to be for the children.
Urban customer on the
move
Great taste, quick service without affecting the work
schedule
Teenager Hangout with friends, but keep it affordable.
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REVIEW OF LITERATURE
McDonalds, the long-time leader in the fast-food wars, faced a crossroads in the
early 1990s. Domestically, sales and revenues were flattening as competitors
encroached on its domain. In addition to its traditional rivalsBurger King, Wendys,
and Taco Bellthe firm encountered new challenges. Sonic and Rallys competed
using a back-to basics approach of quickly serving up burgers, just burgers, for time-
pressed consumers. On the higher end, Olive Garden and Chilis had become potent
competitors in the quick service field, taking dollars away from McDonalds, which
was firmly entrenched in the fast-food arena and hadnt done anything with its dinner
menus to accommodate families looking for a more upscale dining experience. While
these competitive wars were being fought, McDonalds was gathering flak from
environmentalists who decried all the litter and solid waste its restaurants generated
each day. To counter some of the criticism, McDonalds partnered with the
Environmental DefenseFund (EDF) to explore new ways to make its operations more
friendly to the environment.
Facts
McDonalds roots go back to the early 1940s when two brothers opened a burger
restaurant that relied on standardized preparation to maintain qualitythe Speedee
Service System. So impressed was Ray Kroc with the brothers approach that he
became their national franchise agent, relying on the companys proven operating
system to maintain quality and consistency.
Over the next few decades, McDonalds used controlled experimentation to maintain
the McDonalds experience, all the while expanding the menu to appeal to a broader
range of consumers. For example, in June 1976, McDonalds introduced a breakfast
menu as a way to
more fully utilize the physical plant. In 1980, the company rolled out Chicken
McNuggets. Despite these innovations, McDonalds tremendous growth could only
continue for so long. Its average annual return on equity was 25.2% between 1965 and
1991. But the company found its sales per unit slowing between 1990 and 1991. Inaddition, McDonalds share of the quick service market fell from 18.7% in 1985 to
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16.6% in 1991. Plus growth in the quick service market was projected to only keep
pace with inflation in the 1990s. McDonalds faced heightening competition on
several fronts. First, its traditional rivalsBurger King, Wendys,
and Taco Bellwere eating into its margins through promotions and value pricing
strategies. Taking a leaf from McDonalds own playbook, Sonic and Rallys were
using a very limited menu approach to attract time strapped consumers. Finally,
Chilis and Olive Garden were appealing to diners looking for something a little more
enticing that the familiar Golden Arches for their families.
In the late 1980s, McDonalds began recognizing the importance of maintaining an
ecologically correct posture with the public, which was becoming more concerned
about the environment. For example, in 1989, 53% of respondents in one survey
revealed that they had not bought a product because they didnt know what effect the
packaging would have on the environment. Closer to
home, a 1990 study showed that each McDonalds generated 238 pounds of on-
premise solid waste per day. Its no surprise, then, that McDonalds sought a way to
reduce its solid waste while providing a more environmentally acceptable face to the
public. Beginning in 1989, it partnered with the Environmental Defense Fund, aleading organization devoted to protecting the
environment, to seek ways to ease the companys environmental burden on the
landscape. Together, EDF and McDonalds considered its impact on a wide range of
stakeholderscustomers, suppliers, franchisees, and the environment. The company
gave its franchisees much autonomy in finding ways to eliminate environmental
blight. The companys hope was that from these divergent approaches, it stood a
greater chance of finding solutions with broad applicability than if it had tried to
pursue a one-size-fits-all approach from the outset. Some of the environmentally
inspired solutions that came out of the collaboration with EDF were the: Introduction
of brown paper bags with a considerable percentage of recycled content. Solicitation
of suppliers to produce corrugated boxes with more recycled content, which had the
twin effect of reducing solid waste and building a market for recycled products.
Abandonment of polystyrene clamshell containers to hold sandwiches in favor of new
paper-based wraps that combined tissue, polyethylene, and paper to keep food warmand prevent leakage.
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RESEARCH METHODOLOGY
INTRODUCTION TO RESEARCH PROBLEM
MOTIVE: - The basic motive of preparing this report is to study the consumer
preference towards McDonalds in Mumbai and to know about the Buying Behavior
of consumers for McDonalds.
OBJECTIVES: - The objective of the report is to study the consumer preference
towards McDonalds in Mumbai and also to analyze the buying behavior of Burgers
by the people living in Mumbai
SCOPE: - This report to some extend will tell us about the success of the
McDonalds in Mumbai and also about the various other fast food outlets like KFC,
Dominos, Pizza Hut, etc in Mumbai. This report will also help me to know more
about the market strategies and selling modes followed by McDonalds in Mumbai
and various kinds of recommendations and suggestions.
METHODOLOGY: - I have got 50 questionnaire filled in by the localities and
customer outside the McDonalds regardless of caste, creed, nationality in Mumbai.
These questionnaires will account for my primary data where as the secondary data
has been picked up from the internet, books, articles and journals.
OBJECTIVES
Study and analyze marketing strategies of McDonalds in Mumbai. Studying the Marketing Mix of the company.
Performing the SWOT analysis of the company.DATA COLLECTION
Secondary data: -
Already existing data is called secondary data. I collected them by following method
Internet. Books Articles
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CHAPTER-2
ANALYSIS - I
McDonalds Marketing Mix (7 Ps)
After segmenting the market, finding the target segment and positioning itself, each
companyneeds to come up with an offer. The 5 Ps used by McDonalds are:
1. Product
2. Place
3. Price
4. Promotion
5. People
6. Physical Evidence
7. Process
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2.1PRODUCT:
How should the company design, manufacture the product so that it enhances
the customer experience?
Product is the physical product or service offered to the consumer. Product includes
certain aspects such as packaging, guarantee, looks etc. This includes both the
tangible and the non-tangible aspects of the product and service. McDonalds has
intentionally kept its product depth and product width limited. McDonalds studied
the behaviour of the Indian customer and provided a totally different menu as
compared to its International offering. It dropped ham, beef and mutton burgers from
the menu. India is the only country where McDonalds serve vegetarian menu. Even
the sauces and cheese used in India are 100% vegetarian. McDonalds
continuously innovates its products according to the changing preferences and
tastes of its customers. The recent example is the introduction of the Chicken
Maharaja Mac. McDonalds bring with it a globally reputed brand, world class
food quality and excellent customer specific product features.
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2.2PLACE:
Where should be the product be available and the role of distributionchannels?
The place mainly consists of the distribution channels. It is important so that the
product isavailable to the customer at theright place, at theright timeand in theright
quantity.
Nearly 50% of U.S.A is within a 3 minute drive from a McDonalds outlet.
There is a certain degree of fun and happiness that a customer feels each time he dines
at McDonalds. There are certain value propositions that McDonalds offer to its
customers based on their needs. McDonalds offers hygienic environment, good
ambience and great service. Now McDonalds have also started giving internet
facility at their centres and they have been playing music through radio instead of
the normal music. There are certain dedicated areas for children where they can
play while their parents can have some quality time together.
2.3PRICE:
What should be the pricing strategy?
Pricing includes the list price, the discount functions available, the financing optionsa
vailable etc. It should also take into the consideration the probable reaction from the
competitor to the pricing strategy. This is the most important part of the marketing
mix as this is the only part which generates revenue. All the other three are expenses
incurred. The price must take into consideration the appropriate demand-supply
equation. McDonalds came up with a very catchy punch line
Aap ke zamane mein ,baap ke zamaneke daam. This was to attract the middle
and lower class consumers and the effect can clearly be seen in the consumer base
McDonalds has now. McDonalds has certain value pricing and bundling strategies
such as happy meal , combomeal , family meal etc to increase overall sales
volumes.
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2.4PROMOTION:
What is the suitable strategy and channels for promotion of the product?
The various promotion channels being used by McDonalds to effectively
communicate the product information are given above. A clear understanding of the
customer value helps decide whether the cost of promotion is worth spending. There
are three main objectives of advertising for McDonalds areto make people aware
of an item, feel positive about it and remember it.The right message has to be
communicated to the right audience through the right media. McDonalds does its
promotion through television, hoardings and bus shelters. They use print ads and the
television programmes are also an important marketing medium for promotion. Some
of the most famous marketing campaigns of McDonalds are:
You Deservea break today, so get up and get away- To McDonalds
Aap ke zamane mein ,baap ke zamane ke daam.
Food, Folks, and Fun
Im loving it.
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2.5PEOPLE:
How to converge the benefits of internal and external marketing?
McDonalds understands the value of both its employees and its customers. It
understands the fact that a happy employee can serve ell and result in a happy
customer. McDonald continuously does Internal Marketing.
This is important as it must precede external marketing. This includes hiring, training
and motivating able employees. This way they serve customers well and the final
result is a happy customer.
2.6PHYSICAL EVIDENCE:
The physical evidence appearance affects not onlythe impression outsiders have of a
business but allthe way that business functions.
McDonalds focuses on clean and hygienic interiors of is outlets and at the same time
the interiors are attractive and the fast food joint maintains a proper decorum at its
joints.
Hence due importance is to be given to :
Staff members.
Location & appearance.
Buildings Maintence.
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2.7PROCESS
The food manufacturing process at Mc Donalds is completely transparent i.e. the
whole process is visible to the customers. In fact, the fast food joint allows its
customers to view and judge the hygienic standards at Mc Donalds by allowing them
to enter the area where the process takes place. The customers are invited to check the
ingredients used in food.
Hence, McDonalds follows :
Food manufacturing transparent to customers.
Training to the licensees.
Invented the most efficient cooking equipment.
New methods of food packaging anddistribution.
McDonalds in India followed the same tradition.
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2.8SWOTANALYSIS
SWOT analysis is a simple framework for generating strategic alternatives from a
situation analysis. It is applicable to either the corporate level or the business unit
level and frequently appears in marketing plans. Such an analysis of the strategic
environment is referred to as a SWOT analysis. A scan of the internal and external
environment is an important part of the strategic planning process. Environmental
factors internal to the firm usually can be classified as strengths or weaknesses, and
those external to the firm can be classified as opportunities or threats. The SWOT
analysis provides information that is helpful in matching the firm's resources and
capabilities to the competitive environment in which it operates.
STRENGTH
Strong brand name, image and reputation. Large market share. Strong global presence. Specialized training for managers known as the Hamburger University. McDonalds Plan to win focuses on people, products, place, price and
promotion.
Strong financial performance and position. Introduction of new products. Customer focus (centric). Strong performance in the global market place
WEAKNESS
Large market share. Strong supply chain. Rigorous food safety standards. Decentralized yet connected system Ignoring breakfast from the menu
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OPPORTUNITY
Expansion of other cashless payment systems. Well being and ethical image improvement. Expansion of the children market (other businessmarket penetration) Setting up vegetarian menus or outlets to expand the market Growing health trends among consumers Joint ventures with retailers (e.g. supermarkets). Consolidation of retailers likely, so better locations for franchisees. International expansion into emerging markets of China and India. Diversification and acquisition of other quick-service restaurants. Growth of the fast-food industry. Worldwide deregulation. Low cost menu that will attract the customers.
THREATS
The relationship between corporate level McDonald's and its franchise dealers. Anti-American sentiments. Global recession and fluctuating foreign currencies. Intense Competitions Growth of health conscious eaters Outbreak of diseases (mad cow, H5N1, bird flu, SARS) Recent hygiene complaints affect sales
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CHAPTER - 3
ANALYSIS - II
Survey Questionnaire
Q1) Gender
Q2) Age
60%
40%
GENDER
Male
Female
20%
36%
34%
10%
AGE
Below 18
18 to 22
23 to 27
28 and above
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Q3) Occupation
Q4) Do you prefer to have meal form Fast Food restaurant?
24%
6%
8%
10%10%
14%
14%
6%
8%
OCCUPATION
Student
Executive
Public sector worke
Clerical
Secretarial
Manager
Self-employed
Housewife
Others
68%
32%
Prefer to have meal from Fast Food
restaurant
YES
NO
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Q5) Which fast food restaurant(s) do you visit most frequently?
Q6) What is the first thing that strikes your mind about McDonalds?
36%
20%
22%
22%
Prefered Fast Food Restaurant
MCDONALDS
PIZZA HUT
KFC
DOMINOS
26%
16%
22%
18%
18%
First thing that strikes your mind about
McDonalds
BURGER
ADVERTISING
SERVICES
VALUE OF
MONEY
FUN
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Q7) Is the product line in McDonalds adequate?
Q8) Which is your favorite product at McDonalds?
30%
34%
36%
Is the product line adequate
YES
NO
AVERAGE
18%
14%
12%
26%
12%
8%
10%
Favorite product at McDonalds
MAHARAJ MAC
MC CHICKEN BURGER
MC VEGGIE BURGER
FRENCH FRIES
MC CURRY PAN
FILET-O-FISH
OTHERS
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Q9) Which type of McDonalds promotional advertising catch your eye?
Q10) What is the main problem you faced at McDonalds?
14%
16%
18%26%
12%
14%
Promotional advertising catch your eye
INTERNET
NEWSPAPERS
BILLBOARDS
POSTERS
MAGAZINES
TV
20%
16%
18%
14%
32%
Problem faced at McDonalds
LONG QUEUES
RUDE BEHAVIOUR OFEMPLOYEES
CONGESTION
OTHER
NO PROBLEM
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Q11 ) ForMcDonalds products price, is it reasonable? If 10 is perfect, your
score is
Q12) How often do you visit McDonalds outlet?
2%
4%
5%
7%
9%
11%
13%15%
16%
18%
Products price is it reasonable
1 2
3 4
5 6
7 8
9 10
24%
24%
52%
Visit to McDonalds outlet
WEEKLY
MONTHLY
OCCASIONALLY
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Q13) Which area do you think needs the most improvement?
Q14) What factors do you consider important when visiting McDonald's?
10%
8%
30%
22%
20%
10%
Area needs most improvement
DELIVERY TIME
ENVIRONMENT
PRODUCT VARIETY
PRICES
OFFERS AND
DISCOUNTS
OTHERS
18%
12%
20%16%
16%
8%
10%
Factors important when visiting McDonald's
Product assortment
Price
Food quality
Discounts / coupons
Nutrition
Waiting time
Distance to
McDonald's
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Q15) Thinking about your most recent visit to McDonald's, to what level of
satisfaction do you rank that visit?
4%
6%
22%
28%
40%
Level of satisfaction on recent visit to
McDonald's
Very poor
Poor
Good
Very good
Excellent
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CHAPTER-4
SUMMARY, RECOMMENDATIONS & CONCLUSION
SUMMARY
On the basis of gender male (60%) prefer fast food than female (40%). In basis of age majority is at the age of 18-22 (36%) while others are as Below 18
(20%), 23-27 (34%), 28 and above (10%).
Based on occupation here the majority is students (24%) then Manager (14%),Self-employed (14%), Secretarial and Clerical (10%), Public Sector workers and
others (8%) rest Housewife and Executive (6%).
Almost 68% of people prefer to have food form fast food restaurants. MC Donalds is preferred by 36 % of people while pizza hut (20%), kfc (22%)
and dominos (22%).
First thing that strikes mind about MC Donalds is burger (26%) advertising(16%) services (22%) value of money (18%) and fun (18%).
The product line of MC Donalds should be improved since most of themcommented as average (36%), no (34%) and yes (30%).
Majority of people's favourite product is French Fries (26%), Maharaj Mac (18%),mc chicken Burger(14%), mc curry pan and mc veggie burger (12%) filet-o-fish
(8%) and others (10%).
Posters attract most of customers upto (26%) billboards (18%), TV and internet(14%), news papers (16%) and magazines (12%).
There is no major problem faced by customers upto (32%) some of the problemsare long queues (20%) rude behaviour of employees (16%) congestion (18%) and
other (14%).
Based on pricing strategy of MC Donalds upto (18%) customer gave a score of10, (16%) for 9, (15%) for 8, (13%) for 7, (11%) for 6.
Customer visit occasionally upto (52%), weekly (24%) and monthly (24%). MC Donalds needs to improve the product variety then prices, offers and disc
outs, delivery time and environment.
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While visiting MC Donalds (20%) people consider for food quality, (18%) forproduct assortment, (16%) for discounts and nutrition, (10%) for distance and
(8%) for waiting time.
Ranking as per the last visit to MC Donald's (40%) customer voted for excellent,(28%) for very good, (22%) for good, (6%) for poor and (4%) for very poor.
RECOMMENDATIONS
Maintain consistency in the taste and quality of products
Include more items in its product line. (Variety)
Include more veg. options
More promotional and advertising measures to increase its sales or to increase
its market share.
Recognize the small outlets and give more discounts
Growing health trends among consumers
They should focus more on their promotional strategies like advertising etc.
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CONCLUSION
McDonalds is one of the largest fast food companies in the world. They continue
their path for success by keeping their consumers in mind regarding their product
selection as well as their prices. They encourage their employees to do a good job,
usually promote from within, and offers several scholarships to encourage education.
Though McDonalds is a centralized, wait and see company they find ways to use
technological products that will increase their productivity, service, and sales,
everywhere from using the Nintendo DS to train staff to suing Mew POS touch screen
registers. McDonalds will certainly be around for plenty more yearsto come.
McDonalds has been successful in operating within the food service industry through
efficient strategies and quality standards which enables them to gain competitive
advantage. As evidenced by its international market growth, McDonalds has already
been efficient in gaining entry even in the most challenging markets like Britain.
Through its strong sense of quality service and customer satisfaction, McDonalds
was able to offer its products to the Britain market. Products were modified to suit the
British taste and preferences; affordable prices were implemented; effective
promotions and offers were done.
These are some of the strategies involved in the companys business strategy which
allowed McDonalds to gain the Britain support. Despite these successes, the
company should take into consideration the growing level of competitiveness in the
food service industry.
In India, several foreign fast food chains offering similar products are also being
supported by the India consumers. Constant strategic change is then necessary to
ensure that the company would sustain their competitive advantage.
In conclusion, McDonalds has been successful because of the value the company
gives for its customers. Hence, despite the controversial beginning of McDonald s in
India, the company managed to adapt to its peoples cultural needs. Indeed,
McDonalds is a learning organization, one that is willing to learn and open to change.
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BIBLIOGRAPHY
WEBSITES:
http://books.google.co.in http://en.wikipedia.org http://www.mcdonalds.ca http://ezinearticles.com
BOOKS:
Kotler, Phillip and Keller, lane Kevin (2008) Marketing Management, 12thEdition. Prentice hall.
http://books.google.co.in/http://books.google.co.in/http://en.wikipedia.org/http://en.wikipedia.org/http://www.mcdonalds.ca/http://www.mcdonalds.ca/http://ezinearticles.com/http://ezinearticles.com/http://ezinearticles.com/http://www.mcdonalds.ca/http://en.wikipedia.org/http://books.google.co.in/