1. 1. STUDY OF BRAND EXTENSION Submitted by: KRITIKA GUPTA PGP 30030
2. 2. PARENT BRAND: McDonalds Core Values
3. 3. Parent Brand - McDonald's Breakfast Dessert Burgers and wraps Munchies
4. 4. BRAND EXTENSION Internationally, McCafs are housed within McDonalds outlets but have a separate look and feel. These stores are more bold and sophisticated as compared to the McDonalds outlets The same format is being followed in India, where a McCaf store typically occupies 500 sq. ft. of a 4,000 sq. ft. McDonalds outlet Presently McCaf has 27 outlets in India in major cities like Mumbai, Pune, Nasik and Ahmedabad It plans to expand aggressively and open close to 250 stores in the next 3-5 years McCaf is able to tap the advantage of McDonalds excellent store network and supply chain HIGH QUALITY, INEXPENSIVE COFEE TARGET SEGMENT: more diverse segment of the population that favors convenience, speed and lower prices.
5. 5. McCaf Commercial
6. 6. Growth of organized Caf market in India The caf market (organized sector) grew at a CAGR of 8.24% in the last 5 years Within this market, the food segment, experienced a growth of 8.06% while the drinks segment grew at a rate of 8.71% However, the proportion of food in relation to drinks has declines over the years Industry overview
7. 7. Competitors reference group
8. 8. Market share Caf Coffee Day (1.3%) Coffee Day Xpress (0.2%) Costa Coffee (0.1%) Barista Coffee Co (0.1%) Others (98.3%) Caf Coffee Day (1.3%) Coffee Day Xpress (0.2%) Costa Coffee (0.1%) Barista Coffee Co (0.1%) Others (98.3%) 2013: Market size INR 17.6 Bn 2014: Market size INR 19.2 Bn Key observations: Stand alone cafs and the unorganized sector constitutes majority of the market for cafs and bars in India ~98% In the organized sector, Caf Coffee Day, Barista and Costa Coffee together comprise 1.6% Starbucks and McCaf are relatively new to the Indian market and occupy a very small part of the market. With their rapid expansion, however, they are slowly capturing the market with their USP Affordable luxury
9. 9. Market Segmentation - McCaf GEOGRAPHIC SEGMENTATION McCaf has chosen to target urban cities in well-established countries such as Australia, the US, Japan, China, Spain, India etc. DEMOGRAPHIC SEGMENTATION Demographically, McCaf considers young adults with relatively high disposable income and adults in the working population. These consumers look for a laid-back environment with comfortable surroundings, exquisite furnishings, and an artistic ambiance in a coffee house. A major chunk (~40%) of the TG is female, aged 25- 39. Many within this group have young families. McCaf are designed to offer them a place to meet friends and enjoy a quality coffee experience as well as keep the children fed and entertained
10. 10. Market Segmentation McCaf Smoothies Target young adults, age 18 34 The person is a health conscious customer Customers are starting to value a healthy lifestyle and fast foods are becoming less attractive Interests - Nutrition Health conscience Active living Keep it moving PSYCHOGRAPHICS TARGET
11. 11. 4 Ps of Marketing - McCaf PRODUCT McCaf offers a wide range of caf products Coffee, frapp, iced drinks, pastries and sweets, cookies, cakes etc. Their offering range is at par with other cafs in the consideration set (Starbucks, Costa, Barista etc.). The product is high on quality and taste. PLACE McCaf, internationally and in India are housed within a McDonalds outlet, where a separate area is demarcated for the Caf. Because of this, it is able to make use of McDonalds established network. However, even within the traditional McDonalds store, McCaf offers a caf style environment. The company aims to open at least 1 McCaf outlet within a radius of 2 kms.
12. 12. 4 Ps of Marketing - McCaf PRICE McCaf offers value for money coffee without compromising on the quality front. It is priced 15-20% below its competitors. (Please refer to the offering comparison between McCaf and Starbucks on slide [ ]) PROMOTION McCaf is yet to promote itself more in India. Globally it promotes the brand through coupons, premiums, advertisements on billboards and television Example- McCaf SOcial Hour Buy 1 Get 1 Coffee Free between 3-5 pm
13. 13. POP POD Points of Parity & Points of Difference
14. 14. Product Offering Comparison Category McCaf Starbucks Classic coffee 135 185 Frapp 145 185 Ice coffee 115 150 Ice tea 105 170 Smoothies 180 250
15. 15. BRAND POSITIONING Intimate connections Comfortable environment No pretense Daily chit- chats Informal set-up Bonding over a cup of coffee Cup of coffee with a bo VALUE FOR MONEY COFFEE
16. 16. BRAND POSITIONING BFFs Writers & Artists Father, mother, children Professionals Older couples Study groups Siblings
17. 17. BRAND POSITIONING THE INTER-WOVEN EXPERIENCE Conversations linger on after a McDonalds meal at McC
18. 18. References Euromonitor: GMID database McDonalds annual reportshttp://www.aboutmcdonalds.com/mcd/investors/annual_reports.html Business Standard - http://www.business- standard.com/article/companies/mcdonalds-to-open-100-outlets-of-mccafe-in- india-115042000958_1.html The Times of Indiahttp://timesofindia.indiatimes.com/business/india- business/Beverage-boost-McDonalds-to-roll-out-McCafs-in- India/articleshow/23850835.cms First Posthttp://www.firstpost.com/business/starbucks-watch-out-mccafe-is- coming-for-you-with-cheaper-coffee-1163753.html VCC Circlehttp://www.vccircle.com/news/food-agri/2013/10/09/mcdonalds- forays-coffee-shop-market-india-through-mccafe http://businesscasestudies.co.uk/mcdonalds-restaurants/staying-ahead-in-a- competitive-environment/the-mccaf-concept.html#axzz3fT6WMS8T
19. 19. Thank you