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STUDY

ON

MARKETING STRATEGIES ADOPTED BYMC DONALDS

SUBMITTED BY:

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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. 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 McDonalds 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.

(RAVI)

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PROJECT OUTLINE FOR THESIS

A study on Marketing strategies adopted by

Title McDonalds (with particular reference to franchisee

restaurant,)

Name of the CompanyMcDonalds

Chairman

Mr. JACK M.GREENBERG

HARDCASTLE RESTAURANTS PVT. LTD,

Address

Specific Areas of Study

(a) Primary Data

(b) Secondary Data

ASHIANA, 69-C, BHULABHAI DESAI ROAD,

MUMBAI-400026.

MARKETING & INTERNATIONAL BUSINESS

STRATEGIES.

RESEARCH METHODOLOGY

Personal Interview and Structured Questionnaires

Annual Reports & Brochures, Business Magazines &

articles from internet

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INDEX

Sl. No. Topic Page No.

1 Synopsis 1-22 INTRODUCTION 3-4

The Indian Fast Food Market - An Overview

3 INTRODUCTION TO PROBLEM 5-6

4 Objectives & scope of the study

Research ObjectiveScope Of Study

7-8

5 Research methodology 9

Research Design

Sample Design

Data Collection

6 THEORETICAL CONCEPT 10-18

Industrialization Of Services Business Model

Gap Analysis

Gap Analysis And New Products

Usage Gap

Product Gap

Competitive Gap

Market Gap Analysis

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7 DATA ANALYSIS & INTERPRETATION 19-82

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

Dominos Diversity Mission Statement A

Brand With Bite

Economical

Porters Five Forces Model With Reference To Fast Food

Joints

Marketing Scenario At Mcdonalds

Segmentation

Customer Relationship Management

International Business Strategies of Mcdonalds

Policy And Functional Strategies

Financial Analysis/Ratio Analysis

Cost Analysis

Environmental Analysis Of Mcdonalds

External Environmental Analysis

8

9

9

10

Data Analysis, Findings And Observations From

Questionnaire

Conclusions

Recommendations

Limitations

83-99

100

101-105

106

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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. Todays companies work in a war zone of rapidly changing competitors,

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

loyalty.

In todays world of cutthroat fierce competition, customer satisfaction is very

essential to not only exist but also to excel in the market. Todays 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.

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 customers preferences about the hospitality provided by the

fast food industry.

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 customers 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 hard ly any one who doesnt know about

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

Wimpys 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 todays 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 Nirulas 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 Donalds. 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--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 McDonalds:

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: Mumbai market is treated as sampling unit.

Sample size: 10 Customers

DATA COLLECTION

Primary Data: It will be collected from the customers visiting the restaurants

(McDonalds) with the help of questionnaire, personal interviews of the staff

(McDonalds).

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

collected from the companys 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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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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International Business Management

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 growthby

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,

McDonalds traditionally operates with local partners or local management. In

India too, McDonalds purchases inputs from local suppliers. McDonalds

constructs its restaurants using local architects, contractors, labour and - where

possible - local materials. McDonalds 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. McDonalds 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 McDonalds restaurant in India, McDonalds and its international

supplier partners worked together with local Indian companies to develop

products that meet McDonalds 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 todays international markets. For instance, Cremica Industries

worked with another McDonalds supplier from Europe to develop technology

and expertise, which allowed Cremica to expand its business from baking to also

providing bread and batters to McDonalds India and other companies. Another

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benefit is expertise in the areas of agriculture, which allowed McDonalds 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: McDonalds worldwide is

well known for the high degree of respect to the local culture. McDonalds has

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

tastes and culture. Keeping in line with this McDonalds does not offer any beef or

pork items in India. McDonalds 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: McDonalds believes in giving back to the

communities it serves. Wherever McDonalds goes it becomes a part of the

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

McDonalds has introduced the concept ofLitter Patrol - McDonaldss

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

garbage left behind not only by customers from McDonalds restaurants but also by

other visitors to the area resulting in a cleaner neighborhood.

6. Quality, Service, Cleanliness and Value: The McDonalds philosophy of

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

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adhere to Indian government regulations on food, health and hygiene while

continuously maintaining McDonalds own recognized standards. All McDonalds

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

McDonalds India provides fast and friendly service - the hallmark of McDonalds which

sets its restaurants apart from others. McDonalds restaurants provide a clean,

comfortable environment especially suited for families via McDonalds stringent

cleaning standards, carefully adhered to. McDonalds menu is priced at a value that the

largest segment of Indian consumers can afford. McDonalds does not sacrifice quality

for price - rather McDonalds 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 McDonalds

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 nonvegetarian 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

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

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

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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

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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

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

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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 McDonalds 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 crewperson

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

strategiescustomer 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

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

instinctively knew were there to be discovered.

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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

McDonalds 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: McDonalds founder Ray Kroc built the company on

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

at McDonalds today. A McDonalds 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 dont 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 (McDonalds, Nirulas, Pizza Hut) where they find the match according to

there aspirational level.

SUBWAY DOMINOS

NIRULAS WIMPY

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KFC PIZZA HUT

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 Silvers under its umbrella. Pizza Hut is the worlds 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

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

growthoriented 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

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.

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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 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

Nirulas 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, Nirulas 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, Nirulas 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

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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.

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, Nirulas had also opened the first fruit preservation unit in Delhi. The

jams and squash and other preserves were marketed under the name of Nirulas 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, Nirulas started the

Chinese Room which was the first restaurant of its kind in India. Nirulas created history

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

India. In 1954, Nirulas were the first ones to introduce espresso coffee in India. Gaggia,

the inceptors of espresso coffee machines gave Nirulas sole distribution rights for their

machines and Nirulas sold these to the luxury hotels and first class restaurants. Nirulas

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

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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 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

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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.

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

worlds 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 McDonalds 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.

Dominos 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 Africas 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, Wimpys 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 peoples 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, dcor 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 MNCs

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 dont 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

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

studied, making

Success dependent on

maintaining low costs

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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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 Mcdonalds

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

McDonalds 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: Dominos, Nirulas.

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

McDonalds, 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 McDonalds 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 MIXESMcDonalds 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.

McDonalds 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 Cadburys.

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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

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

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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

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

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

of psychological pricing. McDonalds 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

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

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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 Donalds 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) provide safe and

fun recreation and the alliance with Walt Disney Company let the children's shout even

more.

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4. Market Research: McDonald's strategy for communication relies he

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