8/3/2019 mc D final

1/34

Introduction

McDonalds is the Eighth Most Poweful Brand in theWorld. ----Source: Millward Brown Optimor (including data

from brandz, Datamonitor, and Bloomberg)

Total Revenue for 2006-07 was $740.2 million.

Estimated CAGR of 40 percent.

Rs 400 crore being put in for expansion plans into

Tier II cities within next three years.

Doubling of turnover within three years.

Market share of 18 percent in north India.(includes

restaurants, cafes, fast food joints, local vendors etc.)

8/3/2019 mc D final

2/34

Brief History

McDonald's was started as a drive-in restaurant by twobrothers, Richard and Maurice McDonald in California,US in the year 1937.

By mid-1950s, the restaurant's revenues had reached

$350,000. Ray Kroc, distributor for milkshake machines, expressed

interest in the business, and he finalized a deal forfranchising with the McDonald brothers in 1954.

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

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

public

8/3/2019 mc D final

3/34

McDonalds Vision, Mission and Value

Vision

To be the best & leading fast food providersaround the globe

Mission To be the world's best quick service

restaurant experience. Being the best meansproviding outstanding quality, service,cleanliness, and value, so that we makeevery customer in every restaurant smile."

Values

Our values summarized in Q.S.C & V.Provide good quality, services to customer .Have cleanliness environment whencustomer enjoys their meal .The value of foodproduct makes every customer is smiling.

http://upload.wikimedia.org/wikipedia/en/6/6c/McDonald's_Corporate_Logo.svg

8/3/2019 mc D final

4/34

Every customer has some expectation from fast food restaurants and the

restaurants try to make their environment according to their expectation.

MCDONALDS has a programmer of CHAMPS, which are the six expectations of

costumers from fast food restaurants.

C ----- Cleanliness.

H ----- Hospitality.

A ----- Accuracy.

M ---- Maintains of facility.

P ---- Product quality.

S ---- Speed of Services

McDonalds - PROGRAMME

http://upload.wikimedia.org/wikipedia/en/6/6c/McDonald's_Corporate_Logo.svg

8/3/2019 mc D final

5/34

Some of the world-wide sold Products are :-

BURGER.

Such as big Mac is the most important product of Mc Donalds menu some

other important type of burger, are flag ship burger, hamburger and cheese

burger etc. Mc Donalds is also providing chicken, fish and pork sand witches.

CHICKEN MC NUGGETS.

They are introduced in 1983, these are small chicken chunks served with adipping sauce available in 4,6,10,20 pieces they are made by white chicken

strips introduced in 1955 for a limited time and offer again in 2003.

McDonalds - PRODUCTS

all over the WORLD

8/3/2019 mc D final

6/34

OTHER PRODUCTS :

Fish Mac dipper. , Mc Rib. , Mc Muffins (for break fast) , Biscuits cookies

, Beverages.

--Mc Donalds primary soft drinks supplies is coco Cola Company Mc

Donalds is offering also

-Cold and hot iced coffee.

-Hot and iced tea.

-Hot chocolate.

-Various juices.

-Milk shakes.

-Ice cream & Desserts

McDonalds - PRODUCTS all over the WORLD (contd.)

http://upload.wikimedia.org/wikipedia/en/6/6c/McDonald's_Corporate_Logo.svg

8/3/2019 mc D final

7/34

McDonalds In India

In 1996, first McDonalds restaurant

opened on Oct. 13, at Basant Lok,Vasant Vihar, New Delhi.

McDonald's India is a 50 50 JV

partnership between McDonalds

Corporation (U.S.A) and two Indian

businessman Amit Jatia (HardcastleRestaurants Private Limited, Mumbai)

and Vikram Bakshi (Connaught Plaza

Restaurants Private Limited, Delhi).

Approximately 75% of the menu

available in McDonalds in India is

Indianized and specifically designed to

woo Indian customers.

8/3/2019 mc D final

8/34

Marketing Mix

8/3/2019 mc D final

9/34

Promotion

Reconnecting with customersthrocontemporary global marketing

direction ,

Im loving it

Marketing Mix

Promotional Mix

Advertising

Public Relation

Sales Promotion

Personal Selling

Direct Mail

Internet/

E-Commerce

8/3/2019 mc D final

10/34

Place

Direct Distribution Indirect Distribution

Marketing Mix

Manufacturer

ConsumerConsumer

Retailer

Manufacturer

8/3/2019 mc D final

11/34

Product

Our clear strategy is to bring the

customers in initially and provide a range

of entry-level products so that they can try

new items and graduate to the higher

rungs.---

Vikram Bakshi,Mana in Director,

8/3/2019 mc D final

12/34

Product Mix

ProductMix

Veg Menu

McVeggie

McAloo Tikki Paneer Salsa Wrap

Crispy Chinese

Veg McCurry Pan

Pizza McPuff

Non-VegMenu

Chicken MaharajaMac

McChicken

Fiet-O-Fish

Chicken MexicanWrap

Beverages

Cold Coffee

Ice Tea Soft Drinks

Mc Shakes

Hot Serves

FrozenDeserts

Soft Serve Cone

Mc Swirl

Soft Serve

Flavor Burst

Floats

Chicken McGrill

8/3/2019 mc D final

13/34

Veg Menu

8/3/2019 mc D final

14/34

Non-Veg Menu

8/3/2019 mc D final

15/34

Pricing

Initial focus on metros Mumbai and Delhi.

Relatively high income.

Move to smaller satellite towns.(Gurgaon and Pune)

Jaipur and Agra to attract foreign tourists.

8/3/2019 mc D final

16/34

Pricing Strategy

Value Ladder strategy :-

a) Started offering value meals in a range of prices.

b) Ensure affordability and attract widest section of

customers.

c) Brought the customer and provided a range of entry-

level products.

d) Try those new items and graduate to higher-rungs.

e) E.g- if a customer starts with McAloo Tikki, he will

finally graduate to McVeggie and so in Non veg.

f) Helped its Volume business.

g) AAP KE ZAMANEY MEINBAAP KE ZAMANE KE DAAM

8/3/2019 mc D final

17/34

Competitive Pricing

Food McD SUBWAY KFC PIZZAHUT DOMINO

items S

Burgers &Pizzas

Rs 20- Rs70

Rs 65- Rs135

Rs 25Rs175

Rs 55- Rs175

Rs 35- Rs140

(regular) (regular)

ComboMeals

Beverages

Desserts

Rs 49-Rs119

Rs 25- Rs50

Small-

300ml

Rs 12-Rs

25

Rs 45- Rs175

Rs 35- Rs45

Small-

300ml

Rs 20-Rs

50

Rs 55-Rs150

Rs 30-Rs55

Small-

300ml

Rs 15-Rs

65

Rs 120- Rs250

Petbeverage

MRP

(600 ml)

Rs 40- Rs

60

Rs 120- Rs230

Rs 30(600 ml)

Rs 25

(100ml

cup ofBaskin

Robbins)

8/3/2019 mc D final

18/34

SWOT Analysis

8/3/2019 mc D final

19/34

Strengths

Strong Brand name, Image and Reputation

Strong Global Presence

Large Market Share

Proven Production method and countless innovation

Strong financial performance and position

Strong distribution network

Customer focus

8/3/2019 mc D final

20/34

Weaknesses

Unhealthy food image

High employee turnover

Cut throat competition

Legal cases in no. of countries

Lack of product offerings

Fluctuation in operating profits and net profits

8/3/2019 mc D final

21/34

Opportunities

Change in consumer consumption across the global

Embracement of fast food product as any other normalfood product

Growth of fast food industry

Low cost menu that will attract customerExpansion of menu to meet healthier consumer

preference

8/3/2019 mc D final

22/34

Threats

More health conscious consumer

A fierce campaign against the McDonalds by healthprofessional and consumer activist

Growing strength of competition ranging domesticcompanies to foreign players

Heavy investment on promotional campaign

8/3/2019 mc D final

23/34

Challenges in Indian Market:

Political

Cultural/ Social

Distribution (Supply chain management).

8/3/2019 mc D final

24/34

Political scenario

Worlds largest democracy

Fairly stable governments

Armed Forces- Neutral

Bureaucratic red tape omnipresent

8/3/2019 mc D final

25/34

Political challenges

Health and safety guidelines: weight gain,

elevate diabetes risk

Ecological/ environmental issues:

Largest consumer of paper

Food packaging litters roadways, clogs landfills

Home pressure market groups

International pressure groups- regulations

increasing

8/3/2019 mc D final

26/34

Legal Cases

October 16th- World Anti McDonalds day

French fries not 100% vegetarian-contained beef

products which is sacred in India

Promoting obesity by targeting ads towards kids

On cruelty against animals

On labor and union laws

Coffee too hot and hence caused third degree

burns to a woman who accidentally spilled it

8/3/2019 mc D final

27/34

Environmental Issues

Destruction of tropical forests for cattle

ranching.

Is their record on recycling and recycled

products as green as they make out?

8/3/2019 mc D final

28/34

Distribution challenge

Challenges faced by Mc Donalds while entering in India were:

Socially and geographically diverse.

Bad roads and basic infrastructure bottlenecks. Power situation even in metros

Deliver the lowest cost with the highest quality

Maintaining McDonald's "cold, clean, on-time" delivery

standards in India.

8/3/2019 mc D final

29/34

How to overcome these challenges ?

McDonalds infused Rs 400 Crore to set up its delivery

mechanism before entering in India.

McDonalds, an international brand which was trying to make

inroads into the country, developed its Indian partners in such

a manner that they stayed with the company from thebeginning.

McDonalds distribution centres in India came in the following

order: Noida and Kalamboli (Mumbai) in 1996, Bangalore in

2004, and the latest one in Kolkata (2007). McDonalds tied up with various suppliers and distributors in

India.

8/3/2019 mc D final

30/34

Radhakrishna Foodland Private

Limited (RFPL) In 1996, when McDonald's entered India, it was looking for a

distribution agent who would act as a hub for all its vendors.

The association goes back to July 1993, when it studied the

nuances of McDonald's operations and requirements for the

Indian market.

RFPL stored the products in controlled conditions in Mumbai

and New Delhi and supplied them to McDonald's outlets on a

daily basis.

. FJ Walker of Australia, a McDonald's partner, helped RFPLbuild a cold storage in Thane, Another cold storage with

equipment worth about Rs.75 lakh was built in Delhi in 1998.

RFPL also handled.

8/3/2019 mc D final

31/34

AFL Logistics Ltd (ALL), a joint venture between and Coughlin

of the US, and RFPL was responsible for ensuring these

standards.

RFPL also handled McDonald's inventory management.

RFPL also handled in-city distribution to restaurants.

RFPL also ensure that the integrity of the product is

maintained throughout the cold chain.

Cold Chain was one of the unique concepts of McDonalds

supply chain in India, on which it had spent more than six

years to get the system into place.

8/3/2019 mc D final

32/34

The following list of suppliers, who build up the

major supply chain of McDonalds

Dynamix Dairy Industries (Supplier of Cheese)

Trikaya Agriculture (Supplier of Iceberg Lettuce)

Vista Processed Foods Pvt. Ltd. (Supplier of Chicken and

Vegetable range of products including Fruit Pies)

Amrit Food (Supplier of long life UHT Milk and Milk Productsfor Frozen Desserts)

8/3/2019 mc D final

33/34

Other suppliers

Cheese Dynamix Dairy Industries Ltd., Pune

Dehydrated onions Jain Foods, Jalgaon

Iceberg lettuce Trikaya Agriculture, Pune

Chicken patty Vista Foods, Taloja

Veg. Patty, Veg. nuggets, Pineapple/Apple

pieKitran Foods, Taloja

Chicken (dressed) Riverdale, Talegaon

Buns Cremica Industries, Phillaur

Eggless mayonnaise Quaker Cremica Pvt. Ltd., Phillaur

Sesame seeds Ghaziabad

Iceberg lettuce Meena Agritech, DelhiFish fillet patties Amalgam Foods Ltd., Kochi.

Iceberg lettuce Ooty Farms & Orchards, Ooty

Vegetables for the pattiesFinns Frozen Foods & Jain Foods (Nasik,

Jalgaon)

Mutton and mutton patties Al Kabeer, Hyderabad

8/3/2019 mc D final

34/34

McDonald's philosophy had been 'one world, one burger' i.e.

the McDonald's burger should be consistent in terms of cost

and quality throughout the world.

To ensure this, all of McDonald's suppliers followed the

internationally acclaimed HACCP systems wherein both inputsand finished goods were subjected to chemical and

microbiological tests.

The relationship between McDonald's and its Indian suppliers

is mutually beneficial.