Mcdonalds' Marketing Mix

Marketing Mix For

Presented By: • • • • • •

Abhishek Bhartiya B. Aditya Mohan Geetika Sodhi Mahek Nangia Mukul Kumar Wasim Shaikh

Introduction • McDonald’s is the Eighth Most Poweful Brand in the ----Source: Millward Brown Optimor (including data World. 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.)

Brief History • McDonald's was started as a drive-in restaurant by two brothers, Richard and Maurice McDonald in California, US in the year 1937. • By mid-1950s, the restaurant's revenues had reached $350,000. • Ray Kroc Kroc, distributor for milkshake machines, expressed interest in the business, and he finalized a deal for franchising with the McDonald brothers in 1954. • He established a franchising company, the McDonald System Inc Inc.. and appointed franchisees. • In 1961, he bought out the McDonald brothers' share for $2.7 million and changed the name of the company to McDonald's Corporation. Corporation In 1965, McDonald's went public…

McDonald’s In India • In 1996, first McDonald’s restaurant opened on Oct. 13, at Basant Lok, Vasant Vihar, New Delhi. • McDonald's India is a 50 – 50 JV partnership between McDonald’s Corporation (U.S.A) and two Indian businessman Amit Jatia (Hardcastle Restaurants Private Limited, Mumbai) and Vikram Bakshi (Connaught Plaza Restaurants Private Limited, Delhi). • Approximately 75% of the menu available in McDonald’s in India is Indianized and specifically designed to woo Indian customers. • The McDonald's philosophy of QSC&V is the guiding force behind its service to the customers.

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, Managing Director, Northern Region, India

Product Mix

Product Mix

Veg Menu • McVeggie™ • McAloo Tikki™ • Paneer Salsa Wrap • Crispy Chinese • Veg McCurry Pan™ • Pizza McPuff™

Non-Veg Menu • Chicken Maharaja Mac • McChicken • Fiet-O-Fish • Chicken Mexican Wrap • Chicken McGrill

Beverages • Cold Coffee • Ice Tea • Soft Drinks • Mc Shakes • Hot Serves

Frozen Deserts • Soft Serve Cone • Mc Swirl • Soft Serve • Flavor Burst • Floats

Veg Menu

Non--Veg Menu Non

Beverages

Frozen Deserts

Co - Branding McDonald’s has major tie-ups with various companies as their cobranding Statergy.

Few of Them are listed Below:

Coca-Cola Barbie Cadbury Hotwheels

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.

Household Expenditures

Source: India, the structure of Poverty, WORLD RESOURCE INSTITUTE.

Pricing Strategy

Purchasing power pricing:a)

In 1997 slashed prices for vegetable nuggets and soft serve cone.

b)

In September 2001, they offered Veg surprise burgers for Rs 17.

c) March 2004 – Aap ke zamane mein, baap ke

zamane ka daam.

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 entrylevel 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.

Aap ke zamane mein, baap ke zamane ka daam!!! daam!!! Value Pricing. a)

Happy price menu – Rs 20.

b)

Economeal – Rs 49(save Rs 11).

c)

McChicken & McVeggie Meal – Rs 75,Rs 65 (Save Rs 15).

d)

Happy Meal for Kids – Rs 69,99,109 (toy free).

e)

Big saving Meals – Combos Rs 109 – Rs 119(Save Rs 36).

f)

A-la carte menu – Rs 45- Rs 65 (Veg) Rs 55- Rs 65 (Non Veg)

a)

Desserts – Rs 12 – Rs 25.

b)

Beverages – Rs 25- 50 ( a little costly)

Product Bundling

Package deal. • The most common strategy in fast food industry. • The most preferred style for customers of McD. • Plays on Psychological factor of the customer. • Customer acquisition costs are high. • Consumers appreciate the resulting simplification of the purchase decision. • The product mix offers are different in various parts of India.

80--20 Menu Board 80

• 80% visual. • 20% descriptive. • Easier for customers to understand what 29,39,49,59,89,99 rupee options are. • Pricing range, quick service, no-tips environment attracted middle class and students.

Competitive Pricing Food items

McD

SUBWAY

KFC

PIZZAHUT

DOMINO’ S

Burgers & Pizzas

Rs 20- Rs 70

Rs 65- Rs 135

Rs 25 – Rs175

Rs 55- Rs 175 (regular)

Rs 35- Rs 140 (regular)

Combo Meals

Rs 49-Rs 119

Rs 45- Rs 175

Rs 55-Rs 150

Rs 120- Rs 250

Rs 120- Rs 230

Beverages

Rs 25- Rs 50 Small300ml

Rs 35- Rs 45 Small300ml

Rs 30-Rs 55 Small300ml

Pet beverage MRP (600 ml)

Rs 30 (600 ml)

Desserts

Rs 12-Rs 25

Rs 20-Rs 50

Rs 15-Rs 65

Rs 40- Rs 60

Rs 25 (100ml cup of Baskin Robbins)

Sustaining – HOW?

Cost control strategy:a) Well established low –cost supply chain. b) Ensures efficiency and speed in distribution. c) Huge increase in volume sales. d) Very good food processing technology.

McDonald’s : A locally Owned Company

McDonald’s Corporation

McDonald’s India Pvt. Ltd.

Hard Castle Rest. Pvt. Ltd. (West & South)

Connaught Plaza Rest. Pvt. Ltd. (North & East)

McDonald’s : A locally Owned Company Geographically Diverse suppliers: Ensuring stringent quality standards

McDonald’s India: Suppliers • Trikaya Agriculture Supplier of Iceberg Lettuce

• Vista Processed Foods Pvt. Ltd. Supplier of Chicken and Vegetable range of products.

• Dynamix Diary Supplier of Cheese.

• Amrit Food Supplier of long life UHT Milk and Milk Products for Frozen Desserts.

McDonald’s India: Suppliers

SELECTION

MODIFICATION

EVALUATION

MOTIVATION

McDonald’s India: Distribution Radhakrishna Foodland Distribution Centres and cold storages. “With a cold chain in place there is practically no need for a knife in the restaurant. Chopping and food processing is done in plants. Restaurants are confined only to actual cooking” – Amit Jatia.

•Completely dedicated distribution and supply chain. • Matching supplier production with deliveries using ERP. • Quality inspection Program, quality check at 20 different points in supply chain. • HACCP(Hazard analysis critical control points) food safety standards emphasizing prevention of faults.

McDonald’s India: Channel Network North and East India (79) 33 in Delhi 22 in Uttar Pradesh 11 in Haryana 7 in Punjab 3 in Rajasthan 1 in Uttaranchal 1 in West Bengal 1 in Himachal Pradesh

West and South India (53) 32 in Maharashtra 7 in Gujarat 7 in Karnataka 4 in Andhra 3 in Madhya Pradesh

McDonald’s India: Network & competitors

COMPANIES

OUTLETS (No.)

CITIES COVERED

McDonald’s

132

34

Pizza Hut

137

34

Domino’s

220

42

Subway

131

32

Nirula’s

65

NCR

KFC

34

09

McDonald’s India: Outlets

Standardization is the key!!

McDonald’s India: The Road Ahead…

• Increasing seating capacity. • Aggressive expansion plans throughout the country. • More drive thru’s. • Oil alliance with BPCL in 2002, with HPCL in Jan, 2008. • Independent franchisee model. • McDelivery on cycles. • Entry in new cities.

Promotion

•An activity, such as a sale or advertising campaign, designed to increase visibility or sales of a product. •McDonalds, for years has maintained an extensive promotion strategy with highest spending on marketing amongst all its competitors.

Advertising • Focus on overall experience. • “Brand globally and act locally”. • Overall it is doing what it does the best – marketing. • Intensive advertising aimed at children. • Paper mats on trays ensure that no new scheme goes unnoticed.

Advertising • 80-20 menu boards marketing tool. • Sponsors sport events with their logos advertised in these events. • Significant use of billboards and signage. • Image of portraying warmth and a real slice of everyday life has become a trademark and has created many memorable commercials.

THE mascot… • The well known mascot Ronald McDonald is the same throughout the world since 1963. • It is supposed to be the next most well recognized figure second only to Santa Claus. • The color combination maximizes brand exposure and is supposed to increase hunger

Campaigns… • “I’m lovin’ it” is an international branding campaign which was launched in 2003 and has proved to be its biggest success. • “aap ke zamaane mein baap ke zamaane ke daam” is a highly localized campaign which aimed at attracting the masses through its happy price menu.

Issues with McDonald’s • Nutritionists argue that the type of high fat, low fibre diet promoted by McDonald's is linked to serious diseases such as cancer, heart disease, obesity and diabetes. • Many parents object strongly to the influence this has over their own children. • Complaints from employees range from discrimination and lack of rights, to understaffing, few breaks and illegal hours, to poor safety conditions and kitchens flooded with sewage, and the sale of food that has been dropped on the floor.

Issues with McDonald’s • They use their financial clout to influence the media, and legal powers to intimidate people into not speaking out, directly threatening free speech. • Conservationists have often focussed on McDonald's as an industry leader promoting business practices detrimental to the environment. And yet the company spends a fortune promoting itself as environmentally friendly.

People • Each outlet is headed by a Restaurant Manager . He is responsible for the daily operation and customer interaction. • Delivery Crew Member carries basic operation of a restaurant. Ensures customer satisfaction at the restaurants. • In order to motivate there employees they give them stars as per their performance.

Training At Hamburger Hamburger University – McDonald’s Centre of Training Excellence

• Since its inception, training at Hamburger University has emphasized consistent restaurant operations procedures, service, quality and cleanliness. It has become the company’s global centre of excellence for McDonald’s operations training and leadership development • February 24, 1961, Hamburger Universities first class of 14 students graduated • Today, more than 5,000 students attend HAMBURGER UNIVERSITY each year • Since 1961, more than 80,000 restaurant managers, midmanagers and owner/operators have graduated from this facility

Organizational Chart

Physical evidence.. • Cleanliness, speed, quality and transparency of process is the biggest physical evidence. • The interiors are attractive and more or less consistent throughout the world. • A proper decorum and strict standards of cleanliness are maintained at all the joints. • Extra care is given to make the joints children friendly

Physical evidence.. • Family environment message throughout the world, just the way of communication is adjusted to different countries. • Play areas are provided so that kids don’t become panicky. • Counters are kept low and menus pictorially displayed so that children can order for themselves.

Process

Ready to cook frozen food material Delivery to customer

Initiator Universal holding Cabinet Assembler

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