Mcdonalds' Marketing Mix
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AB.Mcdonalds' Marketing Mix
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AB.- Introduction: Introduces McDonald's as a leading brand, detailing revenue and market share metrics to highlight its significant industry presence.
- Brief History: Provides a historical overview of McDonald's origins and growth, including key milestones in its development and franchising approach.
- McDonald's in India: Describes McDonald's entry and adaptation to the Indian market, including partnerships and modifications to fit local tastes.
- Product Strategy: Details product strategy with a focus on introducing entry-level products and promoting diversity in offerings to ascend market segments.
- Co-Branding: Explores McDonald's partnerships with various companies for co-branding to expand reach and brand influence.
- Pricing: Analyzes McDonald's pricing strategies focusing on market penetration and affordability tailored to different target demographics.
- Competitive Pricing: Compares McDonald's prices against competitors to demonstrate value offerings in various product categories.
- Sustaining Operations: Discusses McDonald's strategies for sustained efficiency and supply chain management to maximize profitability and quality.
- McDonald's: A Locally Owned Company: Details the management structure of McDonald's in India emphasizing localized ownership and supplier networks.
- Promotion: Describes McDonald's advertising strategies to enhance brand visibility and product promotion across various media.
- Issues with McDonald's: Identifies and explores the criticisms and challenges faced by McDonald's including health concerns and corporate practices.
- People: Focuses on management and staff operations ensuring customer satisfaction and staff motivation within McDonald's outlets.
- Training at Hamburger University: Describes the consistency and excellence in training at McDonald's Hamburger University to maintain operational standards across franchises.
- Physical Evidence: Emphasizes the physical aspects of McDonald's service ensuring quality, consistency, and family-friendly environments.
- Process: Outlines the processes involved in food preparation and delivery, focusing on efficiency and customer service.
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
World. ----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.)
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.
Kroc, distributor for milkshake machines, expressed
• Ray Kroc
interest in the business, and he finalized a deal for
franchising with the McDonald brothers in 1954.
• He established a franchising company, the McDonald
Inc.. and appointed franchisees.
System Inc
• In 1961, he bought out the McDonald brothers' share for
$2.7 million and changed the name of the company to
Corporation In 1965, McDonald's went
McDonald's Corporation.
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
Non-Veg Frozen
Veg Menu Beverages
Menu Deserts
• McVeggie™ • Chicken Maharaja • Cold Coffee • Soft Serve Cone
• McAloo Tikki™ Mac • Ice Tea • Mc Swirl
• Paneer Salsa Wrap • McChicken • Soft Drinks • Soft Serve
• Crispy Chinese • Fiet-O-Fish • Mc Shakes • Flavor Burst
• Veg McCurry Pan™ • Chicken Mexican • Hot Serves • Floats
• Pizza McPuff™ Wrap
• Chicken McGrill
Veg Menu
Non--Veg Menu
Non
Beverages
Frozen Deserts
Co - Branding
McDonald’s has major tie-ups with various companies as their co-
branding 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 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.
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 McD SUBWAY KFC PIZZAHUT DOMINO’
items S
Burgers & Rs 20- Rs Rs 65- Rs Rs 25 – Rs 55- Rs Rs 35- Rs
Pizzas 70 135 Rs175 175 140
(regular) (regular)
Combo Rs 49-Rs Rs 45- Rs Rs 55-Rs Rs 120- Rs Rs 120- Rs
Meals 119 175 150 250 230
Beverages Rs 25- Rs Rs 35- Rs Rs 30-Rs Pet Rs 30
50 45 55 beverage (600 ml)
Small- Small- Small- MRP
300ml 300ml 300ml (600 ml)
Desserts Rs 12-Rs Rs 20-Rs Rs 15-Rs Rs 40- Rs Rs 25
25 50 65 60 (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.
Connaught
Hard Castle
Plaza Rest. Pvt.
Rest. Pvt. Ltd.
Ltd.
(West & South)
(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, mid-
managers 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
Thank You
Common questions
Powered by AI'Psychological pricing' in McDonald's product bundling strategy plays a crucial role by simplifying purchase decisions and increasing perceived value. The strategy encourages customers to select bundle deals, which seem more economical than individual items, therefore improving sales volume and consumer satisfaction through perceived savings .
McDonald's engaged in co-branding partnerships with well-known brands such as Coca-Cola, Barbie, and Cadbury to enhance brand visibility and engage customers effectively. These partnerships amplified McDonald's marketing reach and created a more appealing brand experience for its clientele .
McDonald's faces the challenge of aligning its significant environmental promotion efforts with actual sustainable practices. While the company invests heavily in promoting itself as environmentally friendly, it is critiqued by conservationists for business practices deemed harmful to the environment, which suggests a disconnect between its branding and operational realities .
McDonald's addresses operational challenges in its franchise model by maintaining strict control over processes and standards through thorough training and comprehensive supply chain management. It employs rigorous training programs and quality control mechanisms, ensuring that franchises adhere to global service standards, thus guaranteeing a consistent brand experience to its Indian customers .
McDonald's promotional focus on children is strategic, aiming to build brand loyalty from a young age. The extensive use of child-oriented advertising, including toys in meals and fun atmospheres, captures the family segment by attracting both children and their parents, thus driving repeated visits and establishing lifelong customer relationships .
McDonald's achieved brand standardization in India by maintaining a consistent global brand image, as seen in the use of its famous mascot, Ronald McDonald, and its global campaigns like 'I’m lovin’ it'. Simultaneously, the company localized its marketing strategies, such as 'aap ke zamaane mein baap ke zamaane ke daam', to resonate with local audiences, ensuring nutritional adaptability without compromising brand standards .
McDonald's used a variety of pricing strategies to appeal to diverse consumer segments in India. They implemented value pricing plans such as the 'Happy Price Menu' starting at Rs 20 and the Economeal at Rs 49 to ensure affordability. The company also introduced promotional offers like 'Aap ke zamane mein, baap ke zamane ka daam' to attract budget-conscious consumers .
McDonald’s distribution strategy in India focuses on maintaining a low-cost, efficient supply chain facilitated by dedicated distribution centers and cold storage. They employ ERP systems for matching supplier production with deliveries and enforce a stringent quality inspection program with 20 different checkpoints to ensure that quality and efficiency are maintained along the supply chain .
McDonald's ensures employee training and alignment with its global quality standards through Hamburger University, its flagship global center of training excellence. This institution focuses on consistent operational procedures, service, quality, and cleanliness, having trained over 80,000 managers and operators worldwide since 1961 .
McDonald's adapted to the Indian market by localizing its menu, with approximately 75% of the available products being Indianized to cater to local tastes. This includes offering a range of vegetarian options such as McVeggie™ and McAloo Tikki™ to align with the dietary preferences of a substantial portion of the Indian population .
