Chapter-1: 1.1 Overview of Fast Food Industries

VIVEK COLLEGE OF COMMERCE
CHAPTER-1
INTRODUCTION
1.1 OVERVIEW OF FAST FOOD INDUSTRIES
The food industry is on a high as Indians continue to have a feast. Fuelled by what can
be termed as a perfect ingredient for any industry - large disposable incomes - the food
sector has been witnessing a marked change in consumption patterns, especially in
terms of food. An increasing number of international fast food chains rushing to India
is because all of them see tremendous potential in for this type of business. The large
upwardly mobile population in the urban areas tend to eat out more often or business
or for leisure.
The various players operating in India are the well established Indian chains like
Nirula's, Haldiram's and multinational companies like McDonalds, Pizza hut, Domino's
pizza, etc.
In addition to these, apparently some of the best known international food chains are
looking at India. Among them are Great American Disaster, The Burger King, Mexican
food chain Tacogrill, Move-n-pick, etc. are some of them to name.
At present all these players are fighting for a small pie, as fast food is really not a big
habit with Indians, but they see a big potential.
The players are fighting on products, pricing, positioning and trying to convert their
first trials into regular purchase by providing delightful service quality. The focus is on
product quality and standardization on taste. Consistency is the key, as its
standardization in fast food as the consumer is short on time and wants to satisfy his
taste buds with a consistent taste experience.
Beyond this each player has its own strategy to expand consumer base.
 Some feel that pricing is not the deciding factor since fast food is not price
sensitive market because it is not a single diet of Indians.
 Some others are competing on positioning which is surprisingly varied, giving
the
small size of the market.
 For most, targeting children seems the right strategy.
 Advertising is popular.
CASE STUDY ON MCDONALDS PAGE 1

However, with competition hooting up most chains are increasing reach as well as
working on establishing a national presence.
The wind of change is blowing through the empire of fast food. The vision of endless
growth through new markets across the planet for fast food companies now looks
unsustainable when its time to adapt or die. As the fast food companies have expanded
around the world, they have had to adapt to local sensitivities.
There were disturbances in India when it was learned that McDonalds's were pre-
cooked in beef fat in the USA, because Hindus revere cows and cannot eat beef.
According to a market research company, Euromonitor International, amount of money
Indians spend in eating out has more than doubled in past decade, to about US$ 5 billion
a year and is expected to double again in about half that time.
1.2 TRENDS IN THE FAST FOOD INDUSTRY
The industry is estimated to grow at 9-12 per cent, on the basis of an estimated GDP
growth rate of 6-8 per cent, during the Tenth Five year plan period. Value addition of
food is expected to increase from the current 8 per cent to 35 per cent by the end of
2025. Fruit and vegetable processing, which is currently around 2 per cent of total
production will increase to 10 per cent by 2010 and to 25 per cent by 2025.
The popularity of food and agro products is not surprising when the sector is now
offering a growth of more than 150 per cent in sales. With such promise in the sector,
a number of foreign companies have joined the fray. While US brands such as
McDonald's, Pizza hut and Kentucky Fried Chicken have become household names,
more are on their way.
1.3 THE MARKET SCENARIO
India among top 10 market for weekly fast food consumption, an online survey has
found. Most of the countries are from the Asia-pacific region, with the US being the
exemption.
According to an A C Neilson study of 28 markets across the US, Europe and the Asia-
Pacific, carried out through the internet in interviews with more than 14000 consumers,
Asians are the world's greatest fast food fans.

1.4 MAJOR PLAYERS
In India the major players which constitute the Indian fast food industry includes Indian
as well as Multinational companies.
These are:
 Nirula's
Established in 1934, Nirula's today is a diversified group having a chain of elegant

Business hotels, Waiter service restaurants, Family style restaurants, Ice Cream
parlours, pastry shops and food processing plants in India.
The chain with over 60 outlets operating in 5 states successfully caters to the Indian
palate of over 50000 guests every day or over 70 years.
The restaurants serves a wide variety of multi-cuisine foods, both western and Indian
including pizzas, burgers, chana kulcha, saag-roti and much more!
Ice cream parlours offers an extensive range of exciting and innovative ice cream
flavors with one new flavor added every month
Nirula's pastry shops are a one-stop shop for bakery and confectionary items.
 Pizza hut
In 1996 Pizza hut came to India with a dine in restaurant in Bangalore that has special
vegetarian pizzas. In addition to traditional Italian topping, it incorporates Indian
favorites such as chicken tikkas, lamb korma, etc. In its list of innovative toppings,
along with pizzas the menu features appetizers like garlic bread and soups, fresh salads,
oven baked pastas and choice f/of ice-cream sundaes.
In 1997 pizza hut opened a restaurant in the capital's building bustling M-Block market
in Greater Kailash-I, unlike the existing pizza hut at shanti niketan which is delivery
counter for just pizzas, this is dine-in whise the entire menu is available.

 Domino's pizza
It was incorporated in 1995 as the master franchise o Domino's pizza international inc.,
of USA. the first Domino's pizza store in India opened in January 1996 at new Delhi.
Today it has grown into a countrywide network of over 104 outlets in 30 cities.
Ever since it was established, Domino's Pizza India has maintained its position of
market leadership with its constant product innovation and maintenance of stringent
service standards. It has established a reputation for being a home delivery specialist
capable of delivering pizzas within 30 minutes. It was the first one to start this facility
to customers.
Domino's constantly strives to develop products that suits the tastes of its customers.
Thus time and again Domino's has been innovating toppings suitable to taste buds of
the local populace and these have been very well accepted by the Indian market.
1.5 COMPANY PROFILE
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants,
serving around 68 million customers daily in 119 countries. Headquartered in the
United States, the company began in 1940 as a barbecue restaurant operated by Richard
and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand
using production line principles. Businessman Ray Kroc joined the company as a
franchise agent in 1955. He subsequently purchased the chain from the McDonald
brothers and oversaw its worldwide growth.
A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation

itself. The corporation's revenues come from the rent, royalties and fees paid by the
franchises, as well as sales in company-operated restaurants. McDonald's revenues
grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent
growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers,
cheeseburgers, chicken, frenchfries, breakfastitems, soft drinks, milkshakes and
desserts. In response to changing consumer tastes, the company has expanded its menu
to include salads, wraps, smoothies and fruit.

1.6 HISTORY
The business began in 1940, with a restaurant opened by brothers Richard and Maurice
McDonald at 1398 North E Street at West 14th Street in San Bernardino, California .
Their introduction of the "Speedee Service System" in 1948 furthered the principles of
the modern fast-food restaurant that the White hamburger chain had already put into
practice more than two decades earlier. The original mascot of McDonald's was a man
with a chef's hat on top of a hamburger shaped head whose name was "Speedee".
Speedee was eventually replaced with Ronald McDonald by 1967 when the company
first filed a U.S. trademark on a clown shaped man having puffed out costume legs.
McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961,
with the description "Drive-In Restaurant Services", which continues to be renewed
through the end of December 2009. In the same year, on September 13, 1961, the
company filed a logo trademark on an overlapping, double arched "M" symbol. The
overlapping double arched "M" symbol logo was temporarily disfavored by September
6, 1962, when a trademark was filed for a single arch, shaped over many of the early
McDonald's restaurants in the early years. Although the "Golden Arches" appeared in
various forms, the present form as a letter "M" did not appear until November 18, 1968,
when the company applied for a U.S. trademark. The present corporation dates its
founding to the opening of affranchised restaurant by Ray Kroc, in Des Plaines, Illinois,
on April 15, 1955, the ninth McDonald's restaurant overall. Kroc later purchased the
McDonald brothers' equity in the company and led its worldwide expansion, and the
company became listed on the public stock markets in 1965. Kroc was also noted for
aggressive business practices, compelling the McDonald brothers to leave the fast food
industry. The McDonald brothers and Kroc feuded over control of the business, as
documented in both Kroc's autobiography and in the McDonald brothers'
autobiography. The San Bernardino store was demolished in 1976 (or 1971, according
to Juan Pollo) and the site was sold to the Juan Pollo restaurant chain. It now serves as
headquarters for the Juan Pollo chain, as well as a McDonald's and Route 66 museum.
With the expansion of McDonald's into many international markets, the company has
become a symbol of globalization and the spread of the American way of life. Its
prominence has also made it a frequent topic of public debates about obesity, corporate
ethics and consumer responsibility.

1.7 KEY DATES
1948: Richard and Maurice McDonald open the first McDonald's restaurant in San
Bernardino, California.
1954: Ray Kroc gains the rights to set up McDonald's restaurants in most of the
country.
1955: Kroc opens his first McDonald's restaurant in Des Plaines, Illinois; he
incorporates his company as McDonald's Corporation.
1960: The slogan, "Look for the Golden Arches," is used in an advertising campaign.
1961: Kroc buys out the McDonald brothers for $2.7 million.
1963: Ronald McDonald makes his debut.
1965: McDonald's goes public.
1967: The company opens its first foreign restaurant in British Columbia, Canada.
1968: The Big Mac is added to the menu.
1973: Breakfast items begin to appear on the menu, with the debut of the Egg Mc
Muffin.
1974: The first Ronald McDonald House opens in Philadelphia.
1975: The first McDonald's drive-thru window appears.
1979: The children's Happy Meal makes its debut.
1983: Chicken Mc Nuggets are introduced.
1985: McDonald's becomes one of the 30 companies that make up the Dow Jones
Industrial Average.
1998: The company takes its first stake in another fast-food chain, buying a minority
interest in Colorado-based Chipotle Mexican Grill.
1999: Donatos Pizza Inc. is acquired.
2000: McDonald's buys the bankrupt Boston Market chain.

2002: Restructuring charges of $853 million result in the firm's first quarterly loss
since going public.
2003: McDonald's sells Donatos in order to refocus on its core hamburger business.
1.8 GLOBAL OPERATIONS
McDonald's has become emblematic of globalization, sometimes referred to as the

"McDonaldization" of society. The newspaper uses the "Big Mac Index": the
comparison of a Big Mac's cost in various world currencies can be used to informally
judge these currencies' purchasing power parity. Norway has the most expensive Big
Mac in the world as of July 2011, while the country with the least expensive Big Mac
is India (albeit for a Maharaja Mac—the next cheapest Big Mac is Hong Kong).
Thomas Friedman once said that no country with a McDonald's had gone to war with
another. However, the "Golden Arches Theory of Conflict Prevention" is not strictly
true. Exceptions are the 1989 United States invasion of Panama, NATO's bombing of
Serbia in 1999, the 2006 Lebanon War, and the 2008 South Ossetia war.
Some observers have suggested that the company should be given credit for increasing
the standard of service in markets that it enters. A group of anthropologists in a study
entitled Golden Arches East looked at the impact McDonald's had on East Asia, and
Hong Kong in particular. When it opened in Hong Kong in 1975, McDonald's was the
first restaurant to consistently offer clean restrooms, driving customers to demand the
same of other restaurants and institutions. McDonald's has taken to partnering up
with Sinopec, the second largest oil company in the People's Republic of China, as it
takes advantage of the country's growing use of personal vehicles by opening numerous
drive-thru restaurants. McDonald’s has opened a McDonald's restaurant and McCafé
on the underground premises of the French fine arts museum, the Louvre. The company
stated it will open vegetarian-only restaurants in India by mid-2013.
1.9 BUSINESS MODEL
 Franchise Model – Only 15% of the total number of restaurants are owned by the
Company. The remaining 85% is operated by franchises. The company follows a

comprehensive framework of training and monitoring of its franchises to ensure

that they adhere to the Quality, Service, Cleanliness and Value propositions
offered by the company to its customers.
 Product Consistency – By developing a sophisticated supplier networked
operation and distribution system, the company has been able to achieve consistent
product taste and quality across geographies.
 Act like a retailer and think like a brand – McDonald’s focuses not only on
delivering sales for the immediate present, but also protecting its long term brand
reputation.
1.10 MCDONALD’S IN INDIA
McDonald’s entered India in 1996. McDonald’s India has a joint venture with
Connaught Plaza Restaurants and Hard Castle Restaurants. Connaught Plaza
Restaurants manages operations in North India whereas Hard Castle Restaurants
operates restaurants in Western India. Apart from opening outlets in the major metros,
the company is now expanding to Tier 2 cities like Pune and Jaipur.
Challenges in Entering Indian Markets
 Regiocentricism: Re-engineering the menu - McDonald’s has continually

adapted to the customer’s tastes, value systems, lifestyle, language and perception.
Globally McDonald’s was known for its hamburgers, beef and pork burgers. Most
Indians are barred by religion not to consume beef or pork. To survive, the company
had to be responsive to the Indian sensitivities. So McDonald’s came up with
chicken, lamb and fish burgers to suite the Indian palate.
 The vegetarian customer – India has a huge population of vegetarians. To cater to

this customer segment, the company came up with a completely new line of
vegetarian items like McVeggie burger and McAlooTikki. The separation of
vegetarian and non-vegetarian sections is maintained throughout the various stages.

1.11 SEGMENTATION, TARGETING AND POSITIONING
McDonald’s uses demographic segmentation strategy with age as the parameter. The
main target segments are children, youth and the young urban family.
% of kids who influence what FMCG brand their

family buys
80% 71%
70% 59%
60% 52%
50%
40%
30%
20%
10%
0%
Biscuits Burgers & Pizzas Fruit Juices
As shown above, kids reign supreme in FMCG purchase related to food products. So
to attract children McDonalds has Happy Meal with which toys ranging from hot
wheels to various Walt Disney characters are given (the latest in this range is the toys
of the movie Madagascar). For this, they have a tie-up with Walt Disney. At several
outlets, it also provides special facilities like ‘Play Place’ where children can play
arcade games, air hockey, etc. This strategy is aimed at making McDonald’s a fun place
to eat. This also helps McDonald’s to attract the young urban families wanting to spend
some quality time while their children have fun at the outlet. To target the teenagers,
McDonald’s has priced several products aggressively, keeping in mind the price
sensitivity of this target customer. In addition, facilities like Wi-Fi are also provided to
attract students to the outlets like the one at Vile Parle in Mumbai.
“Mc Donald’s mein hai kuch baat” projects McDonald’s as a place for the whole
family to enjoy. When McDonald’s entered in India it was mainly perceived as
targeting the urban upper class people. Today it positions itself as an affordable place
to eat without compromising on the quality of food, service and hygiene. The outlet
ambience and mild background music highlight the comfort that McDonald’s promises
in slogans like “You deserve a Break Today” & “Feed your inner child”. This

commitment of quality of food and service in a clean, hygienic and relaxing atmosphere
has ensured that McDonald’s maintains a positive relationship with the customers.
1.12 CUSTOMER PERCEPTION AND CUSTOMER EXPECTATION
Customer perception is a key factor affecting a product’s success. Many potentially

revolutionary products have failed simply because of their inability to build a healthy
perception about themselves in the customers’ minds. McDonalds being an
internationally renowned brand brings with it certain expectations for the customers.
Target Segment What is McDonald’s for me?
A Family with children A treat to children, a fun place to be for the children.
Urban customer on the Great taste, quick service without affecting the work
move schedule
Teenager Hangout with friends, but keep it affordable.
Customers expect it to be an ambient, hygienic and a little sophisticated brand that

respects their values. The customer’s expect the brand to enhance their self-image.
Customer responses obtained at the Vile Parle, Mumbai outlet confirmed the fact that
they connect strongly with the brand. However, fulfilling some of the customer
expectations like a broader product variety provide McDonald’s a great scope for
improvement.
REVIEW OF LITERATURE
McDonald’s, the long-time leader in the fast-food wars, faced a crossroads in the early
1990s. Domestically, sales and revenues were flattening as competitors encroached on
its domain. In addition to its traditional rivals—Burger King, Wendy’s, and Taco Bell—
the firm encountered new challenges. Sonic and Rally’s competed using a back-to
basics approach of quickly serving up burgers, just burgers, for time-pressed
consumers. On the higher end, Olive Garden and Chili’s had become potent competitors

in the quick service field, taking dollars away from McDonald’s, which was firmly
entrenched in the fast-food arena and hadn’t done anything with its dinner menus to
accommodate families looking for a more upscale dining experience. While these
competitive wars were being fought, McDonald’s was gathering flak from
environmentalists who decried all the litter and solid waste its restaurants generated
each day. To counter some of the criticism, McDonald’s partnered with the
Environmental Defense Fund (EDF) to explore new ways to make its operations more
friendly to the environment.
Facts
McDonald’s roots go back to the early 1940s when two brothers opened a burger
restaurant that relied on standardized preparation to maintain quality—the Speedee
Service System. So impressed was Ray Kroc with the brothers’ approach that he
became their national franchise agent, relying on the company’s proven operating
system to maintain quality and consistency.
Over the next few decades, McDonald’s used controlled experimentation to maintain
the McDonald’s experience, all the while expanding the menu to appeal to a broader
range of consumers. For example, in June 1976, McDonald’s introduced a breakfast
menu as a way to
more fully utilize the physical plant. In 1980, the company rolled out Chicken
McNuggets. Despite these innovations, McDonald’s tremendous growth could only
continue for so long. Its average annual return on equity was 25.2% between 1965 and
1991. But the company found its sales per unit slowing between 1990 and 1991. In
addition, McDonald’s share of the quick service market fell from 18.7% in 1985 to
16.6% in 1991. Plus growth in the quick service market was projected to only keep pace
with inflation in the 1990s. McDonald’s faced heightening competition on several
fronts. First, its traditional rivals—Burger King, Wendy’s,
and Taco Bell—were eating into its margins through promotions and value pricing
strategies. Taking a leaf from McDonald’s own playbook, Sonic and Rally’s were using
a very limited menu approach to attract time strapped consumers. Finally, Chili’s and
Olive Garden were appealing to diners looking for something a little more enticing that
the familiar Golden Arches for their families.

In the late 1980s, McDonald’s began recognizing the importance of maintaining an

ecologically correct posture with the public, which was becoming more concerned
about the environment. For example, in 1989, 53% of respondents in one survey
revealed that they had not bought a product because they didn’t know what effect the
packaging would have on the environment. Closer to
home, a 1990 study showed that each McDonald’s generated 238 pounds of on-premise
solid waste per day. It’s no surprise, then, that McDonald’s sought a way to reduce its
solid waste while providing a more environmentally acceptable face to the public.
Beginning in 1989, it partnered with the Environmental Defense Fund, a leading
organization devoted to protecting the
environment, to seek ways to ease the company’s environmental burden on the

landscape. Together, EDF and McDonald’s considered its impact on a wide range of
stakeholders—customers, suppliers, franchisees, and the environment. The company
gave its franchisees much autonomy in finding ways to eliminate environmental blight.
The company’s hope was that from these divergent approaches, it stood a greater
chance of finding solutions with broad applicability than if it had tried to pursue a one-
size-fits-all approach from the outset. Some of the environmentally inspired solutions
that came out of the collaboration with EDF were the: Introduction of brown paper bags
with a considerable percentage of recycled content. Solicitation of suppliers to produce
corrugated boxes with more recycled content, which had the twin effect of reducing
solid waste and building a market for recycled products. Abandonment of polystyrene
clamshell containers to hold sandwiches in favor of new paper-based wraps that
combined tissue, polyethylene, and paper to keep food warm and prevent leakage.
RESEARCH METHODOLOGY
INTRODUCTION TO RESEARCH PROBLEM
MOTIVE: - The basic motive of preparing this report is to study the consumer
preference towards McDonald’s in Mumbai and to know about the Buying Behavior of
consumers for McDonald’s.

OBJECTIVES: - The objective of the report is to study the consumer preference

towards McDonald’s in Mumbai and also to analyze the buying behavior of Burgers by
the people living in Mumbai
SCOPE: - This report to some extend will tell us about the success of the McDonald’s
in Mumbai and also about the various other fast food outlets like KFC, Dominos, Pizza
Hut, etc in Mumbai. This report will also help me to know more about the market
strategies and selling modes followed by McDonald’s in Mumbai and various kinds of
recommendations and suggestions.
METHODOLOGY: - I have got 50 questionnaire filled in by the localities and

customer outside the McDonald’s regardless of caste, creed, nationality in Mumbai.
These questionnaires will account for my primary data where as the secondary data has
been picked up from the internet, books, articles and journals.
OBJECTIVES
 Study and analyze marketing strategies of McDonald’s in Mumbai.

 Studying the Marketing Mix of the company.
 Performing the SWOT analysis of the company.
DATA COLLECTION
Secondary data: -
Already existing data is called secondary data. I collected them by following method
 Internet.
 Books
 Articles
CHAPTER-2
ANALYSIS - I
McDonalds Marketing Mix (7 P’s)

After segmenting the market, finding the target segment and positioning itself, each
companyneeds to come up with an offer. The 5 P’s used by McDonalds are:
1. Product
2. Place
3. Price
4. Promotion
5. People
6. Physical Evidence
7. Process
2.1 PRODUCT:

How should the company design, manufacture the product so that it enhances the
customer experience?
Product is the physical product or service offered to the consumer. Product includes
certain aspects such as packaging, guarantee, looks etc. This includes both the tangible
and the non-tangible aspects of the product and service. McDonalds has intentionally
kept its product depth and product width limited. McDonalds studied the behaviour
of the Indian customer and provided a totally different menu as compared to its
International offering. It dropped ham, beef and mutton burgers from the menu. India
is the only country where McDonalds serve vegetarian menu. Even the sauces and
cheese used in India are 100% vegetarian. McDonalds continuously innovates its
products according to the changing preferences and tastes of its customers. The recent
example is the introduction of the Chicken Maharaja Mac. McDonalds bring with it
a globally reputed brand, world class food quality and excellent customer specific
product features.
2.2 PLACE:

Where should be the product be available and the role of distributionchannels?
The place mainly consists of the distribution channels. It is important so that the product
isavailable to the customer at theright place, at theright timeand in theright quantity.
Nearly 50% of U.S.A is within a 3 minute drive from a McDonald’s outlet.
There is a certain degree of fun and happiness that a customer feels each time he dines
at McDonalds. There are certain value propositions that McDonalds offer to its
customers based on their needs. McDonalds offers hygienic environment, good
ambience and great service. Now McDonalds have also started giving internet
facility at their centres and they have been playing music through radio instead of the
normal music. There are certain dedicated areas for children where they can play
while their parents can have some quality time together.
2.3 PRICE:
What should be the pricing strategy?
Pricing includes the list price, the discount functions available, the financing optionsa
vailable etc. It should also take into the consideration the probable reaction from the
competitor to the pricing strategy. This is the most important part of the marketing mix
as this is the only part which generates revenue. All the other three are expenses
incurred. The price must take into consideration the appropriate demand-supply
equation. McDonald’s came up with a very catchy punch line
“Aap ke zamane mein ,baap ke zamaneke daam”. This was to attract the middle and
lower class consumers and the effect can clearly be seen in the consumer base
McDonalds has now. McDonalds has certain value pricing and bundling strategies
such as happy meal , combomeal , family meal etc to increase overall sales volumes.
2.4 PROMOTION:

What is the suitable strategy and channels for promotion of the product?
The various promotion channels being used by McDonald’s to effectively communicate

the product information are given above. A clear understanding of the customer value
helps decide whether the cost of promotion is worth spending. There are three
main objectives of advertising for McDonald’s are to make people aware of an item,
feel positive about it and remember it. The right message has to be communicated to
the right audience through the right media. McDonald’s does its promotion through
television, hoardings and bus shelters. They use print ads and the television
programmes are also an important marketing medium for promotion. Some of the most
famous marketing campaigns of McDonald’s are:
•“You Deserve a break today, so get up and get away- To McDonald’s”
•“Aap ke zamane mein ,baap ke zamane ke daam”.
•“Food, Folks, and Fun”
•“I’m loving it”.
2.5 PEOPLE:

How to converge the benefits of internal and external marketing?
McDonald’s understands the value of both its employees and its customers. It
understands the fact that a happy employee can serve ell and result in a happy customer.
McDonald continuously does Internal Marketing.
This is important as it must precede external marketing. This includes hiring, training
and motivating able employees. This way they serve customers well and the final result
is a happy customer.
2.6 PHYSICAL EVIDENCE:
The physical evidence appearance affects not onlythe impression outsiders have of a
business but allthe way that business functions.
McDonalds focuses on clean and hygienic interiors of is outlets and at the same time
the interiors are attractive and the fast food joint maintains a proper decorum at its
joints.
Hence due importance is to be given to :
 Staff members.
 Location & appearance.
 Buildings Maintence.
2.7 PROCESS

The food manufacturing process at Mc Donalds is completely transparent i.e. the whole
process is visible to the customers. In fact, the fast food joint allows its customers to
view and judge the hygienic standards at Mc Donalds by allowing them to enter the
area where the process takes place. The customers are invited to check the ingredients
used in food.
Hence, McDonald’s follows :
 Food manufacturing transparent to customers.
 Training to the licensees.
 Invented the most efficient cooking equipment.
 New methods of food packaging anddistribution.
McDonald’s in India followed the same tradition.
2.8 SWOT ANALYSIS

SWOT analysis is a simple framework for generating strategic alternatives from a

situation analysis. It is applicable to either the corporate level or the business unit level
and frequently appears in marketing plans. Such an analysis of the strategic
environment is referred to as a SWOT analysis. A scan of the internal and external
environment is an important part of the strategic planning process. Environmental
factors internal to the firm usually can be classified as strengths or weaknesses, and
those external to the firm can be classified as opportunities or threats. The SWOT
analysis provides information that is helpful in matching the firm's resources and
capabilities to the competitive environment in which it operates.
STRENGTH
 Strong brand name, image and reputation.

 Large market share.
 Strong global presence.
 Specialized training for managers known as the Hamburger University.
 McDonalds Plan to win focuses on people, products, place, price and promotion.
 Strong financial performance and position.
 Introduction of new products.
 Customer focus (centric).
 Strong performance in the global market place
WEAKNESS
 Large market share.

 Strong supply chain.
 Rigorous food safety standards.
 Decentralized yet connected system
 Ignoring breakfast from the menu
OPPORTUNITY
 Expansion of other cashless payment systems.

 Well being and ethical image improvement.

 Expansion of the children market (other business –market penetration)
 Setting up vegetarian menus or outlets to expand the market
 Growing health trends among consumers
 Joint ventures with retailers (e.g. supermarkets).
 Consolidation of retailers likely, so better locations for franchisees.
 International expansion into emerging markets of China and India.
 Diversification and acquisition of other quick-service restaurants.
 Growth of the fast-food industry.
 Worldwide deregulation.
 Low cost menu that will attract the customers.
THREATS
 The relationship between corporate level McDonald's and its franchise dealers.
 Anti-American sentiments.
 Global recession and fluctuating foreign currencies.
 Intense Competitions
 Growth of health conscious eaters
 Outbreak of diseases (mad cow, H5N1, bird flu, SARS)
 Recent hygiene complaints affect sales
CHAPTER - 3

ANALYSIS - II
Survey Questionnaire
Q1) Gender
GENDER
Male
40%
Female
60%
Q2) Age
AGE
10%
20% Below 18
18 to 22
23 to 27
34%
28 and above
36%
Q3) Occupation

OCCUPATION
8%
Student
6%
24% Executive
Public sector worke
14% Clerical
6%
Secretarial
Manager
14% 8% Self-employed
Housewife
10%
10% Others
Q4) Do you prefer to have meal form Fast Food restaurant?
Prefer to have meal from Fast Food

restaurant
32%
YES
NO
68%
Q5) Which fast food restaurant(s) do you visit most frequently?

Prefered Fast Food Restaurant
22%
MCDONALD’S
36%
PIZZA HUT
KFC
22% DOMINOS
20%
Q6) What is the first thing that strikes your mind about McDonald’s?
First thing that strikes your mind about

McDonald’s
BURGER
18%
26%
ADVERTISING
SERVICES
18%
VALUE OF
MONEY
16%
FUN
22%
Q7) Is the product line in McDonald’s adequate?

Is the product line adequate
30% YES
36%
NO
AVERAGE
34%
Q8) Which is your favorite product at McDonald’s?
Favorite product at McDonald’s
MAHARAJ MAC
10%
18%
8% MC CHICKEN BURGER
MC VEGGIE BURGER
12% 14%
FRENCH FRIES
MC CURRY PAN
12%
FILET-O-FISH
26%
OTHERS
Q9) Which type of McDonald’s promotional advertising catch your eye?

Promotional advertising catch your eye
14% 14% INTERNET
NEWSPAPERS
12%
16% BILLBOARDS
POSTERS
MAGAZINES
26% 18%
TV
Q10) What is the main problem you faced at McDonald’s?
Problem faced at McDonald’s
20% LONG QUEUES

32%
RUDE BEHAVIOUR OF
EMPLOYEES
CONGESTION
16%
OTHER
14%
18% NO PROBLEM

Q11 ) For McDonald’s product’s price, is it reasonable? If 10 is perfect, your

score is
Product’s price is it reasonable
2%
4% 1 2
18% 5%
7%
3 4
9%
5 6
16%
11% 7 8
15%
13% 9 10
Q12) How often do you visit McDonald’s outlet?
Visit to McDonald’s outlet
WEEKLY
24%
MONTHLY
52%
OCCASIONALLY
24%

Q13) Which area do you think needs the most improvement?
Area needs most improvement
10% 10% DELIVERY TIME
8% ENVIRONMENT
20% PRODUCT VARIETY
PRICES
OFFERS AND
30%
DISCOUNTS
OTHERS
22%
Q14) What factors do you consider important when visiting McDonald's?
Factors important when visiting McDonald's
Product assortment
10%
18% Price
8%
Food quality
Discounts / coupons
12%
16%
Nutrition
Waiting time
16%
20% Distance to
McDonald's

Q15) Thinking about your most recent visit to McDonald's, to what level of
satisfaction do you rank that visit?
Level of satisfaction on recent visit to

McDonald's
4%
6% Very poor
Poor
40%
22%
Good
Very good
Excellent
28%

CHAPTER-4
SUMMARY, RECOMMENDATIONS & CONCLUSION
SUMMARY
 On the basis of gender male (60%) prefer fast food than female (40%).
 In basis of age majority is at the age of 18-22 (36%) while others are as Below 18
(20%), 23-27 (34%), 28 and above (10%).
 Based on occupation here the majority is students (24%) then Manager (14%), Self-
employed (14%), Secretarial and Clerical (10%), Public Sector workers and others
(8%) rest Housewife and Executive (6%).
 Almost 68% of people prefer to have food form fast food restaurants.
 MC Donald’s is preferred by 36 % of people while pizza hut (20%), kfc (22%) and
dominos (22%).
 First thing that strikes mind about MC Donald’s is burger (26%) advertising (16%)
services (22%) value of money (18%) and fun (18%).
 The product line of MC Donald’s should be improved since most of them
commented as average (36%), no (34%) and yes (30%).
 Majority of people's favourite product is French Fries (26%), Maharaj Mac (18%),
mc chicken Burger(14%), mc curry pan and mc veggie burger (12%) filet-o-fish
(8%) and others (10%).
 Posters attract most of customer’s upto (26%) billboards (18%), TV and internet
(14%), news papers (16%) and magazines (12%).
 There is no major problem faced by customers upto (32%) some of the problems
are long queues (20%) rude behaviour of employees (16%) congestion (18%) and
other (14%).
 Based on pricing strategy of MC Donald’s upto (18%) customer gave a score of 10,
(16%) for 9, (15%) for 8, (13%) for 7, (11%) for 6.
 Customer visit occasionally upto (52%), weekly (24%) and monthly (24%).
 MC Donald’s needs to improve the product variety then prices, offers and disc outs,
delivery time and environment.

 While visiting MC Donald’s (20%) people consider for food quality, (18%) for
product assortment, (16%) for discounts and nutrition, (10%) for distance and (8%)
for waiting time.
 Ranking as per the last visit to MC Donald's (40%) customer voted for excellent,
(28%) for very good, (22%) for good, (6%) for poor and (4%) for very poor.
RECOMMENDATIONS
 Maintain consistency in the taste and quality of products
 Include more items in its product line. (Variety)
 Include more veg. options
 More promotional and advertising measures to increase its sales or to increase
its market share.
 Recognize the small outlets and give more discounts
 Growing health trends among consumers
 They should focus more on their promotional strategies like advertising etc.

CONCLUSION
McDonald’s is one of the largest fast food companies in the world. They continue their
path for success by keeping their consumers in mind regarding their product selection
as well as their prices. They encourage their employees to do a good job, usually
promote from within, and offers several scholarships to encourage education. Though
McDonald’s is a centralized, “wait and see” company they find ways to use
technological products that will increase their productivity, service, and sales,
everywhere from using the Nintendo DS to train staff to suing Mew POS touch screen
registers. McDonald’s will certainly be around for plenty more years to come.
McDonald’s has been successful in operating within the food service industry through
efficient strategies and quality standards which enables them to gain competitive
advantage. As evidenced by its international market growth, McDonald’s has already
been efficient in gaining entry even in the most challenging markets like Britain.
Through its strong sense of quality service and customer satisfaction, McDonald’s was
able to offer its products to the Britain market. Products were modified to suit the British
taste and preferences; affordable prices were implemented; effective promotions and
offers were done.
These are some of the strategies involved in the company’s business strategy which
allowed McDonald’s to gain the Britain support. Despite these successes, the company
should take into consideration the growing level of competitiveness in the food service
industry.
In India, several foreign fast food chains offering similar products are also being
supported by the India consumers. Constant strategic change is then necessary to ensure
that the company would sustain their competitive advantage.
In conclusion, McDonald’s has been successful because of the value the company gives
for its customers. Hence, despite the controversial beginning of McDonald’s in India,
the company managed to adapt to its people’s cultural needs. Indeed, McDonald’s is a
learning organization, one that is willing to learn and open to change.

BIBLIOGRAPHY
WEBSITES:
 http://books.google.co.in
 http://en.wikipedia.org
 http://www.mcdonalds.ca
 http://ezinearticles.com
BOOKS:
 Kotler, Phillip and Keller, lane Kevin (2008) Marketing Management, 12th
Edition. Prentice hall.

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VIVEK COLLEGE OF COMMERCE

1.1 OVERVIEW OF FAST FOOD INDUSTRIES

CASE STUDY ON MCDONALDS PAGE 1

1.2 TRENDS IN THE FAST FOOD INDUSTRY

1.3 THE MARKET SCENARIO

CASE STUDY ON MCDONALDS PAGE 2

1.4 MAJOR PLAYERS

Established in 1934, Nirula's today is a diversified group having a chain of elegant

CASE STUDY ON MCDONALDS PAGE 3

1.5 COMPANY PROFILE

A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation

CASE STUDY ON MCDONALDS PAGE 4

CASE STUDY ON MCDONALDS PAGE 5

1.7 KEY DATES

1963: Ronald McDonald makes his debut.

1965: McDonald's goes public.

1968: The Big Mac is added to the menu.

1974: The first Ronald McDonald House opens in Philadelphia.

1975: The first McDonald's drive-thru window appears.

1979: The children's Happy Meal makes its debut.

1983: Chicken Mc Nuggets are introduced.

1999: Donatos Pizza Inc. is acquired.

2000: McDonald's buys the bankrupt Boston Market chain.

CASE STUDY ON MCDONALDS PAGE 6

1.8 GLOBAL OPERATIONS

McDonald's has become emblematic of globalization, sometimes referred to as the

1.9 BUSINESS MODEL

CASE STUDY ON MCDONALDS PAGE 7

comprehensive framework of training and monitoring of its franchises to ensure

1.10 MCDONALD’S IN INDIA

Challenges in Entering Indian Markets

 Regiocentricism: Re-engineering the menu - McDonald’s has continually

 The vegetarian customer – India has a huge population of vegetarians. To cater to

CASE STUDY ON MCDONALDS PAGE 8

1.11 SEGMENTATION, TARGETING AND POSITIONING

% of kids who influence what FMCG brand their

CASE STUDY ON MCDONALDS PAGE 9

1.12 CUSTOMER PERCEPTION AND CUSTOMER EXPECTATION

Customer perception is a key factor affecting a product’s success. Many potentially

Target Segment What is McDonald’s for me?

Teenager Hangout with friends, but keep it affordable.

Customers expect it to be an ambient, hygienic and a little sophisticated brand that

CASE STUDY ON MCDONALDS PAGE 10

CASE STUDY ON MCDONALDS PAGE 11

In the late 1980s, McDonald’s began recognizing the importance of maintaining an

environment, to seek ways to ease the company’s environmental burden on the

INTRODUCTION TO RESEARCH PROBLEM

CASE STUDY ON MCDONALDS PAGE 12

OBJECTIVES: - The objective of the report is to study the consumer preference

METHODOLOGY: - I have got 50 questionnaire filled in by the localities and

 Study and analyze marketing strategies of McDonald’s in Mumbai.

McDonalds Marketing Mix (7 P’s)

CASE STUDY ON MCDONALDS PAGE 13

CASE STUDY ON MCDONALDS PAGE 14

CASE STUDY ON MCDONALDS PAGE 15

Where should be the product be available and the role of distributionchannels?

Nearly 50% of U.S.A is within a 3 minute drive from a McDonald’s outlet.

What should be the pricing strategy?