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EXPANSION of TACO BELL(US Based Mexican Fast Food Chain) in the INDIAN MARKET

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EXPANSION of TACO BELL(US Based Mexican Fast Food Chain) in the INDIAN MARKET MASTER OF INTERNATIONAL BUSINESS, DELHI SCHOOL OF ECONOMICS EXPANSION OF TACO BELL(US based Mexican fast food chain) IN THE INDIAN MARKET POOJA DADLANI Roll no.-48 8/4/2013 1 | P a g e Undertaking I hereby give a formal undertaking, in writing that the research design that I have prepared here, is in pursuance of an academic study being given to us by our faculty. It is solely for academic purpose to complete the course. I also undertake to certify, to the best of my knowledge, the genuineness of the sources mentioned in the report design. Pooja Dadlani Roll no.-48 2 | P a g e Acknowledgements The following research project “EXPANSION OF TACO BELL(US based Mexican fast food chain) IN THE INDIAN MARKET” was successfully completed under the guidance of Prof. S R Khanna, Lecturer, Department of Commerce, Delhi University. I also thank my group members & friends for their valuable suggestions, comments and criti- cism. They have been welcoming enough to provide me with all the required help that has ena- bled me to make this project a success. POOJA DADLANI Roll no. 48 MIB 2012-2014 3 | P a g e EXECUTIVE SUMMARY The research design proposed here aims to devise a market research plan for Taco Bell (a US based fast food chain) to enter Indian fast food industry. This research design includes the esti- mated cost analysis of primary and secondary research to be conducted by the company before entering into Indian market along with that country analysis and the potential in Indian food in- dustry has been theoretically analyzed. Taco Bell has opened two outlets in Bangalore in South India. The research here aims at the strategy that should be adopted by this fast food company to penetrate into the Indian market to a large extent. The foray of multinational fast food retailers into India has impacted the taste buds of Indian consumers significantly. Instant food is scoring over traditional food due to influence of Western countries, and rise in income & subsequent standard of living, convenience, etc. As a result, fast food menus are gaining wider acceptance from the Indian consumer. The Indian fast Food Indus- try has witnessed high growth strides in the past years, with increasing disposable income; expo- sure to a number of cuisines; and consumers‘ willingness to experiment a mix of both Western and local menu. It has not only provided convenience to people who shuttle between home and work for a bigger part of the day but also eliminated the requirement of conventional cutlery. This industry at the moment thrives on international appeal endorsed by niche chains. The devel- opment of nutritious and healthier replacements for the traditional servings at fast food restau- rants has transformed into mass promotion of portable foods. As per a new research report titled ‗Indian Fast Food Market Analysis‘, currently the Indian fast food industry stands at a massive size of ` 47 billion, driven by a growing number of working professionals and increasing west- ernization. Apart from this, busy life schedule, standardized food, and less time-consuming pro- cesses are also fuelling the demand from domestic consumers in the industry. As demand for all types of fast food items are consistently on the rise, pizza, burger, and French fries have become the all time favorite among young Indians, more so with some of the well-known burger and piz- za restaurants like McDonald‘s, Domino‘s, KFC, Pizza Hut, Nirula‘s etc, operating in INDIA. Being a subsidiary of YUM Brands that has well developed fast food joints like KFC and PIZZA HUT in India, Taco Bell has good potential to be successful in the Indian food industry. Using the expertise and experience that these brands have, Taco Bell should be able to use resources well and expand in the right markets. 4 | P a g e TABLE OF CONTENTS TOPIC PAGE NO 1. Executive summary 4 2. Objectives of the Study 6 3. Research methodology 7 4. Financial and time budget 9 5. Sample questionnaire 11 6. Analysis of target country- India 14 7. Entry strategies for foreign investors 17 8. Fast food industry 21 9. Indian food service industry 24 10. Fast food industry in India 26 11. Taco Bell- History and background 33 12. SWOT analysis 36 13.Selection of taco bell to expand in the Indian market 40 14. Porter‘s five forces 44 15. Marketing mix 45 16. Taco bell in the Indian market 49 17. Results 50 18. References 51 LIST OF GRAPHS Graph no. Page no. 1. India imports 16 2. India food service industry market size 24 3. India food service industry segments 25 4. India food service industry organised sector 25 5. Growth of Qsr‘s in India 26 6. Growth of urban population 29 7. Comparison of fast food chains worldwide 42 8. Yum International 43 5 | P a g e OBJECTIVES To devise a market research plan for expansion of Taco Bell in Indian Food market that has two outlets operating in Bangalore along with cost estimates of primary and sec- ondary research. To study marketing adopted by Taco Bell in other countries. To analyse the current Food service industry in India To find the factors those have been drivers for the growth of this industry. Make suitable suggestions and recommendation for Taco Bell before expanding into Indian market. METHODOLOGY Conduct a survey targeting urban population going to Quick Service Restaurants, online and in person asking their responses to analyse their fast food consumption pattern. Interviews with Resource Persons actively involved in the operations of other fast food chains in India. Collect and analyse secondary data collected through internet, etc. SAMPLING DESIGN The Population of the study will consist of: People visiting Quick service restaurants often, mainly urban population Resource Persons actively involved in the operations of other fast food chains in India. 6 | P a g e RESEARCH METHODLOGY The system of collecting data for research projects is known as research methodology. The data may be collected for either theoretical or practical research for example management research may be strategically conceptualized along with operational planning methods and change man- agement. Some important factors in research methodology include validity of research data, Ethics and the reliability of measures most of your work is finished by the time you finish the analysis of your data. Market research provides relevant data to help solve marketing challenges that a business will most likely face--an integral part of the business planning process. In fact, strategies such as market segmentation (identifying specific groups within a market) and product differentiation (creating an identity for a product or service that separates it from those of the competitors) are impossible to develop without market research. Market research involved here in the project falls into two categories: (1) Secondary Research (2) Primary Research SECONDARY RESEARCH Secondary research uses outside information assembled by government agencies, industry and trade associations, labour unions, media sources, chambers of commerce, and so on. It's usually published in pamphlets, newsletters, trade publications, magazines, and newspapers. Secondary sources include Public sources, Commercial sources and Educational institutions. This portion of research can be completed by keeping these issues in mind: Growth trends in Indian food service today. Increase in the size of my target market Demographic profile of my target customer Factors that influence the customer‘s choice to eat at a certain QSR New eating trends Competition from other players in Indian Fast food market 7 | P a g e Collect and analyse secondary data collected through internet, etc about Taco bell and the In- dian fast food industry. PRIMARY RESEARCH Primary research involves collecting original data about the preferences, buying habits, opinions and attitudes of current or prospective customers. These Include: Surveys Questionnaires Direct mail, telephone, or personal interviews. Feedback forms Conduct a survey of urban population going to Fast Food Restaurants (online and in per- son) asking their fast food consumption pattern. Interviews with Resource Persons involved in the operations of other fast food chains in India. After analyzing the secondary data obtained, Primary data collected and how much money we are willing to spend will determine which techniques we should choose for our research. 8 | P a g e FINANCIAL AND TIME BUDGET Cost of desk Work: Collection of Online Questionnaires and feedback forms through emails and social media net- working sites Cost of conducting email responses from 50 consumers per location - Rs. 5,000(approx) (Cost of Opening an account on an online forum for collecting responses, generating the email leads of the Target Consumers) Cost of data collection from fast food outlets: Collection of responses and feedback forms from the resource persons at various QSRs in differ- ent locations Cost of making phone calls and visiting various resource persons involved in fast food joints‘ op- erations: Rs. 10,000(approx) Cost of fieldwork A market research of consumers in the age group of 10-70 will be conducted in the following cities –Delhi, Hyderabad, Kolkata, Chennai. 25 retailers in the four cities each would be covered for the research work- Delhi, Hyderabad, Kolkata, Chennai Cost estimates to conduct this survey by sending personnel from Delhi is as follows: Travel Charges: Flight Ticket (To other 3 cities) – Rs 4,000 Approx. per person per flight Accommodation: Hotel Room (single) – Rs. 2000/Night Food: Rs.1000 per day per member Miscellaneous Roughly Rs 500 per day per member Conducting the research would take 12 days considering the team consists of 4 members. Thus, investment required= (4000*2*4 +3500*4*12) =Rs.
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