STUDY ON MARKETING STRATEGIES ADOPTED BY “MC DONALD’S” SUBMITTED BY: ACKNOWLEDGEMENT I am sincerely thankful to all those people who have given me any kind of assistance in the making of this project report. I express my gratitude to Mr. ABC. I would hereby, make most of the opportunity by expressing my sincerest thanks to all my faculties whose teachings gave me conceptual understanding and clarity of comprehension, which ultimately made my job more easy. Credit also goes to all my friends whose encouragement kept me in good stead. I am also thankful to authority of McDonald‟s for providing me the information. Last but not the least I would like to acknowledge my gratitude to the respondents without whom this survey would have been incomplete. (RAVI) 2 PROJECT OUTLINE FOR THESIS A study on “Marketing strategies adopted by Title McDonald‟s” (with particular reference to franchisee restaurant,) Name of the Company McDonald‟s Chairman Mr. JACK M.GREENBERG HARDCASTLE RESTAURANTS PVT. LTD, Address ASHIANA, 69-C, BHULABHAI DESAI ROAD, MUMBAI-400026. Specific Areas of Study MARKETING & INTERNATIONAL BUSINESS STRATEGIES. RESEARCH METHODOLOGY (a) Primary Data Personal Interview and Structured Questionnaires Annual Reports & Brochures, Business Magazines & (b) Secondary Data articles from internet 3 INDEX Sl. No. Topic Page No. 1 Synopsis 1-2 2 INTRODUCTION 3-4 “The Indian Fast Food Market - An Overview” 3 INTRODUCTION TO PROBLEM 5-6 4 Objectives & scope of the study 7-8 Research Objective Scope Of Study 5 Research methodology 9 Research Design Sample Design Data Collection 6 THEORETICAL CONCEPT 10-18 Industrialization Of Services Business Model Gap Analysis Gap Analysis And New Products Usage Gap Product Gap Competitive Gap Market Gap Analysis 4 7 DATA ANALYSIS & INTERPRETATION 19-82 Mcdonald's Corporation Mcdonald's Worldwide Mcdonald's India Marketing Strategy Use Of Sub-Strategies At Mcdonald's Job Structure Training And Education Mcdonalds India Supply Chain Corporate Social Responsibility Present Position Of Fast Food Industry Major Players In This Field Domino‟s Diversity Mission Statement A Brand With Bite Economical Porters Five Forces Model With Reference To Fast Food Joints Marketing Scenario At Mcdonald‟s Segmentation Customer Relationship Management International Business Strategies of Mcdonald‟s Policy And Functional Strategies Financial Analysis/Ratio Analysis Cost Analysis Environmental Analysis Of “Mcdonald‟s” External Environmental Analysis Data Analysis, Findings And Observations From 8 83-99 Questionnaire 9 Conclusions 100 9 Recommendations 101-105 10 Limitations 106 5 11 Bibliography 107 12 Annexure 108-111 SYNOPSIS Over the past few years the Indian economy has undergone drastic changes- changes that have had the market flooded with multinationals and a variety of products. There has been a sudden upsurge in the Indian industry and exponential growth in specific industries. Today‟s companies work in a war zone of rapidly changing competitors, technological advances, new laws, managed trade policies and diminishing customer loyalty. In today‟s world of cutthroat fierce competition, customer satisfaction is very essential to not only exist but also to excel in the market. Today‟s market is enormously more complex. Henceforth, to survive in the market, the company not only needs to maximize its profit but also needs to satisfy its customers and should try to build upon from there. Market research study has been conducted in order to bring out the picture of service quality that exists in this industry and the difference in service quality that exists in the market. Like what are the customer‟s preferences about the hospitality provided by the fast food industry. After this a comprehensive and comparative analysis has been made and conclusion has been made keeping in mind the detailed analysis of the findings, which has been collected through the market research. 7 INTRODUCTION “The Indian Fast Food Market - An Overview” Up to the year 1995, Indian fast food market was predominantly dominated by the traditional dhabas, potential restaurants in the customer‟s locality and some restaurants in a five star hotels. Having fast food i.e., burgers, pizzas etc., was considered to be an option for eating out. It was not at all synonymous with the American concept of fast food as a quick takeaway bite or a substitute for lunch. Apart from this fast food being available at the local restaurants and at some five star restaurants, Nirulas was the only fast food chain existing in the country with its restaurants expanding with every passing year since its inception. It has been almost 50 years now since its set up and there is hardly any one who doesn‟t know about Nirulas existence. Nirulas was the first one to bring fast food to India back in the 50‟s since then it has evolved into an eating-place with tremendous brand equity and brand recognition. It proved to be a perfect eating-place for an average middle class who wants to eat out at an affordable price that can‟t afford the five-star restaurants and would not want to go to the local dhabas. Nirulas almost had a monopoly for decades due to the way it has been positioned. It is a place where a person from an average middle class group to upper class group can go to eat out. Its popularity has increased over the decades. With the trends changing and the incomes rising almost anybody who can afford to eat out could go for snacks at Nirulas. However the year 1995-96 witnessed a drastic change. 1996 is considered to be the year of India‟s entry into the world food market. International giants such as 9 McDonalds, KFC, TGIF, Dominos, and Pizza Hut all bombarded the Indian fast food market. Before these, UK-based joint called Wimpy‟s had established its chain in the country in 1990. By year 1996 it had about three to four joints established in Delhi. However it did not pose much of a threat to Nirulas reason being lack of variety and that Wimpy‟s was looked at more of a hangout place rather than eating out with the family. Each of the foreign food joints that have come into the country have their own strategy lined up to differ from the rest. Each of these studied the Indian tastes and style and thereby targeted the Indian customer. An average Indian restaurant goes is no convenience eater, unlike the Americans. Customer is paying for food that tastes good (Spicy, soft, savory etc.), not for how pleasantly the stuff is served or how spotless the windows are, and wants good food for that can make him come back to the restaurant. An Indian food joint owner would definitely understand this but an American company, which comes and places itself directly without knowing the customer, is definitely in for trouble. Customer loyalty in a restaurant business is essentially low. A customer when comes to a restaurant usually looks at the quality of food, variety, ambience, speed of delivery and the location. The variety would influence the frequency of visits since taste is a dominating factor to the Indian customers. Almost all the fast food chains both Indian i.e., Nirulas and foreign i.e., McDonalds etc., are targeting the families. This serves to be an advantage because the turnaround time is short and family has higher propensity to spend because different members order larger variety of dishes. Each of these restaurants delivers quality, value and services in its own way through its line of strategies. The emphasis is on the value that the restaurant is delivering to the customers. 10 INTRODUCTION TO PROBLEM In today‟s era of Privatization and Globalization, as the economy is opening up the disposable income available per person is also increasing which in turn is increasing the use of fast good restaurants to get quick and hassle free meal. The fast food segment has witnessed a sea change over a past few years; virtually every big corporation in the world is busy tying a knot with the Indian partner. Hordes of multinationals and a couple of new Indian entrants are rushing headlong into markets. As a service is any act or performance that are party can offer to another that is essentially intangible and does not result in the ownership of anything its production may or may not be tied to a physical product. In Indian Fast food segment there is a Service gap in Ultimate consumer satisfaction and Fast food service providers. Service gap is a factor that causes the unsuccessful delivery. These are five gaps that cause the unsuccessful delivery: Gap between consumer expectation and management perception. Gap between management perception and service quality specification and service delivery. Gap between service delivery and external communication Gap between perceived service and expected service. 11 PRESENT POSITION OF THIS INDUSTRY IN RESPECT TO SERVICE GAP Gap between consumer expectation a management perception: - While the management of pizza hut perceives that the consumers need better quality food, but the consumers may a clinically want better ambience, (Like, light, music) or work floor area. Gap between management perception Service-quality specification:- The “fast” service provided by McDonald goes very well with its customer perceptions. Here the negotiation has perceived well what the customer wants but the main area where it lacks is that it has not specified its customer “how to serve” or “what quality to be served”. Gap Between service quality specifications & service delivery:- The delivery personnel in McDonald are mainly fresh graduates without a personal degree in “hotel management”. If prospective customer visits except who recognize restaurant will find what have shown in media and what visible here is not same causing a difference.