IBS-Mumbai (Section-B) 2012-14

Vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile

McDonalds India
Marketing Analysis
Project by

Name
Abhijeet Tare Nipun Vaidya Jatin Parmar Swapnil Dhimate Kayur Desai Raj Shah

Enrollment No.
12BSP1322 12BSP1356 12BSP0834 12BSP1307 12BSP1462 12BSP0955

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Acknowledgement

This project is submitted as a Semester-I assignment, part of course titled Marketing Management. We are thankful to our course instructor Prof. Mrs. Heena Panchal, for her valuable guidance and assistance, without which the accomplishment of this task would not have been possible. We also thank her for giving us the opportunity to explore into the real world and learn how the marketing fundamentals are applied into real world scenario. We would also like to thank a number of people who have contributed to our surveys and helped us understand the dynamics of the consumer markets. Lastly we would also like to thank GOOGLE, without its help we would not have the access to many things that have added to our knowledge base.

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Table of Contents Sr.No 1 2 3 4 5 6 7 8 9 Contents
McDonalds India-Introduction PESTLE-Analysis SWOT-Analysis Philosophy & Vision of McDonalds Marketing Mix Understanding Consumers Buying Behavior Consumer Driven Marketing Strategy

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McDonalds India
Introduction:
Since its founding in 1948, McDonald's has grown from a family burger stand to a global fast-food behemoth, with more than 30,000 locations in 118 countries. Those nations, however, are about to have their ranks reduced by one: the Golden Arches are pulling up stakes in Iceland this week, and Icelanders pining for a Big Mac and large fries will soon be going hungry. Dick and Mac McDonald opened their eponymous burger stand in 1948 in San Bernardino, Calif. Under the guidance of Ray Kroc, a onetime milkshake-mixer salesman wowed by the restaurant's success, McDonald's franchises grew swiftly: by the end of the 1960s, there were more than 1,000 across the U.S. The first international franchise opened in 1967 in British Columbia, and was followed by another in Costa Rica later that year. From there, the chain spread steadily: over a six-month period in 1971, Golden Arches popped up on three new continents, as stores launched in Japan, Holland and a suburb of Sydney. A Brazilian McDonald's opened in 1979, bringing Ronald McDonald to South America for the first time. McDonald's reached its sixth (and, barring a sub-Arctic drive-thru, final) continent in 1992, with the opening of a restaurant in Casablanca, Morocco. Four years later, the company heralded the expansion into its 100th nation, Belarus, and claimed to be opening a new restaurant somewhere in the world every three hours.

Entry in India:
In India, McDonald's has two Indian entrepreneurs: Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd, which has been awarded a Development Licensee status by McDonald's Corporation, U.S.A, spearheads McDonald's operations in West & South India, while McDonald's restaurants in North & East India is managed by Vikram Bakshi's Connaught Plaza Restaurants Private Limited, which is still a Joint Venture with McDonald's Corporation.

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For Hardcastle Restaurants Pvt. Ltd ('HRPL'), the transition to a Development Licensee implies a higher level of commitment by McDonald's Corporation as it enhances its trust in the local partner. McDonald's ensures that the evolution to a Development Licensee takes place only after the financial strength, viability, profitability and long - term sustainability of the business is assured. Celebrating over 15 years of leadership in food service retailing in India, McDonald's India now has a network of over 250 restaurants across the country. McDonald's India is a leader in the food retail space, with a presence of more than 250 restaurants serving more than 6.5 lakh customers daily in India. McDonald's India and HRPL in particular has an aggressive expansion plan - including market expansion, new customer outreach formats and menu expansion. With HRPL becoming a Development Licensee in the year 2010, there are strong and robust commitments to investments, expansion and growth. By 2014, HRPL plans to double the number of restaurants it currently has. HRPL is expanding its reach by expanding the portfolio and access points with formats like from kiosks, drive thrus, web-delivery and petrol pumps in addition to the restaurants. In 2012, HRPL plans to open another 35-40 McDonalds restaurant in West and South India. The modest beginnings of McDonalds at Illinois in USA turned out to be among the main brand names in the international scene. It has been synonymous to what is widely-accepted the fast-food concept. The company operates over thirty one thousand stores all over the world to date. It was one of the first to perfect the concept of fast service in the food industry in its early days of operations in 1955. Given that the products of the company are mainly western in character; its operations have also expanded to the Asian region. The first Indian McDonalds outlet opened in Mumbai in 1996. In the rest of the globe, it operates thousands of store franchises that functions autonomously. Around the world, McDonalds traditionally operates with local partners or local management. In India too, McDonalds purchases from local suppliers. McDonalds constructs its restaurants using local architects, contractors, labour and where possible local materials. McDonalds hires local personnel for all positions within the restaurants and contributes a portion of its success to communities in the form of municipal taxes and reinvestment. Six years prior to the opening of the first McDonalds restaurant in India, McDonalds and its international supplier partners worked together with local Indian Companies to develop products that meet McDonalds rigorous quality standards. Part of this development involves the transfer of state-of-the-art food processing technology, which has enabled Indian businesses to grow by improving their ability to compete in todays international markets. McDonalds worldwide is well known for the high degree of respect to the local culture. McDonalds has developed a menu especially for India with vegetarian selections to suit Indian tasted and culture. Keeping in line with this McDonalds does not offer any beef and pork items
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in India. McDonalds has also re-engineered its operations to address the special requirements of a vegetarian menu. The cheese and cold sauces used in India is 100% vegetarian. Vegetable products are prepared separately, using dedicated equipment and utensils. Also in India, only vegetable oil is used as a cooking medium. This separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. The McDonalds philosophy of Quality, Service, Cleanliness and Value (QSC&V) is the guiding force behind its service to the customers. McDonalds India serves only the highest quality products. All McDonalds suppliers adhere to Indian Government regulations on food, health and hygiene while continuously maintaining their own recognized standards. All McDonalds products are prepared using the most current state-of-the-art cooking equipment to ensure quality and safety. At McDonalds, the customer always comes first. McDonalds India provides fast friendly service- the hallmark of McDonalds that sets its restaurants apart from others. McDonalds restaurants provide a clean, comfortable environment especially suited for families. This is achieved through McDonalds stringent cleaning standards, carefully adhered to McDonalds menu is priced at a value that the largest segment of the Indian consumers can afford. McDonalds does not sacrifice quality for value rather McDonalds leverages economies to minimize costs while maximizing value to customers. The company has invested Rs. 450 crore so far in its India operations out of its total planned investment of Rs. 850 crore till 2007. McDonalds India Pvt. Ltd. has moved an application to the government seeking permission for payment and remittance of the initial franchise fee and royalty to McDonalds Corporation. The permission has been sought on two grounds: McDonalds India would pay an initial franchise fee of $45,000 on each of the McDonalds restaurants already franchised or to be franchised, in the future, in India; and a royalty equal to 5 per cent of the gross sales from the operations of all its Indian restaurants on a monthly basis to McDonalds International. They currently serve around 5 million customers a day and hope to grow at the rate of 50% to 70% a year.

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Pestle Analysis
Pestel is an analysis of the external macro and micro environment in which a business operates. Pestel stands for political, economical, social, technological, environmental and legal factors. Political factors
The international operations of McDonalds are highly influenced by the individual countrys policies enforced by each government. For instance, there are certain groups in India, Europe and the United States that clamour for state actions pertaining to the health implications of eating fast food. They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products. On the other hand, the company is controlled by the individual policies and regulations of operations. Specific markets focus on different areas of concern such as that of health, worker protection, and environment. All these elements are seen in the government control of the licensing of the restaurants in the respective states of the country. For instance, there is an impending legal dispute in the McDonalds franchise in India where certain infringement of rights and violation of religious laws pertaining to the contents of the food. The existence of meat in their menus in India is apparently offensive to the Hindu religion in the said market. There are also other studies those points to the infringement of McDonalds Stores with reference to the existing employment laws in the target market. Like any business venture, these McDonalds stores have to contend with the issues of employment procedures as well as their tax obligations so as to succeed in the foreign market like India.

Analysis:
Since it is apparent that the company is expanding continuously, it is wise to deal directly with the proper authorities in the respective markets that they intend to operate in. This way, the company can adopt a good way of establishing good relationship with the government. It is advisable that the company rests on the good graces of the government on which they will be penetrating. To do this, all they have to do is accomplish all the prescribed acts and satisfy all the prerequisites for doing business. The company must also be acquainted with the law in order to know what their responsibilities and their possible liabilities. Also McDonalds should protect its workers by ensuring all the hiring, compensation, training or repatriation in accordance to the Indian labour laws.

Economical factors
Organisations in the fast food industry are not excused from any disputes and troubles. Specifically, they do have their individual concerns involving economic factors. Branches and franchises of McDonalds have the tendency to experience hardship in instances where the economy of the respective countries are hit by inflation and changes in the exchange rates, India is not an exception to it. The customers consequently are faced with a stalemate of going over
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their individual budgets whether or not they should use up more on these foreign fast food chains like McDonalds. Hence, these chains may have to put up with the issues of the effects of the economic environment. Particularly, their problem depends on the response of the consumers on these fundamentals and how it could influence their general sales. In regarding the operations of the company, McDonalds tend to import much of their raw materials into a specific countrys territories if there is a dearth of supply. Exchange rate fluctuations will also play a significant role in the operations of the company. As stated in the paragraph above, McDonald stores have to take a great deal of consideration with reference to their microenvironment. The companys international supply as well as the existing exchange rates is merely a part of the overall components needed to guarantee success for the foreign operations of McDonalds. Moreover, it is imperative that the company be cognizant of the existing tax requirements needed by the individual governments on which they operate. This basically ensures the smooth operations of the McDonalds franchises. In the same regard, the company will also have to consider the economic standing of the country on which they operate on. The rate at which the economy of that particular country grows determines the purchasing power of the consumers in that country. Hence, if a franchise operates in a particularly economically weak country, their products shall cost higher than the other existing products in the market, then these franchises must take on certain adjustments to maintain the economies of scale. However in case of India the company has been able to maintain a constant level of prices for their products.

Analysis:
Ideally before penetrating the market, the company must carry out a well conducted market research, especially in the movements in the economic environment which McDonalds had done before entering the Indian market due to which the company has been able to bear the frequency of the shifts in the inflation rate as well as the fluctuations in the exchange rates which affects the operations of any company.

Socio-cultural factors
Articles on the international strategies of McDonalds seem to function on several fields to guarantee lucrative returns for the organisation. To illustrate, the organisation improves on establishing a positive mind-set from their core consumers. McDonalds indulge a particular variety of consumers with definite types of personalities. It has also been noted that the company have given the markets such as the United Kingdom and India, an option with regards to their dining needs. McDonalds has launched a sensibly valued set of food that tenders a reliable level of quality for the respective market where it operates. Additionally, those who are aged just below the bracket of thirty-five are said to be the most frequent consumers of McDonalds franchises. The multifaceted character of business nowadays is reflected in the harsh significance of the information on the subject of the existing market. This procedure is essentially identified in
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the field as market research. Information with regards to the appeal and potential fields of the market would double as obstructions to the success of the company if this area of the operations is neglected. In the case of McDonalds they establish a good system in determining the needs of the market. The company uses concepts of consumer behaviour product personality and purchasing decisions to its advantage which is clearly evident in case of India as the company was quick in removing their Pork and Mutton products from Indias menu. It is said to have a major influence on the understanding of the prospective performance of the organisation in a particular market.

Analysis:
McDonalds should obtain the relevant information from the target market in addition to the individual customers of the organisation. It is imperative that before a franchise is granted to a particular market, a well drafted and comprehensive market research should be conducted initially so as to establish the acts that would conform to good customs, public policies, and morals of the said Countrys society. Similarly, the company should find out the shifts in areas like the consumer behaviour and purchasing patterns of the market. Fundamentally, this is the key condition for executing a suitable customer relationship management system. Also the company should constantly survey and learn about local culture to better understand and design the best product for them.

Technological factors
McDonalds generates a demand for its own products. The companys key tool for marketing is by means of Online Facebook and Google ads, Collaboration with websites like Snapdeal and Timesdeal to promote sales in India, television advertisements, banners and hoardings. There are similarly some claims that McDonalds are inclined to interest the younger populations more. The existence of play spots as well as toys in meals offered by the company shows this actuality. Other demonstration of such a marketing strategy is apparent in the commercials they use. They employ animated depictions of their characters like Grimace, Ronald and Ham burglar. Other advertising operations employ popular celebrities to promote their products. The like has become endorsers for McDonalds worldwide Im loving it campaign. Moreover, the operations of McDonalds have significantly been infused with new technology. Elements like the inventory system and the management of the value chain of the company allows for easy payments for their suppliers and other vendors which the individual stores in respective markets deal with. The integration of technology in the operations of McDonalds tends to add value to their products. Basically, this is manifested in the improvements on its value chain. The improvement of the inventory system as well as its supply chain allows the company to operate in an international context.

Analysis:
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McDonalds use the internet to their advantage. The cost-effectiveness, interactivity and real- time effects of the communications are a good way to find suppliers. It is also a good way to correspond with the respective McDonalds headquarters in every Country. The company must also look into the use of IT to enhance their inventory operations. As the operations in its inbound and outbound logistics improve, the company will expect significant savings and reduction of costs in the operations.

Environmental factors
The social responsibilities of McDonalds on the country are influential to the operations of the company. These involve accusations of environmental damage. Among the reasons why they are charged with such claims is the employ of non-biodegradable substances for their drinks glasses and Styrofoam coffers for the meals. Several civic groups in India have made actions to make the McDonalds franchises in India aware of the rather abundant use of Styrofoam containers and the resultant abuse of the environment.

Analysis:
The company should find out the environmental regime that governs the operations in every market. It should also monitor the waste disposal of the company. McDonalds should minimize the use of Styrofoam materials and plastic cups. Constant updating of the social corporate responsibility is imperative. This should also entail that the headquarters should take in hand, a manner of internal control of those that would infringe upon this company objective. Sanctions such as revoking of the franchise license or a particularly high fine should be installed to serve as a deterrent to infringement.

Legal factors
There has been the recurrent bellowing in opposition to the fast food industry. This has similarly made McDonalds apply a more careful consideration on their corporate social responsibilities. On the whole, this addressed the need of the company to form its corporate reputation to a more positive one and a more socially responsible company. The reputation of McDonalds is apparently a huge matter. Seen on the website of the company, it seems that they have acquired strides to take in hand the key social censures that they have been berating them in the past decades. The company has provided their customers the relevant data that they need with reference to the nutritional substances of their products. This is to attend to the arguments of obesity charged against the products of the company. In the same way, the consumers provided freedom in choosing whether or not they want to purchase their meals. This is tied up with the socio-cultural attributes of the market on which they operate. For instance, operations in predominantly Muslim countries require their meat to conform to the Halal requirements of the law. In the same regard, those that operate in countries in the European Union should conform to the existing laws banning the use of genetically modified meat products in their food. This was prime reason which forced McDonalds to eliminate beef, pork
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and Mutton out of Indias product menu. Other legal concepts like tax obligations, employment standards, and quality requirements are only a few of important elements on which the company has to take into consideration. Otherwise, smooth operations shall be hard to achieve.

Analysis:
As a certified fast food operator, there are many regulations and procedures that McDonalds should follow. McDonalds should protect its integrity and consumer confidence by ensuring all materials and process are as claimed or must followed. Other legal requirement that the business owner should follow as stipulated in laws are such as operating hours, business registration, tax requirement, labour and employment laws and quality & environment certification (such as ISO) in which the outlet has been certified. The legal requirement is important because the offenders will be fined or have their business prohibited from operating which can be disastrous. The company should hire local counsels to deal with the legal conflicts in individual markets on which the company may encounter. This shall ensure the company that the lawyers that will handle their legal affairs are more versed with the legal regime that would ease out certain problems on their operations.

Conclusion
As we all know that the most significant contribution of this generation is the combination of globalization and internationalization in the businesses sector. Developments in the international setting have an effect on the more particular factors in the operations in individual organisations. Alterations could take place and require intense modifications to the operations such that it could have an adverse effect on the entire structure of the company. However, as indicated in the above PESTEL analysis, this could be acquired by setting a certain level of flexibility in the organisation. This level of flexibility can basically be acquired through the acquaintance of both the internal and external environment of the company. Even though McDonalds may have been deemed as demigod in the fast food business in the international scene, but what it preserves as revealed in its processes is the need for flexibility. The slight changes that take place in the market have an effect on the operations of the business in any case. This denotes that having the information on the effects of these alterations swiftly provides these fast food industry giants to take fine-tuning actions on their acts and still preserve their market position. As implied the markets of nowadays manifest a cutthroat rivalry with the individual competitors, recognized brands or otherwise. Hence, any business in spite of the muscle of the brand name or the size of its reserves could not afford any failures in their individual markets.

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SWOT ANALYSIS
SWOT stands for Strength, weaknesses, opportunities and threats. To meet the needs of the key market it is important to analyze the internal market strengths of the organization. Strengths and Weaknesses must be identified, so that a marketing strategy which is right for the business can be decided upon. Once the strengths and weaknesses are identified, they are combined with the opportunities and threats in the market at place. This is known SWOT analysis. SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps businesses to focus on key issues. Once key issues are identified, they feed into marketing objectives.

Strengths
McDonalds has built up huge brand equity. It is the No. 1 fast-food company by sales, with more than 31,000 restaurants serving burgers and fries in almost 120 countries Sales, 2007 (11, 4009 million), 5.6% sales growth. Good innovation and product development. It continually innovates to retain customers in the business. The McDonalds brand offers consumers choice, reasonable value and great service. Large amount of investments have gone into supporting its franchise network, 75% of stores are franchises. Loyal Staff and strong management team. Advertisements and promotion to market the McDonalds as a brand carves a strong image on customers mind.

Weaknesses
Core product line out of line with the trend towards healthier lifestyles for adults and children. Product line heavily focused towards hot food and burgers. Locations of outlets sometimes are not too closer to storage centers resulting in loss of quality. Quality issues across the franchise network. Break-even sales can be generated after operating for certain number of years only.

Opportunities
Joint ventures with retailers (e.g.; supermarkets)
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Consolidation of retailers likely, so better locations for franchises. Respond to social changes- by innovation within healthier lifestyle foods. Its move into hot baguettes and healthier snacks (fruit) has supported its new positioning. Use of CRM, database marketing to more accurately market to its consumer target groups. It could identify likely customers (based on modeling and profiles of shoppers) and prevent brand switching. Strengthen its value proposition and offering, to encourage customers who visit coffee shops into McDonalds. Installing childrens play-parks and focus on educating consumers about health, fitness. Continued focus on corporate social responsibility, reducing the impact on the environment and community linkages. Expansion into emerging markets of cities present in India. Focus on middle-class income group customers with low-priced quality goods will enhance the profit margin. Senior Citizens have been totally deprived of marketing strategy adopted by McDonalds. The burgers and eatables are more Indianized so that senior citizens find it familiar but the introduction of more milky beverages would attract more senior citizens and kids.

Threats
Social changes - Government, consumer groups encouraging balanced meals, 5 a day fruit and vegetables. Focus by consumers on nutrition and healthier lifestyles. Competitive pressures on the high street as new entrants offering value and greater product ranges and healthier lifestyles products. Example subway, super markets, M&S. Recession or down turn in economy may affect the retailer sales, as household budgets tighten reducing spend and number of visitors. Pressure groups - environmental. Since McDonalds is a symbol of American cultural imperialism, it continues to face continue opposition from religious fundamentalists, protectionists, animal rights activists, and antiglobalization protestors.

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Philosophy & Vision of McDonalds
Every company has a Vision or Mission Statement. A vision statement should be short, clear, vivid, inspiring and concise without using jargon, complicated words or concepts. It represents the corporation guiding principles. It subtly indicates the businesses the firm will pursue and the customer needs it will seek to satisfy. The vision statement also allows the employees to clearly adhere to the standards set up by the business unit and work in as per the guidelines framed by the company. McDonalds Vision Statement "McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile" The McDonald's philosophy of Quality, Service, Cleanliness and Value (QSC&V) is the guiding force behind its service to the customers. McDonalds India serves only the highest quality products. All McDonalds suppliers adhere to Indian Government regulation son food, health and hygiene while continuously maintaining their own recognized standards. All McDonalds products are prepared using the most current state-of-the-art cooking equipment to ensure quality and safety. At McDonalds, the customer always comes first. McDonalds India provides fast friendly service- the hallmark of McDonalds that sets its restaurants apart from others. McDonalds restaurants provide a clean, comfortable environment especially suited for families. This is achieved through McDonalds stringent cleaning standards, carefully adhered to. McDonalds menu is priced at a value that the largest segment of the Indian consumers can afford. McDonalds does not sacrifice quality for value rather McDonalds leverages economies to minimize costs while maximizing value to customers. The main effort of McDonaldss service is to make customer the whole sole beneficiary through its stringent standards maintained all over the world.

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Marketing Mix of McDonalds India
The marketing mix of a company consists of the various elements as follows which form the core of a companys marketing system and hence helps to achieve marketing objectives. The Service marketing mix in the case of McDonalds is as below: Product: McDonalds places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers requirements change over time. In order to meet these changes, McDonalds has introduced new products and phased out old ones, and will continue to do so. Care is taken not to adversely affect the sales of one choice by introducing a new choice, which will cannibalize sales from the existing one (trade off). McDonalds knows that items on its menu will vary in popularity. Their ability to generate profits will vary at different points in their cycle. In India McDonalds has a diversified product range focusing more on the vegetarian products as most consumers in India are primarily vegetarian. The happy meal for the children is a great seller among others. Core Product Expected Product Augmented Product Potential Product

Fast Food

Home Delivery, Quick Service, Clean Preparation, Proper Seating

Drive-thru, Hotline for orders, Toys with meal, online ordering system, Party packages.

Out House catering service, On table order system, Accepting credit/debit cards.

Price: The customers perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item, it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrity. In India McDonalds classifies its products into 2 categories namely the branded affordability (BA) and branded core value products (BCV). The BCV products mainly include the McVeggie and McChicken burgers that cost Rs. 50-60 and the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20-3 This has been done to satisfy consumers which different price perceptions. Promotion: The promotions aspect of the marketing mix covers all types of marketing communications One of the methods employed is advertising, Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and
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magazines. Other promotional methods include sales promotions, point of sale display, merchandising, direct mail, loyalty schemes, door drops, etc. The skill in marketing communications is to develop a campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item and press advertising provides more detail. This may be supported by in-store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item. At McDonalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos. Place: Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer. McDonalds outlets are very evenly spread throughout the cities making them very accessible. Drive in and drive through options make McDonalds products further convenient to the consumers. People: The employees in McDonalds have a standard uniform and McDonalds specially focuses on friendly and prompt service to its customers from their employees. Process: The food manufacturing process at McDonalds 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 McDonalds by allowing them to enter the area where the process takes place. The customers are invited to check the ingredients used in food. Physical evidence: 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.

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Understanding Consumers Buying Behavior
Understanding of consumer behavior has helped any business to flourish, McDonalds is not an exception. It has all through its operative years learnt about consumer behavior and thereby has always taken steps to make it better and better to suit the consumers as well as expand its own business. Cultural Behavior: India is famous for its wide culture and beliefs. A major part of this culture is also in diversified eating and food habits. At first when McDonalds entered India to start its business it launched its burger with the same beef that was famous outside, but people in India did not accept it. Beef is not a part of Indian menu, because cows are considered sacred here. Understanding this, McDonalds change the content of its burger and all those items that consisted beef. In India, meat and vegetarian meals are prepared in separate areas of restaurant because of religious laws about preparation of food for vegetarians and non-vegetarians. Cooks preparing vegetarian dishes wear a distinctive green apron. It even run a campaign in which customers could go and check how there were separate sections for preparing vegetarian and non-vegetarian food. Social Behavior: In India most of the people are experts in influencing others, and most of them get influenced easily as well. Especially a buyers behavior is strongly influenced by a family member or a close friend. Reference groups have potential in forming a person attitude or behavior. Reference groups include opinion leader (a person who influences other because of his special skill or knowledge) FAMILY -: Buyer behavior is strongly influenced by the member of a family. ROLES & STATUS-: Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. to which he belongs. Personal Factors: Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age & personality PSYCHOLOGICAL FACTORS There are four important psychological factors affecting the consumer buying behavior. McDonlads India has always been considering the personal factor of Indian Customers who are price sensitive as well as have varied social needs. The secret of McDonalds success in

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the Indian market is due to its understanding of its customers on an individual level. Personal factors have always played a major role in customers buying behaviour. Psychological These consist of things like motivation, perception, learning and belief & attitude of people all those things which are intangible so little difficulty comes in understanding people as all are different. In McDonalds they keeps on updating or teaching people through its attractive advertisements about its new products, in newspapers or TV or radio, through pamphlets or sometimes asking for something new in form of feedbacks. They work according to customers. Mc. Donalds also tries and does to satisfy the needs of the customers, serves every one according to their perception, beliefs & attitudes of the customer. Conclusion Ultimately, it can be concluded that McDonalds is a company of values and its real focus is on customers that takes it to profit. It understands its social responsibility and is aware of all the factors that can affect its business adversely or profitably. It has flexibility and ability to handle the INDIAN crowd efficiently and earn profits as well McDonalds has proved its worth and attained a social status. It really makes the people LOVE IT. The McDonalds is one of the great success stories in Indian Fast Food Industry.

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Consumer Driven Marketing Strategy
Target Market Segment It was the "family place" to go to since quick service restaurant chain McDonald's entered India. Children were a very important part of its target audience, with a lot of its advertising and menu especially targeting them. But now McDonald's is firmly talking about youth being its primary target consumers. Its advertising, new outlet interior designs and additions to the menu are all firmly targeted at the youth, though the outlets still have that defined family section. Both Amit Jatia, vice chairman, Hardcastle Restaurants, the franchisee that looks after the McDonald's business in the west and south markets in India, and Vikram Bakshi, MD and joint venture partner, McDonald's India -north and east markets - are in complete agreement that youth is the most important consumer segment for McDonald's in India today. "In fact, we are in the process of re-imaging our restaurants to connect the brand with the youth segment, which is being done in phases. We are making the restaurants contemporary and relevant to the needs and sensibilities of the youth. Menu innovation is another area where we are focusing to introduce products and flavours relevant to this segment," said Bakshi. Jatia said: "The introduction of the spicy range of McDonald's offerings was specifically for the young adult target group. Our continuous efforts to keep our foods affordable and adding more filling fare is also because we are targeting youth. Our international McFlurry's dessert range, our expanding menu, breakfast on the go, are all directed at being relevant to the current market place, where youth has a predominant presence in India." Although one part of the business remains a joint venture (north and east) and the other has now become a franchise (Hardcastle, west and south), both companies in India have a common national marketing board that takes common marketing and advertising decisions at a national level. Regional marketing, however, varies for both companies that each have their regional marketing teams in place. "As our latest endeavour to engage the youth, we are about to unleash an 'augmented reality' initiative to promote McDonald's," Bakshi said. This initiative will see interactive digital imaging on the internet and mobile media, as well as at McDonald's outlets, though McDonald's is not willing to reveal much more about it yet.

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McDonalds in India segmentation it has done is on three different bases: 1) Demographic Segmentation: Kids, Family and Students McDonalds offers different products like Happy Meal which includes a free toy for kids. For families it has made different outlets and meals which are suitable for takeaways and drivethru. McDonalds has made its environment which is suitable for students of school to hang out with their friends and can get their lunch at McDonalds. 2) Psychographic segmentation: Convenience and lifestyle McDonalds has adopted itself according to the convenience and lifestyle of the Indian consumers, as India has a huge vegetarian population so McDonalds came up with a different and new product line which includes items like Mc Veggie burger and Mc Aloo tikki Burger. They also made McDonalds as a place to relax and even for entertainment. 3) Behavioral segmentation: Occasions, for e.g. Birthday Parties of kids McDonalds can get more customers by whom they can get most of the share of India Fast Food Industry but they should emphasis on their Targeting technique. To Get a Sustainable Advantage over their competitors McDonalds should introduce new as well as modified products which contains low cholesterol content in it. McDonalds has so much upcoming competition in Indian market that it should concentrate on Differentiation of its products increase its market size by implementing penetration pricing technique in which they should introduce the product with a lower price even lower than the market substitutes price. By this they can they can associate with their marketing objectives and can increase their sales and total revenue even in future. They should apply new positioning technique to create a new image in the minds of consumer about McDonald a place with healthy variants. McDonalds should observe present approach which they are following and subsequent the current advertising with healthy messages. This can be done by adding a more organized and expertise team which can work on healthy mindful advertisement. There advertising should contain all the benefits and healthy qualities about the products McDonalds is offering.

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Building Customer Value
Phase I: Launching the brand
The starting point for McDonald's India was to change Indian consumers' perceptions, which associated it with being 'foreign', 'American', 'not knowing what to expect' and 'discomfort with the new or different'. McDonald's wanted to position itself as 'Indian' and a promoter of 'family values and culture', as well as being 'comfortable and easy'. Simultaneously, the brand wanted to communicate that, operationally, it was committed to maintaining a quality service, cleanliness and offering value for money. Says Arvind Singhal, Head of Marketing at McDonald's India: "From a marketing communications standpoint, we chose to focus on familiarizing the customer with the brand. The brand was built on establishing functional benefits as well as experiential marketing." Until 2000, McDonald's India did not have enough reach to use mass media such as television advertising. Instead, most of its marketing effort focused on outlet design, new store openings and PR about its attempts to tailor a menu to Indian tastes. Amit Jatia said: "Products like McAloo Tikki burger, Veg Pizza McPuff and Chicken McGrill burger were formulated and introduced using spices favoured by Indians. The menu development team has been responsible for special sauces which use local spices do not contain beef and pork. Other products do not contain eggs and are 100% vegetarian. The Indianized products have been so well received that we even export McAloo Tikki burger and Veg. Pizza McPuff to the Middle East." However the company did not escape food criticism in the country. For instance, it hurt the religious sentiments of Indians by using beef flavouring for its "Vegetarian" French Fries. Says Sridhar, National Creative Director, Leo Burnett: "When McDonald's launched we took a conscious call of not introducing any beef or pork in our products. Thus, when controversies around McDonald's products started during the early and growth stages of the Indian business, we reacted quickly. "We educated our customers about the build of our products and did extensive kitchen tours for our customers. We showed them how we use separate vegetarian and non-vegetarian platforms for cooking a first in any market for McDonald's." II Phase: brand advertising By 2000, McDonald's India was ready to begin TV advertising. Arvind Singhal said: "The first Indian TV commercial, Stage Fright, attempted to establish an emotional connection between the (Indian) family and the brand. Over the years advertising has reinforced this positioning, supported by promotions." The Stage Fright campaign aimed to establish McDonald's as a familiar, comfortable place. It featured a child who suffers stage fright and is unable to recite a poem. On entering McDonald's, he easily recites it in the store's familiar environment. A second campaign featured a child and his family moving into a new place. He misses his previous surroundings until McDonald's provides something familiar.

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These storylines were supported by other initiatives. The company's one-minute service guarantee attempted to reinforce its reputation for fast, friendly and accurate service and it also ran in-store events for mothers and children. Mr Singhal says: "To kids sitting on the Ronald McDonald bench, pumping sauce from the sauce machine became brand rituals." K.V. Sridhar, National Creative Director, Leo Burnett, the company's agency in India, adds: "In the launch phase the communication focused solely on building brand and product relevance. The brand's scores on relevance to families and kids were very high." Later, McDonald's realized there was untapped potential in the youth audience who considered McDonald's expensive and mainly for children. Sridhar says: "In 2004, we launched the Happy Price Menu with a value message for a younger audience. For the first time McDonald's India saw a surge of younger consumers and people from socio-economic class B walk into our stores. "We had realized that the Indian consumer was price sensitive and even though the organization managed to establish a sense of familiarity, Indian consumers continued to perceive McDonald's as an expensive eating out option."

Phase III: Appealing to both ends of the age spectrum

In 2008, the latest campaign from the McDonalds-Leo Burnett stable uses father-son duos from the Indian film industry to reiterate the theme of "Yesteryear's Prices". It features Bollywood stars from past decades together with their sons and a message that prices have not risen in line with the passage of time. The Happy Price campaign has also been promoted via virals. Outdoor has also promoted a home delivery option in a country where home delivery is common in urban areas. McDonald's has also been exploring strategic tie-ups with Indian sports properties such as the IPL cricket tournament, where it was one of the event's food providers. Amit Jatia, however, says: "The eating out market in India is very large and has huge potential fuelled by rising disposable incomes. There are many Indian and international players who have entered in the market since the last decade and unbranded food chains have also grown significantly. "The Indian consumer has seen value in what we have to offer at our restaurants which is a testament to our model."

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New Product Development
It is easy to look at chains like McDonald's with disdain, but there is a lot that you can learn from their success. A Major Part of the success enjoyed by McDonald's, stems from their product development strategy. By familiarizing yourself with the way McDonald's develops products, you can apply the same methods to your own products whether they are food products or other consumer goods. Permanent Product Strategy McDonald's features several products on their menu that are permanent and do not change. Examples of this include their basic Burger and cheeseburger, the Mac Maharaja and the McPizza Puff. After the initial development, these items remain on the menu for extended periods of time without undergoing significant changes. This strategy ensures that there is always something familiar for consumers on the menu. Temporary Product Strategy In addition to its permanent product offerings, McDonald's regularly develops temporary products. The Chatpata McAloo Tiki, Shake-Shake Fries. for example, is a product that is offered only seasonally. The purpose of this product development strategy is to give customers something new to experience on each visit and to experiment with new items that may become permanent. Local Product Development Strategy As McDonald's has expanded internationally, it has created several products to meet consumer demand in the local markets. In the Netherlands, for example, they have developed the McKroket, a burger featuring a typically Dutch kroket, a deep-fried, ragout-filled patty. In India McAloo Tiki works like a miracle for giving it the local taste. This strategy ensures that local customers have foods to fit their tastes. Local Adaptation Strategy In addition to developing new products for local markets, McDonald's will also use an adaptation strategy whereby they take a product and modify it to fit local tastes. In India, for instance, the Big Mac has been modified into the Maharaja Mac which contains no beef, in keeping with local diets.

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McDonalds Pricing Strategy
1. Value Pricing McDonalds came with the concept of value pricing for Indian consumers where in it came out with various combos in form of Happy Meals comprising of small burgers, fries, coke + toy. Medium meal combo that consisted of burger, fries and Coke with the price of Rs 75 Maharaja Mac Meal Rs 94 Family Dines under Rs 300The prices for the meals were economical as compared to the offerings in Pakistan and Sri Lanka and are 50% less than United States.

2. Product line Pricing McDonalds has a unique price strategy which falls solely on many of their product lines. Their Value Meals fall into the category of Product Line Pricing. Where there is a range of product or services the pricing reflect the benefits of parts of the range. Example, you can order a Two Cheeseburger Value meal that comes with a medium drink and fries for around Rs 75 (prices may vary). You can Super-Size this meal to get a large drink and large fries for a little more money or you can go with another value meal that might include different items for different price. 3. Promotional Pricing If you have driven past a McDonalds, you will notice that somewhere on their property, whether it is a banner on their building or spelled out on their sign, they are always offering some sort of promotional pricing. This promotion can be seen as a large banner draped across the building on many restaurants. This promotion changes weekly and may consist of different menu items packaged together. 4. Penetration Pricing When McDonalds first began to break into the coffee market, they ran a large marketing campaign in order to gain some market share in the industry. For a limited time frame, you could get a free small coffee every morning from 4-7am. This was to promote their new coffee partnership with Green Mountain Coffee and helped spread the word that McDonalds was now offering coffee.

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McDonalds India: Distribution
Radha Krishna Foodland Distribution Centers 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. McDonalds India: Channel Network

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McDonalds advertising
McDonald's maintains an extensive advertising campaign. In addition to the usual media including television, radio, and newspaper ads, the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. However, television advertisements remain the primary form of advertisement. To date, McDonald's has used 23 different slogans to advertise in the United States, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns. There have been many McDonald's advertising campaigns and slogans over the years. The company is one of the most prevalent fast food advertisers. McDonald's Canada's corporate website states that the commercial campaigns have always focused on the "overall McDonald's experience", rather than just product. The purpose of the image has always been "portraying warmth and a real slice of everyday life." Its TV ads, showing various people engaging in popular activities, usually reflect the season and time period. Finally, rarely in their advertising history have they used negative or comparison ads pertaining to any of their competitors; the ads have always focused on McDonald's alone, one exception being a 2009 billboard advertising the new McCafe espresso. The billboard read "four bucks is dumb", a shot at competitor Starbucks. Campaigns i'm lovin' it is an international branding campaign by McDonald's Corporation. The motion logo at the time (featuring the "M" zooming out and shining and the "i'm lovin' it" (in different languages, usually in English) zooming to the "M", leaving a trail) was produced by using Adobe after Effects and Adobe InDesign. Also, by September 3, 2003, McDonald's selected more than 30 people to appear in new packaging for McDonald's products, starting with a photo shoot taking place from September 3, 2003 until November 2003. They unveiled new "i'm lovin' it"-themed packaging on December 8, 2003 and rolled it out worldwide throughout 2004 with the final delivery date being November 20, 2004. In January 2007, after a public casting call which received 15,000 submissions, McDonald's selected 24 people to appear as part of the campaign. Images of those chosen, taken from September to December 2006, who had submitted a story and digital photograph which "captured ... themes of inspiration, passion and fun," appeared on McDonald's paper bags and cups worldwide. In spring 2008, McDonald's underwent the first phase of their new image and slogan: 'What we're made of.' This was to promote how McDonald's products are made. Packaging was
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tweaked a little to feature this new slogan. In November 2008, McDonald's introduced new packaging, eliminating the previous design stated above (except for the Philippines and a few countries, where the previous design is used in tandem with newer packaging and in Fiji, where the previous design is still current) with new, inspirational messages, the "i'm lovin it" slogan (appearing only once on most packages). McDonald's also updated their menu boards with darker, yet warmer colors, more realistic photos of the products featured on plates and the drinks in glasses. From 2009 to 2010, McDonald's introduced new packaging worldwide.

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