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McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving more than

58 million customers daily.[4] In


addition to its signature restaurant chain, McDonalds Corporation held a minority interest in Pret A Manger until 2008, was a major investor in the
Chipotle Mexican Grill until 2006,[5] and owned the restaurant chain Boston Market until 2007.[6]
A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties
and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007
to $22.8 billion, and 9% growth in operating income to $3.9 billion.[7]
McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, shakes, and desserts. In response to
obesity trends in Western nations and in the face of criticism over the healthiness of its products, the company has modified its menu to include
alternatives considered healthier such as salads, wraps and fruit.

McDonald's Marketing Strategy


McDonalds is the worlds largest fast-food restaurant chain. It has more than 30,000 restaurants in over 100 countries. Over one billion more customers
were served in 2007 than in 2006. Although net income was down by $1.1 billion in 2007, McDonalds sales were up 6.8%, and revenue was a record
high of $23 billion. The unique business relationship among the company, its franchisees and suppliers (collectively referred to as the System) has been
key to McDonalds success over the years. The business model enables McDonalds to play an integral role in the communities we serve and consistently
deliver relevant restaurant experiences to customers. (McDonald's, 2008, 25).
McDonalds overall strategic plan is called Plan to Win. Their focus is not so much on being the biggest fast-food restaurant chain, rather it is more
focused on being the best fast-food restaurant chain. McDonalds strategic alignment behind this plan has created better McDonalds experiences through
the execution of multiple initiatives surrounding the five factors of exceptional customer experiences people, products, place, price and promotion
(McDonald's, 2008, 25). McDonalds also incorporates geographical strategic plans. In the U.S., McDonalds strategic plan continues to focus on breakfast,
chicken, beverages and convenience. These are the core areas in the United States. McDonalds has launched the Southern Style Chicken Biscuit for
breakfast and the Southern Style Chicken Sandwich for lunch and dinner. In the beverage business, McDonalds starting introducing new hot specialty
coffee offerings on a market-by-market basis. In Europe, McDonalds uses a tiered menu approach. This menu features premium selections, classic menu,
and everyday affordable offerings. They also complement these with new products and limited-time food promotions (McDonald's, 26). In the AsiaPacific, Middle East, and Africa markets, McDonalds strategic plan is focused around convenience, breakfast, core menu extensions and value. With
McDonalds overall strategic plan and its geographical strategic plan, the company should start to see more positive financial results.
McDonalds incorporates several organizational strategies. Some of the organizational strategies consist of better restaurant operations, placing the
customer first, menu variety and beverage choice, convenience and daypart expansion, and ongoing restaurant reinvestment. McDonalds plans to
continue to drive success in 2008 and beyond by leveraging key consumer insights and our global experience, while relying on our strengths in
developing, testing and implementing initiatives surrounding our global business drivers of convenience, branded affordability, daypart expansion and
menu variety (McDonald's, 2008, 25). One of the ways McDonalds can obtain a positive net income is to maximize efficiency in its restaurant operations
while at the same time placing the customer first. With strategic focus on menu variety and beverage choice, McDonalds is hoping for increased sales and
guest counts. With their convenience and daypart expansion initiative, McDonalds is hoping to increase efficiency in its drive-thru pick up window, and
the company is staying open later for those late-nighters who want a quick bite to eat. McDonalds also has locally owned and operated restaurants which
are at the core of their competitive advantage and makes them not just a global brand but a locally relevant one (McDonald's, 27). They are in the
process of remodeling and upgrading its franchises. The company is also opening up McCafes with the expectation that the gourmet coffee shop would
move it closer to its goal of doubling sales at existing U.S. restaurants over the next decade (Peter & Donnelly, Jr., 2007, 253). A couple other
organizational strategies are branded affordability, and the development of their employees starting with recruitment and training and leading all the up
to leadership and management.
McDonalds strategic plan is influencing their marketing efforts by building better brand transparency. They want their image to be recognized globally.
They are enhancing the customers experience. Across their markets, they are making is easier for customers to enjoy a great McDonalds experience.
They are introducing drive-thrus to the increasingly mobile populations in China and Russia, while in the U.S. and Canada, greater drive-thru efficiency
and double drive-thru lanes enable them to serve even more customers quickly (McDonald's, 2008, 13). In Germany, McDonalds has a reimaging
program that includes adding about 100 McCafes. They are also installing new kitchen operating systems so that they can continue to deliver high food
quality. McDonalds has already renovated about 10,000 restaurants world wide. They want their restaurants to be an expression of their brand. The
company is also delivering greater value to the customer with new menu selections. By serving a locally relevant balance of new products, premium
salads and sandwiches, classic menu favorites and everyday affordable offerings around the world, they create value for customers and satisfy their
demand for choice and variety (McDonald's, 15).
Types of marketing mix that McDonalds use to achieve their marketing goals are longer operating hours, everyday value meals, and optimizing efficiency
in the drive-thru. McDonalds also uses marketing campaigns. In 2007, McDonalds used the Shrek movie to give children a choice between milk, fruit, or
vegetables as part of their Happy Meal. In addition to their commitment with children, McDonalds is building their brand image with innovated marketing
transporting ideas across borders and using im lovin it to deepen their connection with customers who love their food and the unique McDonalds
experience (McDonald's, 2008, 17). In the 2008 Olympics held in Beijing, McDonalds offered the Beijing Burger, Carmel and Banana Sundae, and Rice
Sticks. They featured nine Olympic and Paralympic athletes on their packaging. In Australia, McDonalds held a marketing campaign where the people
could decide what name to give its new hamburger. The name that won was Backyard Burger. With marketing campaigns like these, McDonalds is trying
to create a better brand image.
Other organizational and marketing strategies are creating stronger bonds of trust by being accessible and maintaining an open dialogue with customers
and key stakeholders (McDonald's, 2008, 27). The company is reinvesting approximately $1.9 billion into their restaurants primarily to reimage existing
restaurants and build new ones. McDonalds is also moving towards a more heavily franchised, less capital-intensive business model. Although in some
countries, such as China, this is not permissible due to governmental laws.
With McDonalds growing global brand image and its emphasis on the five factors of exceptional customer service, this should help them increase sales
and net income. With the initiative of remodeling and upgrading existing franchises, this will give the customer a more pleasant and friendly place to dine
out at. With McDonalds marketing campaign for the 2008 Olympics, they were an integral part of the games and this only enhanced McDonalds brand
image in a positive way. With the recruitment and training initiatives for current employees or future prospects, this will allow McDonalds to achieve less
of an already high turnover ratio.

Introduction
Marketing strategy is essential for the success of a product in a target market as argued by Philip Kotler (1988). This is mainly because of the
increasing diversity in the nature of the customers and the stiff competition in the market. In this essay the marketing strategy of Mc Donald the leading
conglomerate in the fast food restaurants and services industry on selling vegetarian burger in the UK. Furthermore, the consumer behaviour for
vegetarian burger in the UK is critically analysed in order to justify the approach of Mc Donalds approach to deploy the identified strategy.

Marketing Strategy For Vegetarian Burger By Mc Donald Plc


The company under debate: Mc Donald Plc in the UK is the subsidiary of the American conglomerate Mc Donald Inc who specialise in fast food
(burgers and fries) restaurants across the globe. The company is well established across the west and has a wide range of fast food products to cater
the customer requirements and the market demand.
The vegetarian burger is a key product for the company in the UK (Company Profile, 2005). It is further interesting to note that the company promotes
vegetarian burger as its key product mainly in the UK among the western countries apart from its operations in the Far Eastern countries like India
where the company pioneers in vegetarian range of burgers and fast food products.
The marketing strategy for any product comprises of three key elements as argued by Frances Brassington and Stephen Pettit (2003)

Product: The product in this essay is vegetarian burger. The key features of the product include low fat, high level of carbohydrates and
above all the use of quality ingredients to prepare the product. The fact that the burger meals are under fast food category and that its sales is
predominantly high during the lunch hours makes it critical that the quality of the product and its ingredients are of high standards in order to achieve
customer satisfaction. The deployment of best practises like washing the hands and the worktop before preparing the vegetarian burger every time
in the kitchen of all the retail outlets (company profile, 2005) and the use of fresh ingredients to prepare the filling for the burger are the key features
that distinguish the product from its competitors in the market. Also, the bran Mc Donald that is famous for its adherence to strict quality principles in
preparation of the products as well as the procurement of the ingredients is an accelerating force for the promotion of the vegetarian burger in the

retail outlets of Mc Donald Plc across the UK.


Price: Philip Kotler (1988) further argues that price is the ultimate decision making factor for purchasing a product by the customer. Even
though food is n the bas of the Maslows hierarchy of needs making it an essential element for survival, the argument of Malcolm McDonald (1996)
that the customers prioritise their needs not only based upon their requirements but also based upon the price of the product they are intending to
purchase. The approach of Mc Donald Plc to sell its products at a relatively lower price to its high street competitors like burger King Plc makes it
evident that the pricing of the product is an essential element for the growth in its sales. Alongside, the pricing of the products in Mc Donald not only
at a lower level but at a competitive level to reflect upon its quality further justifies the pricing strategy of the company with respect to the vegetarian

Burgers sales in the UK.


Promotion: The advertising and promotion initiative of an organization to increase the sales of a product play a critical part in the marketing
strategy s argued by Frances Brassington and Stephen Pettit (2003). This is evident from the companys investment in advertising its products and
the launch of promotion campaigns reflecting upon the social and national events like football premiership, health awareness initiative of the
government etc. Furthermore, the promotion of the vegetarian burger as a corn burger and not just a vegetarian burger emphasises upon the
companys strategy in distinguishing its vegetarian burger from that of its competitors. This is because it is universally known that corn is low in fat
and is a healthy diet in the UK, which was forgotten with the increase in the fast food culture (Simon Taylor, 2001). This approach of the company to
promote its vegetarian burger has not only increased its sales but also accomplished the process of establishing the product as a unique item in the
category of vegetarian burgers in fast food.
The above three elements mentioned might appear to embrace the 4Ps of the marketing mix without the Place facto in the scene. This is mainly
because of the fact that the marketing mix is the heart of the overall marketing strategy for any product in an organization as argued by Frances
Brassington and Stephen Pettit (2003). Since the Place factor is analysed under consumer behaviour in next section, the other three elements that
form the marketing strategy were discussed in this section.

Consumer Behaviour Analysis


Philip Kotler (1988) argues that the consumer behaviour plays a vital role in the designing of the marketing strategy by an organization to either
promote the sales of an existing product or for launching an existing product. This is clear in the case under debate where the company has devised its
marketing strategy to reflect upon the consumer behaviour in the UK food market.

Simon Taylor (2001) argues that the increase in the awareness for vegetarian diet as an alternative in the UK meals is evident since the late years of
the 1990s itself. The fact that the consumers for vegetarian food not only in the fast food industry but also in the overall consumer food industry right
from the supermarkets up to restaurants since the dawn of the twenty-first century (Simon Taylor, 2004) further justifies that the consumer behaviour
towards the vegetarian food in the UK has been increasingly positive. The major driving factors for this state in the target market are identified by
Simon Taylor (2004) as mentioned below
Awareness: The increase in the awareness among the general public who comprise the consumers in the food industry that the vegetarian diet is a
healthy option for overcoming obesity and other health problems is the primary element for the drive of the consumers towards vegetarian range of
food products.
Scientific developments: The continuous research on meat based food products and the establishment of the fact that the animals (pig, cow etc) that
are slaughtered for producing meat can carry germs that cause diseases like the transfer of malarial bacteria from the female anopheles mosquitoes
into pigs eventually transferring into human beings causing malaria to the consumers has increased the pre-caution among the consumers to avoid
meat products in their food. The above argument might appear weak since the strict adherence of the quality and hygiene standards laid by the
government among the meat retailers might contradict the above statement. But the fact that the transfer of disease causing germs can grow in meat
faster than in vegetables as argued by Simon Taylor (2001) supports the argument.

Government And Media:


The strive of the government to encourage the vegetarian food in the diet among the UK general public is the major cause for the consumer behaviour
towards the vegetarian foods. The fat nation campaign by the BBC in 2004 is a classical example for the support of the media towards eliminating
obesity through encouraging the general public to change towards vegetarian diet.
Furthermore, Isla Gower (2004) argues that the fast food retailing in the UK has grown tremendously with the increase in the retail parks in the
geography. This is mainly because of the fact that the general public or the consumers are increasingly treating the process of shopping as a outing
event with the family rather than perceiving it in the generic form of buying essentials. This attitude of the consumers has increased the sales in the fast
food centres like Mc Donald Plc that is present in the retail parks or in the cit centres where the public gather to spend their time in leisure. The above
scenario with the arguments on the increase in the awareness on the vegetarian diet apparently increases the demand for vegetarian range of fast
food.
The above arguments justify the consumer behaviour elements that attribute to the marketing strategy of Mc Donald Plc in promoting the Vegetarian
burgers in the fast food industry. The fact that the awareness among the consumers that the fast food products are rich in fat and are not healthy were
the major elements that contribute to the customisation of the vegetarian burger as Corn burger since corn is very low in fat making the vegetarian
burger as a healthy alternative fast food.
Also, the customised range of vegetarian meals apart from burgers with the salads as option to fries in the retail outlets of Mc Donald justifies that the
above mentioned arguments on the consumer behaviour towards vegetarian diet and obesity are the driving factors for the marketing strategy of the
company.

Conclusion
The discussion on the marketing strategy of Mc Donald Plc for vegetarian burgers makes it clear that the company is dynamic in nature to respond to
the changes in the market. Alongside, it is also clear that the design of the marketing mix which is the heart of the marketing strategy should reflect
upon the target market demand in order to increase the sales proving the arguments of the academic authors mentioned in this essay. The analysis on
the consumer behaviour has also revealed that the consumer behaviour in the UK fast food market was the major element for the marketing strategy of
Mc Donald Plc in selling vegetarian burger. Alongside, the insight into the companys strive towards increasing sales through a range of products in
vegetarian fast foods further justifies that the consumer behaviour is the key to design the marketing strategy for any product in an organization.

References
Books

Frances Brassington and Stephen Pettitt, (2003), Principles of Marketing, third edition, UK: Prentice Hall Financial Times.

Malcolm McDonald, (1996), Strategic Marketing Planning, UK: Prentice Hall

Philip Kotler, (1988), Marketing Management Analysis, Planning, Implementation and Control, 6th Edition, UK: Prentice Hall

Journals and white papers

Company Profile, (2005), Mc Donald Inc, UK: Data monitor Plc

Isla Gower, (2004), UK Retailing: Market Assessment 2004, UK: Key Note Ltd

Simon Taylor, (2001), Diet and Fat-Free Foods: 2001Market Assessment, UK, Key Note Ltd

The McDonalds Story - Genesis


The story of McDonalds started in 1954, when its founder Raymond Kroc saw a hamburger
stand in San Bernardino, California and envisioned a nationwide fast food chain. Kroc proved
himself as a pioneer who revolutionized the American restaurant industry. Today McDonalds is
the worlds largest fast food chain serving 47 million customers daily. McDonalds is now one of
the most valuable brands globally, worth more than $25 billion. The Golden Arches and its
mascot Ronald McDonald have gained universal recognition. Though the company has roots in
the US, McDonalds today has become an accepted citizen of the world.
Year

Events

1955

Ray Kroc opens his first restaurant. McDonalds Corporation is created

1957

Quality, Service, Cleanliness and Value (QSC & V) becomes company


motto

1963

Ronald McDonald makes debut

1965

The company goes public

1968

Big Mac is introduced`

1974

Happy Meal is launched

1996

McDonalds opens in India, the 95th country

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 McDonalds focuses not only on delivering
sales for the immediate present, but also protecting its long term brand reputation.

McDonalds in India
McDonalds entered India in 1996. McDonalds 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 - McDonalds has continually adapted to
the customers tastes, value systems, lifestyle, language and perception. Globally
McDonalds 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 McDonalds 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.

Segmentation, Targeting and Positioning


McDonalds uses demographic segmentation strategy with age as the parameter. The main target
segments are children, youth and the young urban family.

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 McDonalds a fun place to eat. This also helps McDonalds to attract the young urban
families wanting to spend some quality time while their children have fun at the outlet. To target
the teenagers, McDonalds 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 Donalds mein hai kuch baat projects McDonalds as a place for the whole family to
enjoy. When McDonalds 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 McDonalds 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 McDonalds maintains a positive relationship with the
customers.

Customer Perception and Customer Expectation


Customer perception is a key factor affecting a products 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 McDonalds for me?

A Family with children

A treat to children, a fun place to be for the children.

Urban customer on the move

Great taste, quick service without affecting the work 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 customers 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 McDonalds a great scope for improvement.

McDonalds Marketing Mix (5 Ps)


After segmenting the market, finding the target segment and positioning itself, each company
needs to come up with an offer. The 5 Ps used by McDonalds are:
1. Product
2. Place
3. Price
4. Promotion

5.

People

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 nontangible 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.

Place: Where should be the product be available and the role of distribution channels?
The place mainly consists of the distribution channels. It is important so that the product is
available to the customer at the right place, at the right time and in the right quantity. Nearly
50% of U.S.A is within a 3 minute drive from a McDonalds 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.

Price: What should be the pricing strategy?

Pricing includes the list price, the discount functions available, the financing options available
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.
McDonalds came up with a very catchy punch line Aap ke zamane mein ,baap ke zamane ke
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, combo
meal, family meal etc to increase overall sales volumes.

Promotion: What is the suitable strategy and channels for promotion of the product?

The various promotion channels being used by McDonalds 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 McDonalds 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. McDonalds 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 McDonalds are:

You Deserve a break today, so get up and get away- To McDonalds

Aap ke zamane mein ,baap ke zamane ke daam.

Food, Folks, and Fun


Im loving it.

People: How to converge the benefits of internal and external marketing?


McDonalds understands the value of both its employees and its customers. It understands the
fact that a happy employee can serve well 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.
The level of importance has changed to be in the following order (the more important people are
at the top):
1. Customers
2. Front line employees
3. Middle level managers
4. Front line managers
The punch line Im loving it is an attempt to show that the employees are loving their work at
McDonalds and will love to serve the customers.

The McDonalds Experience


Marketing in a services industry is becoming an increasingly complex challenge. The paradigms
of service marketing demand a passionate understanding of customer expectations and
perceptions, and linking them to product design & delivery as well as operational planning. This
is where McDonalds has excelled due to its ability to successfully integrate the customers
perspective in its products and operations in a comprehensive manner. The revamped menu in
India is an example of McDonalds strategy of integrating the customers perspective in its
products. And, the operational integration is evident from McDonalds emphasis on its suppliers
as its customers as well as its treatment of its consumers as co-producers of services.
The ultimate aim of Service Marketing is not just to become a Service Leader but to create a
Service Brand. The Service Delivery Process is the key to achieving this aim of Service
Marketing.

Service Delivery Process

Core Product

Supplementary Process

During the Service Delivery Process, each moment of interaction between the firm and the
customer, called Moments of Truth, helps understand the opportunities that a firm has to win
or lose the customer. For example, these moments of truth are created for McDonalds every
time the guard at the McDonalds outlet meets the customer, every time an attendant takes down
the order from the customer waiting in the queue, every time the cashier interacts with the
customer, every time the attendant helps the customer guided the customer towards the table,
every time the attendant cleans the table, etc.
Moments Of Truth The Service Encounter
Customer

Service Provider

Service Delivery Points

Managing these moments of truth is a great challenge in Service Marketing especially due to
customers involvement as a co-producer of services (e.g. McDonalds self-service concept
wherein the customer not only collects the order but also cleans the table after consuming the
food). However, McDonald's has been able to create a great experience for its customers by
understanding the nature of the entire Service Delivery Process and the various stages in the
process that are exposed to the customers. Transparency in the processes at its outlet has helped
McDonalds bring the back office in its outlet at the front so that the customer is able to know the
operations and provide feedback on service design improvements.
Internal Customer Focus is equally important as External Customer Orientation in order to win
these moments of truth. McDonalds focus on its People and their service delivery methods
therefore plays a very important role in creating a successful Service Brand. The quality and the
consistency of the service delivered by McDonalds have been greatly enhanced by the
combination of the factors mentioned above. This has helped McDonalds become Service
Leader and a successful Service Brand. This is evident from the fact that very few of its
customers opt for take-home parcels or home deliveries while most of them prefer to eat at the
outlet and enjoy the McDonalds experience.

McDonaldizing the Suppliers


McDonalds has changed the nature of not only the food service industry but also the food
processing industry as well. McDonalds realized that the battle between fast food chains would
increasingly be one of efficiency of supply, lower cost production and greater desire to innovate.
It pioneered with innovative and sophisticated food distribution and packaging systems when the
traditional food processors were unwilling or unable to supply food items that McDonalds
demanded. They achieved amazing consistency by devoting more attention than anyone else to
field service and training at store level. Production was concentrated in huge plants devoted
exclusively to McDonalds. McDonalds also started with tiny suppliers and grew with them
displaying great loyalty.

Nowhere is the supplier loyalty more evident than in development of new, improved products.
Some of McDonalds classic food items like Filet-o-Fish, French Fries, Chicken Nuggets etc. are
results of supplier innovation. Interestingly, it took KFC more than three years before in finally
introduced its own version of chicken nuggets. Thus supplier technological expertise had given
McDonalds a product which was not a mere marketing innovation but a technical one.
McDonalds attempted to squeeze labour out of the stores by moving more preparation back into
the processing plant, creating the opportunity to develop unique products based on suppliers
processing skills. For the first time, McDonalds suppliers became the focal point of new
product development. This converted the fast-food industrys most fragmented distributed
system into more efficient one which helped McDonalds reduce its inventory and manage costs
effectively.

Importance of PLC in McDonalds


The requirements of customers change over time and thus the product offering has to be changed
accordingly. What is the fashion today may be out of market within few weeks. Thus continuous
innovation is required.

To counter these changes McDonalds has continuously introduced new products and has phased
out the old ones which were at the decline stage of their PLC. The introduction is timed such that
the new product does not cannibalize the product already in the maturity or growth stage. Thus
the secret lies in getting profits with different products in the different stages of the PLC.

A perfect example of revitalising a product in decline


phase

The French Fries have been an important part of the McDonalds menu worldwide. But now it
was in the stage of decline and was actually not generating proper return. In an attempt to
revitalize it, a new variant was introduced namely Shake Shake Fries. This is being served with
chatpata spice mix which has resulted in increase in the sales of French Fries and has elevated it
from to the decline stage. This is used to delay the decline of a well established product which
has the potential of generating further revenue.

Competitors Analysis
McDonalds has been a leading fast-foods outlet in Vile Parle. But the outlet understudy has
other competitors eating away into its market share. In addition to its traditional rivalsKFC,
Dominos, Pizza Hutthe firm encounters new challenges. Jumbo King competes using a backto-basics approach of quickly serving up burgers for time-pressed consumers. On the higher end,
the KFC has become potent competitor in the quick service field, taking away customers from
McDonalds. Perhaps in the new environment, fast, convenient service is no longer enough to
distinguish the firm. At this time, a new critical success factor may be emerging: the need to

create a rich, satisfying experience for consumers. This brings us to service and experience
based competition which McDonalds can use for competitive advantage against Jumbo King.
Keeping in mind the demographics of the area, McDonalds has Wi-Fi enabled the outlet to cater
to the student community. It is for this overall Food, Fun & Folks experience that customers
pay a premium over the other competitors.
Competition also reduces product lifecycle; inducing firms to revise their products
portfolios and to revisit their product market to understand changing needs, expectations and
perception of different market segments. The new McBreakfast would be introduced between 6
to 11 am as a pilot project. This would open up a whole new revenue stream for McDonalds by
tapping into the student and working population by providing a healthy and wholesome
breakfast. This shows how demographic shift can affect the demand for products and services.
McDonalds has anticipated these changes to maintain its competitive edge.
Two Dimensional Perceptual Mapping

SWOT Analysis

The Road Ahead


Entry to Tier 2 and Tier 3 cities The main target customer for McDonalds is the new
urban Indian family. With the customer demographics constantly changing and tectonic
social and cultural shifts being observed in Tier 2 and Tier 3 cities due to globalization,
the company is now expanding to Tier 2 cities like Pune and Jaipur.

Rolling out McBreakfast across all outlets In India, the company has recently
launched its entry into the breakfast food category. This is now launched on a pilot basis
on select stores. In Mumbai, it available at the Vile Parle outlet. The company views this
category as a key growth driver in future.

Exhibits
1. McDonalds Indian Menu
Vegetarian

Non Vegetarian

McVeggie

Chicken Maharaja Mac

McAlooTikki

McChicken Burger

Paneer Salsa Wrap

Shahi Chicken McCurry

Crispy Chinese

Wrap Chicken Mexican

McCurry Pan

Fillet-O-Fish

Pizza McPuff

Vegetarian Menu

Non-Vegetarian Menu

Survey Questionnaire
Q. Which is your favorite product at McDonalds?

Q. Is the product line in McDonalds adequate?

Q. What is the main problem you faced at McDonalds?

Q. Which area do you think needs the most improvement?

Q. What is the first thing that strikes your mind about McDonalds?

THE FREE TOYS PROVIDED WITH HAPPY MEALS (WALT DISNEYS


MADAGASCAR)

KIDS PLAYING AT PLAY PLACE- MCDONALDS VILE PARLE (MUMBAI)

THE NEW BREAKFAST MENU STARTED AT SELECT STORES IN MUMBAI.

References
1. Marketing Management Dr. Rajan Saxena
2. McDonalds Behind the Arches John S Love
3. www.Mcdonaldsindia.com
Outlet Manager McDonalds Vile Parle