Company’s Background

McDonald's is the leading global foodservice retailer with more than 31,000 local restaurants

serving more than 58 million people in 118 countries each day. More than 75% of

McDonald's restaurants worldwide are owned and operated by independent local men and

women. McDonald’s primarily sells hamburgers, cheeseburgers, chicken products, french

fries, breakfast items, soft drinks, milkshakes, and desserts. More recently, it has begun to

offer salads, wraps and fruit. Many McDonald's restaurants have included a playground for

children and advertising geared toward children, and some have been redesigned in a more

'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces,

and eliminating hard plastic chairs and tables. Each McDonald's restaurant is operated by a

franchisee, an affiliate, or the corporation itself. The corporations' 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.

McDonald's restaurants are found in 119 countries and territories around the world and serve

nearly 47 million customers each day. McDonald's operates over 31,000 restaurants

worldwide, employing more than 1.5 million people. The company also operates other

restaurant brands, such as Piles Café, and has a minority stake in Pret a Manger. The

company owned a majority stake in Chipotle Mexican Grill until completing its divestment in

October 2006. Until December 2003, it also owned Donatos Pizza. On August 27, 2007,

McDonald's sold Boston Market to Sun Capital Partners.

Product Information
McDonald's menu concentrates on five main ingredients: beef, chicken, bread, potatoes and

milk, which account for £255 million of food expenditure. The company's main menu lists its

basic food offering: the Big Mac, which still exists as a major seller; other standard product

names come from the McDonald's convention of adding a 'Mc' to a particular item. So, a

chicken sandwich becomes a 'McChicken' sandwich and chicken nuggets become chicken

'McNuggets'. This idea has been extended to their dessert range, with the creation of the

'McFlurry' ice cream. They mainly dealt with Beef, Pork and Chicken. McDonald’s mainly

became famous with their ham burger in USA. Their sandwiches also contained various types

of beef and pork meat. But this concept of selling Beaf and Pork was not going to be

successful in most of the Asian countries like India, Pakistan and Bangladesh. They had to

change their whole product line up to gain success in those countries.

Need For Change

When McDonald’s planned to build restaurants in India, they knew that they had to change.

India is the home of Hindu religion. Most of the people are vegetarian and people who eat

meat, don’t eat beef because Cow is a very sacred animal in India. So is Pork for Muslims.

That’s why they had to develop new products and drop their trademark Ham burger. It was a

huge change for a company which has been dealing with Beef and Pork for so many years

and certainly had to think about something else. So they came up with an idea of selling

only vegetarian and chicken burgers and sandwiches. This concept was very welcomed and

eventually became very successful.

According to Amit Jatia, a JV partner of McDonalds India, "It is the only country in the

world for sure that does not offer beef at all. Maybe other countries may do pork burgers, but

in India, we definitely have no pork or beef at all." That's not to say Indian restaurants don't

sell patties on buns. But instead of ground round, Indian burgers are 100 percent vegetarian

burger look-a-likes of potatoes, peas, and carrots, with a little Indian spice thrown in.
Diets in India have been impacted by the many different religions in India for centuries now.

Hindus don't eat beef. Hindu believers consider the cow scared and holy, so harming a

cow...let alone eating its meat is considered a grave sin. Since a majority of the population are

followers of Hinduism, there is no beef on the McDonalds' menu in India. Hindu's and

Muslims (also a prominent religion in India), don't eat pork, so the McDonalds Corporation

in India is quick to point out on their website (mcdonaldsinindia.com) that not only is there

no beef, there is no pork or pork byproducts in any McDonalds restaurant in India.

That's not to say that McDonald's doesn't serve any non-vegetarian products in their Indian

restaurants. They do serve chicken burgers and still have the one Fish Burger...but if you're a

meat eater..then you'll be outnumbered with their vegetarian options.

McDonald’s Products in India

In India, meat and vegetarian meals are prepared in separate areas of the restaurant because of

religious laws about preparation of food for vegetarians and meat-eaters. Cooks preparing

vegetarian dishes wear distinctive green aprons.

The "McCurry Pan", the famous dish is very popular and is an original creation of

McDonald's across India.

The Big Mac is replaced by the Maharaja Mac, which was originally made with lamb but is

now made with chicken.

Mexican-style wraps for both vegetarians and non-vegetarians, such as the Paneer-Salsa wrap

and the Chicken-Mexican wrap, and Curry pans in Shahi-Paneer and Chicken-Tikka

variations are also offered.

Other items on the Indian Menu include chicken products such as the McChicken Burger and

Chicken McGrill (a burger with a thin chicken patty, thin slices of both onions and tomatoes,

filled with green chutney replacing the usual layer of mayonnaise).

The vegetarian burger menu consists of the McAloo Tikki Burger. It is a vegetable burger

with potato, peas, and spices, tomato, onion, and a vegetable-tomato mayonnaise.

McVeggie is another Vegetarian burger on the menu. It looks similar to the above McAloo

Tikki Burger, but is made from mixed vegetables, peas, and spices, lettuce and veg

mayonnaise (referred to as Veg Sauce in India).

Another new Menu Item added is the McSurprise burger. It contains a patty, onion, Italian

mayonnaise.

There is also a Pizza McPuff, consisting of a puff pastry stuffed with peas, sliced cheese etc.

Recently a breakfast menu is introduced in selected outlets. The menu includes veg items like

Veggie McMuffin, hash browns, cuppa corn, Hot cakes with maple syrup, and Spinach and

corn McMuffin. Non veg menu features egg and cheese McMuffin, Sausage McMuffin and

chicken Salami McMuffin. These products will be available at selected outlets from 7 a.m. to

11 a.m. in the mornings only

- McVeggie:

The McVeggie sandwich starts with the oh-so-familiar sesame seed bun. In between the

bread, you'll find a vegetarian patty that is made from peas, carrots, green beans, red bell

pepper, potatoes, onions, rice, and seasoning. This vegetarian burger is garnished with

lettuce, and has mayonnaise made without eggs spread thickly on the bread.

- McAloo Tikki

Potatoes (aloo in Hindi) are a popular filling food item in India. McDonald's in India's

McAloo Tikki sandwich includes a patty made out of potatoes, peas, and spices. It also

includes tomato slices, onions, and vegetarian mayonnaise.

- Paneer Salsa Wrap:

Paneer is referred to as cottage cheese in India. McDonald's Paneer Salsa Wrap starts with a

small slab of paneer that has been dredged in a coating that is a cross between Mexican and

Cajun in flavor. It is fried and the paneer patty is wrapped in flatbread and topped with a

salad mixture that includes lettuce, red cabbage and celery and then is finished off with

vegetarian mayonnaise, salsa and cheddar cheese.

- Crispy Chinese:

McDonald's in India's Crispy Chinese sandwich is crispy, but very China. It's more an

Indianized Chinese. Nevertheless, this vegetarian patty is topped with a creamy Schezwan

sauce and lettuce which makes it a nice addition to the Indian vegetarian menu.

- Veg McCurry Pan:

If you are in the mood for something similar to pizza, but don't want a tomato-based sauce,

McDonald's Veg McCurry Pan is a good choice. It starts with a rectangular shaped crust that

is topped with a creamy sauce (made without eggs), and vegetables including broccoli, baby

corn, mushrooms and red bell pepper. It is then baked until the crust is crisp and the toppings

are hot and bubbly.

- Pizza McPuff:

The vegetarian Pizza McPuff also starts with a rectangular shaped crust, but instead of a

creamy sauce is flavored with a tomato-based sauce and then is topped with carrots, beans,

bell peppers, onions, peas and mozzarella cheese.

The Non-Vegetarian Fare at McDonalds India:

- Chicken Maharaja Mac:

 The Indian version of the Big Mac at

McDonalds in India, is the Chicken

Maharaja Mac sandwich which is

made with 2 grilled chicken patties

and is topped with onions, tomatoes,

cheese and a spicy mayonnaise.

- McChicken:

The McChicken in India is almost the same as its cousin by the same name in other

McDonalds around the world. It contains one breaded and fried chicken patty and is topped

with lettuce and vegetarian mayonnaise. It is similar in size (but not taste) to the spicy

chicken sandwich on the dollar menu at McDonalds restaurants in the U.S.

- Filet-O-Fish:

The Filet-O-Fish sandwich at McDonalds in India is the only sandwich item on the menu that

is exactly the same as the Filet-O-Fish sandwich you might eat at a McDonalds in the U.S.

- Chicken McGrill:
The Chicken McGrill sandwich starts off with a thin grilled chicken

patty that is embellished with cilantro mayonnaise, onions and

tomatoes and is served on a toasted bun.

- Chicken McCurry Pan:

Chicken McCurry Pan is the same as its vegetarian version. It starts off with a rectangle of

dough and is topped with a tomato-curry sauce, spiced with thyme, basil, and oregano. It is

finished off with chicken, bell peppers, and cheese and is baked till crisp and bubbly.

Apart from these specials that appear mainly in the Indian McDonald's here there are a couple

of things that are exactly the same in India as what you would consume at a McDonalds in

the U.S. or anywhere else. And that's McDonald's famous fries, shakes, and soft-serve ice-

cream, both sundaes and cones. And of course soft drinks are available as well!

McDonald’s business strategy in India

McDonald’s business strategy in India was very clear. They already had a good reputation in

world, they had a brand name and image. All they had to do was change their products

according to culture and environment and this is what they did and became very successfull.

When McDonald's India launched in 1996, urban Indians in Mumbai and Delhi typically ate

out three to five times a month, according to AT Kearney, the management consultancy. In

the 12 years since then, that average frequency has doubled and analysts forecast that by 2011

the Indian quick service restaurant market will be worth 30,000 crore (about $6.3bn at

October 2008 exchange rates). But from their earliest investments in India, multinational

company (MNC) owners of restaurant chains have struggled to adapt to the needs of India's

many markets. Some pulled out of the country after failed ventures. At the time,

consolidation of the hugely fragmented Indian retail sector had also barely begun, and there

was scepticism that Indians would prefer burgers and fast food to local food offerings.

However, in the intervening decade, McDonald's has continued to open new outlets in the

country, evolving its marketing strategy through several phases.

Twelve years of McDonald's India

McDonald's India was set up as a 50:50 joint-venture between McDonald's at a global level

and regional Indian partners such as Hardcastle Restaurants Private Limited in western India,

and Connaught Plaza Restaurants Private Limited in northern India. The first Indian

McDonald's outlet opened in Mumbai in 1996. Since then, outlets have begun trading in

metropolitan and Tier II towns across the country. By September 2008, it had premises in

Mumbai, Bangalore, Baroda, Pune, Indore, Nasik, Chennai, Hyderabad, Surat and

Ahmedabad.

Amit Jatia, Managing Director, Mcdonald’s India, said: "The past decade has witnessed a

marked change in Indian consumption patterns, especially in terms of food. Households in

middle, upper, and high-income categories now have higher disposable income per member

and a propensity to spend more."

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 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 flavoring 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."

Phase II: 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. 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. 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."

McDonald's "Happy Price" campaign

Phase III: Appealing to both ends of the age spectrum

In 2008, the latest campaign from the McDonald’s-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."

Benefits of that Change

This change has benefitted McDonalds a lot. It was necessity for them to change. Otherwise

they would not have succeeded in selling their products in India. By making changes, they

have overtaken most of the fast food market in India and are still progressing. To completely

overtake the fast food market in India, they have started home delivery. The first to offer it is

its restaurant in Bandra in Mumbai. And within a few months, all McDonald's restaurants

will offer a home delivery option.

"The key idea is convenience. We are a quick service restaurant available at high-traffic

locations. But there is a large number of people who find it difficult to travel. By offering

home delivery we can reach out to them and increase our penetration," says Amit Jatia,

Managing Director, Hardcastle Restaurants, the franchisee of McDonald's in the western

Indian region.
McDonald's does not place any restriction on the minimum order for home delivery, but it

will charge a flat fee of Rs 10 per order as delivery charges, irrespective of the size of the

order.

In terms of distance covered, McDonald's does not have any rules

laid down, but Jatia says that the stores will deliver to neighborhoods

which are up to 10 minutes away by road.

"The key is to deliver hot and fresh food. So we have mapped the

area that we can cover even during peak traffic. So the distance

covered will differ across the restaurants," says Jatia.

Unlike Pizza Hut and other western fast food outlets, McDonald's has been slow to offer

home delivery. Despite being in the business for nearly eight years, it is only now that it is

slowly rolling out this option.

Jatia says that McDonald's waited so long to get it right. They serve about 4.5 million

customers every month and this number is growing by 30 to 40 percent every year.

Future Plans

McDonald’s plan to double their outlets in India while they are planning to close their outlets

in Europe and USA. They already have 47 restaurants and they are planning to open 50 more

restaurants in next three years. Western India will get fifteen new outlets over the next 12

months at a cost of 600m rupees, according to Amit Jatia, managing director of regional

franchise holder Hardcastle restaurants. McDonald's has invested about 7bn rupees in India

since it entered the market in 1996 and reported growth of about 40%. In next two years they

are planning to have an entirely Indian menu.

Recommendations

McDonalds’ should add more vegetarian dishes in their menu and open their outlets in places

where everyone can reach them easily. They should sell dishes which are really healthy.
Usage of fresh fruits and vegetables should be increased. They can get all types of fresh fruits

and vegetables in every season. They can add some dishes varying with season as well. They

have taken a good step by starting home delivery, this will really benefit them. They can

remove the playhouses from their restaurants because it has been criticized a lot of time.

Some people think that they cause injury to children. So McDonalds’ can think about

removing these playhouses.

Conclusion

McDonalds’ have done well to survive in India, actually they have done more than just

survive. They have almost overtaken the Indian fast food market. They have shown that how

by changing according to culture and atmosphere can benefit you. They have set a good

example for the companies who wish to come to India or any other part of world, where they

do not belong. They should keep up the good work and work hard to improve more.

References

http://www.cbsnews.com/stories/2007/04/02/asia_letter/main2640540.shtml

http://www.aspects.net/~stephenginns/education/skills/tenchange.htm

http://www.aboutmcdonalds.com/mcd/our_company.html

http://209.85.229.132/search?q=cache:0FFjW7bZQqAJ:ipm.ge/article/How%2520McDonald

%27s%2520evolved%2520its%2520marketing%2520in

%2520India_ENG.pdf+mcdonalds+india+change&cd=1&hl=en&ct=clnk&gl=uk

http://www.indiamarks.com/guide/What-You-Can-and-Can-t-Get-at-McDonalds-India-/1739

http://www.rediff.com/money/2004/apr/08spec1.htm

http://www.businessweek.com/innovate/content/may2006/id20060508_952455.htm
http://www.mcspotlight.org/media/press/mcds/bbc070403.html