Group-4 Case Study On Mcdonald's
Group-4 Case Study On Mcdonald's
Group-4 Case Study On Mcdonald's
MCDONALD’S
PARTICIPANTS
DITI, 20020191
MEGHA, 20020037
NITYA, 20020051
SALONI, 20020039
SAKSHI, 20020095
Table of Contents
INTRODUCTION................................................................................................3
OVERVIEW OF THE COMPANY.....................................................................3
PROBLEM STATEMENT...................................................................................4
LOCALIZATION STRATGEY...........................................................................4
INTERNAL ANALYSIS......................................................................................5
EXTERNAL ANALYSIS....................................................................................6
COMPETITOR ANALYSIS................................................................................8
SERVICE DELIVERY.........................................................................................9
SERVICE QUALITY.........................................................................................10
PRICING STRATEGIES...................................................................................11
COMMUNICATION STRATEGIES................................................................12
GLOBAL STRATEGIC PLANS.......................................................................15
SUGGESTIONS.................................................................................................18
CONCLUSION...................................................................................................19
INTRODUCTION
McDonald's brings a smile to many people's faces. It is well-known for its crispy burgers and
large number of locations. In 1996, the company began operations in India as a 50:50 joint
venture collaboration. Given local eating preferences for vegetarian foods, India was a
difficult market to penetrate. India's annual food expenditure was around $128 billion,
compared to 132 billion in China, although it was expanding faster than China's. McDonald's
is one of the most well-known brands in the world. This case study examines McDonald's
Indian market strategy for catering to the needs of Indian consumers based on their tastes and
preferences while maintaining its competitive position in the market. We will explain how
McDonald's listens to its customers in order to develop its brand. It also explains the many
prices, communication, and worldwide strategies that are currently being applied. Marketing
communication strategies such as advertising and promotion are used to produce the colours,
designs, and pictures that give the brand its known face. This is reflected by the Golden
Arches, a well-known McDonald's brand. Understanding and responding to client requests
and requirements in a more effective manner than competitors is part of services and
marketing. A company can establish a loyal customer base using this strategy. This case
study also represents that how McDonald's has established ways to combat decreased sales,
while launching New Taste Menu, which caters to the health-conscious market. The message
was that McDonald's was good and healthy, that it had wonderful staff and was fun, and that
new things like the McCafé range were helping the company attract new customers.
McDonald's has become one of the most recognisable and valuable brands in the world
because to a thorough and innovative marketing and service approach.
PROBLEM STATEMENT
According to the case, the primary problem McDonald's had in India was during the launch.
Because McDonald's is an international food service, Indian consumers were first hesitant
that it would meet their expectations. For the Indian consumer, McDonald's delivering the
cheapest burger is insufficient. They must accommodate and provide a menu that is in
keeping with Indian culture and palate. The cultural element had to be considered and plays a
crucial part in the Indian market, as any omission might damage a company's reputation
globally, limiting the company's ability to provide services to a diverse customer base.
LOCALIZATION STRATGEY
McDonald's used a product adaption strategy to fit the tastes and cultures of the locals.
Because India is a land of diverse cultures and religious beliefs, the degree of adaptation was
substantially higher than in other countries. McDonald's has replaced its flagship product, the
Big Mac, with the Maharaja Mac. It was offered with mutton patty (rather than beef patty) in
India to avoid offending religious beliefs, as around 80% of the population is Hindu, who
consider cow slaughter to be disrespectful, and 12% of the population is Muslim, who
consider pig consumption to be forbidden. Both vegetarian and non-vegetarian options are
available on the menu. The menu for vegetarian food products was displayed in green, while
the menu for non-vegetarian food products was displayed in red. When McDonald's first
entered the Indian market, it had the biggest number of middle-class families; as a result, they
marketed themselves as a brand that served products at the lowest possible price, so that
every middle-class family could afford it. For rupees 25, they introduced economical meal.
The average cost of a veg combo meals was Rs 70, while a non-veg meal was Rs 80. The
decreased price can be linked to two factors: Multinational rivals' mid-range local eateries'
pricing strategy and the expansion of the local supplier chain.
INTERNAL ANALYSIS
STRENGTHS: McDonald’s strength reveals the areas it excels in and which areas it
competes with competitors in.
Highest Brand Value : McDonald's is the most valuable brand in the world,
according to Forbes and Interbrand. McDonald's has a significant amount of
brand equity.
Delicious and variety of food items : McDonald's fries are best in the fast-
food industry. Let's face it, we all enjoy it, don't we? Apart from the present
menu, it is constantly updating it by adding new things such as coffees,
smoothies, and other beverages.
Supply Chain : McDonald's is best fast food chain, with the busiest food
chain, which necessitates limiting food supply. These disruptions result in
higher operational costs and, as a result, lower earnings.
EXTERNAL ANALYSIS
OPPORTUNITIES: Opportunities are elements in which a corporation can work ahead of
its competition to get a competitive edge.
Growth of the fast food industry : This is one of those sectors with a lot of
room for growth. McDonald's can sustain their allure for a longer amount of
time by launching new goods based on geographic conditions. McDonald’s is
quite popular in the United States; yet, it should have an international strategy
in order to expand into Asian markets.
Low Cost: The low-cost menu has the potential to attract a large number of
new clients. For middle-class or lower-middle-class families, eating at
McDonald's is a major event.
THREATS: Threats are situations in which a firm must protect itself and use its capabilities
to overcome them.
COMPETITOR ANALYSIS
It is vital for a firm to continue obtaining competitive information and keeping an eye on their
strategy and approaches to the market in order to be successful. This not only aids in the
protection of the company's market share, but also provides prospects for gaining further
market share and attempting to displace the competition in order to acquire market
supremacy. Every restaurant and eatery in the quick service sector could be considered a
competitor for McDonalds, but we're only looking at Pizza Hut, Dominos, and KFC as major
competitors, analyzing market share, reasons for their growth in India, and how McDonalds
counters their strategies to build a relationship with Indian consumers.
KFC
After McDonald's, KFC is the second-largest fast-food chain, and one of McDonald's
main competitors. The company, which was founded in 1930, has evolved and
extended into new territories, having about 20,000 branches or sites in over 120
countries as of 2015. KFC is owned by Yum! Brands, which also owns Taco Bell and
Pizza Hut. KFC serves salads, French fries, soft drinks, and chicken fillet burgers in
addition to fried chicken. KFC's fried chicken is widely regarded as the best in the
world, and the company's motto, "Finger-Lickin' Good," encapsulates how good they
are at what they do. KFC had a revenue of 23 billion dollars in 2013.
Burger King
Burger King, a division of Restaurant Brands International, is unquestionably one of
the largest fast food chains. Burger King was founded in 1953 and is headquartered in
Florida, USA. Its menu includes soft drinks, hot dogs, desserts, hamburgers, chicken,
and French fries, among other items.
Pizza Hut
Pizza Hut is well-known for its renowned Italian-American food on its menu. Pizza
Hut also offers desserts, pasta, chicken wings, and pizza, among other options. Yum!
Brands owns and operates this brand, as well as others. Pizza Hut is widely
recognized as the best pizza chain in the world, with pizza sales accounting for the
majority of its revenue. Thin & Crispy, Sicilian, Stuffed Crust, Pan Pizza, and Hand
Tossed are just a few of the pizza styles available. If you require fast food other than
hamburgers, you'll undoubtedly go to Pizza Hut, making it one of McDonald's main
competitors.
Domino’s
Founded in 1960 and headquartered in Michigan, USA, Domino's has remained a
strong force in the fast food market, as indicated by its global presence of over 13,000
stores. Dessert, pizza, chicken wings, pasta, and submarine sandwiches are among
Domino's most popular items. Domino's is the only one of the 'big four' pizza chains
that sells Coca-Cola. Domino's used Flirety's DRU Drone to deliver the first
unmanned aerial vehicle pizza delivery in New Zealand in 2016. In 2016, Domino's
had a revenue of 2.47 billion dollars and a profit of 214.7 million dollars, with
260,000 employees working in its locations throughout the world.
SERVICE DELIVERY
The hospitality industry is more of a service enterprise, as a consequence for an powerful
operational management, the focal point must be at the excellent service that clients get hold
of from the company. When quality and pleasing offerings are offered, then clients can
increase loyalty to certain company, a component that builds a sturdy brand name for the
company.
McDonald is the world biggest burger and drive-through eateries; which works midway and
diversified business; to stay ahead in the quick developing industry, the executives ought to
foster a quality assistance conveyance framework to its more than 31,000 cafés in 119
nations. To oversee and control administration conveyance, the administration needs to set a
few benchmarks and see their severe adherence (McDonald Official Website, 2011).It is
known for its new quality inexpensive food; the vitally cheap food that the organization is
known with is sandwiches.
The organization offers both counter help and drive-through assistance depending with the
area and the idea of the specific outlet; it has both inside and outside catering anyway inside
providing food takes the majority of the business time. The organization targets working on
quality and getting more significant yields with the conveyance of value administrations and
new food varieties (McDonald Official Website, 2011)
The customer is the most important stakeholder in any hospitality organization; they strive to
create positive cooperation through the services they provide. The initiative of McDonald has
been credited to the nature of services they offer; notwithstanding, no ideal level of service
conveyance can awesome, nonetheless, it ought to be consistently be improved (Metters,
Kathryn, Madeleine and Steve, 2006).
The figure illustrates how various aspects of service delivery contribute to better customer
service. Service quality is an aspect of a number of factors that must be executed in an
organisation. McDonald's and its franchisees should have a flow chart of events that may be
followed with the goal of having satisfied customers at the conclusion. Organizations that
provide service that is sensitive to client needs outperform others that do not care or are
resistant to change. In order to be competitive in this market, a company must ensure that its
customers are satisfied.
SERVICE QUALITY
As far as the consumer is concerned, the utility that certain individual customers derive from
a particular product is the quality of the commodity. There can't be a singular definition of
service quality because the receiver's impression is what determines whether or not he'll do
business with the organisation again.
When it comes to service quality, there are two major factors to consider: technical quality
and functional quality. Technical quality is concerned with what is delivered, whereas
functional quality is concerned with the manner in which it is delivered.
Technical quality can be seen, but functional technical can't. McDonald's management is
responsible for ensuring that the restaurant group adheres to both technical and non-technical
quality standards (Kotler, Bowen and Makens, 2003). The chart below summarizes the
service quality phenomenon.
PRICING STRATEGIES
Pricing is a significant part of McDonald's advertising methodology and mix. McDonald's
follows a blend of several estimating methodologies: bunding pricing strategy with
psychological pricing and low-cost price strategy. The essential thought is to "think globally
and act locally". McDonald's employs psychological pricing by using prices that appear to be
much less expensive, such as $__.99, rather than rounding to the closest dollar. (MEYER,
McDonald’s Marketing Mix (4Ps) Analysis, 2015). McDonald's has earned a reputation as
one of the world's most popular fast-food chains. With the cost of living continuing to rise,
McDonald's has started offering combinations and specials to draw customers and generate
profits through economies of scale.
Despite the fact that standardisation is a cost-cutting feature, McDonald's price strategy is
implemented locally rather than globally."Aap Ke Zamane Mein, Baap Ke Zamane Ke
Daam" was the brand's catchphrase in India. This was done in 2008 to entice poor and
middle-class customers to sample McDonald's India's services, and it was a huge success.
McDonald’s uses Low pricing strategy and bundle pricing strategy.
To decide the pricing for a certain market, each country must go through a rigorous process.
The basic structure that McDonald's employs to produce localized pricing is as follows:
COMMUNICATION STRATEGIES
McDonald's immense success can be attributed to the company's intense focus on customer
involvement, appropriate leadership that is well-suited to the company's operations, and
exceptional organisational resources invested in effective marketing communication. To fulfil
the cultural needs of each of their consumer segments, they have established a "think global,
act local" strategy. McDonald's places a strong emphasis on customer-focused and goal-
oriented methods. Due to the importance of family values in India, McDonald's promoted the
fact that it is more than simply a fast-food establishment, but also a quick, healthy, and
convenient place for families to enjoy time together. As a result, McDonald's concentrates not
only on providing quick sales, but also on maintaining the brand's long-term reputation.
McDonald's focuses on the fast service restaurant format, which includes fine dining, full
service, quick service, and kiosks, among other food restaurants. McDonald's restaurants are
clean and bright, casual, comfortable, and modern, with an emphasis on the young family
dining out. McDonald's was able to recreate their global strategy of happy meals to target
kids, and the rest of the family jumped on the bandwagon. The flavour and variety of the
brand set it apart, with an emphasis on Indian adaptations and value for money.
McDonald's communication strategy focuses on the family. "McDonalds mein hai kuch baat"
was the tagline during the introductory stage, indicating a special spot for the family to enjoy.
During the expansion phase, the slogan was modified to "To aaj McDonalds ho jaaye,"
implying a welcoming and fun environment for the entire family. McDonald's implemented
their global slogan "I'm Lovin' It" throughout the growth phase to communicate a sense of
security to young families.
McDonald's message should be consistent across all media in order to influence a common
strategy. Teenagers and adults in need of a quick lunch, as well as families with young
children, are McDonald's target audiences. McDonald's communication strategies are based
on these factors.
ADVERTISIN DIRECT
G MARKETING
COMMUNICATION
STRATEGIES
Sales Promotion- McDonald's and other fast-food businesses use sales promotion as
a marketing strategy. McDonald's has launched a number of notable sales campaigns,
including "free breakfast," a limited-time offer that allows consumers to choose two
of the following things for Rs.49: a Mcaloo tikki burger, small fries, and soda, among
others. As a strategy of luring more customers, McDonald's gives discount coupons
and freebies for specific products and product bundles.
Events & Experiences- McDonald's is known for sponsoring and hosting a variety of
events and experiences that promote specific items as well as the company's overall
brand image. Many McDonald's restaurants include special places for kids to play
games and have a good time. McDonald's has organised or sponsored a variety of
events and experiences in order to raise brand recognition and/or promote specific
items among members of the target customer category. McDonald's has a significant
history of collaborating with a variety of companies and artists. The goal of these
collaborations is to keep the company's brand alive in the minds of its customers. This
is more than just generating ad campaigns to promote the value of its products. It
recently collaborated with BTS, a well-known South Korean music band, It has also
worked with artists such as Travis Scott and J Balvin, as well as companies such as
Coca-Cola.
Direct Marketing – it aims to strengthen and personalise ties between the buyer and
a chosen group of customers. McDonald's uses direct marketing on occasion.
McDonald's places a premium on attracting customers who are most likely to be
interested in their offerings. This includes mailing or handing out promotional
materials instead of using the phone, using a voucher system, or even going door to
door. As a result, McDonald's makes an effort to appear at all events and occasions
that attract the attention of boys and girls. This is a promotional offer to entice buyers
to purchase their newest product. McDonald's has the advantage of being able to
target clients who are particularly interested in and attentive to specific things on
offer. McDonald's, for example, may send a letter to eager and enthusiastic consumers
informing them of a new product.
Global Strategic Plan McDonald's operations are designed and linked with the company's
plan-to-win philosophy. The requirement to create an extraordinary client experience is at the
heart of this approach.
Products, people, site, pricing, and marketing are all part of the plan-to-win approach (5Ps).
The organisation thinks that by combining these 5Ps, it would be able to accomplish its aim
of continual customer experience improvement. Human resource planning, selection,
education, performance, compensation, and employee maintenance are all part of the
company's human resource strategy.
This strategy ensures that the firm does not run out of personnel who are needed to supply not
just the company's products and services to clients, but also its values. The firm knows that it
may not be able to push enough items to market if it does not have enough personnel who can
provide services at the quickest potential pace. Customers may want to eat at one of the
company's competitors' restaurants, which offer shorter wait times.
Selection is a key part of McDonald's human resource strategy when it comes to finding the
best individuals to fuel the company's success. McDonald's has access to a wide pool of
labour supply in any location where it operates. It is, nevertheless, careful to choose
employees who can be lucrative. Although it hires competent individuals to help it achieve its
profitability goals, it also hires unskilled workers. McDonald's human resource strategy
places a premium on evaluating employee performance. This strategy ensures that the
company's loyal consumers are not lost to competitors. McDonald's human resource strategy
ensures employee retention through salary, reward schemes, and promotions.
Campaigns against high-calorie foods have been launched by health organisations. Such
campaigns have resulted in the need for fibre-rich foods. To do this, creativity and innovation
are required in the attempt to develop new goods that fulfil emerging client needs. This
initiative is intimately aligned with any organization's human resource operations.
HR specialists work to create strategic strategies that assure ongoing staff development in
order to boost creativity, originality, and productivity. HR professionals may assist in the
recruitment of highly creative people or the training and development of existing workers to
enhance their skill levels in the attempt to guarantee that McDonald's remains profitable via
the invention of new goods and ways of service delivery.
McDonald's relies on a variety of strategies to ensure that its menus include healthful items.
The pie chart below, according to McDonald's, indicates how the company's decision to
promote nutritious cuisine gained many customers from competing restaurants.
Its marketing plans reflect these developments. Such a shift in the company's marketing
strategy is critical to ensuring the company's position as the global market leader in fast
meals.
Incorporating fruit salad into the company's menus is one tactic that should be reflected in the
company's evolving marketing efforts. Marketing, on the other hand, is only useful during the
promotion of a product. Such items must be developed and manufactured by people. The
formulation of human resource strategy can either help or hurt this process.
To build collaborative organisational success, the corporation hires experienced individuals
who can operate in an environment that fosters respect and high levels of party involvement.
Workers have accused the corporation for exploitation of employees through low
compensation and the continuation of extremely hierarchical and bureaucratic organisational
structures notwithstanding this focus. In contrast to the company's objective of leveraging
people to produce and enhance its goods, such an organizational structure stifles innovation
and creativity.
McDonald's takes these steps while building its human resource strategies.
Determine goals, scan the environment, undertake workforce, and gap analysis, and
identify HR priorities to aid in the achievement of departmental goals to create a
successful human resource strategy.
Monitoring, evaluating, and reporting on progress are all important actions that must
be taken. Goals aid in identifying an organization's required direction through human
resources. They serve as a foundation for assessing progress and leveraging
individuals to achieve corporate success.
Workforce analysis entails estimating current and future supply and demand for
employees with the necessary skills, knowledge, and competencies. HR must
determine the discrepancies between demand and supply of employees with the
appropriate abilities to design an effective plan.
HR performs a variety of functions that compete with one another inside a business. As a
result, it must prioritise its responsibilities in accordance with organisational requirements.
McDonald's, for example, must decide whether to focus on employee engagement, training,
and education or on overall HR strategy management.
However, no guidelines on what the organisation should prioritise have been developed. It is
dependent on the specific requirements as decided by the HR's strengths, limitations, and
opportunities as identified during the environmental scanning phase.
Monitoring and assessment guarantee that the strategy is still relevant to human resource
requirements. Monitoring involves overseeing actions to improve the alignment of desired
goals with HR plans.
McDonald's conducts constant monitoring and review. The organisation understands the need
of producing progress reports that provide information on the whole analysis process of its
human resource plan.
CUSTOMER SERVICE
McDonald's has long placed a premium on customer service, ensuring that high-quality meals
are delivered quickly and in sanitary surroundings. However, as demand has grown and the
menu has become more sophisticated, the restaurant has experienced service delays due to the
longer preparation time required for menu items. The quickness with which fast food is
served is one of its most crucial aspects. During peak traffic times, customers should expect
to get their orders within one minute of placing them (lunch and supper rush hours). At
slower times, customers are willing to wait two or three minutes for their purchases before
developing negative feelings about the company.
McDonald's has a lot more money than a small private company. McDonald's uses both
informative and persuasive commercials; the informative ones encourage people to eat
healthier, while the persuasive ones persuade them to purchase the meal. On television,
individuals are shown eating and enjoying the cuisine. McDonald's has a theme song, "I'm
Lovin' It," by Justin Timberlake. Because Justin is a well-known actor and youthful idol, as
well as the song, this will attract a large number of customers.
SUGGESTIONS
Service Differentiation- McDonald's service differentiation plan emphasises that the
brand will provide exceptional service at all various touchpoints, from order
placement to item delivery. McDonald's managers have gained ample training. As a
result, they are able to give their employees with outstanding training. Because of
their behaviours and attitudes, customers hold McDonald's employees in great
respect. Consumers, on the other hand, are dissatisfied with the prospect of long lines
and a lack of personnel to handle the number of customers. This issue is especially
prevalent in markets with a big market share and a huge number of customers, such as
India. McDonald's needs to come up with a fix.
Personnel Differentiation- To deliver good customer service, it is critical to have
well-trained personnel on hand. To maintain good service quality, McDonald's should
continue to invest in employee training and development. Training programmes that
are well-structured will ensure the organization's long-term success.
Integrated Promotional Mix: McDonald's may promote its brand through an
integrated marketing mix that encompasses both traditional and new digital media.
McDonald's uses social media to promote several of its products, including
commercials, radio ads, and other ads on Instagram, Facebook, and Twitter.
McDonald's employs social media and its numerous online advertising commercials
to target a younger audience. Rather than focusing on a single set of people, they can
increase revenue by recruiting a diverse range of customers. McDonalds would gain
immensely if it was up to date with all of the information systems in use, because
technology is widely employed by many different groups of individuals.
Product Augmentation: McDonald's can provide additional product and service
options to customers, such as food on demand and home delivery, in order to make
customer lives easier. Even further improvement in product quality can be made with
fresh components. McDonald's should continue to invest in menu personalization and
standardisation strategies to attract and engage target customers in a range of regional
marketplaces. McDonald's should first and foremost focus on the children's play area.
Although not all McDonald's locations have a play area, it is offered in certain. This is
a very popular service among clients. Toys must also be taken much more seriously,
both in terms of quality and safety, with so many new and fascinating toys on the
market. Next, the company's menu is insufficient, even if it is still competitively
priced in compared to its competitors'. Customers make purchasing selections based
on both the menu and the price. After releasing a new menu with the Dosa burger,
which garnered a lot of great reaction, there is no new one like it. Given the recent
shift in eating patterns of a large percentage of its customers, McDonald's should react
as well. New vegetarian and healthy options should be added to the restaurant's menu.
The importance of having an organic cuisine cannot be overstated.
CONCLUSION
Now, McDonald's has become a household name in India, with outlets in every city.
McDonald's success in a country with rigorous and fixed eating habits and traditions was a
huge breakthrough. McDonald's continues to develop products and build customer trust by
expanding its client base. McDonald's must constantly considers incorporating new ideas into
all of its operations, primarily marketing, if it is to succeed in an extremely competitive
market. McDonald's wanted something that would assist them maintain their long-term
viability and their unique position as a "food retailer." McDonald's' strategy in India in 1995
was a success. McDonald's success in India can be evaluated by its consistent growth in the
Indian fast-food business. McDonald's uses a worldwide strategy to guide their localization
approach, which entails thinking globally but acting locally. McDonald's has placed a high
value on its localization strategy to fulfil its strategic goals in India. McDonald's may acquire
more consumers if it paid attention to what its competitors do on a regular basis, such as KFC
or Burger King. By looking at what its rivals are doing to entice and keep customers.
McDonald's can improve their customer service such that every new customer is happy and
eager to return.