McDonalds in India McDonalds is a leading international fast food restaurant chain with 30,000 restaurants spread across the

globe. In India, it launched its operations in 1996, with two stores. It now has 54 restaurants with a daily inflow of 5 lakh customers. It plans to add 15 more outlets by the end of 2004. As per the Informal Eating Out (IEO) survey involving the survey of branded food chains in India, conducted by ACNielsen, McDonalds was found to be the leader in fast food chains. Many factors can be attributed to the success of McDonalds Indian operations. First, McDonalds has focused on products and changed its menu to suit the tastes of Indian consumers. It launched India specific items including McVeggie burger, McAloo Tikki burger, Veg. Pizza McPuff and Chicken McGrill burger. Considering the Indian preferences and sensibilities, the company doesnt offer pork and beef items in India. It offers egg-less sandwich sauces for vegetarian customers and vegetarian items are prepared at a separate counter at the outlets.

On the pricing front, McDonalds has adopted customized pricing for each of the cities depending upon the tax structure, demand, and purchasing power of the population. However, to attract mass-market customers it has launched a new menu called Happy Price Menu in which select items are priced at Rs 20 across all the outlets in the country.

As McDonalds is into the food business, establishing an efficient supply chain infrastructure is of great importance. McDonalds has, therefore focused on setting up an efficient and effective supply chain. Its supply chain is three tiered, consisting of farms, processing plants, and distribution centers. The company has selected the farmers who can meet its quality and supply standards and directly sources the produce from them. They are supported by McDonalds in terms of seed technology and latest irrigation methods to enable them to obtain higher yields and better produce. The next level of supply chain activities involves the processing of farm produce. For this, the company has tied up with various local suppliers like Vista Processed Foods Pvt. Ltd. a joint venture of OSI Industries Inc., USA, and McDonald's India Pvt. Ltd that processes chicken and vegetarian food products at its plant situated at Taloja, Maharashtra. Dynamix Diary supplies cheese, butter, ghee, and milk products and Amrit Food supplies long life UHT Milk and Milk Products for Frozen Desserts from its fully automated plant situated at Ghaziabad, Uttar Pradesh. The next level of supply chain activity is the distribution of processed food to the outlets. For this, the company has tied up with Radhakrishna Foodland, which is into food products distribution. Foodland provides logistics support to McDonalds by providing cold storage facilities and transporting the processed foods to the outlets using temperature controlled transport vehicles. To maintain the service standards, the company has made it mandatory for personnel to undergo periodic training programs. The core principles of McDonald's that are, Quality, Service, Cleanliness, and Value (Q.V.C&V), guide its training programs. The companys highly structured training programs are conducted at four levels: crew development program, restaurant management program, mid-management program, and executive development program. Entry-level workers are trained under the basic crew development program. The training is conducted at each restaurant. Crew members are given on-the-job and off-the-job training. The next level of training is the management development program. This training

program is devised for the employees in the restaurant management team. The program ranges from the basic level to the advanced level. McDonalds also focused on creating a right ambience in the outlet. Since it has been positioned as a family restaurant, McDonalds ensured that the physical environment reflected that image. The outlets are spaciously designed, well lit and has an informal atmosphere, so that kids can play around and families have the opportunity to conduct events like birthday parties. Besides, no-smoking zones have been set-up in the outlets, taking into account the sensibilities of families. The company has also laid special emphasis on the convenience of kids. The height of the counters at some outlets is lower than normal, so that they are easily accessible to kids. In addition, McDonalds has made use of vibrant and pleasing colors, and paintings based on different themes, which children can relate to. McDonalds has also created localized ads titled "What Your Bahana". The ads have the same theme as the "I'm lovin it" global campaign. The characters in the ads cite weird reasons for eating out at McDonalds. Humor has been used to put across the message to the consumers. To keep up the interest in the brand, McDonalds also ran various sales promotion activities targeting the children and family, such as offering toys and conducting contests.

Questions 1. The services marketing mix consists of three additional elements like people, process, and physical evidence apart from the traditional marketing mix elements such as product, price, promotion, and place. How McDonald wass able to utilize these additional three elements to market its services? Answer: McDonalds has used the three elements like physical evidence, personnel, and processes effectively to market its services. Physical evidence: As McDonalds is in the food retailing business, customers cannot evaluate the services it provides before consuming them. So, the company tried to offer some tangible factors based on which customers could judge the service quality. McDonalds projected its outlets as family restaurants and created an ambience that reflected that image. It offered a bright and informal atmosphere. The outlets were spacious and done up in colors that would appeal to children. Personnel: The company laid special emphasis on its personnel and their training. All the personnel working at different levels were asked to undergo training. McDonalds used four kinds of training programs crew development program, restaurant management program, mid-management program, and executive development programs. These programs were aimed at training employees at different levels. The programs emphasized McDonalds core principles of Quality, Service, Cleanliness, and Value. Processes: A part of McDonalds success can be attributed to its best practices in the service delivery process. Primarily, the company established an effective and efficient supply chain that not only cut costs but also helped it to provide fresh and quality

products to the customer. On the service delivery front, it standardized each process in the production and delivery of orders. 2. The proliferation of western fast-food chains such as McDonalds, Pizza Hut, Subway, and Dominos in the Indian market has only been a recent phenomenon. What are the reasons that have contributed to the increased popularity of western fast food chains in India?

Answer: Though fast food chains, McDonalds, Pizza Hut and Dominos, entered the Indian market quite a while ago, their growth plans remained relatively conservative till 2000. However, they then began to step up their efforts to increase their presence in India. There are many cultural and economic changes that can be attributed to the increased popularity of the fast-food chains in India. Primarily, the changes in customer preferences are responsible for the proliferation of these fast food chains. The proliferation of the media and awareness about western culture has influenced. customers preference for these outlets. Moreover, with globalization, many customers have traveled overseas and had an experience of western culture. This has made many Indians accustomed to the western lifestyle. The increased income level of the consumers is also responsible for the increased popularity of the western fast food chains. People now have more spending power and this has encouraged them to experiment with new products and services. Another major factor is the growth of organized retailing in India. The growth of shopping malls has provided easy access for these fast food chains to set up shop and at locations that assures them of the required traffic.