MCDonalds Essay

Strategy and Repositioning the Brand McDonalds in India Sameer, Sharanbir Kaur Abstract- Despite global slowdown, Indian economy is resurgent and offers knowing opportunities as well as challenges to global players. McDonalds still tr eat ons the Indian market as one of their young markets although what they lead achieved in 15 historic period here, it would usually take them 25 to 30 years in another(prenominal) market. McDonalds philosophy of Quality, Service, Clean followss and Value (QSC&V) is the guiding force behind its stellar emolument to the customers. However there is still a huge potential in the Indian food market that remains untapped in terms offamily eating houses, rapid service restaurants and break extravagant eateries. Coming in the wake of these, their re cross outing effort requires much more than a mere change of the logo or signage. There is a need to critically evaluate the right marketing mix. The article is focused upon assessing the marketing efforts i n India in terms of positioning of McDonalds. Index Terms- Restigmaing, Repositioning, Demography, Marketing commingle I. FAST FOOD INDUSTRY IN INDIA T he Indian fast food industry has evolved over time and always has been in line with the needs of wad of all ages and segments.There argon enterprises which scale from one room outlet to a chain having hund ruby-reds of outlets like McDonalds in India. As per wiseborn(a) research base ? Indian Fast Food Market Analysis? , India is blessed with one of the fastest growing fast food markets in the world. The Indian fast food market is growing at an annual growth rate of 30-35%. Al al more or less all big fast food brands of the world devour succeeded in making their presence felt in the country and most of them posting an appreciable growth. Although the market has witnessed robust growth in the past meet of years, it remains largely under penetrated and concentrated in the metropolitan cities.However, there is large room for gro wth in tier-II cities, tier-III cities which are mostly untapped. Therefore, the future of Indian fast food industry lies in masses that live in tier-II and tier-III cities. In 2013, the global fast food market is forecasted to have a rank of $200 billion, an increase of 29. 3% and a volume of 94. 7 billion transactions, an increase of 10. 4% since 2008. The consumer sp baring on processed food has increased at an average rate of 7. 6 per cent annually from 2008 to 2010 and this is expected to rise at an average of around 8.6 per cent until 2012, according to a report by Assocham. Almost all big fast food brands of the world have succeeded in making their presence felt in the country and most of them are posting appreciable growth. It is estimated through the Euromonitor International and Credit Suisse Emerging Consumer Survey, that the average Indian spends just $ 11 as compared to his Chinese counterpart who would ideally spend $ 20 on fast food. Yet , if we get a line the India n spending on food in totality , they spend 23 % of their dinero on the same while the Chinese spending is 20 %.So, the inference that can be drawn is that owing to the eating pattern of Indians they prefer to eat at home and would spend on cooking ingredients over fast food. However, this does not spell good news for the industry. It is set to witness the entry of new fast food players that plan to hit the Indian market with a vengeance with international giants like Dunkin Donuts and Starbucks being amongst them. II. THE COMPETITION People prefer fast food because its cheap, easy to prepare, and heavily promoted. India is a developing country with 2 percent of organized and 98 percent of unorganized sector.So most of the fast foods that came into Indian market as India has a high growth in every sector. Major players in fast food in India are McDonalds KFC Pizza Hut Dominos Cafe Coffee Day Barista More than 75% of McDonalds restaurants worldwide are owned and operated by nonsymb iotic locals. McDonalds output line in India is almost similar to other burger chains with a dominant Indian flavour. Perhaps, it would be correct to say that their save similarity with their foreign outlets is that they have French Fries and still use buns. Examining the immense Indianzation they have attempted intheir batting order here it wouldnt be surprising to see Indian Chapatis in correct of buns. Their current offerings reflect the same. www. ijsrp. org International Journal of Scientific and Research Publications, Volume 2, Issue 9, September 2012 ISSN 2250-3153 2 Table I Present calling card for McDonalds India Menu Ranges Burgers and other Bites Spicy Delights McSpicyPaneer ExtraValue Meals Chicken McNuggets Meal McAloo Tikki joyful Price Menu Breakfast Menu Favourites Sausage McMuffin with egg French Fries McAloo Tikki Happy Meal Meals Source McDonaldsIndia. com Desserts vainglorious Spicy Paneer Wrap Filet O Fish Meal maharaja Mac Meal McVeggie /McChicken Meal Chicken McGrill Beverages McSwirl Iced tea/ Cold Coffee Minute Maid Pulpy Orange/ Cappucino/ Tea Soft Serve (Strawberry /Chocolate) Veg imperious Veg Pizza McPuff Veg McMuffin Sausage McMuffin Pancakes Filet O Fish Chicken Maharaja Mac Chicken McGrill Meal McChicken/ McVeggie McVeggie Meal McFlurry McChicken meal III. BUSINESS MODEL The crease Model of McDonalds is a franchise-based model coupled with strong corporate branding. The focus is on the branding of McDonalds as a globally accredited service provider with strong customer perception about www. ijsrp. orgInternational Journal of Scientific and Research Publications, Volume 2, Issue 9, September 2012 ISSN 2250-3153 3 Happy Employees means Happy Customers McDonalds Efforts of repositioning its Brand-Recently, McDonalds management has decided to change itsstrategies. They now want to provide not only a place to sit and eat but also an experience that can be enjoyed by their customers. reckon 1 The Service Marketing Trian gle Zeithaml and Bitner (1996 ) McDonalds completed very early in their business that in order to achieve happiness amongst customersthe possible route is through happy, motivated and committed employees.In conformation with this they played on the customer first strategy. Even in India, their efforts clearly indicated that they were keen to understand the Indian consumer. Hence they adapted themselves to tickle the taste buds of their Indian customers to become a brand that enjoys a very high brandrecall. Therefore they focused on internal as well as external marketing. The take of importance has changed to be in the following order (the most important people arenow at the top). Corporate Branding The marketers are shifting the branding efforts from their product brands to a more holistic corporate branding .The reason for the shift can be traced to the belief that, it is the corporate image that carries a great intrusion on the buyers who are more aware and more exposed to me dia coverage on various issues be it environmental tariff, being corporate social responsibility or be it responsibility towards health of future generation. McDonalds describe a corporate branding framework that is based on three elements Figure 2 McDonalds Service Pyramid Figure 3 Corporate Branding Source Hatch and Schultz (2003)), Bringing the Corporation into Corporate Branding, European Journal ofMarketing, The recent McDonalds rebranding strategy is a part of this thought and vision. McDonalds road to success has not always been rosy. They have been at the receiving end of the medias onslaught. There was a huge uproar in US subsequently media exposure against McDonalds unhealthy menu that was affecting the nation and ahead(p) it to a generation suffering from obesity and heart diseases among many more ailments. There were employment issues internally which showed that they did not treat their workers well. Hence they assessed their strategies again and came up with new obj ectives thatstrengthened their previous aims and gave a new direction to them as well. www. ijsrp. org International Journal of Scientific and Research Publications, Volume 2, Issue 9, September 2012 ISSN 2250-3153 4 McDonalds Marketing Efforts Over the Years Proactive Rebranding A Proactive strategy includes a new line of business or market that does not conform to the subsisting brand identity. When McDonalds once referred to itself as Mickey Ds to target kids in a commercial, it had just coined a new way of catering to an audience separate from its traditional family audience.Objectives of McDonalds Repositioning StrategyMcDonalds, the promise of American fast food anywhere in the world, has had to rethink and reposition its brand offerings in different countries. While some basic elements like Ronald were left in place the menu underwent an overhaul. For example, in India, the menu has no shout dishes since it is not considered religiously correct to eat cows meat there is t he very popular McAlooTikki, a potato-based patty in burger buns the Big Mac is replaced by the Maharaja Mac, the Big Mac in chicken there is also the paneer (cottage cheese) McVeggie burger.The Italian McDonalds has a special coffee spot. To remark its 20th anniversary in China, McDonalds rebranded under the Make Room for Happiness campaign. They had all you want coffee refills Wi-Fi and a more modern restaurant design were unveiled. This was done exclusively for China, where McDonalds positioned itself as a place to relax away from the high demands of the average Chineses life. Its Im Lovin It slogan made way for Make Room for Happiness, and McDonalds became the place where the stressed young Chinese can spend quality time rejuvenating after working for long hours.The result was an 18% increase in sales, and an increasing legion of fans that is fueling McDonalds growth in China. McDonalds ever-changing Markets Changing Strategies Decades after its launch, the Big Mac is changing colours, literally. The worlds largest fast-food chain is letting go of its familiar red-and-yellow colours for more muted tones as it goes for its biggest and costliest revamp in the country, in line with its global strategy of attracting more adults. For the next generation of consumers McDonalds plans to cultivate a very different image from its existing one.After revamping 280 stores in various markets uttermost year, McDonalds is now opting for the Tampa model and go forth spread that design to upwards of 800 locations this year roughly triple what it did last year. The company is donning a new look when India is on its way of becoming a global hotspot for food retailers, with chains like Starbucks, Burger King readying to enter the country. Some McRemodel highlights include Redoing roofs The bright red roofs that have topped McDonalds for several decades are getting the heave, replaced with flatter, more conventional roofs.Muting paint The nor-east yellows and reds co mmon to the interiors and exteriors are becoming history, replaced with much more subtle oranges, reds, yellows and even greens. Updating chairs Those industrial steel chairs are giving way to wooden chairs, colorful stools and, in some cases, vinylcovered chairs that resemble leather. Some stores will have larger lounge chairs similar to the kind you might expect to find in a coffee shop. Doubling drive-through To ease lines inside and outside stores, many locations are adding second drive-through windows to speed up service.Splashing colour McDonalds hasnt junked its familiar red and yellow colors altogether, but it is making them far less obvious. Instead of filling the restaurants with them, its splashing bright yellow and red here and there for effect. Dividing dining areas The sea of tables and chairs is history in the remodelled stores. The new dining rooms are divided into separate eating zones for larger groups, eat-and-run customers and ethnic music who want to stay and lounge. Adding flat-screens TVs Large, flat-screen TVs some playing contemporary music are showing up in manylocations, though fewer than half of the remodelled stores will display them. The new design makes the customer feel more comfortable and at leisure to enjoy their surroundings. This offers to McDonalds two key opportunities- firstly, to shift to another www. ijsrp. org International Journal of Scientific and Research Publications, Volume 2, Issue 9, September 2012 ISSN 2250-3153 customer base with high spending power and then to broaden their menu with offerings at a higher price point. Risks Involved When a global organization like McDonalds is going in for rebranding, a lot of financing is regard and the global impact is huge. Though the step taken by the managers of McDonalds is well calculated but speculations are on till the time it doesnt amusement park well in the market and most importantly to the customers. This kind of rebranding in the Indian Food Industr y can help change the image of McDonalds completely like in the case of Pizza Hut, which has become a part of fine dining segment, which it was not earlier. The Indian consumer is considered to be loyal but still the risks involved are high. 1. A trade-off between what is expected from a company and what a company has to gain from theconsumers One can see that one facet raises the scale while the other weighs it down making it a tough task. In order to sustain the balance, it requires big investments which will sure add to the costs incurred in the rebranding. If the rebranding falls flat, it will result in a major profit decline. 2. Store positioning McDonalds needs to have the most current information to determine if present outlets are cannibalizing each others business. To achieve this McDonalds team willneed comprehensive, demographic data of India along with both theirs and competitors outlets. IV. CONCLUSIONThe task is mammoth as McDonalds tries to keep up in the race for a piece of the great Indian pie . As per Forbes , McDonalds India operations contribute 30 % to their sales which is a considerable share. It might become imperative to create a Point of Difference to strife it out in the Indian market as all fast food brands have modelled themselves on local flavours now , the latest being KFC with its ? streetwise menu. While McDonalds does have the edge with its excellent supply chain and distribution network the customer ultimately does become the king with low brand loyalty in this category being thegeneralisation . The rebranding effort on their part seeks to bring 5 in a new flavour to their brand offering but what remains to be seen is whether they are still able to strike a chord with the customer. ACKNOWLEDGEMENT We would like to express our heartfelt gratitude to the people who assisted us in this endeavour of ours. First and foremost , we would like to thank Mr. Praveen Gupta, HOD , Lal Bahadur Shastri Institute of way for his valuable time and support. Also, a special source to the staff of McDonalds Jor Bagh, Delhi who was very patient and helpful during our visits to the outlet for the study.REFERENCES 1 2 3 4 5 Lovelock,Wirtz and Chatterjee ,? Services Marketing ? , in Plastics ,Sixth Edition ,India , Pearson , 2010 , pp. 66-98 , pp. 340-372 Aaker, D. A. (2004b), ? Leveraging the Corporate Brand? , California Management Review, 46 (3), pp. 6-18 Bijoor, H. , ? A Time to Rebuild? , condescension India, February 20,2011 pp. 48. Hatch, M. J. and Schultz, ? Bringing the Corporation into Corporate Branding ? , European Journal of Marketing, 2003, 37 (7/8), pp. 1041-1064. Jacquelline, B. and Kline,S ,? From McLibel to McLettuce Childhood, Spin and Re-branding? ,2007 , Society and Business Review, 2(1)