Presence of a large vegetarian population, who eschew non-vegetarian food, has given rise to outlets which exclusively serve vegetarian fast food. Also, different variety of food may be served depending on the times of the day. Beverages such coffee, tea, soft drinks and fruit Juices may also be served in such outlets. Some outlets may additionally have specially designed counters for ice-cream, chat etc. India isn’t probably the type of country you’d associate with an abundance of fast food restaurants, and to some extent that’s the case but along with everywhere else in the world, fast food is becoming part of the lifestyle in India.
The big fast food chains have all made brave attempts to conquer the Indian market. McDonald’s, Domino’s and KEF all found it difficult to cater for Indian tastes, but then decided to hang their own menu to adapt rather than expect a cultural shift – and now McDonald’s and Domino’s have a wide presence in India. KEF have struggled. The key to the success of the big chains is adapting the traditional Indian snacks and cuisine to make them fast food friendly. Company Profile McDonald’s Corporation franchises and operates McDonald’s restaurants in the global restaurant industry.
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These restaurants serve menu at various price points Company or by franchisees, including conventional franchisees under franchise arrangements, and developmental licensees and foreign affiliated markets under license agreements. Under the conventional franchise arrangement, franchisees provide a portion of the capital required by initially investing in the equipment, signs, seating and decor of their restaurant businesses, and by reinvesting in the business over time. The Company owns the land and building or secures long-term leases for both Company-operated and conventional franchised restaurant sites.
In certain circumstances, the Company participates in reinvestment for conventional franchised restaurants. As of December 31, 2011, of the 33,510 restaurants in 119 countries 27,075 were franchised or licensed (including 19,527 franchised to conventional raunchiness, 3,929 licensed to developmental licensees and 3,619 licensed to foreign affiliates (affiliates)-primarily Japan) and 6,435 were operated by the Company. McDonald’s restaurants offer a uniform menu, although there are geographic variations to suit local consumer preferences and tastes.
McDonald’s menu includes hamburgers and cheeseburgers, Big Mac, Quarter Pounded with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken Nuggets, Snack Wraps, French fries, salads, oatmeal, shakes, McClure desserts, sundaes, soft serve cones, pies, soft drinks, coffee, MacAfee beverages and other beverages. In addition, the restaurants sell a range of other products during limited-time promotions. McDonald’s restaurants in the United States and international markets offer a full or limited breakfast menu. Breakfast offerings may include Egg McMullen, Sausage McMullen with Egg, Miscarried, biscuit and bagel sandwiches, and hotcakes.
The business is managed as distinct geographic segments. Its segments include the United States (U. S. ), Europe, and Asia/ Pacific, Middle East and Africa (MEAN). In addition, it presents Other Countries and Corporate, which includes operations in Canada and Latin America, as well as Corporate activities. During 2011, the Company opened 1,118 traditional restaurants and 32 satellite restaurants (small, limited-menu restaurants for which the land and building are generally leased), and closed 246 traditional restaurants and 131 satellite restaurants.
THE MCDONALD’S STORY The story of McDonald’s started in 1954, when its founder Raymond Crock saw a hamburger stand in San Bernardino, California and envisioned a nationwide fast food chain. Crock proved himself as a pioneer who revolutionized the American restaurant industry. Today McDonald’s is the world’s largest fast food chain serving 7 million customers daily. McDonald’s 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, McDonald’s today has become an accepted citizen of the world. Year I 1955 | 1957 | motto I Events I Ray Crock opens his first restaurant. McDonald’s Corporation is created I Quality, Service, Cleanliness and Value (SC ; V) becomes company 1963 | Ronald McDonald makes debut 1968 | Big Mac is introduced’ I 1974 | Happy Meal is launched I 996 | McDonald’s opens in India, the 95th country I 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 – McDonald’s focuses not only on delivering sales for the immediate present, but also protecting its long term brand reputation. McDonald’s India McDonald’s in India is a locally owned and managed company run by Indians, employing local staff, sourcing from local suppliers to serve its customers. In India, the brand McDonald’s is managed by two entities… Consonant Plaza Restaurants Pet Limited, led by Mr.. Victim Basic, is spread across North ; East of India; and Hardest Restaurants Pet Limited, led by Ms.
Smite Sati, is spread across West ; South of India. Today, we are 235 restaurants strong and counting, with our presence spread across 45 cities in the country When we opened our doors in India at Basalt Look in New Delhi in October 1996, it was the 95th country where the McDonald’s was operating. India was the only country in McDonald’s system, serving a menu which did not have any beef or pork based products. It was also the first country and the only country in McDonald’s system to have completely segregated vegetarian and non vegetarian cooking section the kitchen. India is the only country where the menu has significant number of products like McCall Tike Burger, Chicken McGill, Pizza Mockup, McVeigh, Chicken Maharaja Mac etc that have been locally innovated. Today, our menu in India has a healthy balance of both We are committed to India, and respect the culture and sensitivities existing in the local community, yet remain innovative that we are globally known for. McDonald’s Journey in India * 1996 First McDonald’s restaurant opened on Cot. 13, at Basalt Look in New Delhi.
It was also the first McDonald’s restaurant in the world to not serve beef and pork based products * 1997 First Drive – Thru restaurant at Nomad (UP) First disabled roundly store at Nomad (UP) * 1999 First Mall location restaurant at Nasal Plaza (New * 2001 First thematic restaurant at Consonant Place (New Delhi) * 2002 The first restaurant in a food court at sac’s, Last Magna (New Delhi) The first restaurant at the Delhi Metro Station at Inter State Bus Terminus The first fundraiser in association with ORBIT and Dry.
Shrouds Charity Eye hospital. (Delhi) * 2003 The first Dessert Kiosk – Abridged (Harlan) * 2004 Mcdonald’s Delivery Service (Incisively) introduced in New Delhi Local menu innovations like McCall Tike, McVeigh and Pizza Mockup exported to Middle East. 2006 Incisively on Bicycles flagged off at Chain Chock (Delhi) – another first initiative by McDonald’s India 10th McDonald’s Restaurant opens in India 10th Year Anniversary * 2007 First McDonald’s open in Eastern Region at Park Street, Kola First restaurant opened at Airport (Domestic Airport at New Delhi) First ‘Made For You’ (MFC) restaurant opened at Greater Nomad, Attar Pradesh * 2008 First 24 hours McDonald’s Restaurant opens at Old Delhi Railway Station.
Chicken Nuggets launched in India * 2009 First thematic restaurant at Consonant Place (New Delhi) 2010 The first rummaged (new look) restaurant opened at Ambiance mall, Vacant Junk, New Delhi * 2011 Mystics range of burgers and wraps launched in India McClure dessert products launched in India in two iconic Flavors. Challenges for McDonald’s in India: Vegetarianism: The major issue was beef. Cow being sacred and worshipped, beef could not be served. Muslims did not eat pork. The challenge was to change the form of the worldwide popular Hamburger to make an entry into India.
With 25-30% of the population being local vegetarian and a large majority eating meat, an alternative to beef and pork was necessary. The population of a billion was undoubtedly a promising opportunity for an international company. McDonald’s accepted the challenge and created the Allow – Tike Burger known as McCall Tike especially for the Indian vegetarian customers. Allow- Tike was a potato patty with spices. It also made a chicken and fish option available for the non vegetarians.
McDonald’s even separated the non vegetarian cooking process and the vegetarian cooking process to convince the customers of the “Shut Shakier Experience’ which means pure vegetarian experience. In addition, the crew cooking vegetarian food were asked to wear green aprons. McDonald’s in India was one of its kinds as it did not offer beef at all. In order to convince and change the perception of the customers about the burgers they offered, McDonald’s made attempts to clarify their stand about beef in India. So the world famous hamburger was without meat.
This was indeed a classic case of product adaptation, to gain foothold in a new market. Competition from Local Food Retailers: The competition from the local food retailers was intense. The food retailers had been doing business for years. Their familiarity with the market and the understanding of the local taste gave them a competitive edge. There were numerous eating Joints which offered snacks and meals with affordable price tags. Indian style restaurant chains. The metropolitan cities and some developed urban areas offered superior dining experience through the existence of some fine, classic restaurants.
But the price was expensive and only a select group of customers could afford to make visits there. On the other hand, the size of the unrecognized food retailing was larger and comprised of roadside food vendors, Dhabi (the eateries on the highways) and on the outskirts of the cities and a plethora of small eateries. Local DOD in a large assortment was widely available within acceptable price ranges. It was observed that food choices made by consumers were impulsive. Aroma, taste, habits and visibility worked on the subconscious level and played a major role in affective decision making.
The local food business exactly understood the psychology of the customers and operated accordingly. The mass markets in India had their own set of preferences. Target Marketing: Value propositions had to be directed to the right target market to establish a new product. An interesting question was who would eat at McDonald’s? In order to develop the marketing strategy, it was important for any company to understand the consumer market. The more one knew and understood about consumers, the more effectively one could communicate and market to them.
Four aspects of consumer behavior which needed to be examined to understand a consumer market were the ability of the people to buy, consumer needs, buying motives and the buying process. The initial attempt of McDonald’s was to induce trials and get the customers into the restaurants. Word of mouth and advertising was expected to reveal the experience of eating at McDonald’s. McDonald’s Value Meal addressed the price sensitivity of the Indian consumer market. However, irrespective of this effort, McDonald’s was affordable to select customers only.
These were the ambitious middle, upper middle and affluent classes who were keen to combine eating with fun. Children were the major influences. McDonald’s advertisement put forth an attractive proposition to the children segment that played a major role in the decision making as regards the choice of a restaurant. Happy Meal was used to reflect the fun element of the experience at McDonald’s. Happy Meals were all about the simple pleasures of holding, a time of excitement, Joy, and being treated special.
Each Happy Meal was themed and had on offer, a set of collectible toys from that particular theme. One theme typically was used for duration of 4 – 6 weeks. In this deal the customer got a choice of a burger, a drink and a toy. Happy Meals were a huge success. The rising income levels in India increased the disposable income. Fun and entertainment assumed importance in the financially stable families. McDonald’s was perceived to be a fun place with special areas marked for kids, toy gifts and of all the attraction of burger.
Subsequently, McDonald introduced newer menus appealing to the India taste. Children in India preferred a burger over pizza and McDonald, the king of burgers was announced as the number one in a survey titled Indian’s most respected companies by Business Week in India for Food retailing in 2006. Youngsters valued McDonald’s for the trendy environment and the Joint acted as an interesting meeting drive through windows. In India, because of unavailability of space and lack of proper infrastructure, the company could not do so.
However, home delivery was an area of consideration. In March 2007, McDonald’s announced that it would invest about RSI 3 core (US $0. 75 million) over the next three years to strengthen its home delivery services. It launched an all-India single home delivery number -?? 66-000-666 to facilitate this service. In March 2007, the company’s Managing Director Mr.. Victim Basic said “Ms Delivery currently accounts for almost 5 per cent of the overall sales and with the introduction of the new system; the company is looking at a substantial share of 7. Per cent in the turnover by next year”. Pricing Food pricing was a sensitive issue in India. An ideal strategy was to focus on customer’s ability to pay and tap the rich and upper middleman’s population in India. Although McDonald’s strategy was to increase sales volumes by making products available at affordable price, its products were perceived to be expensive. The company outlets in Delhi and Iambi initially were opened due to the increased affordability of people with western exposure and brand recognition factors in metros.
Additionally, people in the metros were open to experiment with variety of foods. Absorption of newer cultures was faster in the Metros than other areas. The mass markets in India were price sensitive. The positive factors were the growth in consumer markets with rapid growth in disposable incomes, development of modern urban lifestyles and the demand for value. Eating Habits Eating out was a special occasion to many Indian families. Meals had been an essential medium for social sharing and relationship. Whenever families decided to eat out, the choices available were abundant.
The trend in metropolitan cities was however changing. With more nuclear families and dual income households, the demand for fast and readmes food was growing. The needs of the growing working population stimulated the need for new products and services. Indian culture was relatively new to the use of technology and streamlined process in food service. McDonald’s needed to find ways and methods to motivate the customers opt for initial trials and acceptance. The conventional eating pattern of Indians involved breakfast, lunch and dinner.
Lunch and dinner menus were complete meals providing the right balance in terms of nutrition. Breakfast was conventional as per the family culture and upbringing. Burgers were likely to be slotted in the category of snacks. But globally burgers and beverage brands were linked with poor eating habits. The market situation called for focus on the environment within the restaurant and western association. Issues McDonald’s had been accused of destruction of vast areas of the rainforest’s for the production of cattle to produce beef, promoting unhealthy food with a risk of cancer and cruelty to animals.
There had been complaints as regards the nutrition, hygiene Animals Vegetarians and animal welfare campaigners were not too wholehearted about McDonald’s – for obvious reasons. As the world’s largest user of beef, they were expansible for the slaughter of countless cows every year. In Europe alone they used half a million chickens every week, all from windowless factory firearms. This meant that these animals suffered great cruelty during their unnatural, painful and short lives, many being kept inside with no access to fresh air and sunshine, and no freedom of movement.
A major consideration for the fast food industry was whether it was acceptable for the food industry to exploit animals at all. McDonald’s argued that it stuck to the letter of the law and if there were any problems, it would be a matter concerned with the government. Although meat eating had a long history, it was only in recent decades that factory farming and intensive methods had been applied on a vast scale. This mass production process was primarily to benefit the food companies’ drive for greater profits, backed by their promotional campaigns.
McDonald’s corporation was the world’s largest promoter of meatballs products, the largest user of beef and the second largest user of chicken. Environment Conservationists had often focused on McDonald’s as an industry leader promoting business practices detrimental to the environment. But the company spent a fortune rumoring itself as environmentally friendly. They annually produced over a million ton of packaging, used for Just a few minutes before being discarded.
The environmental effect of the production and disposal of all this needed to be taken into account. Multinational companies operating on such a scale contributed to global warming, ozone destruction, depletion of mineral resources and the destruction of natural habitats. The modern industrial system, with transnational corporations in particular, had callously taken advantage of the natural resources globally, damaging forests and other ecosystems, reducing biodiversity, adding to and, and sea and air pollution while adversely affecting the global climate.
McDonald’s contribution to these were mainly through the effects of cattle ranching (as the world’s foremost promoter of a beef-based diet), through the growing and transportation of cash crops, and through the production and disposal of thousands of tons of packaging material. Nutrition and Health One of the most fundamental and enjoyable aspects of the day-to-day lives of people had been eating food of their choice and the circumstances in which it was eaten.
For most people this generally meant eating the healthiest possible food (bearing in mind constraints of time and poverty), usually cooked on site and then eaten communally – either in a family or home setting, or with others while at work or in An industrial or service infrastructure increasingly dominated the local neighborhoods and people’s lives, undermining existing patterns of human interaction, whether among families, friends, neighbors or in the community in general.
Mass-produced, processed food gradually and increasingly replaced fresh and healthy foods in people’s diets over the course of the twentieth century. In recent decades, McDonald’s capitalized on this situation by promoting quick meals to e eaten outside the home. This change in eating habits brought serious consequences to human relations and health. These consequences sparked a debate about healthy food. They also brought out a whole range of new campaigns and movements dedicated to encouraging healthy eating and healthy lifestyles.
Macro environmental factors affected McDonald’s, forced it to become defensive, and they had to resort to lip service to try and deflect public criticism. In the health debate, food industry was heavily criticized for creating products that are high in fat, sugar and salt. Health consciousness was rising amongst people with the obesity crisis tinting the world. The concern was serious as it was children who were the most affected. Nutrition and exercise issues which were important and needed to be reviewed earlier, now were considered, discussed, and debated only after witnessing the frightening consequences.
Many critics blamed McDonald’s like businesses for public health concerns, contending that fast food menus and portion sizes contribute to obesity, diabetes and heart disease and a variety of other diet related problems. But at the same time, it was worthwhile to note that the type of demand exhibited by he market initiated the processes within the companies. As long as the demand for fast food continued, nutritional issues would continue to be argued and deliberated upon.
India also had its own set of so called nutritious and non-nutritious food. People in India appeared to prefer food for its taste. Bell Purl, Samos’s and Potato Wad which were some of the very popular Indian snacks were weak in terms of nutrition. However, a large level of population savored them for the spicy taste ignoring the hygiene and the value in terms of nutrition. Trans- fats and their use in DOD also had been a major controversial issue. It had been established scientifically that artificial trans- fats were bad for human health.
In United States, New York City was the first city to announce a ban on all restaurants from using artificial Trans fats with the deadline on July 1, 2007. When the legal system imposed bans and developed a regulatory framework, the food industry was compelled to respond. In January 2007, McDonald’s picked new Trans fat free oil for cooking its famous French fries after years of testing. In view of the health risks and dangers, it was important hat food service did not Just confine to respond to the basic need of hunger.