Mcdonalds 4 Ps of Marketing (PDF)

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     SYNOPSIS sS


Can you guess the name of the company which:

        Is the ninth most valuable brand in the world?
        Has replaced the US army as the Nations largest job training organization?
        Controls the market share of more than 3 food chains taken together in
           America?


It’s none other than McDonald’s Corporation USA. Looking at the above statistics makes
one wonder that what is the driving force behind all these achievements? How is it that
the chicken burger available in San Francisco is same as the one available in Delhi?
Many of these questions have been answered in the book “McDonald’s: Behind the
Golden Arches” written by John Love. But are these standards being carried out in India
as well?


The golden arches of McDonald’s are slowly becoming an integral part of the Indian
landscapes. Everyone knows McDonald’s is big, but very few know just how significant
its impact on Indian business really is. The inside of McDonald’s remains a mystery.
McDonald's India is a joint venture of McDonald’s Corporation with Amit Jatia and
Vikram Bakshi. Amit Jatia handles the operations in western region whereas Vikram
Bakshi in the northern region.


McDonald's India is an employer of opportunity, providing quality employment and long-
term careers to the Indian people. The average McDonald's restaurant employs more than
100 people in 25 different positions – from cashier to restaurant manager. McDonald's
world class-training inputs to its employees can be seen in the present close to 2000
employees currently in Mumbai and Delhi.




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But the most overlooked fact of McDonald’s India is its contribution to the food
processing industry. Six years prior to the opening of the first McDonald's restaurant
in India, McDonald's and its international supplier partners worked together with
local Indian Companies to develop products that meet McDonald's rigorous quality
standards. Part of this development involves the transfer of state-of-the-art food
processing technology, which has enabled Indian businesses to grow by improving their
ability to compete in today’s international markets. McDonald’s dedication to its
suppliers has lead to their growth, beyond the boundaries of the India.


These aspects of McDonald’s do not get covered and highlighted by the news hungry
press. But when the false news of using beef tallow in the French fries hit the market, the
press did not leave a chance to exaggerate it. Despite the fact that right form the
beginning; no beef ingredients have been used in any of the products in India.
The marketing agency of McDonald’s, Mudra comes to its rescue in such times. The
advertisements created by Mudra are a rage all over the nation, especially amongst the
children. Who can forget the little kid who gets nervous in the school competition, but
becomes happy again when his father takes him to McDonald’s?


McDonald’s India has tried not to leave any stone un-turned in its objective to satisfy the
Indian customer. But in Amit Jatia’s words, “Customers are generally not forgiving.”
According to the survey conducted, customers demand low prices, more seating space,
more variety, home delivery, and the list is endless.


The fundamental secret to McDonald’s success is the way it achieves uniformity and
allegiance to an operating regimen. McDonald’s India has to adhere to many rules and
regulations laid down by the parent company, and it still has to cater to the Indian
customer and his needs. McDonald’s India is a case study on how to mix conformity
with creativity.




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          HISTORY OF MCDONALD’S                                                       In
1954, a fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San
Bernardino, California, and envisioned a massive new industry: fast food. In what should
have been his golden years, Raymond Kroc, the founder and builder of McDonald's
Corporation, proved himself an industrial pioneer no less capable than Henry Ford. He
revolutionized the American restaurant industry by imposing discipline on the production
of hamburgers, French fries, and milk shakes. By developing a sophisticated operating
and delivery system, he insured that the French fries customers bought in Topeka would
be the same as the ones purchased in New York City. Such consistency made McDonald's
the brand name that defined American fast food.


Worlds Oldest McDonald’s                                    1.2 Worlds Oldest
                                                               McDonald’s

This 44 year-old site is the oldest in the worldwide
chain of 20,000 restaurants and the last one with red-
and-white striped tile exterior. After opening in 1953,
it immediately became the standard for the fast food
franchises across the country. The building and its 60-
foot high neon sign with "Speedee the Chef" are
eligible for listing on the National Register of Historic
Places.


Employees wear 50's style uniforms of paper hats,
white shirts and bolo ties. The restaurant serves the
original menu of hamburgers, cheeseburgers, fries and old-fashioned milkshakes. Also
available are more recent McDonald's items such as Big Macs and Happy Meals.


McDonald's reopened the facility as it was with walkup windows and outdoor seating.
They also constructed and addition housing a museum, gift shop, restrooms and more
outdoor seating.




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1955                                                  1983
                                                      Chicken McNuggets is introduced.
Ray Kroc opens his first restaurant in Des Plaines,
                                                      New Hamburger University campus opens in Oak
Illinois and the McDonald's Corporation is created.
                                                      Brook, Illinois. Set in 80 wooded acres. Training is
                                                      provided for every level of McDonald's management
1957                                                  worldwide.
Quality, Service, Cleanliness and Value (QSC& V)
becomes the company motto.
                                                      1984
1959                                                  50 billionth hamburger sold.
The 100th McDonald's opens in Chicago.                Ronald McDonald Children's Charities is founded in
                                                      Ray Kroc’s memory to raise funds in support of child
                                                      welfare.

1961                                                  1989
Hamburger University opens in Elk Grove, near         McDonald's is listed on the Frankfurt, Munich, Paris
Chicago.                                              and Tokyo stock exchanges.

1963                                                  1990
One billion hamburgers sold.                          McDonald's opens in Pushkin Square and Gorky
Ronald McDonald makes his debut.                      Street, Moscow.

1964                                                  1993
Filet-O-Fish sandwich is introduced.                  The first McDonald's at sea opens aboard the Silja
                                                      Europe, the world's largest ferry sailing between
1965                                                  Stockholm and Helsinki.
McDonald's Corporation goes public.
                                                      1994
1967                                                  Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait,
The first restaurants outside of the USA open in      Latvia, Oman, New Caledonia, Trinidad and United
Canada and Puerto Rico.                               Arab Emirates, bringing the total to over 15,000 in 79
                                                      countries on 6 continents.
1968
The Big Mac is introduced.                             1996
The 1,000th restaurant opens in Des Plaines, Illinois. McDonald's opens in India – the 95th country.

1972
A new McDonald's restaurant opens every day.
The Quarter Pounder is introduced.

1973
Egg McMuffin is introduced.

1974
The first Ronald McDonald House opens in
Philadelphia.
The Happy Meal is launched.




          MCDONALD’S IN INDIA


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McDonald's      India    is   a   joint-venture
company managed by Indians. McDonald’s
India, a subsidiary of McDonald’s USA, has
expanded its presence in India via 2 joint
venture companies – Connaught Plaza
restaurants and Hard castle restaurants.
McDonald’s (India) has a 50 per cent equity
stake each in both joint venture companies.
Connaught Plaza restaurants manages operations and expansions across North India
(Delhi, Jaipur and Punjab) – led by Vikram Bakshi – and Hardcastle restaurants, which is
headed by Amit Jatia, manages operations and expansions across Western India (Mumbai,
Pune, and Gujarat).


Around the world, McDonald's traditionally operates with local partners or local
management. In India too, McDonald's purchases form local suppliers. McDonald's
constructs its restaurants using local architects, contractors, labour and - where possible –
local materials. McDonald's hires local personnel for all positions within the restaurants
and contributes a portion of its success to communities in the form of municipal taxes and
reinvestment.


Six years prior to the opening of the first McDonald's restaurant in India, McDonald's
and its international supplier partners worked together with local Indian Companies to
develop products that meet McDonald's rigorous quality standards. Part of this
development involves the transfer of state-of-the-art food processing technology, which
has enabled Indian businesses to grow by improving their ability to compete in today’s
international markets.




          Mr. Jatia and Mr. Bakshi




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McDonald’s worldwide is well known for the high degree of respect to the local culture.
McDonald's has developed a menu especially for India with vegetarian selections to suit
Indian tasted and culture. Keeping in line with this McDonald's does not offer any beef
and pork items in India. McDonald's has also re-engineered its operations to address the
special requirements of a vegetarian menu. The cheese and cold sauces used in India is
100% vegetarian. Vegetable products are prepared separately, using dedicated equipment
and utensils. Also in India, only vegetable oil is used as a cooking medium. This
separation of vegetarian and non-vegetarian food products is maintained throughout the
various stages of procurement, cooking and serving.


              The McDonald's philosophy of Quality, Service, Cleanliness and Value
(QSC&V) is the guiding force behind its service to the customers. McDonald’s India
serves only the highest quality products. All McDonald’s suppliers adhere to Indian
Government regulations on food, health and hygiene while continuously maintaining
their own recognized standards. All McDonald’s products are prepared using the most
current state-of-the-art cooking equipment to ensure quality and safety. At McDonald’s,
the customer always comes first. McDonald’s India provides fast friendly service- the
hallmark of McDonald’s that sets its restaurants apart from others. McDonald’s
restaurants provide a clean, comfortable environment especially suited for families. This
is achieved through McDonald’s stringent cleaning standards, carefully adhered to.


McDonald’s menu is priced at a value that the largest segment of the Indian consumers
can afford. McDonald’s does not sacrifice quality for value – rather McDonald’s
leverages economies to minimize costs while maximizing value to customers.


The company has invested Rs 450 crore so far in its India operations out of its total
planned investment of Rs 850 crore till 2007.




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       McDonald’s India Pvt. Ltd. has moved an application to the government seeking
permission for payment and remittance of the initial franchise fee and royalty to Mc
Donald’s Corporation.


       The permission has been sought on two grounds: McDonald’s India would pay an
initial franchise fee of $45,000 on each of the McDonald’s restaurants already franchised
or to be franchised, in the future, in India; and a royalty equal to 5 per cent of the gross
sales from the operations of all its Indian restaurants on a monthly basis to McDonald’s
International.


The company hopes to break even in 2008. They currently serve around 5 million
customers a day and hope to grow at the rate of 50% to 70% a year.




          MCDONALD’S Products
In order to satisfy the palate of the local population in a country, McDonald's offers a
regionalized version of its menu. The result is McDonald's foods and meals not seen in
other countries.

Asia


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Bahrain

In addition to the McArabia, McDonald's restaurants in Bahrain, beginning in March
2008, sell the McCrispy, a meal consisting of 1, 2, or 3 chicken strips served in a wrapper
for a single strip or in a box for 2 or 3, with a choice of barbecue, sweet & sour, or garlic
sauce. Like all Middle Eastern McDonald's restaurants, all food served in Bahraini outlets
is halal.




China




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McDonald's Chinese New Year meal, grilled chicken sandwich and twisted French fries.
Tray liner has an image of the Chinese zodiac.



In China, the Chicken McNuggets come with the traditional BBQ, Sweet & Sour, and
Honey Mustard sauces, but there's also a chili garlic sauce (very popular in China). In
China there are specific McDonald's restaurants and counters for ice cream, beverages,
and desserts (otherwise rare in China). They also include crispy chicken wings on their
menu which comes in 2, 4, and 6 pieces. There is also a seasonal Chinese New Year meal
available, including Grilled Chicken Burger, curly fries, with a horoscope of the twelve
zodiac animals of Chinese astrology and traditional "red" packets, or gift bags, for
monetary gift giving as good luck. Note that all chicken burgers offered in Chinese
McDonald's use thigh fillet (eg Premium Grilled Thigh Fillet Burger, Hot and Spicy
Grilled Thigh Fillet Burger), rather than breast meat as per usual in occidental countries.




Hong Kong




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During the Bun Festival on Cheung Chau, a special item called McVeggie Burgers were
sold.

McDonald's sells beef, chicken and pork burgers. Fried chicken wings and nuggets are
also popular. In some restaurants, a separate counter sells ice cream and desserts to
pedestrians. Soft Serve Ice Cream can be ordered with either red beans or green beans.
Some restaurants have a section for the McCafé. Apart from the general menu, it also
promotes some other foods seasonally or longer, like spicy french fries, the Shogun
Burger (a Teriyaki pork patty with lettuce, served in a sesame seed bun), Grilled Chicken
Burger, twisted macaroni breakfasts, salads, soups, pineapple or red bean sundae,
pineapple pies, taco flatbreads with pork, beef or chicken, rice fan-tastic (a burger-like
entree with rice patties in place of buns) and many others. Hong Kong hosts some of the
world's busiest McDonald's with many operating round the clock. It also sells many toys
or dolls, like Hello Kitty, Snoopy, and Disney figures in addition to set meals, which are
very popular. In Chinese New Year, red packets (lai see) are included in set meals. During
the local Bun Festival, McDonald's restaurant on the island of Cheung Chau sells
mushroom burgers instead of hamburgers and any other items which contains meat. In
Kowloon Park, there is also a small counter named Snack Station selling ice cream, as
well as a counter that sells McDonald's drinks in the swimming pool.




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India




The McCurry Pan is a very popular dish across India. It is an original creation of
McDonald's India.

Beef and pork products are not served to cater to Indian religious sensitivities. Chicken
(only Halal) along with fish are the only meat products used.

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 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.




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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.


Indonesia

McDonald's sells fried chicken, which is by far more popular than the hamburgers.
McRice is also offered, a small mound of steamed, plain rice. McSoup is a chicken
flavored soup with bits of reconstituted croutons and vegetables. A bun containing a beef
patty covered with satay sauce (spicy ground peanut sauce) is sold as Mc Sate.



Malaysia

There is a special menu named Prosperity Burger only for the Chinese New year festive
season. There is also the Ayam Goreng McD which literally translated means McD's
Fried Chicken, a crispy two piece fried chicken meal. The McSpicy available in
Singapore is also available in Malaysia, marketed under the name Chicken McDeluxe.
During the 2006 football season, spicy McNuggets were also introduced for a short
period of time along with spicy Ayam Goreng McD. Another long time favourite is Bubur
Ayam McD which literally translates to "chicken porridge" or congee. Bubur Ikan McD
which is fish porridge/congee was also served for a short time.

Fried chicken is also offered in Malaysia but it is not more popular than hamburgers as in
neighbouring Indonesia, perhaps because of competition from Kentucky Fried Chicken
and local fried chicken outlets.

For a limited time only, a burger consisting of four beef patties, called the Mega Mac,
was introduced in Malaysia.




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Pakistan

There is a Spicy McChicken burger that has chutney in it. There is also a McChutney
Burger, a meatball sandwich called the McKofta, and strawberry custard pie. Also,
McArabia was recently introduced, with a chicken patty rolled up in Pita bread.




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         Marketing Mix
Logic:      Marketers     have      four   tools    to     use     to    develop   an     offering   to
meet the needs of their targeted customers. Collectively they are called the
marketing mix.


You may have heard of the "four Ps" of marketing: product, price, place, and
promotion. Collectively these are called the marketing mix. More comprehensively they
are viewed as: product, service, or program - something of value you are offering the
customer, client, or park visitor price - what the customer, client, or park visitor pays
(direct costs are financial, indirect or alternative costs are such things as time it takes and
the things people give up if they choose your offering)
place, distribution, location, or accessibility - where the transaction takes place, perhaps
in a park promotion or communication - this is how you inform the target market the
benefits in your marketing mix. Collectively these are the tools organizations uses to
develop offerings to satisfy their target market(s) ... the only tools at their disposal.
Remember: If your marketing mix doesn't meet their needs they will not be satisfied - and
if   they     aren't    satisfied    you     are        unlikely    to    meet     your     objectives.
The marketing mix should be viewed as an integrated and coordinated package of
benefits that reflect the characteristics of customers and various targeted publics and
satisfy their needs, wants, and expectations. Note that the elements of the marketing mix
should be integrated because each element of the mix usually has some impact, direct or
indirect, on the other three. For example, if you improve the product or service you
probably have to change the price because it costs more to produce. Although you may
not have to change where the product is delivered to the customer, you will almost
certainly have to change the promotion or communication with the customer because you
need to tell the customer about the changes you have made in the product and how the
changes will make it more desirable and satisfying.




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One problem in many organizations is that different divisions may be responsible for
different elements of the marketing mix. This happens even in well managed
organizations. The result is that the offering is confusing to the target market. Lack of
communication among divisions makes this problem worse. And if they don't share the
same view of organizational objectives, the problem is worse still.


These variables are known as the marketing mix or the 4 P's of marketing. They are the
variables that marketing managers can control in order to best satisfy customers in the
target market. The firm attempts to generate a positive response in the target market by
blending these five marketing mix variables in an optimal manner.

    Product                   Price                 Promotion                 Place
 The product is the      Pricing decisions                              Place (or placement)
 physical product or      should take into      Promotion decisions      decisions are those
  service offered to       account profit        are those related to      associated with
the consumer. In the      margins and the       communicating and             channels of
   case of physical       probable pricing       selling to potential      distribution that
   products, it also         response of          consumers. Since       serve as the means
     refers to any     competitors. Pricing       these costs can be        for getting the
      services or        includes not only       large in proportion    product to the target
  conveniences that      the list price, but    to the product price,      customers. The
    are part of the        also discounts,           a break-even        distribution system
  offering. Product    financing, and other       analysis should be           performs
  decisions include       options such as          performed when           transactional,
   aspects such as             leasing.          making promotion           logistical, and
       function,                                    decisions. It is          facilitating
     appearance,                                 useful to know the           functions.
 packaging, service,                             value of a customer         Distribution
    warranty, etc.                                    in order to         decisions include
                                                 determine whether        market coverage,
                                                additional customers      channel member
                                                are worth the cost of    selection, logistics,
                                                   acquiring them.           and levels of
                                                Promotion decisions             service.
                                                involve advertising,
                                                   public relations,
                                                   media types, etc.




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Product: The product, service, or program includes both tangible and intangible
elements. The tangible, of course, are those things that the customer can see, touch, feel,
taste, or smell. The intangible include such things as the image of the offering ... which
includes the image of the organization making the offering, the psychological aspects of
pricing (high price to many customers is equated with high quality - and vice versa).




Price: The price is what the customer pays. It includes direct and indirect costs as well as
opportunity costs. The benefits of the product have to be great enough to warrant the
price. Price includes all costs associated with the product, service, or program.


Place: The place is where the customer receives the product, service, or program. The
place of delivery, including all of its resources, is part of what the consumer buys. A place
that meets his or her needs better may be worth more. The place may be a park, a visitor
center in the park, or an interpretive exhibit along a trail. In setting its strategy, the
organization must determine how much the target market is willing to pay for atmosphere
and physical resources of place.


Promotion: Promotion includes all forms of communication you use to communicate the
benefits of your offering to the target market(s). The objective is to persuade the customer
in such a way that he or she recognizes that your offering is uniquely qualified to meet his
or her needs. The term promotion mix is commonly used to refer to the types of
communication that are available: advertising, public relations, personal selling,
publicity, and sales promotion. Some authors include direct marketing. Word of mouth,
though seldom discussed, is powerful promotion.




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The marketing mix principles (also known as the 4 p’s.) are used by business as tools to
assist them in pursuing their objectives. The marketing mix principles are controllable
variables, which have to be carefully managed and must meet the needs of the defined
target group. The marketing mix is apart of the organizations planning process and
consists of analyzing the defined:
How will you design, package and add value to the product? Product strategies.
What pricing strategy is appropriate to use? Price strategies.
Where will the firm locate? Place strategies.
How will the firm promote its product Promotion strategies.




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Product

                                     Product
                                     Decision




     Branding                         Quality                       Features



                             Bene f i t s o f fe red

We must remember that Marketing is fundamentally about providing the correct bundle
of benefits to the end user, hence the saying ‘Marketing is not about providing products
or services it is essentially about providing changing benefits to the changing needs and
demands of the customer’.

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.

McDonald’s concentrated on studying the Indian culture, its value-systems and its
influence in food consumption decision making. It found that although a substantial
proportion of the populations were non-vegetarians, they stuck to mostly fish, mutton and


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chicken. Muslim took beef but though pig meat to be dirty; Hindus preferred neither beef
nor pork; Christian took both beef and pork. McDonald’s decided, for the first time in
their business history, to drop ham and beef burger from their menu. Two years back, they
even       excluded        mutton        burgers             from        their           offerings.
McDonald’s developed a menu especially for Indian with vegetarian selection to suite
Indian taste. It introduced products like McTikki Aloo for the Punjabi taste buds.
McDonald’s has also re-engineered its operation to address the special requirements of a
vegetarian menu. The cheese and cold sauces used in India is 100 % vegetarian.
McDonald’s are committed for giving customers wholesome, healthy, and delicious food.
They ensure that the cooking area as well as cooking equipment for vegetarian products
is visibly segregated from the non Vegetarian sections. What’s more- their crew members
cooking   vegetarian    food   items    are        identifiable   by   their     green     aprons.




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Pricing
Pricing is the only mix which generates a turnover for the organization. The remaining
3p’s are the variable cost for the organization. It costs to produce and design a product, it
costs to distribute a product and costs to promote it. Price must support these elements of
the mix. Pricing is difficult and must reflect supply and demand relationship.




                                                          Penetration


                                                          Skimming


                                                          Competition
      Pricing Strategies
                                                          Product Line


                                                          Bundle


                                                          Psychological




The customer's perception of value is an important determinant of the price charged.
Customers draw their own mental picture of what a product is worth. A product is more
than a physical item; it also has psychological connotations for the customer.
The danger of using low price as a marketing tool is that the customer may feel that
quality is being compromised. It is important when deciding on price to be fully aware of
the brand and its integrity. A further consequence of price reduction is that competitors
match prices resulting in no extra demand. This means the profit margin has been reduced
without increasing sales.


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PHYSICAL EVIDENCE:


The physical evidence factor of all the McDonalds centers are the signboards, golden
arches, buildings, interiors, colours combination of yellow and red, clean facilities,
visible food preparation section etc. the site shown in the picture is 52 years-old and is
the oldest in the worldwide chain of 20000 restaurants and the last one with red-and-
white stripped tile exterior. After opening in 1953, it immediately became the standard for
the fast food franchises across the country. The building and its 60-foot high neon sign
with “Speede the Chef” are eligible for listing on the national register of historic.


A very popular punch line of Mcdonals-“Aap ke zamane mein, baap ke zamane ka
daam”. The main reason of this price strategy was too attract the middle class & the
lower class of people in India. After this not only the upper class prefers going there but
all class of people go there.

Value Pricing

√   Happy meal – small burger ,fries ,coke+toy

√   Medium Meal Combo- burger ,fries,coke-veg Rs:75 ,Maharaja Mac Meal Rs: 95

√   Family Dines under Rs: 300

√   Price lower than Pak ,Srilanka ,50% lower than U.S.




                                            22
Promotion
A successful product or service means nothing unless the benefit of such a service can be
communicated clearly to the target market. An organizations promotional mix can consist
of:


                                                    Advertising


                                                    Public Relation


                                                    Sales Promotion
      Promotional Mix
                                                    Personal Selling


                                                    Direct Mail


                                                    Internet/
                                                    E-Commerce

The promotions aspect of the marketing mix covers all types of marketing
communications. The methods include advertising, sometimes known as 'above the line'
activity. Advertising is conducted on TV, radio, cinema, online, poster sites and in the
press (newspapers, magazines).


Key objectives of advertising are to make people aware of an item, feel positive about it
and remember it. The more McDonald's knows about the people it is serving the more it
is able to communicate messages which appeal to them


Messages should gain customers' attention and keep their interest. The next stage is to get
them to want what is offered. Showing the benefits which they will obtain by taking
action, is usually sufficient. The right messages must be targeted at the right audience,
using the right media.




                                            23
The Media Magic


“You Deserve a break today, so get up and get away- To McDonald’s”
The above break commercial was one of the initial commercial themes adopted by
McDonald’s United State which became the best known commercial song on television
and,      in   fact,    the   most     identifiable         advertising   themes        of        all    time.


Needham was one of the first advertising agencies of McDonald’s which made many
revolutionary advertisements for the company. Needhams advertising formula became
know in McDonald’s as “Food, Folks, and Fun” and it remains the backbone of all the
chain’s                                   advertising                                             campaigns.


McDonald’s is now, one of the world’s mightiest consumer marketers. Its brand valuation
is $25 billion, making the ninth most valuable brand in the world.


Why                            Mudra                                 in                                 India?


DDB Needham and Leo Burnett are the advertising agencies of McDonald’s are
worldwide. Hence, when they came to India, The subsidiary of both the companies
pitched for the account and ‘Mudra’ the Indian partner of DDB Needham got the account.
Since the very beginning Mudra has been the advertising agency of McDonald’s India.


The Mudra team meets up with McDonald’s marketing team on a regular basis and they
have      a    debate   and   discussion     on       the     new    strategies    to        be     adopted.


McDonald’s uses various Medias like television, hoardings and bus shelters. They are
almost out of print ads. McDonald’s also sponsor many Television Programmers like
kaun             Banega              Crorepati,               Children            shows                   etc.


Even the paper Mats on the trays at the McDonald’s are designed as per the ongoing
Marketing Strategy of McDonald’s. For e.g.: During the French fries issues, all their


                                                  24
Paper mats had description of the burgers, how the vegetarian products are made etc, to
regain the confidence of the customers. The placing of the pamphlets, banners in and
around the outlets is decided upon by the area sales manager and the operations manager,
in co-ordination with the restaurant manager. For e.g. : currently they have the Bugs Life
Theme going on wherein they give free Bugs Life toys with the happy meal. All the
outlets are decorated with the pictures of the toys and even the paper mats have pictures
of the toys on them. The hoardings around the outlets carry the same theme.


The                  80-20                   Menu                   Boards
Even the menu counters in the outlet are a marketing tool for the company. They have to
be designed such that they catch the attention of the customer and tempt him to order the
product. So McDonald’s have menu boards that are descriptive as well as visual. They
call it the 80-20 menu board eighty percent visual and twenty percent descriptive.


Under the recent research conduct by McDonald’s they found that the consumers would
have a clear remembrance of the 80-20 Board. This board also helps give a feel of the
product             before              it            is            purchased.




Reconnecting with customers’ thro’contemporary global marketing direction “I’m loving
it”. “I am loving it” refers an attitude we want your employees to embrace & reflect in
their services.




Their other lucky Promotion strategies were like :-


• Collaboration with coke, M Tv, Hungama .com, Sony Music, etc.
• Scratch cards on large jumbo meals.
• Prices- caps, T-shrit, internet card, CD’s, Free tickets to Lucky Ali’s contest.
• Purchase of 2nd meal in a month qualified for Opel Corsa/ NZ trip.




                                             25
Place
Refers to how an organisation will distribute the product or service they are offering to
the end user. The organisation must distribute the product to the user at the right place at
the right time. Efficient and effective distribution is important if the organisation is to
meet its overall marketing objectives. If organisation underestimate demand and
customers cannot purchase products because of it profitability will be affected.




Direct Distribution               Indirect Distribution


     Manufacture                                     Manufacturer
     r



         Consum                                          Retailer
         er



                                                         Consumer




                                            26
The following table summarizes the marketing mix decisions, including a list of some of
the aspects of each of the 4Ps.

    Product                   Price            Promotion          Place

Functionality          List price           Advertising           Channel members
Appearance             Discounts            Personal selling      Channel motivation
Quality                Allowances           Public relations      Market coverage
Packaging              Financing            Message               Locations
Brand                  Leasing options      Media                 Logistics
Warranty                                    Budget                Service levels
Service/Support




                                          27
            Positioning
“Mc Donald’s mein hai kuch baat” a place for entire family to enjoy. Mc Donald’s
positioned for youth families.

Positioning is about communicating your unique selling advantage or proposition to your
target audience in everything you do. Marketing, sales, customer service. The consistency
helps your customer remember. Can't articulate your unique selling proposition in less
than        10       words?     Maybe            you          lack        clarity    about    positioning.


Our marketplaces have lots of choices. Too many, perhaps, for the average consumer to
evaluate logically. With hundreds of choices in any given locale, many people simply
look for a referral to a product or with professional services: a company that their friends
trust. Those who shop around, consider two or three options and take the best of the three.


With hundreds of choices, and with products and services that most consumers find hard
to     differentiate,     how       do     you     set        yourself,      apart   from    the     crowd?


Positioning allows a marketer to think about why a customer would want to do business
with them. What do you offer that the other producers don't? What does a potential client
get    by        doing   business        with    you,        that    will    serve   their   needs    well?




Positioning has three components:




                                                        28
   •   What are your strengths? Your distinctive competencies? What about your offerings
       provide value to your customers?

   •   Who is your target customer? What about them, makes them an ideal fit for the value you
       offer?

   •   How are you different from your competitors in ways that your customers and potential
       customers will value? In other words, what is your unique selling proposition? Your
       competitive advantage?

When all three are put together, you have a positioning statement. Positioning statements
are the basis for all marketing messaging, sales scripts, and at a corporate level: branding.


So here are the things you need to know to be able to develop your own market
positioning:

   •   Who are you? As a company? As a sales rep?


   •   What is your firm or known for? (Ask people what they think. It may not be what your
       internal talk says it is. Is it prompt claims? Or telling it like it is? Or it might just be
       everyone knows you.)


   •   What do your customers appreciate about your products or services? (Ask your
       colleagues and your customers. Again, it might not be what you think. Maybe you are
       known for high quality. Or perhaps for returning calls promptly or your problem solving
       ability. Maybe it is just that you are convenient. )


   •   What are you particularly strong at? (These are your core competencies.)


   •   What are you better at, than anyone else in your business? As a company? As a
       professional? As a sales rep? (Quality? Innovation? Cost effective choices?)


   •   Who are your most satisfied customers? What is it that they value most about what you
       have to offer?




                                                29
   •   Based upon your sales goals and annual plan, who is your target market? The key here is
       the fit between what you do well and who or what type of business needs what you are
       good at.


   •   What value can you bring your customers that they will value the most, based upon your
       unique strengths?


   •   At a company level, can you articulate this competitive value for your target, best
       customers? Does your branding reflect this? Do your communications use this messaging
       as its foundation?

             o    Are your web, collateral, and sales force attuned to this value?

             o    Do your services focus on this value?

             o    Does your customer service reflect this value?


             o    Does your customer service reflect the promise of the brand? Or are
                  customers continually shocked that the customer service is not like the
                  brand image at all?

Your customers are bombarded with hundreds - perhaps thousands - of commercial
messages each day. Believe it or not buying your product or service is probably not their
most important priority. So, in the end, it comes down to relationships. Does your vendor
understand                                      your                                  needs?


Thus, positioning is EVERYTHING, because, positioning is that unique value you offer,
to that target market you seek, in ways that are better, more effective, more amazingly
meeting your needs than any of your competitors. And, the customer service, and
employee relationships need to MATCH or be INTEGRATED with the market
positioning.




                                               30
            Impotance Of Positioning
Marketing strategy that aims to make a brand occupy a distinct 'position,' relative to the
competing brands, in the mind of the customer. Firms apply this strategy either by
emphasizing the distinguishing features of their brand (what it is, what it does and how,
etc.) or try to create a suitable image (inexpensive or premium, utilitarian or luxurious,
entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very
difficult to reposition it without destroying its credibility.

• Develops Brand Image

• Creates Demand

• Creates Demand

• Creates Value In The Mind Of Customer

• Commands Premium Price




         Marketing Research



                                             31
If I will Launch Pizza hut in Market I will try keeping the following things in the
mind:

   1. Target Customer:

           •   Young Families: They are the people who prefer outing with their
               families.These people believe in working hard and partying harder.

           •   Senior citizens: Generally these fast food restaurants have targeted kids
               or younger generations. So I would like target them.

   2. Price: The burgers I think is rightly priced here but the beverages are little bit
        high priced which most people can’t afford it. It should’nt happen that people
        come here only to eat burgers but also have these beverages. So the beverages
        would be priced accordingly that everyone could afford it.

   3. Product: I think the product here are little bit westernized .The senior citizens
        would not find it familiar it with them. The burgers and eatables to more
        Indianized so that senior citizens find it familiar. And to introduce more milky
        beverages so that it would attract more senior citizens and kids.

   4. Place: I would try opening these restaurants in residential areas so that senior
        citizens would not find any problem in going out. And open these in malls and
        multiplexes so that the young generations which likes to hang out in these places
        would find it easier to go there.




            Marketing Research of McDonald’s



                                             32
There are approximately 22,000 registered restaurants in India, which have sales of over
$15,000 per month. In addition, there are more than 100,000 roadside restaurants
(dhabas) selling their prepared foods in small stalls in cities and on highways. There are
1,568 registered hotels in India.



The opportunity for U.S. food companies in India's food service market is small but
growing. Sales by Indian food service companies totaled approximately $6 billion in
fiscal year 1998. Restaurants account for approximately 55 percent of Indian food service
sales. The institutional sector consists of hospitals, prisons, defense establishments,
schools, company canteens, railways and airlines.




                        3.1 Indian Food Service Sub-Sector Sales
                                        FY 1998
                                 100 percent = $6 billion


                           Hotels
                            5%
                                                                     Restaurants
           Institutes                                                Institutes
                                                 Restaurants
             40%                                    55%              Hotels


* Excludes roadside restaurants
Source: Literature search, Interviews, PSi analysis




Factors driving increased food service sales:



                                            33
        Growth in Personal Income: The increase in buying power of Indian
           consumers is driving growth in the food service sector. India's per capita
           income has increased by over 20 percent from 1992 to 1996.


        Shrinking Household Size: The total number of households in India has
           increased by less than 3 percent per year from 1990 to 1998; however, the
           number of households in middle, upper and high-income categories has grown
           by more than 12 percent annually. These households have higher disposable
           income per member and have a greater propensity to spend on food.


        Urbanization: Approximately 50 percent of high, upper and middle-income
           group Indian consumer households reside in urban areas.


        Growing Number of Women in the Workforce: Over 16 percent of the
           population of Indian women work full-time and spend most of their time away
           from home. Due to these changes many Indian consumers are opting for meals
           away from home.


        Menu Diversification: High-income Indian consumers are seeking variety in
           their choice of food. Urban Indian consumers are aware of various
           international cuisine (e.g. Continental, Chinese, Mexican, Italian, Thai, and
           Japanese) and an increasing number are willing to try new foods


A growing number of specialty restaurants, fast food outlets, home delivery and take-
away restaurants have opened in the last few years. A number of foreign restaurant chains
(e.g. Domino's, Pizza Hut, Pizza Express,TGIF, KFC and Baskin Robbins) have started
operations in India and have achieved success.




                                           34
    Promotional Techniques Which We
    Would Have Used

Before adopting any promotional techniques we would have conducted a survey.

Ratio of Vegetarians and Non-Vegetarians visiting McDonald’s




              Non-Veg
               46%
                                                   Veg
                                                   54%




                            Favorite Product



                                                  McChicken
                                                   Burger
                      Others
                                                     19%
                       27%



                 McVeggie
                  Burger                         French Fries
                   12%                               42%




                                     35
Do you find the product line satisfactory?


                                             39%
                32%
                               29%
40%

30%

20%

10%

0%
          Yes             No          Its okay




                  Favorite Advertisement




         31%
35%
                                                     26%
30%
                   21%
25%
20%
15%                          7%      7%       8%
10%
5%
0%
      Stage     Shifting Sleeping Traffic Others   None
      Fright    House Couple Policemen




                               36
Do you find McDonald’s value for money?




          No                              Yes
         72%                              28%




   Problems faced in the visits to McDonald’s




                                                43%
 45%
 40%
 35%      24%
 30%                                  21%
 25%
 20%               9%
 15%
                             3%
 10%
  5%
  0%
        Long    Wrong     Bad       Other     No
       Queues   Order    Music    Problems Problems




                        37
                  Suggestions to improve McDonald’s




No Suggestions                                    22%

      Better Music         7%

      More Space                      13%

 Home Delivery                         15%

      More Variety                           19%

       Low Prices                                      24%
                  0%             5%              10%          15%          20%         25%




                  Unique Selling Proposition of McDonald’s



30%

25%

20%

15%
          26%           24%
10%                                    19%              17%
5%
                                                                      6%          8%
0%
           Food        Hygiene        Ambience          Quick       Location     Others
                                                       Service




                                            38
       Based on this survey we arrive at our promotional techniques
which should be appropriate to be used for increasing the sales:
   1. Increase its product line.
   2. To have more variety to choose from, to include more deserts and more items like
       Pizza McPuff.
   3. To provide better and quick service.
   4. Lower the supply chain cost so that it helps in cost reducing.
   5. To expand their Happy Meal choices to attract and retain customers.
   6. To educate about healthy lifestyle.
   7. Introduction of McCafees serving premium and specialty coffees and other
       beverages and other products such as cakes, pastries etc in the existing
       McDonald’s.
   8. Provide with better ambience.
   9. Focus on gifts for all generations i.e. youth, kids’ especially senior citizen which
       is a completely new concept.
   10. Special promotions during festivals.
   11. Increasing the space for provision of birthday party areas.
   12. Try to sponsor college festivals.
   13. Work for social welfare of the society.


After analyzing the marketing mix of McDonald’s, it is clear that the company can be
said to be `global’, i.e. combining elements of globalization and internationalization.
McDonald’s have achieved this through applying the maxim, `think global, act
local’.Which is one of the most important reasons for their success in India.




                                              39

				
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