McDonald’s In India Essay Example

McDonald’s In India Essay McDonald’s In India Name: Course: Date: We will write a custom essay sample on McDonald’s In India specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on McDonald’s In India specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on McDonald’s In India specifically for you FOR ONLY $16.38 $13.9/page Hire Writer McDonald’s In India Introduction McDonald’s is considered one of the fastest growing fast food franchises in the world. Therefore, it is no surprise that the company has taken a keen interest in promoting its brand outside the country. One of the countries McDonald’s has established a presence is India. While the company enjoys a global popularity, India is a country that does not believe in eating beef. It is therefore interesting to find out how a business that depends of beef as a marketing strategy fairs in a country whose culture prohibits eating beef. Therefore, a SWOT analysis is carried out to determine the strengths, weaknesses, threats and opportunities that the company have in India. Consequently, a marketing strategy is developed to ensure that the company establishes a foothold in the country. Situational Analysis Strengths and Weaknesses Financial strength McDonald’s is considered the number one fast food company in terms of sales. This means that it has a large financial basis. In this regard, it is very capable of cushioning the losses that may be incurred in the Indian market. The company also has over 30 thousand restaurants in about 120 countries. In India, they have more than 200 units of the franchise (Collins 2000). In this regard, it is very capable of cushioning the losses that may be incurred in the Indian market. Production Strength The company’s many restaurants indicate that the company has a huge potential for production. It means that they have been able to replicate the same product in all countries. The company has the ability to adapt to the socio-cultural differences inherent in the country of operation. In India, the company has ensured that they serve burgers with lamb meat so that they can counter the fact that Indians do not partake of beef. Marketing Strengths Intellectual property: The company trademark mascot is Ronald McDonald. The golden arches are also trademarks that are associated with McDonald’s company. The ability to establish trademarks makes it possible for people in India to identify with the brand. The company has built very strong brand equity. Almost all startups by McDonald’s have an almost 100% chance of success (Collins 2000). Brand Image: McDonald’s has developed a strong brand image globally over the years. The brand offers an array of consumer choice at a reasonable price and exceptional prices. There has also been a lot of investment that is geared toward sustaining its franchise store networks. As of 2007, 75% percent of McDonald’s restaurants were franchises. It is believed that McDonald’s is able to make sales just from the brand name. This is what is referred to as brand equity. Core competencies include price, promotion, product, and place. Product McDonald’s merchandise primary range comprises of non-vegetarian burgers and vegetarian burgers. The vegetarian burgers include items like salad sandwich, Veg surprise, Aloo Tikki Burger, or the Mc veggie bugger. The non-vegetarian burgers include the Chicken Mc grill, the fillet or fish Maharaja Burger, the Chicken Maharaja Burger. Also in the product portfolio is French-fries, wrap chicken maxican, veg pizza mc puff, and wrap paneer salsa. The establishment also offers coffee, soft drinks and value meals. All these foods and drinks are aimed at providing variety for different customer preferences. Another important factor to recognize is the fact that McDonald’s in India has taken into account cultural needs of its market by introducing burgers that use lamb meat instead of beef. This enables them to establish themselves as a formidable fast food entity in India. Price The vegetarian burgers in McDonald’s have a price rage of between 20 Rupees and 48 Rupees. The wrap paneer salsa, price range is between 45 Rupees and 50 rupees (Book My Restaurant 2011). On the other hand, non-vegetarian burgers have a price range of between 30 Rupees and 60 Rupees. The wrap chicken maxican price tag is at 55 Rupees (Book My Restaurant 2011). Potato wedges cost 20 Rupees; Medium French fries cost 28 Rupees (Book My Restaurant 2011). Promotion The primary focus of McDonald’s is attracting children to their establishment (Collins 2000). The happy meals target children since with each meal served, a child is given a toy. In addition, the customer is accorded a chance to win prizes in draws and the use of scratch cards (). These options are offered if an order is placed on some of the combos offered. The value meals and econo meals indicate to the customer that they can buy different items while at the same time saving money as opposed to when the items in the value and econo meals are bought differently. Place The McDonald’s outlets in India have been evenly spread out to ensure that there is easy access to them. The reason for this is the fact that they do not offer delivery services thus making sure that the outlets can be easily accessed. McDonald’s also makes it possible for customers to use take away services that utilize drive–in facilities. One weakness that the company faces is high employee turnover that has led to more money being used to train employees. Threats and Opportunities Technological Environment The company has many opportunities to explore. For example, the â€Å"Going green† initiative is geared toward the company improving on energy management, using environmentally friendly refrigeration methods and making it possible for efficient packaging. These technological advancements approach make the company develop a good reputation toward environmental sustenance. Economic Environment There have been an increasing number of people dinning out. This makes it possible for the company to maximize on sales using this particular kind of clientele. The Growth of the fast food industry in the country accords McDonald’s is the chance to experience continued success. The global economic downturn saw many companies register losses. This is because many people would prefer to spend less and thus cutting down on expenses such as eating out (Majumdar 2010). A repeat of an economic recession is makes it impossible for a business to maintain sales. Since the economy is stable, the company still stands a chance of managing profits. Competitive Environment The company also has threats to achieving success. The fast food industry is becoming more competitive and therefore, people have different options for services. McDonald’s has to compete with local fast food outlets that offer cheaper food and more culturally acceptable food variety. This competition therefore threatens the market share for the company. McDonald’s has to find means to ward of the competition. Political Environment The political environment allows the company to operate in a peaceful atmosphere. A peaceful atmosphere makes it possible for the company to enjoy economic freedom. However, this environment could also be affected by political issues such as terrorism. India has been a target of terrorism over the years. With increasing terror attacks being targeted toward Americans, it is possible that American companies abroad will also be targeted. This may affect how business carries on in the country. Cultural/Social Environment Focus by consumers on eating healthy can be considered a social change that may affect the company sales. This is because the company is associated with unhealthy products. This may force McDonald’s to change its menu to suit the needs of a society that is increasingly conscious of eating healthy. The other concern is that fact that the company has decided to use lamb meat in place of beef to cater for cultural inhibitions. While this move may be viewed as an attempt to include India into the McDonald’s family, it alienates those who prefer beef in the country. Therefore, they stand to lose business from this clientele. However, McDonald’s can make use of the growing consumer awareness toward eating healthy (Collins 2000). This opportunity has already been explored with the company spearheading campaigns for eating healthy and providing healthy options for its consumers Set Objectives by Target Market Qualitative Objectives Product performance as an objective is geared toward enhancing sales of products offered by the company. The company has to ensure that the product being offered is acceptable to the cultural norms and that prospective customers are going to relate. The ability of a product to gain popularity is by ensuring that the products are well advertised through creation of brand awareness (Gordon 2002). Brand awareness as an objective is geared toward making the McDonald’s brand known allover the country. However, creating brand awareness has to be geared toward a market type that is likely to buy the products. Brand Awareness is therefore more of a strategic approach to product promotion. Through effective brand awareness, then there is the possibility of making the company’s products become the preferred brand. Brand preference depends on effective brand awareness strategies. It therefore has to ensure that what is advertised is what the consumer is going to get so that the company can develop a brand preferred b consumers. The McDonald’s brand name is already known worldwide. This makes it have strong brand equity. It is necessary that the company use the brand name to make more sales. Quantitative objectives They include market share, share of customer and sales volume. The main objective is to increase the quantity of market share, share of customer and sales volume. Market share refers to number of customers who would prefer to use McDonald’s. The share of customer refers to customer percentage that purchase a company’s product of all the customers who buy in a particular product category (Gordon 2002). The product category is fast foods. The share of customer will therefore mean the percentage of all customers who buy from McDonald’s as opposed to other fast food outlets. The higher the percentage, the higher the market share McDonalds’s has. To increase the market share, the company has to have many outlets so that the volume of sales is mores. The sales volume is the amount of product sold depending on market share and share of customer. Marketing Strategy Customer Demographic profile The customer demographic profile consists of two criteria. The first is market segmentation and the second target market selection. The main aim of customer demographic profiles is to ensure products are engineered to meet customer expectations. Market segmentation is a technique employed by companies to enable them better target products offered by a company. Therefore, McDonald’s needs to segment its market in India so that the products offered will elicit the expected market reaction. The Hindu religion does not allow Hindi faithful to have beef (Majumdar 2010). While they may offer lamb to the Hindi faithful, it is also important to recognize that there are other religions within the country that have no problem with beef. It is therefore important that McDonald’s determine the regions where beef is accepted is not and ensure that all customer needs are met. Therefore, market segmentation should look at market segments in terms of homogeneity in needs and the distin ct nature of its customer base in India. Market segmentation as a strategy may also consider whether market action may bring about similar responses to the market. Target market refers to a group of people who have similar perceptions, needs and interests. Target market selection therefore means that the company identifies the needs of a market segment and ensuring that the needs in thus segment are met. Two important factors need to be considered when choosing a targeted market segment. The first is the attractive nature of segment and secondly, the compatibility between the segment selected and the company’s objectives, capabilities and resources (Gordon 2002). The attractiveness of the segment refers to the ability of the market to sustain volume of sales the company expects to achieve. Other factors include the level of competition in the segment, the projected profit margins, the loyalty of the market segment of toward the brand and the growth rate of the market segment. In strategic planning, McDonald’s has to ensure that all these factors have been considered before opening another branch in the country. Controllable Variables Product Strategy In employing marketing strategies, there are controllable variables such as product strategy, pricing strategy, and advertising strategy. Controllable variables are factors that a company has full control over in a bid to increase sales volume (Majumdar 2010). Product strategy refers to a company making sure that products appeal to a particular market segment. For example, in India, McDonald’s have to ensure that they remain culturally relevant by offering lamb for their burgers instead of beef. The company also has to offer vegetable products since a religious practice among the Hindi, Ahimsa, advocates for the consumption of vegetables and respect for animals. Therefore, products have to meet these cultural needs. While considering products strategy, it is also important to think about the price of goods. Pricing Strategy Pricing strategy ensures that the products are affordable by setting cheap prices but ensuring that the prices are such that the company can still make profits. Several pricing strategies could be used. One pricing strategy and the simplest are to determine the cost of making the product and then add a percentage profit. Since the Indian market through market segmentation may require a different menu, this is an effective way of setting the price of the products (Collins 2000). Another strategy is the limiting strategy where a dominant company in the market sets the price at low rates to discourage any new entrants. This means that McDonald’s in India needs to maintain the market share to be the price determinant where any new company selling above it may risk failure. However, the best strategy is market-oriented pricing where McDonald’s utilizes market research to ensure that the prices being set are affordable and attractive. Since the main aim is increasing profits. Promotional Strategy Promotional strategy is an approach a company uses to make their product known. The strategy involves advertising, public relations and personal selling. Advertising should be geared toward attracting a particular clientele. The main concern for McDonald’s has always been children. In advertising, the company has to consider what is to be said, where it should be said, who to say it, when to say it and how it should be said. The company should utilize their company trademark mascot Ronald McDonald to promote them in India. This is because he is a universally recognized figure. The advertisements featuring Ronald McDonald should be aired on television, print media and the other visual media. The message should appeal to children and their parents offering them the chance to win if they buy econo and value packs. Naturally, the advertisement should adhere to the cultural setting in terms of the language used. Advertising in essence should be used to strengthen McDonald’s presence in the country by appealing to more people to buy its products. Distribution Strategies The distribution strategy refers to how McDonald’s will ensure that its products reach everyone who needs it. Currently, McDonald’s in India has more that 200 outlets in India. This means that the company already has a strong presence in the country. However, it could be prudent to collaborate with retail outlets such as supermarkets to offer their products (Osenton 2002). This one channel could be used to ensure that people get the chance to access McDonald’s products while shopping for other household utilities. Through market segmentation, McDonald’s India should identify more areas where outlets could be erected. The outlets could be erected next to malls and other busy business centers and next to housing units. Increasing points of sales will ensure that the company realizes more profits because of an increase in sales volume. The point of purchase should use self-service since this is a faster method as opposed to waiting tables. Self-service also e nsures that orders are right and hence avoids customer dissatisfaction. However, for a family concept, it would be vital to keep a family together and personal selling in this regard may be effective (Majumdar 2010). Implementation The main goal for McDonald’s India is to increase sales volume and maximize profits. In this sense, the goals include increasing product performance, creating brand awareness, improving brand preference and increasing brand equity. To implement strategies to enhance product performance the company should ensure that they offer culturally acceptable foodstuff and ensure all the market requirements are met. For one, the menu needs to be changed to be vegetable oriented. This not only makes the establishments culturally acceptable, but also healthy. To implement this kind of menu requires employing individuals who are aware of these issues. To create brand awareness, McDonald’s India need to make sure that the company there are advertisements on television and relevant print media such as billboards, newspapers, and flyers. This strategy could also work for the goal to enhance its brand equity. To increase market share, the company also needs to make it possible that menu is relevant culturally. To gain more customers, the company has to implement Indian themes in their restaurants by having Indian employees and decor. However, the decor should not overshadow the McDonald’s theme such that the brand image is lost. The schedule of key events needs to be strategically planned. For example, the company should advertise the opening of new outlets and their locations. To inaugurate new outlets, the company should hold open days and provide discount offers for the day. This aims at establishing brand awareness and increasing market share. This should be done when the company reveals partnerships with retailers who have agreed to display their products on their shelves. Results Measurement Criteria Sales To determine the increase in sales volume, the company should determine calculate the profits earned and compare it to profits earned in previous years. If profits are more, then it means that sales have soared. There should also be measures to determine the sale of individual products so that the company can find out which products perform better. This will enable the company to determine what products contribute more to profit margins and which ones do not. This will also enable the McDonald’s to devise strategies to improve the sales of products performing poorly. Market Share To determine market share, McDonald’s India should analyze sales depending on the market segments the company has created. This is an effective way to identify the viability of target market research. To determine market share, it would be considered necessary to compare the performance of other fast food service providers with that of McDonald’s India. McDonald’s should also compare sale of products with previous years to determine if there has been a shift in the market share. Contingencies If outcomes do not meet the expectations of the company, the best thing is to review the strategic plan putting into consideration reasons as to why the strategy did not work out. For example, the strategic plan should shift from customer-oriented strategy to enhancing employee capacity to offer services and improving organizational structures. In reviewing employee structures, the company should consider ways to reduce employee turnover since time spent on training is time that could be spent on satisfying customer needs (Osenton 2002). If the strategic plan does not work, it is always a good idea to ask the customer what is unsatisfactory with McDonald’s establishments visited. This could be done by having suggestion boxes. The company should also employ the use of customer satisfaction forms, where customers rate the service by answering questions about the service. This can be a good contingency plan since the company can monitor the effectiveness of the strategy on a daily basis. It also accords the company the chance to rectify the various problems customers experience customers face. All this should be aimed at increasing sales and in this regard maximizing profits. References Book My Restaurant (August 5, 2011). Mc Donald’s India-Menu and Price/brands. Retrieved from http://bookmyrestaurant.co.in/blog/brands/mc-donalds-india-%E2%80%93-menu-and-price Collins, S. (January 01, 2000). Watson, James L., ed. Golden Arches East: McDonald’s in East Asia. Journal of Popular Culture, 34, 160-166. Gordon, I. (2002). Competitor targeting: Winning the battle for market and customer share. Etobicoke, Ont: J. Wiley Sons. Majumdar, R. (2010). Consumer behaviour: Insights from Indian market. New Delhi: PHI Learning. Osenton, T. (2002). Customer share marketing: How the world’s great marketers unlock profits from customer loyalty. Upper Saddle River, N.J: Financial Times Prentice Hall.