Sunday, 5 May 2013
McDonalds Project Report on Customer Satisfaction
· McDonald’s India is expected to record a CAGR of around 30% over 2007 to 2012, in the context of the expected continuation of growth in the Indian economy during this period. Average bill value will grow modestly as existing customers are expected to increase frequency of visits and also as McDonald’s India plans to diversify its menu to address the increasing fragmentation in consumer preferences across various income segments. With McDonald’s India intending to hold on to its base pricing of its low-priced menu, transaction volumes can be expected to increase with the growing market penetration and a consequent increase in new customers.
· During the forecast period, McDonald’s India is expected to grow its number of outlets by 20% per year. The choice of geographic locations will become more diverse. It will open outlets in Tier II and III cities, along highways and at travel locations such as airports and railway stations. Apart from a thrust in these specialised locations, outlet expansion will feature a healthy mix of stand-alone and retail locations.
McDonald’s India also plans to open drive-through outlets in properties alongside highways across the country. At some stage in the future, it could extend its brand into a 24/7 service, introducing breakfast and other types of food. It plans to implement these concepts on the stand-alone outlet platform on highways.
· Having focused strongly on making its products affordable to a mass consumer base, McDonald’s India will train its sights on improving profitability, mainly by increasing average consumer spend at its outlets. It plans to implement three key measures – change product mix; focus on high-growth locations; and expand outlets with greater economic efficiency. It will include higher-price, higher-margin products in its menu, and even adopt differential pricing, depending on the geographic location of its outlets. It will concentrate on high-growth locations such as upmarket multiplexes, food courts and high-street malls. Restaurant formats such as drive-through and the compact-area format Kiosk and Express delivery outlets will be established to suit different geographic locations.
· With the increased coverage of small cities and towns, and the rapidly growing special locations, McDonald’s India’s market penetration is expected to grow. Customers’ frequency of visits to its outlets is also poised to grow due to its unwavering focus on speed of service, quality of overall dining experience and innovation in taste, which are all in line with consumer expectations in quick service dining.
· McDonald’s India was established in India through two equal joint ventures – Connaught Plaza Restaurants Pvt Ltd for North and East India markets; and Hardcastle Restaurants Pvt Ltd for West and South India markets. Connaught Plaza Restaurants Pvt Ltd, one of the promoters of McDonald’s India, is mainly in the foodservice business. It also has interests in the hospitality services industry.
· McDonald’s India is positioned as a quick service dining outlet, and operates in the high-growth chained burger fast food category, which recorded a CAGR of 28% from 2002 to 2007. The quick service dining model has been performing strongly during the past two years, thereby becoming a larger part of the overall market for informal eating in India. The key growth drivers are that the number of women working in India’s middle income households has increased and, due to time constraints, people are frequenting quick service outlets more.
· In 2007, McDonald’s India seemed to have introspected considerably on the key aspects of its business. On the cuisine front, it slowed down menu innovation, and did not introduce any new product to the menu; initially it had focused extensively on localisation to establish consumer acceptance to the taste profile of its cuisine. In its operations, it focused on cost reduction, entering into bulk procurement arrangements with its suppliers, eliminating wastage, and removing slow-moving products, for example, Curry Pan from its menu. It is in the process of establishing “made-for-you” compliant kitchens at a high initial investment to eliminate wastage in its kitchens. In this kitchen system, food is cooked only once a consumer’s order is placed with no increase in cooking time.
· As of 31 March 2008, McDonald’s India operated 128 outlets in India. Fifty three of these outlets are located in West and South India, and 79 outlets are in North and East India. The steady rate of outlet expansion resulted in a strong inflow of first-time consumers into McDonald’s India’s outlets, driving a 27% increase in volume sales in 2007. McDonald’s India has also been focusing on building consumer loyalty to increase frequency of visits.
· To roll out its outlets steadily and with cost-effectiveness, McDonald’s India will diversify its outlet format introducing delivery and Express outlets, which will have a more compact area than its existing dine-in outlets. It will deploy its Express delivery model featuring a limited menu in cities with high levels of demand during the forecast period, with an aim to drive sales volume growth. It plans to invest Rs300 million between 2008 and 2010 to implement the home delivery model. To compete more effectively with wayside eating places, McDonald’s India will introduce kiosk outlets serving desserts and beverages.
Source-Euromonitor International Limited-Company Profile
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