Project Report on McDonald’s India - Consumer Foodservice- Customer Satisfaction
Marketing Dissertation on McDonald -Customer Satisfaction Survey
PhD Research Proposal on Marketing Strategy of McDonald's in India
Strategic Direction
·
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.
Company Background
·
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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