SERVICE MARKETING MIX

ON
MCDONALDS
 INTRODUCTIO
N
• Started in 1937 as barbeque drive in restaurant by two brothers Dick & Mac McDonald
in sanbernardino, California.
• Raymond kroc, founder & builder of McDonald’s Corporation was a milkshake machine
salesman prior to meeting the two brothers in 1954.
• By 1958 McDonald had sold its 100millionth hamburger.
• McDonalds restaurant is operated by either a franchise, an affiliate, or the Corporation itself.
• Revenues comes from the rent royalties & Fees paid by the Franchisees, as well as sales in
company
operated restaurants.
• Currently McDonalds a chain of family restaurants Operates in 119 countries & having more than
36,525 restaurants & serving 68million customer everyday by 4,20,000 employees
• Low price, Speed, Service & cleanliness became the critical success factor of the business.
• McDonalds established in India on October 13 1996.
• McDonalds India is a 50-50 J.V. Partnership between McDonalds corporation [USA] & 2
Indian Businessman-Amit Jatia & Vikram Bakshi.

[Link]
Industrial Analysis [Link]
 Company
Overview:
• McDonald's is the world's leading food service retailer with more than 33,000 restaurants in 118 countries
serving more than 67 million customers each day.

• Ownership and management

– Nothern India- Vikram Bakshi's company Connaught Plaza Restaurants
– Western India- Amit Jatia that is Hardcastle Restaurants

• McDonald's worldwide is well known for the high degree of respect for the local culture of each market it
operates in.

• In line with this respect for local culture, India is the first country in the world where McDonald's does
not
offer any beef or pork items.
 Cont’d..
• McDonald's has developed a menu especially for India with vegetarian selections to suit the
Indian palate, and has also re-engineered its operations to address the special requirements of
vegetarians. .
• Special care is taken to ensure that all vegetable products are prepared separately, using
dedicated equipment and utensils. This separation of vegetarian and non-vegetarian food
products is maintained throughout the various stages of procurement, cooking and serving.

• So much so that the mayonnaise and soft serves are also 100% vegetarian, and McDonald's uses
only vegetable oil as a cooking medium in India.

• Established a benchmark in the sector of quick service restaurant

• Awarded many awards like the "Most Respected Company" for four successive years

[Link]
 How did it
• Started in 1950’s
begin?
• Automobiles penetration among Americans and construction of highways

• Initially catered to suburban automobile owners

In India:
• There are over 310 McDonald's restaurants across the country, serving more
than 6.5 lakh customers daily in India.

• McDonald's success is built on a foundation of integrity. Millions of

consumers around the world trust our brand, as we earn it every day by
respecting our customers and employees, and delivering outstanding quality,
service and value.
 Visio
n
“ To be the world’s best quick service restaurant experience.”
• To achieve their vision they are focused on three world wide strategies:

World Wide Strategies:

1. Be the best employer for people in each community around the world.

2. Deliver optional excellence to customers in each restaurant.

3. Achieve enduring profitable growth by expanding the brand and leveraging the strengths
of McDonald’s system through innovation and technology.
 Market
Share:

International Revenues
McDonald's International Revenues
Percent of Total
Geographic Region Revenues
US 35%
France, Germany, UK 21%
Rest of Europe 14%
Australia, China, Japan 8%
Rest of Asia, the Middle East, Africa 8%
 TimeLine in India:
• Launch of First McDonald's® Restaurant - 1996
• Introduction of Happy Meals™ - 1997
• Introduction of Drive thru - Kalamboli restaurant - 2001
• Launch of McDelivery - Bandra restaurant in 2004
• Introduction of Happy Price Menu™ - 2004
• Introduction of Global Menu - McNuggets™ - 2009
• Introduction of Breakfast Menu - October 2010
• Introduction of Global Menu - McSpicy™ April 2011
• Introduction of Global Menu - McFlurry™ October 2011
• Introduction of McValue™ Lunch Meals - January 2012
• Introduction of McEgg™ – August 2012
• Introduction of Masala Grill – April 2013
 MCDONALDS VALUE CHAIN ANALYSIS
 Inbound logistic - Food and materials to restaurants through
approved third party logistics.
 Operations - Ensures fixed process in food preparation. It
operates in Conventional franchising, Developmental license,
Affiliates.
 Outbound logistic - Macdonald’s restaurants operate in the
following formats: sit-down restaurants, drive-thru,
counter- service outlets in food courts.
 Marketing & Sales - McDonald’s uses print and media
advertising.
 Service -High speed services.

Operational Formats of McDonalds

Source- [Link]
INDUSTRIAL ANALYSIS[CONTINUED]
 MCDONALDS 5 FORCES ANALYSIS(MICHAEL FIVE FORCES MODEL)
1-Threat of Competition-HIGH
 Very similar products in the fast food industry.
 High competitors advertising capabilities.
Location of outlets are closed enough ex KFC, Star Bucks etc.
2-Threat of New Entrants-MODERATE.
 Low switching cost.
 Moderate capital cost.
 High cost of Brand Development.
3- Bargaining Power of McDonald’s Customers/Buyers
(Strong Force)
 Low switching costs.
 Large number of providers .
 High availability of substitutes.
 CONTINUED…

4- Bargaining Power of McDonald’s Suppliers (Weak Force)-

• Large number of suppliers.
• Low forward vertical integration.
• High overall supply.
5- Threat of Substitutes or Substitution (Strong Force)
• High substitute availability.
• Low switching costs.
• High performance-to-cost ratio.
Sources- McDonald’s Corporation Form 10-K 2014.
• Roy, D. (2011). Strategic Foresight and Porter’s Five Forces. GRIN Verlag.
• United States Department of Agriculture Economic Research Service (2015).
Food Service Industry Market Segments.
 SWOT ANALYSIS OF MC-D
• Strengths-
 Successful Advertisement & brand name.
 Collaboration with coke, dannon yogurt, Heinz ketchup.
 Socially responsible with charities.
 Safety and quality food.
• Weakness –
 Management failure to see trends that do not fit
 High employed turnover
 Price competition
 Controlling quality with franchised operation
 Negativity publicity-unhealthy food menu
• Opportunities
 Upscale restaurants
 Serving only1% of the world population
 Organic food for health conscious
 Expanding to new part of globe
• Threats
 Sued for unhealthy food many times
 Health concern
 Competitors
 Contamination risks
 Geopolitical issue affect
 7PS OF MCDONALDS
1P-Product.
Product Profile
 Vegetarian Menu.
 Non-Vegetarian Menu.
 Beverages.
 Frozen Deserts.
Product Attributes.
Care for customers sentiments towards religion
& Culture.
 It has separate cooking areas & Equipment's.
 2P-PRICE

 Quite Affordable Products.

o Brand Affordability.[B.A] Ex-McAloo tikki Rs20 to 39etc.
o Brand Core Value product[B.C.V]Ex- McVegiee Rs 50 to 60etc
 Psychological Connotations.
 Cost Leadership.
 Heavily Marketed “Happy price Menu”.
 Many Combos.
Low Cost Food Franchise
Source-www.marketing91.
com
 3P-PLACE
• Located in Prime Locations[Malls, Shoping Complex's].
• Almost In all big cities-Easily accesible.
• Drive-in & Drive through Options MC-D Future Convenient to consumer.
• Covering many residential areas ex-NCR.
• Right of the High-ways.
 4P-PROMOTION
Advertising through T.V, Radio, Cinema, Online, Postersites & Press like News Paper &
magazines
Other Promotional methods include-Point of Sales Display, Merchandising, Direct mail,
Loyalty Schemes, Door Drops etc.
McDonalds Prime focus is on targeting children in “Happy Meals” to which are targeted at
children-Small toys are given along with meal.
 Lucky draws, Scratch Cards.
 Hoardings at Major Places.
 5P-PEOPLE

• Philosophy of quality, services, cleanliness and value is the guiding force behind its service.
• Fast friendly service.
• McD has standard uniform for employs for equality service treatment
• Delivery crew members carries basic operation of a restaurant. Ensure customer satisfaction
at the restaurants.
 6P- PHYSICAL EVIDENCE

• The physical evidence appearance affects not only the impression outsiders have of a
business but all the way that business functions
• Staff members
• Location and appearance
• Buildings Maintenance.
• Interior. PHYSICAL EVIDENCE

CLEANNESS SPEED QUALITY TRANPARENCY

 7P-
PROCESS
• Food Producing Transparent to consumers.
• New method of packaging & distribution.
• Invented most Efficient cooking equipment.
• Customers are invited to check the ingredients
used in food.
• It allows customer to enter the area where the
Process takes place to have a Clearview of
what they are consuming.
 INNOVATIVE ADDITIONS-

 McDonalds should go for healthy products like now its using Maida for producing breads it
should use wheat flour to produce it.
 It should go for fruit based products like juices, fruit salads etc.
 It should have tie ups with Indian Railways to serve the tourist/travellers.
 It should also have tie ups with State bus transport corporation for serving road transport, Flights
and
Cruse.
 Corporate tie-ups for target reach.
 It should have Table Tab system, the orders will be made directly from the table to the kitchen.
 It should use tools like Customer relationship Management & Data Base Management.
 Make to order.
 Introducing of Jain Food.
 It should host candle night dinner once in month as pilot project.
 It should have food carnival relating to innovative fast food and apply in McDonalds.

Loyalty Programs & CRM
 Success of any Organization depend upon its core business
values:
• Our policies and practices in place, allow us to use our size and scope to help
make a difference.
• Customer is the core: The reason for our existence and the tremendous
success of McDonalds, is majorly due to our customers. Hence, we show our
appreciation to them by providing high quality food and services. Our goal is
quality, service, cleanliness and value for every customer, every time.
• People who define us: The true success of McDonalds, lie with the
employees of the company. Therefore, we provide opportunity, nurture
talent, reward achievement and develop leaders. As we believe that a team
of well trained professionals with rich and diverse backgrounds is essential
for continued success.
• Community Matters: We take the responsibilities that come with being a
leader, seriously. We help build better communities, in turn creating a better
world.
Perceptual Mapping
Benefits of CUSTOMER LOYALTY
PROGRAM:
Loyalty McDonald's Smile Loyalty
Programs: card
McCafé
:
On October 14, 2013, McDonald's launched the first McCafé India in the South Mumbai
district of Mumbai.
National Breakfast Day
promo:
During the promotion period, every customer who visits any
Breakfast Store during Breakfast hours shall be eligible to get a free
Veg. McMuffin or Egg and Cheese McMuffin.

McDonald’s will be celebrating the biggest breakfast activation by

serving more than 315,000 McMuffin sandwiches to customers all
over the country. On March 17, 2014, starting at 6:00 AM, all
participating McDonald’s breakfast stores nationwide are joining the
celebration to say “thank you” to its customers who start their day at
McDonald’s.

Each participating McDonald’s breakfast store will be giving away free

McMuffins to the first 1,000 customers at a first-come-first-serve
basis – that’s over 315,000 hot and fresh McMuffins to be given away
nationwide via Dine-In, Take-Out, and Drive-Thru.
McDonald’s Focuses on Attracting Local Customers
with Mobile App
Happy
Meal:
 Even Dissatisfied McDonald's Customers Are Likely To
Return
The survey, conducted by market research company Consumer Edge Insight, revealed that though only 22 percent
of McDonald's customers said that they were "extremely satisfied" by their last visit to the fast food eatery (by far
the "lowest score in the survey“, according to the Consumerist), McDonald's still enjoyed one of the highest "Intent
to Visit Again" scores, with 64 percent of visitors saying that they are "extremely likely" to visit again.

Why customers who aren't typically satisfied with McDonald's keep going back for more?
Respondents put McDonald’s first in perceived value, convenient locations, and fast service.
So customers will put up with food that doesn’t knock their socks off if they can get it:
Easily, affordably and quickly,
-David Decker, president of Consumer Edge Insight, concurred.
“For quick-service restaurant patrons the most important factors that drive loyalty to a
brand are good value and
convenience, with low prices and quick-service being very important as well,” he said.
“McDonald’s has a clear
image lead on all of these factors… [Its] high repeat-purchase intention scores despite their lower satisfaction scores
illustrates the strength of their brand on the attributes that matter most to quick-service customers.”
According to the survey, "great-tasting food is only the 8th most important factor in driving [customer] loyalty"
to fast food chains.
Customer Relationship Management
Why do people like McDonald's ?
How does McDonald's attract and retain its customers ?

People like McDonald's because this food mode makes one think of childhood.

McDonald always invent new meals to have more clients. So McD makes menus with vegetables, fruits, mineral water and
products of warranty origins. McDonald's try to adapt to the different cultures and to the local tastes and people enjoy
that.

People like McDonald's because it allows to spend good time with

family and to make good memories.

They also created McCafé. There we can have breakfast or we can

make a break and eat or drink something. Indeed they have a variety
of quality coffees and refined cakes and pastries

Moreover, Wi-Fi is free in the restaurants. It attracts also students,

young people and people who travel.
“
If you work just
for money, you’ll
NEVER make it,
but if you love
what you’re doing
and you always
put the customer “
first, success will
be yours.

RAY KROC - Founder of McDonald’s

Feedback and suggestion forms available at each outlet

Online feedback form for techno-savvy individuals

Information about upcoming products provided in website

Order through website

• Storage of all details like address, phone no, etc.

Special promotions during festivals as Indians tend to spend more at such events.
Thank You