Kfc Vs Mc D

8/8/2019 Kfc Vs Mc D

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History of McDonalds

McDonald's has come a long way ever since its beginning in 1955. Here areafew milestones of the McDonald's journey ...In 1954, a fifty-two-year-old milk-shake machine salesman saw a hamburgerstand in San Bernardino, California, and envisioned a massive new industry:fast food. In what should have been his golden years, Raymond Kroc, thefounder and builder of McDonald's Corporation, proved himself an industrial

pioneer no less capable than Henry Ford. He revolutionized theAmerican restaurant industry by imposing discipline on the p roduction ofhamburgers, French fries, and milk shakes. By developing a sophisticatedoperating and delivery system, he insured that the French fries customersbought in Topeka would be the same as the ones purchased inNew York City. Such consistency made McDonald's the brand name thatdefined American fast food.


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Timeline

1955Ray Kroc opens his first restaurant in Des Plaines, Illinois and the McDonald'sCorporation is created.

1957Quality, Service, Cleanliness and Value (QSC& V) becomes the companymotto.

1959The 100th McDonald's opens in Chicago.

1961Hamburger University opens in Elk Grove, near Chicago.

1963One billion hamburgers sold. Ronald McDonald makes his debut.

1964Filet-O-Fish sandwich is introduced.

1965McDonald's Corporation goes public.

1967The first restaurants outside of the USA open in Canada and Puerto Rico.

1968

The Big Mac is introduced. The 1,000th restaurant opens in Des Plaines,Illinois.

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

1973Egg Mc Muffin is introduced.


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

1983

Chicken Mc Nuggets is introduced. New Hamburger University campus opens

in Oak Brook ,Illinois. Set in 80 wooded acres. Training is provided for every

level of McDonald's management worldwide.

198450 billionth hamburgers sold. Ronald McDonald Children's Charities is foundedin Ray Krocs memory to raise funds in support of child welfare.

1989McDonald's is listed on the Frankfurt, Munich, Paris and Tokyo stockexchanges.

1990McDonald's opens in Pushkin Square and Gorky Street, Moscow.

1993The first McDonald's at sea opens aboard the Silja Europe , the world's largestferry sailing between Stockholm and Helsinki.

1994Restaurants open in Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, NewCaledonia, Trinidad and United Arab Emirates, bringing the total to over 15,000

in 79 countries on 6 continents.

1996McDonald's opens in India the 95th country.


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Overview

McDonald's - A Global Phenomenon.

McDonald's opened its doors in India in October 1996. Ever since then, our

family restaurants in Mumbai, Delhi, Pune, Ahmadabad, Vadodara, Ludhiana,

Jaipur, Noida, Faridabad, Doraha, Manesar and Gurgaon have proceeded to

demonstrate, much to the delight of all our customers, what the McDonald's

experience is all about. Our first restaurant opened on 15th April 1955 in Des

Plaines, Illinois, U.S.A. Almost 50 years down the line, we are the world's

largest foodservice system with more than 30,000 restaurants in 100 countries,

serving more than 46 million customers every day.

Mc Donalds India Partnership

McDonald's India is a joint-venture company managed by Indians. McDonalds

India, aubsidiary of McDonalds USA, has expanded its presence in India via 2

joint venture companies Connaught Plaza restaurants and hard castle

restaurants. McDonalds (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 hard castle restaurants, which is headed by Amit Jatia, manages

operations and expansions across Western India (Mumbai, Pune, and Gujarat).


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Around the world, McDonald's traditionally operates with local partners

or local management. In India too, McDonald's purchases from 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 todays international markets.

McDonalds 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 ofa

vegetarian menu. The cheese and cold sauces used in India is 100% vegeta rian.

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.

McDonalds India serves only the highest quality products. All McDonalds

suppliers adhere to Indian Government regulations on food, health and hygiene

while continuously maintaining their own recognized standards. All

McDonalds products are prepared using the most current state-of-the-art

cooking equipment to ensure quality and safety. At McDonalds, the customer

always comes first. McDonalds India provides fast friendly service- the

hallmark of McDonalds that sets its restaurants apart from others. McDonaldsrestaurants provide a clean, comfortable environment es pecially suited for

families. This is achieved through McDonalds stringent cleaning standards,

carefully adhered to McDonalds menu is priced at a value that the largest

segment of the Indian consumers can afford. McDonalds does not sacrifice

quality for value rather McDonalds 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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McDonalds 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 Donalds Corporation. The permission has been sought on two

grounds: McDonalds India would pay an initial franchise fee of $45,000 on

each of the McDonalds 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 McDon alds

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.

Respect for local cultureMcDonald's India has developed a special menu with vegetarian selections to

suit Indian tastes and preferences. McDonald's does not offer any beef or pork

items in India. Only the freshest chicken, fish and vegetable products find theirway into our Indian restaurants. In addition, we've re-formulated some of our

products using spices favoured by Indians. Among these are Mc Veggie

burger, Mc AlooTikki burger, Veg. Pizza Mc Puff and Chicken Mc Grill

burger. We've also created eggless sandwich sauces for our vegetarian

customers. Even our soft serves and Mc Shakes are egg-less, offering a larger

variety to our vegetarian consumer


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Business ModelFranchise Model Only 15% of the total number of restaurants are owned by

the Company. The remaining 85% is operated by franchisees. The companyfollows a comprehensive frameworkof training and monitoring of its franchisesto ensure that they adhere to the Quality, Service, Cleanliness and Valuepropositions offered by the company to its customers.Product Consistency By developing a sophisticated supplier networkedoperation and distribution system, the company has been able to achieveconsistent product taste and quality across geographies.

Act like a retailer and think like a brand McDonalds focuses not only ondelivering sales for the immediate present, but also protecting its long term brand reputation. Mc Donalds entered India in 1996. McDonalds India has a joint venture with Connaught Plaza Restaurants and Hard Castle Restaurants.Connaught Plaza Restaurants manages operations in North India whereas HardCastle Restaurants operates restaurants in Western India. Apart from openingoutlets in the major metros, the company is now expanding to Tier 2 cities likePune and Jaipur.

Challenges in Entering Indian MarketsRegiocentricism: Re-engineering the menu - McDonalds has continually

adapted to the customers tastes, value systems, lifestyle, language and

perception. Globally McDonalds was known for its hamburgers, beef and pork burgers. Most Indians are barred by religion not to consume beef or pork. Tosurvive, the company had to be responsive to the Indian sensitivities. SoMcDonalds came up with chicken, lamb and fish burgers to suite the Indian palate. The vegetarian customer India has a huge population of vegetarians.To cater to this customer segment, the company came up with a completely newline of vegetarian items like Mc Veggie burger and Mc Aloo Tikki. Theseparation of vegetarian and non-vegetarian sections is maintained throughoutthe various stages.


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Segmentati n, Targeting and PositioningM l uses demographi segmentation strategy with age as the parameter.The main target segments are children, youth and the young urban family


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Percentage of kids who influence what FMCG brand

their family buysAs shown above, kids reign supreme in FMCG purchase related to food products. So to attract children McDonalds has Happy Meal with which toysrange in from hot wheels to various Walt Disney characters are given (the latestin this range is the toys of the movie (Madagascar). For this, they have a tie-upwith Walt Disney. At several outlets, it also provides special facilities like PlayPlace where children can play arcade games, air hockey, etc. Thisstrategy is aimed at making McDonalds a fun place to eat . This also helpsMcDonalds to attract the young urban families wanting to spend some qualitytime while their children have fun at the outlet. To target the teenagers,McDonalds has priced several products aggressively, Keeping in mind theprice sensitivity of this target customer. In addition, facilities like Wi -Fi are alsoprovided to attract students to the outlets like the one at VileParle in Mumbai.Mc Donalds mein hai kuch baat projects McDonalds as a place for thewhole family to enjoy. When McDonalds entered in India it was mainlyperceived as targeting the urban upper class people. Today it positions itself asan affordable place to eat without compromising on the quality of food, serviceand hygiene. The outlet ambience and mil d background music highlight the

comfort that McDonalds promises in slogans like You deserve a BreakToday & Feed your inner child. This commitment of quality of food andservice in a clean, hygienic and relaxing atmosphere has ensured thatMcDonalds maintains a positive relationship with the customers.


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Customer Perception and Customer ExpectationCustomer perception is a key factor affecting a products success. Many

potentially revolutionary products have failed simply because of their inability

to build a healthy perception about themselves in the customers minds.

McDonalds being an internationally renowned brand brings with it certain

expectations for the customers. Customers expect it to be an ambient, hygienic

and a little sophisticated brand that respects their values. The customers expect

the brand to enhance their self-image. Customer responses obtained at the Vile

Parle, Mumbai outlet confirmed the fact that they connect

strongly with the brand. However, fulfilling some of the customer expectations

like a broader product variety provide McDonalds a great scope for

improvement .


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Marketing Model

McDonalds Marketing Mix (Ps) 5After segmenting the market, finding the target segment and positioning itself,

each company needs to come up with an offer. The 5 Ps used by McDonalds

are:

1. Product

2. Place

3. Price

4. Promotion

5. People

6. Physical Evidence (cleanliness, speed, quality, transperency)

7. Process (1.Food manufacturing transparent to customer, 2. Training to the

licensees, 3. Invented the most efficient cooking equipments, 4.New method of

food packaging and distribution,5.McDonalds in India followed the same

tradition, 6. Spent rs 50 crores on market reserch)

Product:How should the company design, manufacture the product so that it enhancesthe customer experience?Product is the physical product or service offered to the consumer. Productincludes certain aspects such as packaging, guarantee, looks etc. This includesboth the tangible and the non tangible aspects of the product and service.

McDonalds has intentionally kept its product depth and product width limited.McDonalds studied the behaviour of the Indian customer and provided a totally

different menu as compared to its International offering. It dropped ham, beefand mutton burgers from the menu. India is the only country where McDonaldsserve vegetarian menu. Even the sauces and cheese used in India are 100%vegetarian. McDonalds continuously innovates its products according to thechanging preferences and tastes of its customers. The recent example is theintroduction of the Chicken Maharaja Mac.McDonalds bring with it a globally reputed brand, world class food quality andexcellent customer specific product features


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Place

Where should be the product be available and the role of distribution channels?The place mainly consists of the distribution channels. It is important so that the

product is available to the customer at the right place, at the right time and in

the right quantity. Nearly 50%of U.S.A is within a 3 minute drive from a

McDonalds outlet.

There is a certain degree of fun and happine ss that a customer feels each time he

dines at McDonalds. There are certain value propositions that McDonalds offer

to its customers based on their needs. McDonalds offers hygienic environment,

good ambience and great service. Now McDonalds have also started giving

internet facility at their centres and they have been playing music through radio

instead of the normal music. There are certain dedicated areas for children

where they can play while their parents can have some quality time together.

Price

What should be the pricing strategy?

Pricing includes the list price, the discount functions available, the financing

options available etc. It should also take into the consideration the probable

reaction from the competitor to the pricing strategy. This is the most important

part of the marketing mix as this is the only part which generates revenue. All

the other three are expenses incurred. The price must take into consideration the

appropriate demand-supply equation. McDonalds came up with a very catchy

punch line Aap ke zamane mein , baap ke zamane ke daam. This was to attract

the middle and lower class consumers and the effect can clearly be seen in the

consumer base McDonalds has now.McDonalds has certain value pricing and bundling strategies such as happymeal, combo meal, family meal etc to increase overall sales volumes.


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Promotion

Whatis the suitable strategy and channels for promotion ofthe product

The various promotion channels being used by McDonalds to effectively communicate theproduct

information are given above. A clear understanding of the customer value hel ps decidewhether the

cost of promotion is worth spending.

There are three main objectives of advertising forMcDonalds are to make people aware of anitem,

feel positive aboutit and rememberit. The right message has to be communicated to theright audience

through the right media. McDonalds does its promotion through television,hoardings and bus

shelters. They use print ads and the television programmes are also an

important marketing medium for promotion.

me fthe m t fam u marketin cam ai n fMcD nald are:


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,

Aap ke zamane mein ,baap ke zamane ke daam.

Food, Folks, and Fun

Im loving it.

People

How to converge the benefits ofinternal and external marketing?

McDonalds understands the value of both its employees and its customers. It understands thefactthat

a happy employee can serve well and result in a happy customer. McDonaldcontinuously does

Internal Marketing. This is important as it must precede external marketing.This includes hiring,

training and motivating able employees. This way they serve customerswell and the final result is a

happy customer.

The level ofimportance has changed to be in the following order (the more important people are

atthe top):

1. Customers

2. Frontline employees

3. Middle level managers

4. Frontline managersThe punch line Im loving it is an attemptto show thatthe employees are loving their work at

McDonalds and willlove to serve the customers.

T e McDonalds E perience

Marketing in a services industry is becoming an increasingly complex challenge. The paradigmsof

service marketing demand a passionate understanding of customer expectationsandperceptions, and

linking them to product design & delivery as well as operational planning. Thisis where McDonalds

has excelled due to its ability to successfully integrate the customers perspective in its products and

operations in a comprehensive manner. The

revamped menu in India is an example ofMcDonalds strategy ofintegrating the customers

perspective in its products. And, the operationalintegration is evident from McDonalds

emphasis on its suppliers as its customers as well as its treatment ofits consumers as co-

producers

of services.

The ultimate aim of Service Marketing is notjust to become a Service Leader but to create aService

Brand. The Service Delivery Process is the key to achieving this aim of Service Marketing.

During the Service Delivery Process, each moment of interaction between the firm and thecustomer,

called Moments of Truth, hel ps understand the opportunities that a firm has to winor lose the

customer. For example, these moments of truth are created forMcDonaldsverytime the guard at

the McDonalds outlet meets the customer, every time an attendant

takes down the order from the customer waiting in the queue, every time the cashierinteractswith the

customer, every time the attendant helps the customer guided the customer towardsthe table, every

time the attendant cleans the table, etc.

Managing these moments oftruth is a great challenge in Service Marketing especially due


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un erstan ng t e nature o t e ent re erv ce e very rocess an t e var ous stages n t eprocess that are exposed to the customers. Transparency in the processes atits outlet hashelped McDonalds bring the back office in its outlet atthe front so thatthe customeris able

to know the operations and provide feedback on service design improvements.

InternalCustomer Focus is equally important as ExternalCustomer Orientation in ordertowin these moments oftruth. McDonalds focus on its People and their service delivery

methods therefore plays a very important role in creating a successful Service Brand. Thequality and the consistency ofthe service delivered by McDonalds have been greatlyenhanced by the combination ofthe factors mentioned above. This has helped McDonalds

become Service Leader and a successful Service Brand. This is evident from the factthat

very few ofits customers opt fortake-home parcels or home deliveries while most ofthem

preferto eat atthe outlet and enjoy the McDonalds experience.

McDonaldizing the Suppliers

McDonalds has changed the nature of not only the food service industry but also the food

processing industry as well. McDonalds realized thatthe battle between fast food chains

would increasingly be one of efficiency of supply, lower cost production and greater desire to

innovate. It pioneered with innovative and sophisticated food distribution and packaging

systems when the traditional food processors were unwilling or unable to supply food items

thatMcDonalds demanded. They achieved amazing consistency by devoting more attention

than anyone else to field service and training at store level. Production was concentrated in

huge plants devoted exclusively to McDonalds. McDonalds also started with tiny suppliers

and grew with them displaying greatloyalty.

Nowhere is the supplierloyalty more evidentthan in development of new, improved products.

Some ofMcDonalds classic food items like Filet-o-Fish, French Fries, ChickenNuggets etc. are results of supplierinnovation. Interestingly, ittook KFC more than threeyears before in finally introduced its own version of chicken nuggets. Thus supplier

technological expertise had given McDonalds a product which was not a mere marketing

innovation but a technical one. McDonalds attempted to squeeze labour out ofthe stores by

moving more preparation backinto the processing plant, creating the opportunity to develop

unique products based on suppliers processing skills. Forthe firsttime, McDonalds suppliers

became the focal point of new product development. This converted the fastfoodindustrys most fragmented distributed system into more efficient one which helped McDonaldsreduce its inventory and manage costs effectively.

Importance of PLC in McDonalds


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The requirements of customers change overtime and thus the product offering has to be

changed accordingly. Whatis the fashion today may be out of market within few weeks. Thus

continuous innovation is required.

To counterthese changes McDonalds has continuously introduced new products and has

phased outthe old ones which were atthe decline stage oftheir PLC. The introduction is

timed such thatthe new product does not cannibalize the product already in the maturity or

growth stage. Thus the secretlies in getting profits with different products in the different

stages ofthe PLC.

A perfect example of revitalising a product in decline phase

The French Fries have been an important part of the McDonalds menu worldwide. But nowit was in

the stage of decline and was actually not generating proper return. In an attempttorevitalize it, a new

variant was introduced namely Shake Shake Fries. This is being servedwith chatpata spice mix which

has resulted in increase in the sales of French Fries and haselevated it from to the decline stage. This

is used to delay the decline of a well establishedproduct which has the potential of generating further

revenue

SWOT


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ExhibitsMcDonalds Indian Menu


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Vegetarian Menu


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Thus a majority belive that the favourite delicacy of Mc Donalds is Mc Veggie Burger

6%

18%

12%

34%

12%

8%

10%

Favorite Product

Maharaja mac mc chicken mc veggie french fries mc curry pan fliet o fish others

Is The Product Line Adequate?

Yes

No

Average


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A majority of People feel that Mc Donalds is flawless and deem no change necessary in it

A Section of people reckon that the food joint can even better the services if they increase theproduct variety

Pr blem face I Mc D al 's

Long Queues

Rude Be

aviour

Congestion

Ot

er

o Proble

Impr veme t Require

delivery Ti

e

Ca

aciousness

Product Variety

Prices

Offers and Discount

Ot

ers


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The burger of Mc Donalds has salivated many a toungue of customer and surprisingly the goldenarched m of Mc Donalds one of the first things that a customer thinks about Mc Donalds.

First T i g b t Mc D al s T at Strike

C st mer's Mi

Burger

G

lde

rc

ery

Services

value F

r M

ey

Fu

Documents

Kfc Vs Mc D