McDonald Success stories

8/13/2019 McDonald Success stories

1/13

McDonald's Entry into India

David H. Wells / Aurora Photos / Corbis

RELATED ARTICLES Your Best BRIC Opportunities Toda

Ho! to Capitali"e on India#s $ro!in% &'ono(

&)plorin% India

B *ridu +hullar Relph

O't,--

How McDonalds broke into the lucratie Indian !arket"

In 0012 *'Donald3s set up operations in India throu%h a 4oint venture partnership !ith

t!o lo'al Indian 'o(panies5Hard'astle Restaurants Private 6i(ited in the !est and

south re%ion and Connau%ht Pla"a Restaurants Private 6i(ited in the north. Ba'7 then2

the suppl 'hain in8rastru'ture2 9ualit 8ood suppliers and the retail environ(ent as a

!hole !ere seriousl underdeveloped2 sas A(it :atia2 vi'e 'hair(an o8 *'Donald3s

India2 West ; . ?&ven prior to its entr into India2 *'Donald3s !as

'o((itted to !or7in% !ith lo'al suppliers and 8ar(ers to sour'e all its re9uire(ents2@ he

sas. ?The 'o(pan there8ore spent si) ears and around .0 (illion to set up the

8ood suppl 'hain even be8ore openin% its 8irst restaurant in the 'ountr.@

India2 despite bein% the !orld3s se'ond lar%est produ'er o8 8ood2 loses nearl 0. billion!orth o8 8ood produ'e due to !asta%e at various levels2 espe'iall the la'7 o8 proper

in8rastru'ture 8or stora%e and transportation2 :atia e)plains. ?*'Donald3s India has

pioneered its uni9ue 'old 'hain (ana%e(ent sste( that has been able to both 'ut

do!n on its operational !asta%e and retain the 8reshness and nutritional value o8 ra!

and pro'essed 8ood produ'ts. This i((ensel bene8ited the 8ar(ers at one end and
http://www.executivetravelmagazine.com/articles/your-best-bric-opportunities-todayhttp://www.executivetravelmagazine.com/articles/how-to-capitalize-on-indias-growing-economyhttp://www.executivetravelmagazine.com/articles/exploring-indiahttp://www.executivetravelmagazine.com/authors/mridu-khullar-relphhttp://www.executivetravelmagazine.com/articles/your-best-bric-opportunities-todayhttp://www.executivetravelmagazine.com/articles/how-to-capitalize-on-indias-growing-economyhttp://www.executivetravelmagazine.com/articles/exploring-indiahttp://www.executivetravelmagazine.com/authors/mridu-khullar-relph


2/13

enabled 'usto(ers to %et the hi%hest 9ualit 8ood produ'ts2 absolutel 8resh and at a

%reat value.@

When the 'o(pan entered India2 it !as 9ui'7 to note that its bi%%est 'hallen%e !ould

be to 'ater to the lo'al tastes and pre8eren'es. In addition2 (ost 'usto(ers initiall

per'eived *'Donald3s to be an e)pensive restaurant that 'atered onl to the outh. The

'hallen%e !as to brea7 that per'eption and %ain a''eptan'e as a 8a(il restaurant2

!hi'h it did. ?We (ade a 'o((it(ent o8 not servin% an bee8 or por7 ite(s to the

'usto(ers2 7eepin% in (ind Indian sensitivities and our respe't 8or the(2@ sas :atia.

The 'o(pan 'han%ed the %lobal 8avorite5the Bi% *a'5to a 'hi'7en bur%er 'alled the

*ahara4a *a' and started usin% e%%less and 'o(pletel ve%etarian (aonnaise and

'oo7in% onl in ve%etable oil. It also introdu'ed a uni9uel Indian produ't5the *'Aloo

Ti77i5a 8irst o8 its tpe in the *'Donald3s sste(.

:atia sas that ne! businesses enterin% India need to re(e(ber that retail toda has'han%ed 8ro( sellin% a produ't or a servi'e to sellin% a hope2 an aspiration and2 above

all2 an e)perien'e that a 'onsu(er !ould li7e to repeat. ?As 'onsu(er behavior

'ontinues to evolve2 so (ust the !as in !hi'h (ar7eters and brands appeal to the(.@

Mridu Khullar Relph is a freelance writer, based in Delhi. Her credits

include Ti(emagazine, The e! Yor7 Ti(es, theInternational Herald Tribune2

$lobalPost2 &lle(India edition), *s.and The Christian


3/13

1. 4 REASONS WHY MCDONALDS IS

SUCCEEDING IN INDIA Prof. Sameer Mathur,

Ph.D.

2. Sameer Mathur BuddingMarkets.com

Marketing Professor 2009 2013 Ph.D. and M.S.

(Marketing) 2003 2009 Marketing Professor

2013 Indian Institute of Management, Lucknow

3. Agenda Why is McDonalds succeeding

in India, whereas other fast food giants (e.g.

KFC) have not done well?

4. 4 Reasons Sensitivity to local taste

(no beef or pork) Affordable Prices Promoting

a family-dining experience Innovative practices

(e.g. Home-Delivery)

5. No beef products Restricted to

chicken, fish, lamb and vegetarian products

Localization as a Marketing Policy in India

6. It really doesnt make sense to sell

beef in a country where 85% of the population

doesnt eat it or will even shun a restaurant

where beef is served Vikram Bakshi,

Managing Director, McDonalds India Common

Sense Approach


4/13

7. Affordable Prices 1 US$ ~ Rupees 45

8. Indians like eating with families and

friends. TV ad: Toh Aaj McDonalds Ho Jaye

(Lets go to McDonalds today) Promoting a

Family-Dining Experience

9. Quite unlike the United States

Innovative: Home Delivery

10. First India McDonalds opened in

1996 Critics were apprehensive: Attracting

Indians to American pattern of food consumption

appeared daunting. Multinationals: perceived

threat to local economy & native culture. Food:

a family affair, eating out was less common. The

Early Days

11. More Recent Numbers

12. International brands (e.g. KFC) have

not done well McDonalds 42% Market Share

13. Summary Why is McDonalds

succeeding in India, whereas other fast food

giants (e.g. KFC) have not done well?

14. McDonalds is the most successful

fast food franchise in India with ~40% market


5/13

share 4 Reasons for McDonalds success in

India Sensitivity to local taste (no beef or pork)

Affordable Prices Promoting a family-dining

experience Innovative practices (e.g. Home-

Delivery) Summary

15. Recommended Reading

16. Over 600,000 views from more than

100 countries http://www.BuddingMarkets.com/

Sameer Mathur BuddingMarkets .com

http://www.facebook.com/BuddingMarkets/

17. Sameer Mathur smathur.com Free to

Download Get These Slides Free

http://www.slideshare.net/ProfessorMathur/4-reasons-why-mcdonalds-is-succeeding-in-india
http://www.slideshare.net/ProfessorMathur/4-reasons-why-mcdonalds-is-succeeding-in-indiahttp://www.slideshare.net/ProfessorMathur/4-reasons-why-mcdonalds-is-succeeding-in-indiahttp://www.slideshare.net/ProfessorMathur/4-reasons-why-mcdonalds-is-succeeding-in-indiahttp://www.slideshare.net/ProfessorMathur/4-reasons-why-mcdonalds-is-succeeding-in-india


6/13

ANKINGS

ACCREDITATIONS

LOCATIONS

EVENTS

FACULTY

You are here1. HOME

. !"O#$ $H#%&E'"('&

Washburn Student Proe!ts

*'Donald#s adapts to India

#y Alick $ordon% Arind Desh!ukh%

Deiki $u&ta% Sa! HunandChul

(on #aek

6i7e (an oun% (en his a%e2 Rohan

!as a bit nervous about his 8irst date!ith eha. The had been 8riends 8or

(an ears2 but this !as the 8irst ti(e

the had been out on their o!n

to%ether. A8ter orderin% their 8ood2 the

!aitress responded !ith the ubi9uitous
http://www.thunderbird.edu/about-thunderbird/rankingshttp://www.thunderbird.edu/about-thunderbird/accreditationshttp://www.thunderbird.edu/about-thunderbird/accreditationshttp://www.thunderbird.edu/about-thunderbird/locationshttp://www.thunderbird.edu/about-thunderbird/thunderbird-eventshttp://www.thunderbird.edu/about-thunderbird/thunderbird-eventshttp://www.thunderbird.edu/about-thunderbird/faculty/thought-leadershiphttp://www.thunderbird.edu/http://www.thunderbird.edu/about-thunderbirdhttp://www.thunderbird.edu/blog/faculty/washburnhttp://www.thunderbird.edu/blog/faculty/washburnhttp://www.thunderbird.edu/about-thunderbird/rankingshttp://www.thunderbird.edu/about-thunderbird/accreditationshttp://www.thunderbird.edu/about-thunderbird/locationshttp://www.thunderbird.edu/about-thunderbird/thunderbird-eventshttp://www.thunderbird.edu/about-thunderbird/faculty/thought-leadershiphttp://www.thunderbird.edu/http://www.thunderbird.edu/about-thunderbirdhttp://www.thunderbird.edu/blog/faculty/washburn


7/13

9uestion2 ?Would ou li7e 8ries !ith thatE@ ?Yes please2@ responded Rohan be8ore

pain% and 'arrin% his and eha3s tras o8 8ood ba'7 to their table.

Fnli7e in the Fnited . But not to !orr *'Donald3s 8ans2

ou 'an still %et our Kren'h 8ries and Chi'7en *'u%%ets.

*'Donald3s also represents so(ethin% di88erent to the outh o8 India. The'o(pan has been a''used o8 'ultural i(perialis( b nu(erous sour'es but this

is not reall true. *'Donald3s has had to Indiani"e itsel8 in order to be a''epted

b the population =. &ven so2 *'Donald3s has retained (an o8 its 7e

!estern ele(ents and this has (ade the restaurant that (u'h (ore popular.

Thin7in% o8 our o!n e)perien'es at *'Donald3s2 8e! o8 us !ould re(e(ber all

the %reat ti(es !e had !ith our 8riends at that 'ool A(eri'an stle restaurant.
http://www.mcdonalds.com/us/en/home.htmlhttp://www.mcdonaldsindia.com/http://www.mcdonalds.com/us/en/home.htmlhttp://www.mcdonaldsindia.com/


8/13

Yet this is e)a'tl the (e(or that Indian outh asso'iate !ith *'Donald3s.

The see the restaurant as so(ethin% di88erent2 uni9ue2 and 8un. The see it as

a %reat pla'e !here the 'an %et out o8 the house and a!a 8ro( their parents.

This is !here India3s ouths %o to han% out !ith their 8riends and treat

the(selves to so(e %reat tastin% reasonabl pri'ed 8ood.

*'Donald3s has 'ultivated this i(a%e and built brand loalt !ith oun% Indians

throu%h advertise(ents spe'i8i'all tar%eted to!ards oun% adults =see appendi)

->. The restaurant re'o%ni"es that this a%e bra'7et2 (ore so than in the F2 this despite the 8a't that

*'Donald3s does not even have the (ost restaurants. That honor lies

!ith Bas7in,Robbins. *ean!hile the (ar7et is e)pe'ted to %ro! nearl MG b

the ear -N =Kast Kood in India>. All o8 !hi'h (a7es *'Donald3s and its

'o(petitors salivate. In total2 *'Donald3s has (ore than 1 restaurants

'on'entrated pri(aril in the northern and !estern distri'ts o8 the 'ountr

=*'Donald3s India !ebsite>. In addition to their traditional restaurants2 the

'o(pan also operates (an i'e 'rea( 7ios7s. These are s(all stores lo'ated

pri(aril in shoppin% distri'ts !here 'usto(ers 'an ta7e a brea7 8ro( their da to

sit and en4o an i'e 'rea( 'one =see appendi) >.The 'o(pan has also 'hosen

to 8or%o its usual 8ran'hisin% (odel. Instead 'hoosin% to start t!o 4oint venturesand establish t!o (aster 8ran'hisees that are responsible 8or (ana%in% ever

restaurant in the 'ountr. This 4oint venture (odel helps the 'o(pan e)er'ise

stron%er 'ontrol over the individual restaurants and ensures that ea'h one (eets

the 'o(pan3s stri't J


9/13

But !hile *'Donald3s has (ade su''ess in India see( eas2 (an other

'o(panies have 8ound out that in realit it is not. Ha%en,Da"slearned this the

hard !a. In a 'ountr !ith a s!eet tooth2 !here not onl the oun% people2 but

the older %enerations as !ell2 love i'e 'rea( =Dash Intervie!>. It !as assu(ed

that Ha%en,Da"s !ould be a %reat su''ess. In an e88ort to dru( up publi'it

and brand itsel8 as another 'ool 8orei%n 'o(pan2 Ha%en,Da"s held a previe!

event 8or the international 'o((unit the da be8ore the 'o(pan !as to open

its 8irst outlet. To advertise the event2 the 'o(pan displaed a si%n 8eaturin% the

phase2 ?&ntr restri'ted onl to holders o8 International passports.@ On the da o8

the previe! event2 an Indian student !as re8used entr. The 'o(pan 'lai(ed

that the oun% (an !as re8used not be'ause o8 his nationalit2 but onl be'ause

o8 over'ro!din%. Ho!ever the (essa%e had alread been sent. The student

too7 a photo%raph o8 the si%n and sent it to ea'h o8 the (a4or ne!spapers inIndia. Ha%en,Da"s3s pro(otion ba'78ired be'ause it re(inded India3s population

o8 the Qo Do%s and Indians allo!ed3 slo%an that !as 'o((on durin% the British

Rule. Be'ause o8 a poor 'hoi'e o8 !ords2 an event that !as supposed to brand

Ha%en,Da"s as 'ool and popular ended up e(broilin% the 'o(pan in a

(assive 'ontrovers. While Ha%en,Da"s3s poor 'hoi'e in advertisin% (ade its

shop in e! Delhi !orld 8a(ous2 it did not !in the appre'iation o8 the Indian

(ar7et. Ha%en,Da"s still has not e)panded beond its sin%le store in e! Delhi

=Das%upta>.

*an other 'o(panies have stru%%led be'ause o8 their overesti(ation o8 and

un!illin%ness or inabilit to adapt to the Indian (ar7et as !ell. +ello%%3s8ailed to

'onsider Indian 'onsu(ers3 brea78ast pre8eren'es. 6evi3stried to sell blue 4eans

8or the sa(e pri'es the 'o(pan 'har%es in the F


10/13

o8 +KCand Ta'o Bell2 as !ell as lo'al 'o(petitor irulashave also %ro!n in si"e

and popularit in the (ar7et. These 'o(petitors have the added bene8it o8

seein% !hat strate%ies have !or7ed !ell and !hat strate%ies have 8ailed 8or

*'Donald3s and other 'o(panies. Additionall2 !hile *'Donald3s stresses its

J. These bills !ill enable to 'ountr to build

(an ne! roads and up%rade the e)istin% in8rastru'ture. *'Donald3s hopes thatb the ti(e the 'o(pan is read to be%in its e)pansion e88orts beond the (a4or

'ities and into other re%ions o8 the 'ountr2 the in8rastru'ture !ill be in pla'e to

allo! the 'o(pan to do so.

The Moral o+ the Story*


11/13

uni9ue proble(s and opportunities o8 the Indian (ar7et. The 'o(pan then too7

its ti(e2 adaptin% its produ'ts and 4ust as i(portantl its 'orporate strate%2 and

has been hu%el su''ess8ul sin'e. At the sa(e ti(e2 the 'o(pan 'annot a88ord

to be'o(e 'o(pla'ent and rest on its laurels. An 8uture (issteps2 ho!ever

s(all2 'ould ruin *'Donald3s e88orts and hard 8ou%ht %ains in the 'ountr2

allo!in% the 'o(pan3s rivals to 'atapult past the( and onto even %reater

su''ess.

A&&endi, -


12/13

This advertise(ent translates to2 ?Celebrate ever little happiness@ i(plin% that

at *'Donald3s2 an Indian oun% adult 'an a88ord to 'elebrate !ith his %irl8riend

and his e).

A&&endi, /

Here !e see a *'Donald3s I'e Crea( 7ios7 in India.

#ibliora&hy

CIA World Ka'tboo7. De'e(ber -. Central Intelli%en'e

A%en'. httpsS//!!!.'ia.%ov/librar/publi'ations/the,!orld,

8a'tboo7/%eos/in.ht(l.

Das%upta2 Resh(i R. ?o Indians allo!ed Haa%en Da"s sas !ron% 'hoi'e o8

!ords@. The Ti(es o8 India. De'e(ber

-0. httpS//ti(eso8india.indiati(es.'o(/india/o,Indians,allo!ed,Haa%en,Da"s,

sas,!ron%,'hoi'e,o8,!ords/arti'lesho!/MN1M.'(s.

Dash2 +ishore. *'Donald3s in India. Case


13/13

?Kast Kood L India.@ &uro(onitor InternationalS Countr .

This report !as a %roup pro4e't 8or the $lobal

McDonald Success stories

Documents

Transcript of McDonald Success stories