Saturday, 2 July 2016

McDonald's - Perspective Study on Globalization and Adaptation in India

Introduction
Since the opening of Indian business space for foreign trades as part of landmark reforms in 1991, many multinational companies have come to do their business in the country. One such company has set its shop in the Indian soil is McDonald’s, the multinational Fast Food Giant. The company established itself as the seller of American fast food in 1996. Since its inception in India, it had established 212 outlets in the country by early 2011.  Since more companies joined the fray to get the Indian business space in the fast food industry, McDonald’s had to evolve strategies to woo the Indian customers by understanding the Indian cultural sensibilities and their appetite.

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Tailor-made Products
The company has presence in over 119 countries through as many as 31000 eateries. It was able to resolve a dilemma – bringing global standards or adopting local tastes and preferences. That was the reason why it could have a global presence in a short span of time. For instance, it developed Arabian flat bread in Kuwait City, McLaks for fish-loving customers in Norway and a Rice burger for the food lovers in Hong Kong. This business acumen and developing new items for consumption has endeared the fast food giant with its customers across the globe. Apart from this, the fast food chain has been able to project itself as the most sought after family restaurant in the country. To enhance its appeal as the family restaurant, highly trained staff maintains high cleaning standards in its corridors, kitchen and serving rooms.  Also the serving trays and utensils are cleaned several times in an hour to ensure the high standards of cleanliness.

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Products for Indian Condition
In line with this thought, McDonald’s had introduced a new marketing campaign that went viral in 2011. It primarily consisted of TV commercial and in-store promotions.  This campaign was to support the launch of Mac Spicy products to woo the Indian customers. The idea was to add more variety to the company’s menu to suit the Indian customers’ tastes. These menu items were largely taken from its core global menu, but tailored to tingle with the Indian taste buds. In addition to this, the fast food giant had overcome what the analysts termed at that time – ‘snack joint tag’ - in India, by introducing a lunch and dinner menu to sync with the Indian customers.
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Pricing Strategy
The multinational companies come with the ages-old concept of adapting to the local conditions.  Indian customers are known for spending thriftiness as many of them hail from the middle class background. In keeping with this customer mentality, McDonald’s has come with the concept of value pricing for its priced Indian customers.  For its Indian customers, mainly the fast food major has come out with Happy Meals, Medium meal combo, Maharaja Meal and Family Dines. These cuisines are offered at very attractive and competitive prices across the country. This comes under the product-line pricing, targeting the middle class customers and families in particular.  For example, you can order a “Two Cheeseburger Value” meal for Rs. 75. It comes with a medium drink and fries. It also provides “Super Size” meal for a higher amount that comes with a large drink and a large bowl of fries. The customer has the option of going for another “Value” meal with other combinations on offer.

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Place and Distribution
McDonald controls the product price by its unique business model. Of the total business volume, only 15% is controlled by its eateries. The remaining 85% is controlled by a network of franchises in India.  Apart from this, the addition of the franchisee network helps the fast food giant to establish a framework of training and monitoring. This in turn enables them to stick to superior quality in service, and higher degree of cleanliness and value propositions. This franchisee network also adds the scope for experimenting with the locally available cuisine to add to the McDonald's list of offer to the customers. The franchises also ensure the timely delivery of the products ordered by the customers either by phone or by casual visit. Moreover, the children are given special incentives in the form of small toys or figurines when their parents buy the fast food items from the company’s eateries. 

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Promotion
McDonald undertakes steps to reach out to its target customers in the Indian context by means of advertisements, online campaigns and short-time videos on the customer experience and ambience of the restaurant. The online campaigns in the form of videos and brochures are sent to the target customers to get their attention. The TV advertisements and the social media campaigns are also run to educate the food lovers about different options available for them. Throughout the area where the eatery is located, the billboards and posters are displayed to tell the people about the proximity of the McDonald restaurant. Now-a-days, the mobility platform is used to a large extent to reach out to the tech-savvy people through SMS, MMS and other means.

promotion


India-specific Business
In the Indian context, the company discovered the local flavours like “Value Meals” and “Combos” to win the heart of the people. Moreover, the cleanliness of the restaurant – both inside and outside – and the children’s section helped it to win over the families. This operation model is adopted to help the fast food major to control the prices of the products offered and, at times, reduce their prices to attract more customers to its fold. The marketing campaigns, both online and offline, have helped the people educated about the range of offers it has to give its customers. This is the reason why India has become a good customer base for the McDonald’s.

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Summary
McDonald has evolved into a true multinational company by adopting the local conditions of different countries. Despite fanning out to various countries, the core products for which the fast food major was famous for is retained and adding more of the local flavour to win over the food-loving people. The American company was able to do this due to the establishment of franchisee networks in different countries and experiment with local flavours.
Thuruvananthapuram Mumbai, Maharashtra, India
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