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Case Study 11: Marketing of Services: The McDonald’s Way

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Marketing Cases from Emerging Markets

Abstract

For a lot of people, the name of McDonald’s instantly brings a smile. It is known for its crispy burgers and its wide network of outlets. The company started its business operations in India in 1996 as a 50:50 joint venture partnership between the two businessmen Amit Jatia (Jatia) and Vikram Bakshi (Bakshi). India was a challenging market, given local dietary preferences for vegetarian dishes. Tim Fenton pointed out that India’s eat out market was about $128 billion a year compared with $132 billion in China, but was growing faster than that of China.

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, McDonald’s Corporation.

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Notes

  1. 1.

    Amit Jatia, the MD of Hardcastle Restaurants, joined the McDonald’s family as the youngest JV Partner in 1995. He took hands on training for a year at McDonald’s in Jakarta (Indonesia) as well as a degree in Hamburgerology from the Hamburger University, Oak Brook (Illinois, USA). He was also nominated for “The Economic Times Awards for Corporate Excellence” as “Entrepreneur of the Year” in 2004 and 2005.

  2. 2.

    Vikram Bakshi became the MD, McDonald’s India (North and East) on September 28, 2006. He was also nominated as the President of the National restaurant Association of India.

  3. 3.

    Tim Fenton was the president of Asia, Pacific, Middle East and Africa and was accountable for the 38 countries and more than 8,200 McDonald’s restaurants in this region. He served as president, East Division, for McDonald’s USA. He was responsible for more than 5,200 restaurants in the eastern United States, covering eight geographical regions in 21 states.

  4. 4.

    It is a vegetable burger, which includes a patty made out of potatoes, peas, and spices. It also includes tomato slices, onions, and vegetarian mayonnaise.

  5. 5.

    It starts with a rectangular shaped crust, but instead of a creamy sauce, it is flavoured with a tomato-based sauce and then is topped with carrots, beans, bell peppers, onions, peas and mozzarella cheese.

  6. 6.

    It looks similar to McAloo Tikki Burger, but starts with the sesame seed bun. In between the bread, there is a vegetarian patty made from peas, carrots, green beans, red bell pepper, potatoes, onions, rice, and seasoning. It is garnished with lettuce, and has mayonnaise spread thickly on the bread.

  7. 7.

    A samosa is a stuffed pastry and a popular snack in South and Southeast Asia. It generally consists of a fried or baked triangular, semi-lunar or tetrahedral pastry shell with a savory filling, which may include spiced potatoes, onions, peas, coriander, and lentils, or ground beef or chicken.

  8. 8.

    Kababs are a wide variety of meat dishes originating in Persia and later on adopted by the Middle East andTurkey, and now found worldwide.

  9. 9.

    Chole bhatura is a combination of spicy chick peas and fried bread called bhatura made of flour.

  10. 10.

    Pakoda is a fried snack (fritter) found across South Asia. It is created by taking one or two ingredients such as onion, eggplant, potato, spinach, plantain, cauliflower, tomato, chilli, or occasionally bread or chicken and dipping them in a batter of gram flour and then deep-frying them.

  11. 11.

    A paratha is an Indian flat-bread that originated in the Indian subcontinent. Parathas are usually stuffed with vegetables such as boiled potatoes, leaf vegetables, radishes or cauliflower and/or paneer (South Asian cheese). Aloo-paratha is the variety that is stuffed with boiled potato and spices.

  12. 12.

    The bhaaji is a vegetarian dish made from a vegetable. A typical north Indian lunch or dinner usually starts with Poori (flat bread), accompanied by one or more bhaaji(s).

  13. 13.

    Dosa is a fermented crepe or pancake made from rice batter and black lentils. It is indigenous and is a staple dish in the southern Indian states of Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu.

  14. 14.

    Vada can vary in shape and size, but are usually either doughnut or disc shaped and are about between 5 and 8 cm across. They are made from dal, lentil, gram flour or potato. Vadas are preferably eaten freshly fried, while still hot and crunchy and is served with a variety of dip called sambar.

  15. 15.

    Rs = Indian Rupee (s), Re. 1 = 100 paisa, In February 2011, US$1 = Rs. 45 (approximately).

  16. 16.

    V S Rama Rao, “Fast Food Retailing in India,” www.citeman.com, September 17, 2010.

  17. 17.

    In India, highways are dotted with local restaurants popularly known as dhabas (singular: dhaba). They generally serve local cuisine. They are most commonly found next to petrol stations, and are generally open 24 h a day.

  18. 18.

    “The Burger Story” www.tonicpanel.com.

  19. 19.

    Leo Burnett Worldwide is an American advertising company, created in 1935 by Leo Burnett. The company was opened in Chicago in 1935. In 1950 the company started its two first major advertising projects, for Kellogg’s and P&G.

  20. 20.

    Bollywood is the informal term popularly used for the Hindi-language film industry based in Mumbai, Maharashtra, India. The term is often incorrectly used to refer to the whole of Indian cinema; it is only a part of the total Indian film industry, which includes several regional film industries sorted by language.

  21. 21.

    The Indian Premier League (IPL) is a professional league for Twenty20 cricket competition in India. It was initiated by the Board of Control for Cricket in India (BCCI) headquartered in Mumbai, India.

  22. 22.

    The Associated Chambers of Commerce and Industry of India (ASSOCHAM) is the umbrella body of chambers of commerce in India. The organisation represents the interests of trade and commerce in India, and interacting with the Government of India on policy issues, and liaisoning with their international counterparts to promote trade between India and other nations.

  23. 23.

    India’s first Food Franchising Report by Franchise India and CIFTI-FICCI. The primary objective of the report is to provide a snapshot of current trends in Food Franchising vis-a-vis expert analysis of various elements having implications on it.

  24. 24.

    Established in 1991 by Arvind Singhal, Technopak Advisors is a Management Consulting firm in India, offering strategic advice, start up assistance, performance enhancement impetus, consumer insights and capital advisory to Indian and International companies.

  25. 25.

    Sagar Ratna is a well known brand of restaurant chain in northern India serving vegetarian cuisine with a speciality in south Indian delicacies.

  26. 26.

    Yo! China is India’s first and largest chain offering Indian Chinese cuisine in almost all corners of the country. It offers a trendy casual dining atmosphere and has 43 points of presence in trendy locations across India.

  27. 27.

    Haldiram’s is one of India's largest sweets and snacks manufacturers, based in Delhi, India.

  28. 28.

    Bikanervala is a chain of traditional restaurant in India which specializes in ethnic Indian food specially sweets and snacks.

  29. 29.

    Nirula’s is India’s oldest fast food restaurant chain, based in North India and most popular in NCR Delhi. It specialized in “Desi (local) version” of western fast food as well as offered Indian cuisine and casual dining.

  30. 30.

    Mavalli Tiffin Room (commonly known as MTR) is the brand name of a food related enterprise located in India. It is famous for the MTR restaurant located on the Lal Bagh Road in Bangalore and also for the pre-packed food articles which are sold in packets having the MTR brand. MTR also claims to be the inventor of the popular South-Indian breakfast item, Rava idli.

  31. 31.

    Murugan idli shop is considered among the best to taste South Indian dishes. Idly, Dosai and Meals are enjoying the prominent positions among the menu of a south Indian.

  32. 32.

    Denny’s Corp is a full-service coffee shop/family restaurant chain. It operates over 1,500 restaurants in the United States. Denny’s is known for always being open, serving breakfast, lunch, dinner, and dessert around the clock. .

  33. 33.

    Pollo Tropical is a fast food restaurant chain specializing in the Floribbean cuisine of South Florida (a fusion of Florida cuisine and Caribbean food). Pollo Tropical is owned and operated by Carrols Corporation. The chain has its headquarters in Kendall, unincorporated Miami-Dade County, Florida.

  34. 34.

    Johnny Rockets is an American restaurant franchise whose concept is to create a classic American restaurant atmosphere. The theme is the diner-style restaurant that had become a common sight by the 1950s.

  35. 35.

    Wendy’s Old Fashioned Hamburgers is an international fast food chain restaurant founded by Dave Thomas. As of March 2010, Wendy’s was the world’s third largest hamburger fast food chain with approximately 6,650 locations.

  36. 36.

    Arby’s is a fast food restaurant chain in the United States and Canada that is a wholly owned subsidiary of Wendy’s/Arby’s Group. It is primarily known for selling roast beef sandwiches and curly fries. The company's target market attempts to be more adult-oriented than other fast food restaurants.

  37. 37.

    CKE Restaurants, Inc. is the parent company of the Carl’s Jr., Hardee’s, Green Burrito, and Red Burrito restaurant chains.

  38. 38.

    Schlotzsky’s is a privately held franchise chain of restaurants, specializing in sandwiches, headquartered in Downtown Austin, Texas. As of November 20, 2006, Schlotzsky’s has nearly 380 franchised and company-owned locations in 36 states in the United States and in six other countries around the world, generating $210 million in systemwide revenue.

  39. 39.

    BannaStrow’s is a franchise concept that focuses on a menu of Crepes and Waffles, cooked to order in front of its customers for a wonderful show.

  40. 40.

    Moe’s Southwest Grill is an American chain of fast casual style Tex-Mex restaurants headquartered in Atlanta, Georgia.

  41. 41.

    Carvel is an ice cream franchise owned by Focus Brands. Carvel is best known for its ice cream cakes, which feature a layer of distinctive ‘crunchies’. It also sells a variety of novelty ice cream bars, ice cream sandwiches and soft serve ice cream.

  42. 42.

    Dunkin’ Donuts is an international doughnut and coffee retailer founded in 1950 in Quincy, Massachusetts by William Rosenberg.

  43. 43.

    Popeyes Chicken & Biscuits (sometimes named Popeyes Louisiana Kitchen or Popeyes Chicken & Seafood; often referred to as just Popeyes) is a chain of fried chicken fast food restaurants, owned since 1993 by the Sandy Springs, Georgia-based AFC Enterprises.

  44. 44.

    The Pizza Company is a restaurant chain and international franchise based in Bangkok, Thailand.

  45. 45.

    Swensen’s is a global chain of ice cream restaurants that started in San Francisco, California.

  46. 46.

    Burger King, often abbreviated as BK, is a global chain of hamburger fast food restaurants headquartered in unincorporated Miami-Dade County, Florida, United States.

  47. 47.

    Ipsos Indica Research is an independent company which ranks fifth among global research companies.

  48. 48.

    http://indiafranchiseblog.blogspot.com.

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  17. Jain, V. (2009, April 14). Affordable meals drive sales at fast-food chains. http://www.livemint.com/Companies/B5vbOgO2ZOhMANyrayIEaK/Affordable-meals-drive-sales-at-fastfood-chains.html

  18. Punjab Newsline (2009, December 24). McDonald’s India to open more restaurants cum drive thru in Punjab. http://punjabnewsline.com/news/node/16353

  19. Nandita B. (2011, April 11). U.S. fast-food chains bet on India to drive growth. www.reuters.com

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Paul, R., Roy, S.K. (2014). Case Study 11: Marketing of Services: The McDonald’s Way. In: Mutum, D., Roy, S., Kipnis, E. (eds) Marketing Cases from Emerging Markets. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36861-5_15

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