INDEX OF TABLES

PROBLEM STATEMENT

To identify the key success factors of McDonald’s in India.

RESEARCH OBJECTIVE

To understand the various strategies employed by Mc Donald’s to compete with

the well-established Local Fast Food market and analyze the differences in the

consumption pattern of a family and their preferences.

Literature Review

About the Success of McDonalds in India

McDonald’s has become not only the largest fast food restaurant organization,

but has come to symbolize globalization itself as it has literally changed eating

habits around the world. It commands the leading share (42%) of the U.S. fast

food market and runs more than 28,000 restaurants in 120 countries. Each day,

about eight percent of the U.S. population will eat a meal at McDonald’s, and

each year, ninety six percent of the U.S. population will eat at a McDonald’s. By

1988 McDonald’s had opened 10,000 restaurants in just 33 years. It was then

able to reach the 20,000 mark in another 8 years. By 1997 McDonald’s was

opening 2,000 restaurants per year – an average of one every five hours.

McDonald’s serves less than one percent of the global market per day and sees

the opportunity to continue growth into the next century.

McDonalds is the world's largest food service system with more than 30,000

restaurants in 100 countries, serving more than 46 million customers every day.

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

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

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

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

experience is all about.

Their first restaurant opened on 15th April 1955 in Des Plaines, Illinois, U.S.A.

Locally Owned

McDonald’s in India is a 50-50 joint venture partnership between McDonald’s

Corporation [USA] and two Indian businessmen. Amit Jatia’s company

Hardcastle Restaurants Pvt. Ltd. owns and operates McDonald's restaurants in

Theystern India. While Connaught Plaza Restaurants Pvt. Ltd headed by Vikram

Bakshi owns and operates the Northern operations.

Amit Jatia and Vikram Bakshi are like-minded visionaries who share McDonald's

complete commitment to Quality, Service, Cleanliness and Value (QSC&V).

Having signed their joint-venture agreements with McDonald's in April 1995, they

trained extensively, along with their Indian management team, in McDonald's

restaurants in Indonesia and the U.S.A. before opening the first McDonald’s

restaurant in India.

Respect for local culture

McDonalds is so successful in India because of its respect for local culture.

McDonald'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 their

way into their Indian restaurants.

In addition, they’ve re-formulated some of their products using spices favtheired

by Indians. Among these are McVeggie burger, McAloo Tikka burger, Veg. Pizza

McPuff and Chicken McGrill burger. They've also created eggless sandwich

sauces for their vegetarian customers. Even their soft serves and McShakes are

egg-less, offering a larger variety to their vegetarian consumers.

International Standards

McDonald's India's local suppliers provide us with the highest quality, freshest

ingredients. Complete adherence to the Indian Government regulations on food,

health and hygiene is ensured, while maintaining their own recognized

international standards. Fast, friendly service - the hallmark of McDonald's

restaurants the world over is the mantra they abide by.

Stringent cleaning standards ensure that all tables, chairs, highchairs and trays

are sanitized several times each hour. Such meticulous attention to cleanliness

extends beyond the lobby and kitchen to even the pavement and immediate

areas outside the restaurant.

McDonalds Philosophy

"They take the burger business more seriously than anyone else."

Principles followed by McDonalds to be successful in India

Quality, Service, Cleanliness & Value - It is an unflinching McDonald's ideology

that their customers must always get quality products, served quickly and with a

smile, in a clean and pleasant environment; and all at a fair price

They are committed to exceeding their customers' expectations in every

restaurant every time.

They have a passion and a responsibility for enhancing and protecting the

McDonald's brand.

They believe in a collaborative management approach, employing a mutually

respectful business philosophy,

They will seize every opportunity to innovate and lead the industry on behalf of

their customers.

Evolution of McDonalds

Richard and Maurice McDonald originally founded McDonald’s in the 1930s, but

its success is due to the efforts of Ray Kroc, who put the hamburger on the

assembly line. Each worker’s steps were calculated in order to ensure maximum

efficiency. The result was a decrease in preparation time and an increase in

volume, allowing for cheap prices and fast service.

The restaurant chain grew slowly at first. Kroc decided to build all of the

restaurants and then franchise them out in order to have uniformity. He later

founded the Hamburger University in 1961 in order to train franchisees and

corporate decision-makers. Hamburger Universities were later founded in Tokyo,

Munich, and London. He built primarily in the suburbs as suburban America was

just developing in the 1950’s after WWII. The popularization of the automobile

also increased McDonald’s popularity and throughout the 1960’s and 70’s the

chain grew incredibly quickly.

In 1973 McDonald’s first opened for breakfast with the creation of the Egg

McMuffin. By 1987 one fourth of breakfasts eaten outside the home in the United

States came from McDonald’s. In 1975 McDonald’s pioneered its first drive-thru

window; drive-thru sales eventually accounted for more than half of McDonald’s

system wide sales.

In the 1970s competition with other fast food chains intensified, culminating in the

"Burger Wars" of the early 1980s. In order to cater to changing consumer

preferences, McDonald’s introduced Chicken McNuggets in 1983 and by the end

of the year, McDonald’s was the second largest retailer of chicken in the world.

However, due to a series of difficulties including failed marketing strategies and

new sandwiches that flopped, growth in the U.S. slowed during the 1990s.

Overseas, the 1990s saw an increase in international units from 3,600 in 1991 to

more than 11,000 by 1998, largely in Japan, Canada, Germany, Great Britain,

Australia, and France. The number of overall countries with McDonald’s nearly

doubled from 59 in 1991 to 114 in 1998. In 1993 McDonalds first expanded in to

the Middle East and opened in Tel Aviv, Israel. As the company entered new

markets, it showed flexibility with respect to the local preferences: in Germany,

McDonalds serves beer with meals; in Israel, the first kosher McDonald’s opened

in Jerusalem in 1995; in Arab countries, the restaurant chain used Halal menus;

in 1996 McDonalds entered India where they offered the Maharaja Mac, made

with lamb rather than beef; in Sweden, the first McSki-thru opened in Lindvallen,

Sweden.

McDonald’s ubiquity has made it a lightning rod for criticism from numerous

fronts. Vegetarian groups, farmers, university students, labor groups, and groups

from practically every foreign country have attacked McDonalds for damaging

people’s health with bad food, using produce from huge factory farms, invading

college student centers, using toys made in sweatshops, being the front-man for

economic globalization, and every kind of global cultural hegemony.

Potato Farming In Gujarat

McDonald's India, even prior to its entry into India, was committed to working with

local suppliers and farmers to source all its requirements. The company therefore

spent 6 years and around Rs. 450 crore to set up the food supply chain even

before opening its first restaurant in the country.

India, despite being the world’s second largest producer of food, loses nearly

Rs.50,000 crore worth of food produce due to wastage at various levels,

especially due to lack of proper infrastructure for storage and transportation.

McDonald's India has pioneered the cold chain management system wherein the

freshness, crispness and nutritional value of vegetables and processed products

are retained.

In 1991, McDonald's was looking for a particular variety of potato for

manufacturing its world famous French fries. One of McDonald’s suppliers –

Lamb Weston – invested heavily in setting up production lines to process these

potatoes and make the fries. However, production was discontinued, as the right

quality of potatoes could not be sourced.

The right quality potato in India was unavailable as farmers used seeds from the

preceding crop, which in turn resulted in a single variety and poor quality

potatoes. McDonald’s needed the process-grade variety of potato for its

products, which are as per McDonald's international quality standards. The

variety of potato required by McDonald’s had to have a certain length, high solids

content and low moisture content while the ones that were available were of the

table-grade variety. Nonetheless, as per its initial commitment to local sourcing,

McDonald's and its supplier partner, McCain Foods Pvt. Ltd., began to work

closely with farmers in Gujarat and Maharashtra to develop process-grade potato

varieties.

McCain Foods Pvt. Ltd. is the world’s largest French Fry Company in the world.

Established in 1957, today it is a brand that is known and respected in more than

100 countries, generating worldwide sales of more than $5.5 billion. It has more

than 55 processing plants on 4 continents (29 of which are French fry and potato

specialty facilities) and exports to more than 80 countries worldwide.

Leaders in agronomy, technology and innovation, McCain Foods Pvt. Ltd.

partnered with McDonald’s to work with farmers in Gujarat (specifically the towns

of Deesa and Kheda) to interact with agronomists and field assistants to

demonstrate the best practices – right from better agronomy techniques like

irrigation system, sowing seed treatments, planting methods, fertilizer application

programmes and better storage methods for the produce. In addition to this, the

farmers also benefit through incremental monetary gains as they sell directly to

McDonalds.

Everyday Value At McDonald’s

Outlets in India

McDonald's India is an employer of opportunity, providing quality employment

and long-term careers to the Indian people. The average McDonald's restaurant

employs more than 100 people in 25 different positions – from cashier to

restaurant manager. McDonald's world class-training inputs to its employees can

be seen in the present close to 2000 employees currently in Mumbai and Delhi.

Manpower Planning: The Scheduling Manager is in charge of the

manpower planning in the outlet. They have full timers who work for 9

hours and part timers who work for 3-4 hours. If they expect more

customers (during holidays etc) then more part timers are recruited.

Recruitment: Done by reference of the employees in the outlet or other

outlets.

Training and Development:

Training is a continuous process at the McDonalds. It is the responsibility

of the training squad to train the other employees. The training squads

maintain training logs of the employees, which clearly states that which

employee is to be trained, and on what station.

The 3/30 Plan: According to this plan, the training squad has to train 3

people on three different stations in a month. One employee is trained on

one station, say the vegetarian station for 10 days, and then for the non-

vegetarian station for the next 10 days and so on. This is done till the

employee becomes proficient on the station and is capable of handling the

station on his own.

Performance Appraisal:

Every employee joins in as a Trainee Crew where he is given the Green

Badge. After a period of 3 months, the employee is checked for the health

safety, cleanliness and sanitation after which he is given the Yellow Badge.

After receiving the Yellow Badge, there are 5 stations that the employee has

to be proficient in:

1. Backroom Cleaning – This includes mopping the floors, clearing the

tables, maintenance of the machines etc.

2. Fried Products – This involves frying of the French Fries, Pizza Puff

etc. to the right degree.

3. Buns, Dress and Grill (BDG) – This includes grilling the bun and

dressing them properly. There is a time limit given to perform every

function and the employee has to perform it efficiently, with minimum

wastage.

4. Counter – The last station is of the counter handling. The employee

should be able to converse with the customers courteously and take

proper orders.

5. Personality – The last criteria is the overall personality of the

employee. McDonalds being in the service industry, having smart and

courteous employees is of utmost importance to them.

The productivity record has to show 90+ points. The productivity is

checked in various ways. For example – McDonalds has a policy if

serving each customer within one minute on an average. The productivity

at the counter is checked by the time taken by an employee to complete

the order. For E.g.: If Freda (A service-counter in charge) has taken 2.5

minutes on a average to serve each customer in her shift, at the end of the

shift, the shit running manager will speak to her and ask her the reason

and accordingly ask her to try and improve. If this trend continues, Freda

is trained further.

After the productivity record shows 90+ points, the employees have

to appear for a documented written test where they must get more than 90

marks.

Having got a 90+ average of the two, the employee is promoted to

the next hierarchy level.

McDonald's worldwide stand for QSC&V, where “V” stands for value and

therefore the value proposition assumes special significance. Explaining this, Mr.

Amit Jatia, Managing Director, McDonald's Western India says, “McDonald's

success has been built on commitment to the delivery of QSC&V (Quality,

Service, Cleanliness and Value) to customers, the expansion of restaurant

numbers to improve convenience and large scale investment in supplier

development, training and people. Getting QS&C consistently, and overwhelming

appreciation of Value keeps our customers satisfied and maintains our

competitive edge.” The value initiative at McDonald's is all-pervasive. Our

strategy is to achieve best value by enhancing experience (offering best quality),

while keeping prices reasonable. This applies to products we serve our

customers and to every other aspect of the way we do business. At McDonald's,

costs are kept low by increasing efficiency and cutting wastage at all levels. This

is possible by advanced operations, management and human behavior skills

tested over time in around 120 countries across the world. It is important to

understand that delivering highest quality doesn’t come easily. Customers, who

walk into a McDonald's restaurant, expect to be served food that is hot and fresh,

made from the highest quality ingredients, served within minutes of placing their

order and at a price, which is affordable. Such is the strength of the brand that

they rely on McDonald's to do all this, without thinking about how it is actually

achieved.

This is achieved through to the minutest details and doing things the right way,

whether it is the McDonald's unique cold chain network which ensures that food

products move from farms to restaurants absolutely fresh, at the lowest possible

cost, or, the reverse osmosis water treatment plant at every restaurant to provide

water which is the ultimate in purity, McDonald's in India has invested heavily in

achieving quality.

McDonald’s Value offers

• Though all McDonald's food products offer tremendous value, we continually

review and improve our menu offerings to make sure that we not only meet our

customers’ expectations, but also exceed them. As a result, we have introduced

a series of ongoing value options to enable our customers to appreciate this

aspect of the brand even more strongly.

McDonalds Advertising Strategies

DDB Needham and Leo Burnett are the advertising agencies of McDonald’s

worldwide. Hence, when they came to India, the subsidiaries of both the

companies pitched for the account and ‘Mudra’, the Indian partner of DDB

Needham got the account. Since the very beginning Mudra has been the

advertising agency of McDonald’s India.

The Mudra team meets up with McDonald’s marketing team on a regular basis

and they have a debate and discussion on the new strategies to be adopted.

McDonald’s uses various medias like television, hoardings and bus shelters.

They are almost out of print ads. McDonald’s also sponsor many television

programmes like Kaun Banega Crorepati, Children shows etc.

Even the paper mats on the trays at the McDonald’s are designed as per the

ongoing marketing strategy of McDonald’s. For e.g.: During the French fries

issue, all their paper mats had description of the burgers, how the vegetarian

products are made etc, to regain the confidence of the customers.

The placing of the pamphlets, banners in and around the outlet is decided upon

by the Area Sales Manager and the Operations Manager, in co-ordination with

the Restaurant Manager. For e.g.: Currently they have the Bugs Life Theme

going on wherein they give free Bugs Life toys with the Happy Meal. All the

outlets are decorated with the pictures of the toys and even the paper mats have

pictures of the toys on them. The hoardings around the outlets carry the same

theme.

Even the menu counters in the outlet are a marketing tool for the company. They

have to be designed such that they catch the attention of the customer and tempt

him to order the product. So McDonald’s have menu boards that are descriptive

as well as visual. They call it the 80-20-menu board-eighty percent visual and

twenty percent descriptive. The aim is to make things easier for the customer to

understand what the 39, 49, 59, 79, 89 rupee options are. And of course it is

easier for McDonald’s also to give back the one rupee change so that the service

can be quick.

The marketing strategy of McDonald’s in India has gone through mainly 3 stages:

• Stage I: Building the Brand

• Stage II: Awareness of the products

• Stage III: Gunning for market share.

Stage I: Building the Brand

The Stage Fright Advertisement (We make you smile!)

The initial marketing strategy was focused on building the brand name in India.

McDonald’s wanted to bring an awareness of its presence, of the arrival of

McDonald’s in India. Hence, even thought it had presence only in 2 cities, Delhi

and Mumbai, it still went in for Nationwide Advertising.

The first advertisement of McDonald’s in India was of a child getting tensed in a

Fancy dress competition and forgetting his lines. His father then takes him to

McDonald’s where he forgets all his fears and gives a brilliant performance

appreciated by all in the restaurant. Every child in India could relate itself to the

child in the advertisement and it gave the parents the idea that if their child were

unhappy, taking him to McDonald’s would definitely bring a smile to his face.

When Vikram Bakshi was asked how the idea for the first advertisement came

up, his reply was:

“The idea came from the experiences of what we saw happening at the

restaurants. I think one of the things that recent research has shown is that 69

percent of the kids prefer us. That kind of response is overwhelming! We have

seen over a period of time that some of the things we set out to do in 1997-98

are paying off now. Really the kids are very happy to be here. They find it a

hassle free experience. Nobody to say, "Sit down!" or "Don't move!" He is no

longer told that if he runs around he will bang into someone and spill things over.

He doesn't encounter adults all the time like he does in specialty restaurants-

waiters who are in their thirties and forties, with faces which say, "Keep out of my

way!" What he sees when he comes into McDonalds is a place that is brightly lit-

there are no dark corners that he needs to be scared of. The people working

here are all young. He can walk up alone to the counter and ask for whatever he

wants, someone will talk to him, take him seriously, look after him, ask him

questions. He has a play area where he can run around. And clearly even

parents are happy to bring their children here. I have seen many instances where

parents come in with their children; they are playing while the parents are also

enjoying themselves. There was this lady I met and she asked me, "What is this

that you do to children?" So I said, "What do we do meaning?" She said, "My two

year-old recognizes McDonalds. When I took her to Wimpy's the other day she

refused to enter the place, saying it was not McDonalds."

Stage II: Awareness of the Products

McDonald’s then felt that it needed to highlight its products along with the

experience. Hence, came the series of advertisements highlighting on the

products and new launches of McDonald’s. McDonald’s wanted the customers to

know that they have something for everybody, be it children or adults, vegetarian

or non-vegetarian. The advertisements in these series were:

The Sleeping Couple: In the sleeping couple advertisement the husband

is shown dreaming about the various products of McDonald’s. Anyone

watching the advertisements felt like going to McDonald’s right away.

The Police and Thief: The thief is on a run from the police but makes a

stop at McDonald’s to have the new McPizza Puff and the Chicken

McGrill.

The Barber and the Customer: The customer is getting himself shaved

when he hears about the launch of McPizza Puff and Chicken McGrill, and

runs to the nearest McDonald’s half shaved.

The Runaway Bridegroom: A couple is getting married when the

Bridegroom runs away in the middle of the marriage to have the new

McPizza Puff and the Chicken McGrill and the whole family follows him.

Veg Surprise: The latest commercials, around 3 of them, are focused on

the launch of the new Veg Surprise for Rs.17 only with the punch line

“Yakein hi nahin hota”.

Stage III: Gunning for market share

The latest advertisements of McDonald’s are a transition from the first strategy.

In the initial advertisements, McDonald’s was attempting to build a relationship

with the customers. But now, the advertisements portray that the relationship has

already been established. Its got the mind share, and its now gunning for market

share.

The ad campaigns are trying to portray McDonald’s as a constant companion,

which makes people feel special. The recent commercial highlights the bond that

McDonald’s shares with people. It shows a child moving to a new locality, and he

is sad. But when he sees McDonald’s in his neighborhood, the child is once

again reassured.

The recent ad campaign is targeting the Indian is targeting the Indian father, as

he is still looked upon as a decision-maker. The new positioning: McDonald’s is a

special place where caring dads take their families to give them a great time. So

it’s a clear positioning as a family restaurant. “We are positioning ourselves as

the welcoming and affordable family restaurant committed to values of quality,

fun and excitement. It is also a restaurant which makes you feel special and

makes you smile”, says Amit Jatia.

Miscellaneous Advertisements

There were many other advertisements made by McDonald’s emphasizing on the

schemes, the prices and various other aspects. Some of them were:

The ‘Itch Karo’ Scheme: This advertisement was to promote the scheme

of McDonald’s wherein you could win prizes right from a small Cadbury to

a television and bike.

Soft Serve Cone: There were many advertisements focusing on the Rs.7

soft serve cone. One of them was of a traffic policeman who gets tired of

directing the customers to the McDonald’s outlet. This advertisement if of

the most liked and remembered advertisements of McDonald’s.

Happy Meal: There are various advertisements relayed during children

programmes on television and also children channels emphasizing on the

happy meals and the toys you get with them.

McDonald’s India has undertaken many social activities like:

Supporting Health drives like Pulse Polio since 1998.

McDonald’s Spotlight, an inter-school performing arts competition

started in 1998 for schools all over Mumbai and Navi Mumbai to

provide the students with an atmosphere for healthy competition. Over

120 schools participated in 1998,1999 and 2000.

McDonald’s has tied up with Nehru Science Centre, Mumbai (NSCM)

in 2000 for a period of three years to bring the students of Mumbai a

science quiz. This quiz has been conducted by NSCM for the past ten

years. With McDonald’s, it hopes to get the contest to a new level.

Having cleanliness drives with the BMC – like the one on 15th August

1997 for making Mumbai garbage free and joined in celebrating 50

years in India’s independence.

Outlets in India

McDonald's India is an employer of opportunity, providing quality employment

and long-term careers to the Indian people. The average McDonald's restaurant

employs more than 100 people in 25 different positions – from cashier to

restaurant manager. McDonald's world class-training inputs to its employees can

be seen in the present close to 2000 employees currently in Mumbai and Delhi.

Manpower Planning: The Scheduling Manager is in charge of the

manpower planning in the outlet. They have full timers who work for 9

hours and part timers who work for 3-4 hours. If they expect more

customers (during holidays etc) then more part timers are recruited.

Recruitment: Done by reference of the employees in the outlet or other

outlets.

Training and development:

Training is a continuous process at the McDonalds. It is the responsibility

of the training squad to train the other employees. The training squads

maintain training logs of the employees, which clearly states that which

employee is to be trained, and on what station.

The 3/30 Plan: According to this plan, the training squad has to train 3

people on three different stations in a month. One employee is trained on

one station, say the vegetarian station for 10 days, and then for the non-

vegetarian station for the next 10 days and so on. This is done till the

employee becomes proficient on the station and is capable of handling the

station on his own.

Performance Appraisal:

Every employee joins in as a Trainee Crew where he is given the Green

Badge. After a period of 3 months, the employee is checked for the health

safety, cleanliness and sanitation after which he is given the Yellow Badge.

After receiving the Yellow Badge, there are 5 stations that the employee has

to be proficient in:

1. Backroom Cleaning – This includes mopping the floors, clearing the

tables,

maintenance of the machines etc.

2. Fried Products – This involves frying of the French Fries, Pizza Puff

etc. to the right degree.

3. Buns, Dress and Grill (BDG) – This includes grilling the bun and

dressing them properly. There is a time limit given to perform every

function and the employee has to perform it efficiently, with minimum

wastage.

4. Counter – The last station is of the counter handling. The employee

should be able to converse with the customers courteously and take

proper orders.

5. Personality – The last criteria is the overall personality of the

employee. McDonalds being in the service industry, having smart and

courteous employees is of utmost importance to them.

The productivity record has to show 90+ points. The productivity is

checked in various ways. For example – McDonalds has a policy if

serving each customer within one minute on an average. The productivity

at the counter is checked by the time taken by an employee to complete

the order. For E.g.: If Freda (A service-counter in charge) has taken 2.5

minutes on a average to serve each customer in her shift, at the end of the

shift, the shit running manager will speak to her and ask her the reason

and accordingly ask her to try and improve. If this trend continues, Freda

is trained further.

After the productivity record shows 90+ points, the employees have

to appear for a documented written test where they must get more than 90

marks.

Having got a 90+ average of the two, the employee is promoted to

the next hierarchy level.

Consumer Perception about McDonalds in India

To be successful in business one has to be etched in the minds of its customers.

Hence, it is important to understand the customers’ perception.

So what is perception?

Perception is a process by which an individual selects, organizes and interprets

information inputs to create a meaningful picture of the situation. Perception not

only depends upon physical stimuli, but also on the stimuli’s relation to the

surrounding field and connections with the individual. The key point is that

perceptions can vary among individuals exposed to the same situation. People

can emerge with different perception of the same object because of three

perceptual processes:

Selective Attention

Selective Distortion

Selective Retention

Selective Attention occurs due to individuals being exposed to so much

information transmitted to them, they just shut themselves up and pay attention

to only a few information. For example people are likely to notice events that are

pertaining to there current needs. They also notice stimuli that they anticipate will

happen or whose deviation from the normal course is large.

Selective Distortion is the tendency to twist information into personal meanings

and interpret information in away that fits into the preconceptions. Thus, even

noticed stimuli are sometimes go unreacted by the prospect.

Selective Retention causes one to remember the good points mentioned and

perceived by the mind and forget good points mentioned about the unrelated and

concepts that the mind has not perceived yet.

In short, perception is a very complex through which one paints a unique picture

of the situation, a picture that could be very different from the reality. Sometimes

sensation and perception are used interchangeably but in fact, they are very

different. Sensation is a collective interaction of the senses while perception is a

complicated interaction of selection, organisation and interpretation. Perception

begins with an individual is confronted by a stimuli which then is registered,

interpreted by the brain and for which feedback is enacted.

Numerous stimuli are constantly confronting with each other. Thus there are

many factors that affect the selectivity of the customer. The factors could be

External or Internal.

EXTERNAL FACTORS:

The external factors consist of environmental influences such as intensity, size,

contrast, repetition, motion, and familiarity to name a few.

The intensity principle states that more the intensity of the cause, more likely is it

to be perceived.

Closely related to intensity is the principle of size. Larger the size of the object,

greater is the attention and higher is the probability of making an impact on the

perception.

The contrast principle states that the external stimuli that stands out against the

background or which is not what people were expected gets noticed which in turn

enforces the retention ability.

A repeated external stimulus by the retention principle is more attention – getter

than singly transmitted information.

The motion principle states that people pay more attention to moving objects in

there field of vision than they to stationary objects.

Familiarity serves as an important attention getting stimuli as people pay more

attention to objects which they can relate to.

INTERNAL FACTORS:

Apart from the external factor there are some internal factors that also affect the

selectivity process of an individual. People select situations from the environment

to which they can appeal to and are compatible with there learning, motivation

and personality.

Learning pays a single biggest role in developing the perception of an individual.

People generally look to relate information to already existing learning, any

deviation from the expectations can either cause the subject to look for the

reasons for deviation or just shut the mind out and refuse to incorporate the data.

Motivation also affects the selectivity process the same way as learning does. A

motivated individual tries to incorporate any data that could cause him to improve

his position or reinforce the existing belief that has motivated him.

Personality is another factor which increases the selectivity process of an

individual.

The onus in today’s world is on modifying the consumers’ selectivity in favor of

the product that is being promoted. Once a product gets rated highly in the

perception of the individual the product retention gets doubly simpler and helps

the product or brand manager as the product gets wide attention and knowledge

about the product is already present the consumers mind.

REFERENCES OF LITERATURE REVIEW

Marketing Management - Philip Kotler (Tenth Edition) ISBN-81-203-1609-6

Organisational Behavior - Steven Robbins (Tenth Edition) ISBN-81-203-2283-5

Organisational Behavior - Fred Luthans (Ninth Edition) ISBN-0-07-120412-1

RESEARCH DESIGN

Exploratory Research

We will use the descriptive research design where the main contact technique

will be a survey method. This method will be used because it will help us to get

the required responses from the individuals having various parameters such as

age, sex, occupation, etc.

Tool utilized for the contact:

Our research will follow a combination of questionnaire, observation and

personal interview method.

The personal interview will help us to obtain a better insight into demographic

and psychographic parameters.

Data Analysis:

The main data analysis tools used will be:

Formulation of cross-tabulated data using chi-square test.

Correlation (Factor affecting Perception)

Hypothesis testing using Chi-square test for closed end questions (yes /

no)

Sampling Frame:

Since it is not possible to define the exact list of visitors to Mc Donald’s in

Mumbai, as there is no sampling frame available from which the sample can be

drawn.

Defining the target Population:

For any research study to be successful it is very important to carefully

define the target population so that the proper source from which data is to be

collected can be identified. Since our study deals with consumer satisfaction with

respect to Mc Donald’s so we have chosen the target population that only those

individuals who are regular visitor of the Mc Donald’s.

Hence our target population is defined as all individuals:

1. Aged between 14-50

2. Visits at least once in a month.

3. Have visited at least more than one McDonald’s outlet.

4. Resident of Mumbai.

Sample Size:

1. The franchisees of McDonald’s in the Mumbai area representing the whole

city are to be selected.

2. Sample of Approx. 150 customers selected randomly from different

franchisees of McDonald’s in the Mumbai area.

Sample Size Determination:

The sampling unit of our study will include males and females (age group of 25-

50) from middle and upper middle class, professionals and non-professionals.

The sample size will consist of approximately 150 sampling units.

The research will use Cluster-Sampling method and will use the stratified

sampling wherein a particular stratum will be representative of demographic and

psychographic parameters.

Research would be based on probability sampling where a confidence level of

95% has been assumed with the standard error of 8%.

Sample size would be determined after taking into account following factors

Confidence Level: 95 %

Corresponding z value (Z): 1.96

Error in Estimation of proportion: 8%

In absence of information about the Population probability of customer entering

Multiplexes, Population Proportion (P) is assumed to be .5 to be on safer side.

Their sample size n is calculated as follows,

N = P * (1-P) * (Z/E)2

N = 0.5 * (1 – 0.5) * (1.96/.08) 2

= 150.06

≈ 150

Our sample size would be around 150, located in different parts of Mumbai.

Data Analysis:

The main data analysis tools used will be:

Formulation of cross-tabulated data using chi-square test.

Correlation (Factor affecting Perception)

Hypothesis testing using Chi-square test for closed end questions (yes /

no)

Nature and form of results:

Hypothesis:

H0: There exists a significant difference the perception of Customers visiting any

Fast Food center.

H1: There is no significant difference.

H0’: Demography has significant influence on the number of visits to the Fast

Food centers

H1’: Demography does not have significant influence on the number of visits to

the Fast Food centers.

Measurement instruments:

Questionnaire

Personal Interview

Personal Observation

Limitations of the study:

1] The study is limited to the city of Mumbai.

2] The study can be analyzed to have a brief overview of performance of

McDonald’s within Mumbai only and not outside it.

3] Time limitations & Cost limitations.

Field Work:

The sampling would be carried out at different McDonald’s outlet located in

Mumbai. The subjects which have been identified above would be approached at

randomly selected hours in a day at the McDonald’s outlet.

The subjects would be asked to fill up the questionnaire.

DATA TABULATION & DATA ANALYSIS

Gender based

Male Female Total

No. of

Respondents

80 56 136

Percentage of

Respondents

(%)

58.82 41.18 100

Out of the 136 respondents questioned 80 (58.82%) were Male while the

remaining 56 (41.18%) were Female.

Gender

Male59%

Female41% Male

Female

Food habits

RESPONDENTS PERCENTAGE approx. (%)

Vegetarians 50 37

Non Vegetarians 86 63

TOTAL 136 100

Vegetarian

50

86

Yes

No

Our survey recorded more Non Vegetarian visiting Mc Donald’s than their

Vegetarian counterparts.

Frequency of Visit

TIME RESPONDENTS PERCENTAGE approx. (%)Every day 0 0Twice in week 14 10Once in Fortnight 32 24Once In a Month 60 44Others 30 22TOTAL 136 100

Frequency of Visit

010203040506070

Every d

ay

Twice

in w

eek

Onc

e in F

ortnite

Onc

e In

a M

onth

othe

rs

Da

ys

Frequency ofVisit

Out of the 136 respondents surveyed almost 90% visited McDonald’s visit atmost

once in a fortnight.

Favourite in McDonald’s

Products RESPONDENTS PERCENTAGE approx. (%)Mc Chicken Burger 52 38Mc Veggie Burger 38 28French Fries 30 22Others 16 12TOTAL 136 100

Favorite

0

10

20

30

40

50

60

McChickenBurger

McVeggieBurger

FrenchFries

Others

Favorite

The preference of the respondents shows a vast range of variance among the

given options. Also the data showed that the preference is not commanded by

the food habit as many Non Vegetarians preferred Mc Veggie Burger and French

Fries.

Average Spending:

Spending (Rs.) RESPONDENTS PERCENTAGE approx. (%)Less than 50 24 1850-100 56 41100-200 46 34200 and above 10 7TOTAL 136 100

Spending

0102030

405060

<50 50-100 100-200 200 andabove

Rs. Spending

Most of the visitors in Mc Donald’s spend on an average (about 75%) between

Rs. 50 to 200.

Value for money

Views RESPONDENTS PERCENTAGE approx. (%)

Yes 106 78

No 30 22

TOTAL 136 100

Values for Money

Yes78%

No22%

Yes

No

About 78% of the respondents claimed that Mc Donald’s provides Value for

money.

Problems faced:

Common Problems RESPONDENTS

Long Queues 54

Wrong Order 2

Bad Music 22

Others Problems 22

No Problems 54

TOTAL 136

Problems

010

2030

4050

60

Long

Que

ues

Wro

ng O

rder

Bad

Mus

ic

Oth

ers Pro

blem

s

No P

roblem

s

Problems

Common problems faced by those who visit Mc Donald’s are Long Queues while

equal no. of respondents responded that they had No Problems during there

visits. Some people also sighted Bad Music another major problem.

Hesitancy after the "French Fries" issue:

Response Respondents PERCENTAGE approx. (%)

Yes 24 18No 72 53Not Aware 40 29TOTAL 136 100

Affect of the French Fries Controversy

0

10

20

30

40

50

60

70

80

Yes No Not Aware

Responses

The survey results showed that more than half of the respondents are not

affected by the Controversy while only 18% had been affected.

USP of Mc Donald’s:

USP

0

5

10

15

20

25

30

35

40

45

Food Hygiene Ambience QuickService

Location

Response

Response Respondents PERCENTAGE approx. (%)Food 40 29hygiene 40 29ambience 24 18Quick Service 20 15Location 12 9TOTAL 136 100

Respondents in the survey gave equal importance to Food and Hygiene as the

two most identified USP’s of Mc Donald’s while Ambience, Quick service and

Location receiving lesser weightage.

RECOMMENDATIONS

1. One of the observations from the survey that could be noticed were the

usually long queues that the customers encountered at the outlets they

visited. They had to wait in for some time before they can place the order

which created some amount of inconvenience among the customers.

So, in order to avoid the i