Serving the Indian Palette

Offering the cheapest burger in the world was not easy. Six years prior to the opening of the first McDonald’s restaurant in India, McDonald’s and its international supplier partners worked with local Indian companies to develop the products that met McDonald’s rigorous quality standards. In India, McDonald’s chose to offer a menu that had no beef or pork items and special product formulations to accommodate the Indian culture and palate. This included developing special sauces with the use of local spices which once again, contained no beef or pork or any of their derivatives or flavorings. Furthermore all the vegetarian products, including the mayonnaise in vegetables burgers were egg less and 100% vegetarian. An additional investment of Rs 15 crores was made at the factory level to ensure that the liens for vegetarian and non-vegetarian food were separate.

Additions to the menu have been a regular feature of McDonald’s in India. The product development team works on innovations in products. These are based on consumer insights and feedback obtained through extensive research. McDonald’s in India, conducts regular qualitative and quantitative studies the target consumer lifestyle across India, a practice that is followed internationally a well. All the new products are test launched and following customer approval and feedback of the product is taken forward after making the necessary changes. The number of changes in the product offering is the greatest in India. Over the years Mc Donald’s has enhanced its product offerings to the customer. Some of the notable ones are:

Year of Introduction Product

1996 Mc Veggie
2000 Veg Pizza Mc Puff
2001 Chatpatey Potato Wedges
2002 Paneer Salsa Wrap
2003 Crispy Chinese [veg]
2004 Shahi Chicken Mc Curry Pan
2004-05 Shahi Paneer Mc Curry Pan

The Indian value proposition:

Business decisions in the company are based on emerging trends in the informal eating out industry as well as marketplace dynamics. In the present economic environment, reviewing the external environment, macro economic factors and consumer spending patterns is extremely important and this is reviewed along with qualitative studies.

As providing value to the customer is key, price sensitivity studies are conducted before determining the pricing. The rate of inflation is also reviewed. A penetration pricing strategy has been adopted for most of the products to sustain long term growth. Thus, Mc Donald’s prices its product in such a way that a very large cross section of Indian population can afford it. It also does not sacrifice quality for value – rather Mc Donald’s leverages economies of scale to minimize costs while maximizing value to customers.

Mc Donald’s definition of value is broader than most restaurants of its kind – it is more than just the price. Value at Mc Donald’s is the sum of the total McDonald’s experience: quality food; fast friendly service; a clean and pleasant environments and products priced for the largest segment of Indian consumers’ possible. With this objective McDonald’s India has launched a variety of options grouped under the umbrella of Value Meal. The la carte items (Burgers, Wraps, a Mc Curry Pan) can be purchased with either a small drink & small fries to make up a small value Meal or with a medium drink ad medium fires for a medium Value meal. For Rs 10/- (net) more, the medium Value Meal can be upsized to large Value Meal. This offers the customer a larger selection and also provides value to the customers (up to Rs 12/- on very Value Meal) with these combinations.

The happy price menu is amore to demonstrate tot eh customer s that Mc Donald’s is affordable. It aims to connect the customers wit the branding, the proposition – not with the price or the product alone. Under this offering the McAloo Tikki, Chicken Mc Grill, Pizza Mc Puff and the Soft serve small [Hot Fudge & Strawberry] are offered at Rs 20. The endeavor is to offer good food more convenient hours, enhanced services and great value.

With the new happy meal which has been recently launched he company aims at addressing the issue of value, choice & Flexibility. The starting price point is Rs 55.00 [net] across the country and it offers a wide range of burgers to choose from viz., in addition to Mc Aloo Tikki , chicken Mc Grill and pizza Mc Puff earlier, now customers can also choose from Mc Veggie, Mc Chicken and Filet–O-Fish a apart of their happy meal. The customer is also given the option of substituting the aerated beverage for a small Mc Shake for Rs 6.00 more.