Corporate: McDonald's reworks its menu

MARKETING
McDonald's reworks its menu

Although yet to make profits, the global food-chain is serving up an exciting new combo for Indian palates.

By Jaya Basu

If the golden arches are more representative of America than Bill Clinton is, McDonald's isn't exactly an alien entity in India too. After spending Rs 250 crore on its Indian operations, the global food-chain is not making profits. But it has succeeded in serving up an exciting new combo to Indian customers. Take two pieces of bun, put in a patty, and garnish it with two equations. Price leads to volumes. Children bring in the family. That explains why McDonald's is the only global food-chain in India that can afford to stand tall.

McDonald's is in the throes of a major expansion. The Rs 30-crore plan will be funded through internal accruals and loans. It is adding 10 outlets to the 25 existing ones-13 in Delhi and 12 in Mumbai. The agenda: one outlet each in Jaipur and Pune. Early next year, McDonald's will foray into the southern metros, starting with a franchisee operation in Bangalore. Finally, there will be four new outlets in Mumbai, three in Delhi, and one on the Delhi-Agra highway.

Explains Vikram Bakshi, 45, Managing Director, Connaught Plaza Restaurants, which owns the McDonald's outlets in Delhi and North India: ''Before rushing to other towns, we will consolidate and focus on developing the brand.'' Bakshi claims that all the food-chain's new outlets have been making money from day one as McDonald's attracts volumes through low prices. Thanks to large volumes, it claims 40 per cent margin on an ice-cream cone priced at Rs 7. Says Bakshi: ''I will never become unaffordable, as I will not then be able to build up volumes.''

Apart from price, a liberal dose of family is the cornerstone of McDonald's strategy. Something which Nirula's has been doing for a while. McDonald's ad campaign is aimed at children. Affirms Bakshi: ''Children are going to be our core customers in the long run.'' The logic: children influence parental decision-making. Agrees Rakesh Mohan, 47, Executive Director, Mohan Meakin: ''McDonald's repositioning makes sense as children can be converted into loyal customers for many years.''

McDonald's is working overtime to expand its product range to suit Indian taste-buds. Says Bakshi: ''We are very conscious that there are still gaps in our product line. We want to provide something new to Indians, but with a very familiar touch.'' As of now, it has the McAloo and the McTikka, which are aimed at Indian audiences. While they don't register mile-high spikes on the sale graphs, these products do get the fussy Indian consumers to walk into the outlet. In August, McDonald's will launch chicken products, specifically developed for India.

Ask Samir Kuckreja, the 34-year-old Technical Advisor at Nirula's, about McDonald's, and he serves up a standard: ''There is a lot of growth potential for each player and we have enough space.'' McDonald's is filling up that space fast. Bakshi says there is scope for at least 10 more units in Delhi. That could be the shape of things to come from a food-chain that opens three outlets somewhere in the world every 24 hours.

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