Last is not always the last...

As all good things come to an end, so does this Blog.

We had a great time maintaining this blog devoting long hours to make the reading experience of our readers enriching and exciting. We would like to take this opportunity to thank our readers for their comments and appreciation which encouraged us to improve the quality of the blog. Last but not the least, we would like to thank Prof. Siddharth Soni for providing us this opportunity to share our views and learn new things through the course of the sessions of Strategic Brand Management.

This blog has increased our hunger to write more which we hope to continue through our other works.

Branding - The Social Media Way : Part 2

In the last post on this topic, we talked about the growth of the Social Media spends by various brands as they have begun to realize the power of engaging customers through the online media. We also talked about how various firm follow different strategies for their Social Media activities. In this post, we'll talk about how McDonald's is trying to woo its customers and compete with other brands on this virtual platform.

According to Heather Oldani and Steve Wilson from Social Media Business Council, McDonald's digital strategy (for consumers and employees) has been based on four principles, which are:

1. Go to them and foster THEIR communities
2. Be multidimensional
3. Continue engagements
4. Be transparent

This thing is indicated through their Listen, Participate, Lead policy for their communications. The conversation strategy adopted for the various social media channels also varies in the Type of conversations, Primary owner and the Target audience.

Conversation strategy of McDonald's for various Social Media channels

McDonald's has executed this strategy for engaging its customers in 6 prominent ways:

• Cross promotion with Facebook Apps: The best thing (and the most successful thing) employed by McDonald's is 'The Quest' app on their Facebook page. It acts as a cross promotional tool for both Facebook and Twitter. Fans play a game on the Facebook application, unlocking various product based incentives. Fans are also encouraged to share their achievements through Twitter hashtags.  

The Quest app on McDonald's Facebook page

• Involvement through Social games: McDonald's added a virtual restaurant that fans can add to their city in the game Cityville. The rewards and bonuses for the fans depend on their ability to manage the restaurant. The popularity of the game is being leveraged by McDonald's in a fantastic manner.

• Sharing Videos: McDonald's has numerous YouTube channels on varied themes by employees and fans. These channels increase the engagement levels and enhance traffic on their other Social media channels. As McDonald's displays the actions of real people (employees and customers) there is a high likeability of fan interaction on Facebook and Twitter as well with comments, tweets and likes flowing in abundance. One such campaign asked customers to upload one's photo as part of an online game. This image was turned into a video using 3D mapping technology, in which the person was shown doing awesome football tricks. The video ended with the person kicking the trash (ball) into a McDonald's bin. Users could share this video on their Facebook profile/ page. This helped McDonald's reach a wider audience with over 1 million page impressions and 5,700 fuller bins than normal (interesting fact, but how did they measure this?).

• Expanding their Social reach: The Facebook page of McDonald's also provides a feature in which the customers can change their language to Spanish. Called 'Me Encanta', this feature has been included to target the Hispanic population in the U.S., thus providing a wider reach transcending language barriers.

McDonald's Facebook page with 'Me Encanta' tab targeted at the Hispanic population

• Personalized replies on Twitter: The team handling the McDonald's Twitter handle respond to individual questions, compliments and comments despite having close to 0.2 million followers. Interacting in a direct manner with the customers increases engagement levels.

McDonald's Twitter Page

• Involvement of Community: McDonald's has been constantly engaging its customers through competitions, polls and events. One example of this has been the use of Facebook and Twitter to promote the Ronald McDonald House Charities (RMHC). When McDonald's launched the 'Day of Change' campaign in 2010, they used the Social Media to generate awareness and engage customers. The results were impressive as the online donations increased by 130% in August 2010 compared to August 2009 and also impacted the physical donation boxes in a positive manner.  Also, the E-newsletter subscriptions grew by 748% during the campaign, thus providing a way for the charity to keep in touch with new contacts. 

RHMC Facebook Page

Thus, we have seen that McDonald's has worked actively in branding itself through the Social Media and its continued efforts will lead to higher fan interactions, leading to higher traffic at stores and eventually better returns for the brand.

Will the fast food culture trend continue?

According to a study by the McKinsey Global Institute, India's 300-million-strong middle class will grow to a whopping 583 million by the year 2025. India's youth, which have emerged as the major economic drivers on the heels of the IT/ITeS and BPO culture, are spending enormous amounts of time and money on ex-home lifestyle activities. Nor is the action confined to the metros alone - though, with thirty-five cities housing over a million people as compared to America's nine, these are still the primary catchments.

Nonetheless, tier II/III towns are catching up. And fast food is an inalienable component of this trend that is sweeping every corner of the nation. In fact, in a period where the economic slowdown had put a damper on most retail space-related transactions, many fast food chains continued to snap of prime space for their expansion plans.

Why is this?

One reason could be the lack of time.Though the economic conditions are not very well at present yet people specially the ones having nuclear families always run short of time.So they grab something from these fast food joints. Another point is these joints offer food with a wide price range which suits the needs of everyone.

Moreover the mall culture has picked up.These joints have outlets in malls also where most of the people go for eating than shopping.

Is there any other reason you can think of?If yes then comment...

Marketing Mix Cafe Coffee Day

PRODUCT:

Café Coffee Day product mix constitutes a wide range of products that appeal primarily to Indian coffee and snack lovers. Products have a decided Indian taste to it – be it food or coffee. Most of the eatables have been adopted to meet the Indian taste buds like samosa, biryani, masala sandwich, tikka sandwich etc. Thus they have been trying to capture the Indian taste along with classic coffee.The best selling item in summer is frappe, which is coffee and ice cream blended together. The young people favor it. In winter it is cappuccino. Their merchandising includes funky stuff like t-shirts, caps etc.

PRICE:

Considering that Café Coffee Day knows its major customer lies in the bracket of 15- 29,it has tried to derive a policy whereby it can satisfy all its customers. The price for a cup of coffee ranges from Rs.45 to Rs 80. From the time it first started its operations, there has been only minor changes in the pricing policy of Café Coffee Day. The changes have been more due to the government taxes than any thing else.

PLACE:

The strategy CCD has adapted is to place a cafe in every possible location where some business can be generated.This is a prime factor in determining the success of a retail chain. Café Coffee Day looks to cater to their target market with strategically located outlets.

Their outlets are generally located in High Street/ Family Entertainment Centers, gas stations, near Colleges etc.

PROMOTION:

CCD is involved in all the areas of serious consumer passion like:

--Television: Café Coffee Day held a contest around a very popular programme on Zee English calledFriends. All the six lead characters are shown often visiting a coffee shop.They have tied up with Channel [V]‘s Get Gorgeous contest.

--Tie-ups: Besides that Café Coffee Day also tie up lot of the youth brands. So they have a contest going on with Levis,another one with Scooty, Liril, latest one with AirtelFriends.

--Association with movies: CCD can be seen in movies like Khakhee and Main Hoon Na

--Sales Promotion:Café Coffee Day uses special ‘Café Citizen Card’ for rewarding Café Coffee Day’s customers. It is a loyalty program to gain new customers and retain the existing ones.

PRICE:

The ordering and delivery process in CCD was earlier based on self- service. But now in most its coffee shops the waiter comes and takes away the order and delivers the order on table.

PHYSICAL EVIDENCE:

a)Logo , image, brand: Café Coffee Day has used bright red and green colours in its logo. RED stands for leadership , vitality, passion for coffee. The GREEN stroke harks back the coffee plantations that they own. Café is noticeably larger in the logo to denote that Café Coffee Day pioneered the café concept in India way back in 1996.The font looks as though the letters have congealed out of a liquid.

b) Architecture and Decor: Largely wood and granite based interior with young colours of today,like limegreen, yellow, orange, and purple predominate.

c) Literature: The literature provided by Café Coffee Day is indicative of its youthful image. The menus, posters, pamphlets are all designed to attract young and young at heart.

PEOPLE:

People at Café Coffee Day believe that “People are hired for what they know but fired for how they behave”. Motivation and personal skill are laid emphasize upon. Their employees are like friend to the customer but at the same time they know about the international standards of hygiene and cleanliness and personal grooming.

Going an ethical way!!

"If it is not right, then don't do it; If it is not true, then don't say it" 

This quote by US journalist John Byrne makes us to think on ethical part of fast food industry as well. Given that most fast food choices are unhealthy ones, it led me to question whether fast food companies are being ethical in offering the products that they do. If you ask these companies about their product, the answer is always diplomatic one that product is legal. However, ethical claims differ from claims about what is legal or illegal. The act that is legal cannot be necessarily ethical as well. Similarly, fast food companies, boasting about being legal by providing legal product, does not necessarily mean that they are ethical.

I do not believe that fast food companies are immoral just because they do not act in a paternalistic fashion towards their customers. Consumers have the choice to avoid these products, consume them in moderation, or eat them everyday. The key to me is that each company provides adequate disclosure regarding its products so that consumers can make reasoned decisions. Although it was not always easy to find, each of the nine fast food restaurants I attended have websites that disclose nutritional information about their food items. As well, two of the companies, Burger King and Wendy’s, actually had large, nutritional charts readily visible in their restaurants. Given that consumers have access to this information, I do not believe that there is anything morally wrong with these companies selling fast food.

what it says, what if offers

One could take issue with the fact that many of these companies market their products to children. Mascots such as Ronald McDonald, the Burger King, and Jack from Jack in the Box are essentially modified cartoon characters that hock fast food to kids. As well, most of these restaurants also promote meals especially designed for children that include toys. While these actions are arguably questionable, parents ultimately control whether and what children eat at these restaurants. They should be able to assess these products regardless of the advertising hype and act accordingly.

There are many things that might be done to address the ethical problems raised by the behavior of multinational corporations: laws, legal action and public pressure arising from activists. In the end, public awareness might be the most important tool. If individuals are enlightened about fast food companies' practices and their impact on health, environmental pollution and culture change.

Branding - The Social Media Way : Part 1

With the advent of the Social Media, marketers have come to believe that it is the 'IT' tool for reaching their target audience in the future. With over 800 million active users on Facebook and 380 million users on Twitter, the marketers believe that Social Media as a platform provides a high Return on Marketing Investment when compared with other traditional mediums.

A report by Forrester Research indicates that by 2016, Social Media spends will grow to 26% of all advertising spends. A study by Nielsen called 'State of the media: The social media report' (Q3 2011) found out that nearly 4 in 5 active internet users visit social networks and blogs. Also, 53% of active adult social networkers follow a brand. Another finding was that Social Networking apps are ranked no. 3 on the most used list for U.S. smartphone users.

Another study done by Charlene Li and Ben Elowitz (in July 2009) analyzed various brands based on their presence on different social media channels including Blogs, Branded Communities, Discussion forums and External social networks like Facebook, Twitter etc. This was followed my measuring the engagement levels of customers across these social media channels and find the engagement levels of these brands per fan. Based on their research they found that Starbucks was the best global brand in Social Media followed by Dell. These researchers also developed a framework for profiling these brands based on customer engagement and no. of channels used.

Engagement profiles of Brands

The four profiles are classified as follows:

1. Mavens: Above average engagement score. Present on seven or more channels. Robust strategy and dedicated teams for social media.
2. Butterflies: Lower than average engagement scores. Present on seven or more channels. Tend to invest in few channels while ignoring other channels (being inactive).
3. Selectives: Higher than average engagement scores. Present on six or fewer channels. Lightly staffed social media initiatives.
4. Wallflowers: Below average engagement scores. Present on six or fewer channels. Have ventured recently in this area and are testing things through a few channels.

Another thing done by these researchers was looking at the financial performance of the brands observed  in Q4 ’08, Q1 ’09, Q2 ’09 and Q3 ’09. The conclusion was that the higher the engagement of the brands were, the higher the financial performance was. Mavens were found to have sustained strong revenue and margin growth despite the economic slowdown. It was also found out that social media reach alone caused a positive impact for a brand as more touch points caused a ripple effect for the brand. The authors also suggested that deep engagement in less number of channels could also prove to be an effective and successful strategy.

Financial returns for the brands with the above profiles

 The above results are indicative and not conclusive, but this surely tells that every brand should operate with a concrete strategy and not lie in the south-west portion of the brand profile map.

According to The Virtue, McDonald's has slipped from 32 to 62 to 66 from 2008 to 2010 on the list of Top Social Brands. In the next post on this topic, we'll talk about McDonald's current engagement strategies to help it jump back to a higher stead on the Top Social Brands index.

A Revealation---The power of a brand

Today I would like to share an interesting fact about a research that was conducted on pre-school children which clearly depicts the power of a brand.The food and beverage industries spend more than $10 billion each year to market to children in the US. One of the goals of marketing is branding to encourage children to recognize and differentiate particular products and logos.

In this study, researchers studied the food and drink preferences of more than 60 preschool children. They offered them a portion of a hamburger, a Chicken McNugget, McDonald’s French fries, 1% milk or apple juice, and two baby carrots in McDonald’s packaging and in matched but plain packaging.They found that children were six times more likely to prefer chicken nuggets when they were presented in McDonald’s packaging; and were three times more likely to prefer French fries when in McDonald’s packaging. Preschoolers with more TV sets in their homes and children who ate at McDonald’s more often were more likely to prefer foods and drinks they thought were from McDonald’s.

So one can say that marketers are doing a lot to attract children from their young age so that they can create an association with them which in turn would make them loyal towards the brand once they grow up.

But the big question remains that is it justified to promote fast food like this? Shouldn't they come up with more healthier options specially when it comes to attracting preschoolers and kids.

On the other hand we can attribute the phenomenal success of Mc Donald's to their marketing strategies that are so well defined and properly targeted to the right audience...

Who is the global winner? McDonald's or Subway?

Which company can go global? Answer is simple.... whose product is global.... Fast food category is not an exception.... Where fast food is the need of whole world nowadays, players in this industry must play in different markets to survive in the competition. So, the major players like McDonald's, Subway, Domino are doing. All the giants are expanding rapidly worldwide, providing best quality product changing recipe as per country and being a best distributor.

I have got some data to point out some findings this time. Wall Street Journal reports of this year shows that at the end of last year, Subway had 33749 restaurants worldwide, whereas McDonald's had 32737. Subway believes some of its success is due to their private ownerships.They say that it enables them to focus on the product, quality, restaurants and not on the other things associated with a public company.

Subway v/s McDonald's

McDonald's is still a leader if we consider sales in terms of revenue. When asked on this, they say that they remain focussed on listening to and serving their customers and are committed to being better, not just bigger.  On the other hand, Subway is rapidly expanding its international operations and The Wall Street Journal reports that it expects its number of international restaurants to exceed its domestic ones by 2020. Subway expects one of its biggest new markets to be China where it is planning to increase from 199 restaurants to more than 500 by 2015. Subway is also known for opening outlets in non traditional locations, so McDonald's has been known to serve different customers differently.

Figures may depict any player as a winner, say in terms of outlets, or revenues or just profits. But, only thing we can say that winner will the one who will continue to win the hearts of their customers through their stomachs!!!!

Cafe Coffee Day- the preferred medium for alternative marketing needs

Cafe Coffee Day has successfully executed a number of campaigns for various brands across a wide spectrum like FMCG, white goods, telecom, education and many more categories to meet their brand objectives and thus has proved to be a strong alternative to conventional media properties.

The opportunity to get the brand message across to customers in a very subtle yet effective method is limitless. From large wall spaces which can attract the customer with eye catching brand messages to 3D table stickers, to branded tissue papers, the list is endless. CCD is also trying to continuously innovate and offer the best possible options to create a successful campaign.

CCD offers the option to deliver a well rounded brand experience if the youth happens to be the target customer of the brand. The leveragable strengths of CCD:

Vis-a-vis reminder medium

• Lucrative base of 3 million young consumers (15-30 yrs). No other reminder medium can boast of such a focused TG delivery.

• Distribution: 800+ cafes spread across 120+ cities which includes tier 2 as well as tier 3 towns as well. A definite advantage compared to medium like Radio and Cinema.

• Dwell time: Though other mediums could talk of higher time spent on the medium, ad communication is much limited to a few seconds. Vis a Vis communication is effective for the complete dwell time at CCD.

• Engagement: Trials, customized communication.

Vis-a-vis below-the-line medium

• Focused TG (as against mall activations or road shows).

• Uninterrupted OTS, due to high dwell time and continuous visibility of communication, thus least opportunity of consumers to switch communication.

• Captive audience, as against other diversions at malls or road shows. There are no attention diverters and the audience is in a relaxed state of mind and open to engaging with the communication.

HIGHLIGHTS

ITC- Fiama Di Wills/VivelCampaign

Objective: to sample the product to a filtered young Sec A/A + potential buyer

Touch Points in cafes: High impact and involvement driven, Tent Cards, CRM forms, Walls, Standees

Visibility: High impact intersections like Wall, Standee, Tent Cards. As soon as the customer sits down, he/she is handed over a Vivel/Fiama gift hamper by the team member and requested to fill up a CRM form. The CRM forms are collected in the drop box kept on the counter.Number of Samples given out for Vivel/Fiama, in three phases: 2 Lakh

Metro Now Campaign

Theme : Soapbox

A soapbox is a raised platform on which one stands to make an impromptu speech

CCD Activation:

10 cafes, high on student footfalls chosen for the promotion where CCD consumers would be invited to come up, stand on a soap a box and ”Give Gyaan”

Topics chosen:

• “Old enough to get married have a child but not old enough to Drink??”

• “Safe Premarital sex v/s moral issues”

• Age - 43 SRK is the superstar & heartthrob of the youth…??

• “Love at first sight”

The schedule was announced on tent cards, leaflets, danglers and standees in 40 cafes in Delhi/NCR. A professional MC conducted the event at all the 10 cafes. The best views won prizes and got aired on Metro Now.

CCD offerings for campaigns and promotions

ON THE TABLE- Stickers and Tent cards

WITH THE FOOD- Side Menu Card

CONTESTS- Contests have been activated through leaflets/contest forms given out with the menu-card /bill folders. Drop boxes, which also add to prominent visibility, are used to collect all entries to the contest

ON THE WALL- The most imposing branding option within a cafe for visual communication with minimal amount of text.

SAMPLING- The surest way to reach your filtered TG reducing all clutter costs. For example, to communicate soya milk re-launch and communicate its benefits Heshey’s Soya Milk samples were distributed after billing customers in 60 cafes in Mumbai, Delhi and Bangalore. The collaterals used were 3D table stickers and standees. About 5 lakh samples were dispensed over a period of one month.

Whetting the Indian Belly - Part 3

In this third and final post on the topic, we talk about the 'Place' portion of the 4Ps framework. After Indianizing their product offerings with suitable pricing and an extensive promotion strategy, fast food restaurants have enticed the Indians good enough to consume their products. But, the question remains as to how to ensure that these seemingly awed and drooling consumer base get to consume these products with ease.

McDonald's 1st store at Basant Lok, Delhi

When McDonald's opened its 1st store on a windy October the 13th in 1996, no one would have predicted that within 15 years the same brand would wind up in over 235 locations in India. This journey has been made possible due to its Joint Venture with Connaught Plaza Restaurants Pvt. Ltd. (for the Northern and Eastern Regions) and a Development License with Hardcastle Restaurants Pvt. Ltd. (for the Western and Southern Regions).

McDonald's 2nd store at Bandra, Mumbai

So, after opening its first store in Basant Lok, which was essentially a SBD (Secondary Business District), McDonalds opened another store in a similar location in Bandra. Thereafter, more McDonald's sprung up in SBDs and near office spaces (including the 1st drive thru at Sector 16, Noida in a Hotel which was also the 1st disabled friendly store) and eventually into Malls like Ansal Plaza, Delhi in 1999. By this way, McDonald's expanded into Tier-I cities with new outlets opening at Railway Stations (including the one at New Delhi Railway Station that operates for 24 hours a day), Airports, Metro Stations and Petrol Pumps.

McDonald's store at Kashmere Gate Metro Station, Delhi

However, this expansion was not just limited to bigger cities and McDonald's opened its outlets in  Tier-II and Tier- III citiles like Nasik, Indore, Baroda, Vapi, and Surat in the West and Dehradun, Jaipur, Agra, Patiala and Chandigarh in the North. These smaller cities have become the target markets for fast food restaurants like McDonald's who are aiming to generate larger revenues from these untapped markets with a huge population of aspirational customers. It also opened restaurants on Highways with extended operational hours and the availability of the Breakfast Menu (introduced in 2008). McDonald's also introduced Dessert Kiosks in malls which separated themselves from the traditional McDonald outlets through separate billing counters and in some case by being located in a different area in the mall.

McDonald's Dessert Kiosk

Though McDonald's was able to reach a large customer base through its outlets (dine-in customers), there was still a large number of customers who couldn't (or didn't wanted to) reach the stores. Thus, McDonald's came up with its McDelivery service in 2004 which helped it to serve the farthest corners in the big cities (where this service is available). A unique initiative was also undertaken by McDonald's  in this regard in the he crowded streets of Chandni Chowk, Delhi where they introduced bicycles for this service. This McDelivery service has since then has been expanded to the online format as well, in which customers can register on the McDonald's India website and Log-in to order their meals.

McDelivery using Bicycles at Chandni Chowk, Delhi

McDelivery option is now also available through online registration

With high growth in the fast food industry and rapid launch of new outlets by all the players, it remains to be seen how these companies expand their business in both the somewhat saturated big cities and the untapped and emerging smaller cities.

A shift in gear

Well we have been discussing a lot about fast food for the past few days.Mc Donald's, Taco Bell, KFC are all leading fast food brands.We have talked about their strategies, their positioning, their logos in depth.Now lets change the gear a little bit.Lets talk about some coffee shops.Apart from having coffee in their offerings,they offer a number of other items like pastries, sandwiches and burgers to name a few.Are they not the competitors of KFC, Pizza Hut and Mc Donald's.We should spare a thought to it.

Lets start with Cafe Coffee Day- leading coffee shop brand in India.As their tagline goes "A lot can happen over a cup of coffee". It is the most popular coffee among the youths, even young proffessionals to some extent due to its affordable pricing and "cool" ambience. People go ,have coffee, listen to music, chat, snack on items.Before CCD came into existence there was another coffee shop which was very popular-Barista. It is still there but CCD no doubt has captured the market.Barista's target audience-mainly middle aged working proffessionals is different from CCD's. On the price front, Barista is high. They also offer a wide range of mocktails and other snack items apart from coffee and ice cream shakes and so on and so forth.

Another striking feature due to globalization and increase of disposable income, even youths from tier 2 and tier 3 cities have started visiting these places.CCD is present in tier 3 cities like Bhubaneshwar. So it is no more the youths from metro cities who frequent these places.This is a good piece of news for all the fast food companies and even coffee shops who are planning to go live in the recent future.

One thing which I am desperately waiting for is the launch of Starbucks in India-which is destined to happen sometime in the near future. It will change the existing situation and give a new dimension to the entire scenario.

"Made For You"

Last month when I visited my home during Diwali vacation, I landed up at home very early in the morning and was feeling very hungry. I just asked my mom if I can have some 'Ghavan' (maharashtiran recipe like neer dosas) and my loving mom served me up hot 'Ghavans' just within an hour. And, It's nevertheless to say that I almost swallowed 5-6 of them in few mins. What a pleasurable experience to get food specially made for me which my mom has always been doing for me!!

When you visit any regular restaurant, you always expect to get the food specially made for you and you mostly get it there. McDonald's picked up the similar thought to offer its customers the food which is prepared right after they order it. and, that's how its successful Made for you (MFY) strategy came into the picture in fast food as well.

Made for You!!!

The Made for You strategy production process was both natural extension of McDonald's use of process automation and radial departure from the made-to-stock philosophy. The main objectives of this system were to allow for customized customer orders, improve service response time - within 90 secs and improve food quality and freshness. This is a system where your food is prepared just after you have ordered it. Once customer places order at the counter, counter person punches the order and order gets displayed on the monitor in preparation area, where crew members put the best efforts to serve the order just within 90 sec.

McDonald's dynamic staff at work

If we go little into the detailed part of this system, you can see two sided tables in the kitchen where mostly order is handled by initiator and assembler. Both of them work together to prepare order in least possible time made by cooks using highly technological efficient instruments like top loading toaster, condiment guns, UHCs and wrappers and boxes underneath. The process is so dynamic here that if you visit McDonald's MFY store, you will see all crew running and moving really fast.

To sum it up, we can say that the important factors to make this MFY system successful are service, quality, food preparation, people and profitability. During peak hours, customers sometimes don't get food within 90 sec, but freshness and consistency of food is never compromised. Customers always get the order hot and fresh. Surely they way McDonald's has streamlined its kitchen delivery model and made this MFY system as a standard in fast food industry!!! so, this is how leader differentiates itself!!!

Integrated Marketing Communications for launch of Spicy Delights by McDonalds

With the introduction of their new range of McSpicy products in India called ‘Spicy Delights’ McDonald’s has embraced technology and social networking sites in a whole new level, keeping up with the changing times.

Before the launch of the McSpicy range of McDonalds, when a customer placed an order at a McDonald's outlet, they were given visiting card-sized slips that simply read 'Coming on 28th March. French Fries' new buddy. Soft Serve's new love. Chicken Maharaja Mac's competition'.

The card carried an image of burger buns with a QR code - a specific barcode readable by dedicated QR barcode readers and smart phones - in between them instead of a patty. The QR code, which was printed across all the pre-launch merchandising elements (in-store and Out-of-Home) directed the consumer to the site www.myspicy.in microsite.

At the microsite, a rib-tickling viral called the 'The Great Spicy Speculation', in which the present items such as McVeggie, Maharaja Mac, French Fries, Mc Aloo Tikki, and Coke posed as characters and discussed the new additions in the menu on social networking sites and messenger services as if they were new joinees in an office. LinkedIn profiles were also made for the new additions, while tickets were also booked for them on a travel website.

The video ended with the message: 'The story gets spicier at www.myspicy.in'. It also routed the viewer to a page by the insecure Maharaja Mac that said 'Website not found - this site has been re-routed to www.i-love-maharaja-mac-more.com. It's much better than this. Besides it's LIVE right now'. People were also allowed to leave their contact details with McDonald's promising to inform them as soon as the new menu was out.

As part of the outdoor campaign, displays in the McDonald's outlets, hoardings, bus shelters and railway stations, carried ads of the pre-launch QR code and the reveal launch ads.

McDonald's rolled out a 10-day pre-launch campaign to build a buzz around the new menu. The company claims to have reached 2,50,000 people in a span of the ten-day pre-launch campaign and close to another 10,000 views on YouTube for the viral.

After the launch kiosks were launched at McDonald's outlets, where people could pick their option from Too Hot, Too Cool, Just Right. LED hoardings in a few locations carried Live Updates of the people's choice and their pictures, giving them their few seconds of fame.

Major AD’s were during the IPL matches. The company also tied up with a radio station where RJs went to McDonald's outlets and asked people about what they thought of the new McSpicy range - is it Too Hot, Too Cool or Just Right? The brand also reached out to students across 50 colleges in Mumbai.

In today’s world engagement is very important and it leads to conversation. It is necessary today to have a platform where people can express themselves and it is good for the brand to know what’s on their customers’ minds. Mc Donalds successfully accomplished this in its McSpicy Campaign. The campaign has created waves in the social media and is considered to be a social media tutorial.

Whetting the Indian Belly - Part 2

In the last post on this topic the discussion was on how fast food restaurants (taking the example of McDonald's) have modified their communication strategy for the Indian market in order to reach out to their target market segment. In this post, the focus will be how the products of these restaurants have been modified/adapted to taste the Indian tastebuds. 

Chicken Maharaja Mac, the desi version of Big Mac

When McDonald's came in India it decided to not have any beef or pork items on its menu, for the 1st time. So out went Big Mac and came in Chicken Maharaja-Mac (and the vegetarian counterpart  McVeggie). Along with this, the use of eggless mayonnaise was also implemented. The overall menu went for an overhaul with McAloo Tikki, Veg. Pizza McPuff, Veg. Surprise (introduced a little later) and Chicken McGrill also being introduced. The former three became so popular that these were exported to the Middle Eastern markets. These three were introduced at very economical prices and later became part of the Happy Price Menu (similar to Dollar Menu in U.S.A.) starting at Rs. 20 and also including beverages and soft serves. Some international items like Salad Sandwich, Potato Wedges and Coke Float were retained for the Indian Menu. 

These Indian flavours drove people in crowds (one of the possible reasons) and  product trial itself contributed to a large portion of the company's sales in its initial years. However, McDonald's wanted people to make repeat visits and eat and drink even more. So, they introduced McSwirl at Rs.7 thus giving the local ice cream carts a run for their money; and acting as an instant dessert option for the regular burger-fries customers.

Different Vegetarian options catering to different tastes

The process of 'test-marketing' before launching a product was however, not fool-proof. McDonald's came up with McCurry Pan and Crispy Chinese burgers of which the former enjoyed moderate success while the latter failed miserably despite it being economically priced. Similar was the case with Shake Shake Fries which couldn't do well in India, though it had been successful in some of the international markets.

Shake Shake Fries being a successful product in Hong Kong

From McDonald's example it can be seen that it is important that the product being launched in a new market should go through extensive testing and there is no assurance that a product highly successful in a given region (or country) might succeed in the other. There is also a need for diversity of taste on the menu in a country like India as even within a state, the demand and the liking for a particular product may vary from store to store (due to diversity of population). Keeping these things in mind McDonald's brought the international versions of its products for its Breakfast Menu but modified them through spicing and sourcing methods. Only time will tell if this new strategy of theirs works or not.

Breakfast Menu India - Hot Cakes (from International Menu)

Breakfast Menu India - Cappuccino and Sausage McMuffin (from International Menu)

Mc Donald's-The name says it all

When it comes to finding a suitable location for a store, Mc Donald's has a simple strategy.They look for locations that are suitable for their customers-in the malls, airports and even colleges.Typically McDonald's looks for intersections with traffic signals of two well-trafficked streets and ample parking.

Lets have a look at some of the branding strategies adopted By Mc Donald's.McDonalds has done a very good job of making sure that one recognizes their restaurants or products when one sees them. They use the slogan “I’m loving it” in their advertising campaigns.This is actually aimed at the young adults who are one of their core target segments.The ads frequently show people in the commercial area having fun and eating Mc Donald's products.

They have a mascot that is named Ronald Mc Donald- which looks like a clown.This mascot and the golden arch are the probably the two most prominent things that comes to one's mind when one thinks of Mc Donald's.Their logo which is a yellow M on a red background also stands out.

All these brand elements have played a tremendous role in building up the brand Mc Donald's.The food is one aspect and all these have helped in building a brand imagery around the brand.

Segmenting the right segment!!!

In one of the previous posts, we had mentioned about McDonald's franchise business model as one of its very important successful factor. But, only having right model in places does not give you sustainable leading position. Your marketing strategy has to be aligned with your model's insight. It is very important for company to understand its target customers in order to have effective marketing. If company understands its customers well, then only it can communicate with them effectively.

McDonald's is using the same strategy here. They have segmented the customers according to the bases of demographic, psycho-graphic and behavioural. They have segmented their products and positioned according to kids, students, family. They are yet to enter in adults segment specifically. The main purpose of segmenting is to classify market into smaller segments, so that we can serve specific needs of smaller segments with different service and offerings. This segmentation can be done on the basis of age, gender, lifestyle, region, etc.

In India, McDonald's uses segmentations on three different bases:

Demographic - kids, students, family

McDonald's Happy Meal includes toys for kids. It has made the outlets for students of school and colleges easy to hang out with friends. It has also made some different outlets specially for families.

Psycho-graphic - convenience and lifestyle

McDonald's has been very adaptive to cater to the needs of Indian customers. In India, larger population is vegetarian. So, McDonald's came up with products like Mc Veggie burger or Mc aloo tikki to serve the Indian customers.

Behavioural - occasions

McDonald's provides special offerings on birthdays by organizing parties at the outlets. It advises customers to go for the offers to get discounts which in turn change their buying behaviour.

So, in all, McDonald's has been pretty successful in segmenting the market effectively. There is much more scope for them to enter into different segments like adults, professional which they need to work on to enlarge their customer base. But, how much to segment also remains the important question. Only thing which needs to be kept in mind that 'You can't be all things to all people'!!!

Smartphones are changing the way food is ordered

Long gone are the days when famished diners had to go to the trouble of flipping through a phone book to order a pizza for delivery. Instead, the abundance of smartphones is changing the way that diners think about food and the way that restaurants and fast food joints think about diners. These days, smartphone owners have plenty of food and dining related apps to choose from. And it doesn’t matter what device they own – whether it’s an iPhone, iPad, iPod, Android phone or tablet there are lots of apps to explore.

In 2009 Pizza Hut launched its first mobile ordering app for iphone in 2009. The app was a winner, ranking in first place on Forbes’ list of “10 best branded mobile apps of 2009” and garnering two Mobile Marketing Association (MMA) 2009 Global Awards. In May, 2011, Pizza Hut launched free mobile ordering applications for the Android smartphone and the Apple iPad, as well as an updated version of its award-winning Apple iPhone app. The app trio makes Pizza Hut the leader in points of access among national pizza chains and continues the company’s commitment to utilizing digital and social media tools to get customers their favourites faster and easier than ever. The features of the latest app include-

• Full Pizza Hut menu offering all pizzas, pasta, WingStreet wings, drinks, sides and desserts
• Guest Checkout allows customers to order without signing in
• Orders are automatically saved to a customer’s account for easy reordering
• Most Popular items section provides quick and easy access to a customer’s Pizza Hut favourites
• Specials section provides updates on new products and deals
• Customers can add credit card options without creating an account for easy checkout

The newest addition to Pizza Hut’s mobile line-up of order food apps, the new ‘lifestyle’ iPad order food app presents each of the menu items in mouth watering, high-definition colour; has great sound-effects; and comes with a fun, new pizza-builder feature that lets iPad users drag-and-drop individual toppings on part or all of the pizza to create their “own delicious pizza masterpieces” and see what their personalized pizza creation looks like before placing their order.

It has been observed that people are becoming more and more tech savy and demand more convenience and ease of shopping. Seth Goin, the author of 'The Purple Cow (2003)' says that “Everything that can be invented has already been invented” which means everything that we do in the world of marketing has been overused and has been rendered almost useless. The world and its consumers look for something out of the ordinary. He says that cows, no matter how perfect or attractive, are still boring and commonplace, but a ‘purple cow’ would be interesting and intriguing. A purple cow is defined as something worth making a remark about. The concept has one fundamental belief - one person giving another person genuine reviews about something they believe in. The idea is to target the early adopters and let them spread the word about the product or service. The players in the fast food industry should focus on creating purple cows by going beyond just TV advertising and manufacturing and technology would be a great enabler for achieving this.

Whetting the Indian Belly

There’s an old proverb that ‘the way to a man’s heart is through his stomach’. The case for Indian men is no different, but with the increasing decline in their attention span due to the clutter of information (in the form of sights and sounds predominantly); other human senses (smell, taste and touch respectively) have started to become indifferent after sitting on the bench for longer durations during the day. Thus, the wise old marketer decided to communicate via the former senses about a product primarily meant for the latter senses. Ironical but true.

Latest campaign: Har chhoti khushi ka celebration

Fast Food Restaurant brands coming from the land across the Atlantic dwelled over the strategy that was needed for them to succeed in tapping this vast market. One major aspect of this strategy was to position their brands properly, establishing a distinct value proposition in the minds of Indians through their communication efforts. So, when McDonald’s started its operation in India, it first started familiarizing customers by introducing locally developed products including the McAloo Tikki burger and Veg. Pizza McPuff and using experiential marketing techniques by focusing on functional benefits. Thus, came up the campaign 'McDonald’s mein hai kuch baat' (http://goo.gl/okBLi) which had a mystical feel to the brand and invited the people to come and try their products.

The Happy Price Menu campaign: What your bahana is?

 

As the brand familiarity and popularity grew, it was now time for McDonald’s to expand on its base. While introducing its Happy Price Menu (similar to Dollar Menu in U.S.A) the company promoted the value proposition for its new range of products. Campaigns like ‘What your bahaana is?’, ‘Bees mein full dhamaal’ (http://goo.gl/WsWsv) and ‘Baap ke zamane ke daam’ (http://goo.gl/si6vR) followed. For its core menu however, it used various campaigns including ‘Toh aaj McDonald’s ho jaaye’ (http://goo.gl/aOBLn) which talked about the everyday experience, encouraging its customers to visit often with friends and family and enjoy their time out. This was followed by the ‘I’m lovin it’ (http://goo.gl/gMGsk) campaign which was a global campaign employed in 118 countries (with literal translations being used in some regions). This use of a single campaign around the world reiterated the consistency and service quality offered by McDonald’s.

The International campaign: i'm lovin' it

Now, McDonald’s has started targeting the upmarket segments (higher income groups) with its McSpicy range of offerings while continuing with its Happy Price Menu with the ‘Har chhoti khushi ka celebration’ campaign. Thus, McDonald’s has realized that with the growth it has achieved in the past 15 years in India can be taken forward by communication targeted at the right segments.

Storyboards courtesy: afaqs.com

Mc Donald's Strategy - A snapshot

Do you know since its inception Mc Donald's was focusing on its burgers- which is their trademark period.With increasing competition from other fast food chains they did bring about changes in their menus.They introduced family meals which are essentially value meals-pay less but get more items i.e. the combo meals. They also introduced meals for kids. To engage they kids they also started giving some kind of small gifts.
Mc Donald's is probably the first company that comes to ones mind when one thinks of franchising.But over a period of time that have moved from their mass standardization strategy to some kind of customization to suit the taste buds of their global customer base.For e.g. in India they have removed beef burgers from their menu because of religious sentiments.Instead they have come up with items like Mc Aloo Tikki Burger( i.e. a potato burger) and host of other vegetarian items.This helps them to adapt as per the needs of the country and in the process build up a strong customer base. Another important point here is about the diversity of items.They introduced their desert menu sometime back.Pies have been around for a long time though.But it was just an add on.Burgers were their main source of revenue.But not any more.Deserts have become one of the primary reasons why people visit Mc Donald's in the afternoons or evenings.They now add to the bottom line.So the company has added wide range of desert items under Mc Flurry. More on McDonald's later...Keep watching this space for more updates.

Sensory branding and Olfactory Marketing

Research shows that people rated a better-smelling product higher in completely unrelated performance areas. It has been observed that scents in hotel affects the hotel’s ratings for mostly unrelated topics like customer service, cleanliness, decor, and so on.

Several researches have proved that scent has a strong impact on product sales. In an experiment at a petrol station with a mini-mart attached to it, pumping around the smell of coffee saw purchases of the drink increase by almost 300 per cent. Also, scent enhances a product’s distinctiveness, which helps consumers remember it down the line. Thus scent plays a very important role in brand recall as well. Having a brand-specific aroma wafting through an environment is a good way to make a stronger, more memorable brand impression than signage alone.

This novel marketing tool is being used by growing number of businesses around the world. “Scent Marketing” in food retailing can involve techniques such as dispersing the aromas of products, or creating a specific mood through the use of scent. Some recent examples in the international context include the Bloom grocery chain, that has put up a scented billboard (created by ScentAir) that pumps out the smell of grilled steak to promote its new line of beef, or ice-cream chain Emack & Bolio’s, which sends out the scent of waffle cones at their shops. In India sensory branding is still in the nascent stage.

Another example is Starbucks. One of the keys to the phenomenal success of Starbucks has been that its stores offer a consistent and appealing sensory experience. The music, colors, and lighting are all important, but it has been found that the wonderful coffee aroma is what dominates one’s senses on entering a Starbucks outlet.

Starbucks was under pressure to increase store revenue and profits, and, they turned to sensory branding for the solution. The most startling change was that the firm went back to grinding coffee in its stores for the sole purpose of improving the coffee aroma. Presumably, it’s cheaper to ship the coffee pre-ground in sealed packages, but Starbucks management felt that any productivity loss at the stores will be offset by improved customer loyalty and higher sales due to the aroma. Starbucks also recently dumped its breakfast eggs because their smell didn’t pair well with the coffee aroma. This is a fairly amazing reason to drop what was supposed to have been a major growth product line, and shows that some companies really DO understand sensory marketing and branding.

Realising that majority of sensory experience of drinking espresso comes mainly from the retail environment, Nestle unit Nespresso not only modified its home brewing equipment to release more enticing smells, they even launched a chain of coffee shops offering customers a rich olfactory experience just to address the perceived sensory gap in the home environment.

Olfactory marketing works so well because the sense of smell is most directly connected to the parts of the brain responsible for processing emotions. It goes directly to the limbic system, which is the emotional control centre of the brain, so when you smell something it immediately triggers an emotion whereas all the other senses have to be processed first.

Franchise strategy that worked well for McDonald's!!

In this competitive world, any organization needs to have right strategy first. The strategy should be aligned with the vision and mission of the organization, so that all the elements within the organization can direct their effort towards the same goal. Fast food industry being very competitive, all the companies need to have right strategies in place.

The popular strategy which worked for McDonald's and many other fast foot chains is Franchise system. One of the key reasons why McDonald's could expand worldwide so fast and achieve brand recognition globally is its very efficient Franchise Business model. This model has not only helped McDonald's to expand domestically as well as internationally, but it has also standardized its operation at all places. This has made them to provide same products and same experience to all its customers - no matter which part of the world they are. 

McDonald's Franchise outlet

Today, McDonald's franchise network has reached in more than 100 countries serving 52 million people with more than 30000 franchise restaurants. This had made McDonald's as world's leading food service retailer. 70 percent of the total stores are  owned by independent franchisees. 

McDonald's franchise model has been such a success that if someone thinks of buying any franchise, then McDonald's is the first name to be considered. What differentiates McDonald's franchise model from its competitors is strategy to allow its franchisees to pay just rent rather than buy their premises outright. So, buying its franchise offers a profitable option to have business with many advantages like recession free business, cheap product, non discretionary good, quick food meeting time constraints of customers.

We started this post saying that organization need right strategy to succeed. After analysing McDonald's franchise model, can we say it's right strategy for it? Is it the only strategy that worked for McDonald's? Are there any other factors which complimented this business model?

Keep checking blog for more details...

Product Placement by Fast Food Restaurants

Whether it is Shahrukh Khan driving a Volkswagen New Beetle in Ra. One or Hrithik Roshan guzzling Mountain Dew in ZNMD or Kareena Kapoor walking with a Sony Vaio in tow in Bodyguard, product placement is the new ‘IT’ thing in Bollywood. Product placement means the prominent display of a brand in a movie (or even TV shows) where the characters use the product (Big bucks required for this!!) or there is a fleeting/ flashing display (Lesser money) of the brand in the background. This phenomenon has there been for quite a long time in Hollywood with successful associations with brands like Apple, Ford and Coca-Cola which feature in about two dozen blockbusters (above $100 million grosser) every year.

Kareena Kapoor with a Sony Vaio in Bodyguard (2011)

 

So, how does product placement work out for Fast Food restaurant brands? The movie studios approach a potential brand for a tie-up based on the script requirements or opportunity of product placement (to cover the production budgets). Sometimes brand associations are already present (as in the case of sequels or TV/Book adaptations) and such a relationship is continued for higher brand leverage and stronger recall. 

Dunkin' Donuts featuring in Source Code (2011)

However, there are a few challenges that are present. The biggest challenge that such brands face is the ‘Use’ part of the product in the movie. It is practically impossible for the makers of the movie to feature a 60 second sequence in which a character ‘primarily’ eats a burger or a pizza (while sipping a Diet Soda) without making the audiences get bored or miffed or both. Thus, the product placement needs to be cleverly done so that it fits in perfectly into the script and defines ‘a way of life’ for the character indicating his/her preference of the brand. This challenge is quite often overcome by filming a scene alongside a restaurant sign-board or showing the product packaging (pizza boxes etc.) among other techniques.

Pizza Hut featuring in The Invention Of Lying (2009)

Another challenge is identifying with the target audience of the brand with the character that is seen consuming the product. For example, when Dunkin’ Donuts made an appearance in Wall Street: Money Never Sleeps alongside the character of Jacob Moore (Shia LaBeouf as a proprietary trader); it displayed the life of a young workaholic who elicits a certain kind of lifestyle, consuming products of a known fast food brand due to the trust factor (regarding the quality of the product) as well as the time factor (paucity of time due to hectic work life).

Dunkin' Donuts featuring in Wall Street: Money Never Sleeps (2010) depicting the lifestyle of the character.

Similarly, Pizza Hut had a tie up in the movie Wayne’s World where the central character Wayne Campbell (Mike Myers as a TV show host) is prominently seen with the brand; the character displaying a laid back attitude and life of a young man.

Pizza Hut featuring in Wayne's World (1992) depicting the life of a carefree TV host     

The children are however, difficult to target in a direct manner due to legislative restrictions; and promotional tie-ins with brands are the way to do it. McDonald's for instance tied up with DreamWorks Animation's Shrek franchise by including its toys in its Happy Meals and also introducing a Guava-Mint flavoured dessert.

McDonald's Guava-Mint flavoured Dessert as a part of its tie-in with Shrek Forever After (2010)

But, both the studios as well as the fast food brands need to be cautious about the side-effects of such a tie-in, as was the case when McDonald’s had to recall 12 million glasses sold as promotional tie-in with the movie Shrek Forever After contained the toxic metal cadmium leading to a fall in share price by 1.7% for McDonald’s. Thus, before agreeing on a tie-in/ product placement with a given movie; the fast food brand should evaluate the theme of the scene in which the product will be displayed along with the overall target audience for the movie.

McDonald's Shrek glasses had to be recalled after the toxic metal Cadmium was found in them

The product placement phenomenon has become an extensive part of the TV shows and sitcoms, so much so that the TV presenters of the morning news of KVVU have McDonald’s Ice Coffee on their desks, even though they rarely touch the logo-covered cups. So, product placement is here to stay; but the job of the brand managers is to effectively reach out to their target audiences through these tie-ins. 

KVVU's Morning News presenter have Ice Coffee from McDonald's placed in front of their desks