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ENTREPRENEURSHIP
                   PROJECT
     PROJECT REPORT AND MARKET
       SURVEY OF MCDONALD’S




Name of the school     : SHARJAH INDIAN SCHOOL

NAME OF THE STUDENT : DAN K. JOHN

CLASS                  : XII-E
CBSE ROLL NO.           :

ACADEMIC YEAR          : 2012-2013

TEACHER IN CHARGE      : MR. JAMES THOMAS
INDEX
SL.        TITLE          SOURCE OF THE            PAGE    SIGN OF
NO.                          PROJECT                NO.      THE
                                                          TEACHER
 1    ACKNOWLEDGEMENT

                                    -
 2       FAST FOOD          www.wikipedia.org
        RESTAURANT
       AN INTRODUCTION

 3      MCDONALD’S          www.wikipedia.org
       AN INTRODUCTION


 4      HISTORY OF          www.wikipedia.org
        MCDONALD’S         www.macdonalds.com

 5    LIST OF PRODUCTS      www.wikipedia.org



 6       CORPORATE          www.wikipedia.org
          OVERVIEW


 7     MARKETING MIX       www.marketing91.com



 8     SWOT ANALYSIS        www.slideshare.net
                              www.scribd.com
                           talkfinanceonline.com
 9     CONSOLIDATED      www.aboutmacdonalds.com
      BALANCE SHEET OF
        MCDONALD’S

10     QUESTIONNAIRE        www.slideshare.net
                             www.scribd.com
11   SURVEY RESULT
       ANALYSIS
                               -
12     THE TOP FIVE     www.infobarrel.com
      REASONS WHY
     MCDONALD’S IS SO
         POPULAR

13     CONCLUSION

                               -
14    BIBLIOGRAPHY

                               -
ACKNOWLEDGEMENT
  I have taken efforts in this project. However, it would not have been
   possible without the kind support and help of many individuals and
 organizations. I would like to extend my sincere thanks to all of them.


   I thank my God for providing me with everything that I required in
                         completing this project.


I am highly indebted to the Teacher in Charge Mr. James Thomas for his
 guidance and constant supervision as well as for providing necessary
information regarding the project & also for his support in completing the
                                 project.


I would like to express my gratitude towards my parents for their kind co-
operation and encouragement which helped me in the completion of this
                                 project.


   I would like to express my special gratitude and thanks to industry
             persons for giving me such attention and time.


My thanks and appreciations also go to my classmates in developing the
  project and to the people who have willingly helped me out with their
                                abilities.
FAST FOOD RESTAURANT
                     An INTRODUCTION
A fast food restaurant, also known as a quick service restaurant
(QSR) within the industry itself, is a specific type of restaurant
characterized both by its fast food cuisine and by minimal table
service.
Food served in fast food restaurants typically caters to a " meat-
sweet diet" and is offered from a limited me nu; is cooked in bulk in
advance and kept hot; is finished and packaged to order; and is
usually available ready to take away, though seating may be
provided.
Fast food restaurants are usually part of a restaurant chain or
franchise operation, which provisions standardized ingredients
and/or partially prepared foods and supplies to each restaurant
through controlled supply channels.
Arguably the first fast food restaurants originated in the United
States with A&W in 1916 and White Castle in 1921. Today,
American-founded fast food chains such as
McDonald's and KFC are multinational corporations with outlets
across the globe.
Variations on the fast food restau rant concept include fast casual
restaurants and catering trucks. Fast casual restaurants have higher
sit-in ratios, and customers can sit and have their orders brought to
them. Catering trucks often park just outside worksites and are
popular with factory workers.
Some trace the modern history of fast food in America to July 7,
1912, with the opening of a fast food restaurant called the Automat
in New York. The Automat was a cafeteria with its prepared foods
behind small glass windows and coin -operated slots. Joseph Horn
and Frank Hardart had already opened the first Horn & Hardart
Automat in Philadelphia in 1902, but their “Automat” at Broadway
and 13th Street, in New York City, created a sensation. Numerous
Automat restaurants were built around the country to deal with the
demand. Automats remained extremely popular throughout the
1920s and 1930s. The company also popularized the notion of
“take-out” food, with their slogan “Less work for Mother”.
Modern commercial fast food is highly processed and prepar ed on a
large scale from bulk ingredients using standardized cooking and
production methods and equipment. It is usually rapidly served in
cartons or bags or in a plastic wrapping, in a fashion which reduces
operating costs by allowing rapid product identi fication and
counting, promoting longer holding time, avoiding transfer of
bacteria, and facilitating order fulfilment. In most fast food
operations, menu items are generally made from processed
ingredients prepared at a central supply facilities and then shipped
to individual outlets where they are cooked (usually by grill,
microwave, or deep-frying) or assembled in a short amount of time
either in anticipation of upcoming orders (i.e., "to stock") or in
response to actual orders (i.e., "to order"). Follow ing standard
operating procedures, pre-cooked products are monitored for
freshness and disposed of if holding times become excessive. This
process ensures a consistent level of product quality, and is key to
delivering the order quickly to the customer and avoiding labour
and equipment costs in the individual stores.

To make quick service possible and to ensure accuracy and security,
many fast food restaurants have incorporated hospitality point of
sale systems. This makes it possible for kitchen crew people to view
orders placed at the front counter or drive through in real time.
Wireless systems allow orders placed at drive through speakers to
be taken by cashiers and cooks. Drive through and walk through
configurations will allow orders to be taken at one register and paid
at another. Modern point of sale systems ca n operate on computer
networks using a variety of software programs. Sales records can be
generated and remote access to computer reports can be given to
corporate offices, managers, trouble -shooters, and other authorized
personnel.

The aim of this project is to conduct a market study on a
thriving fast food restaurant, going deep into its formation,
history and growth; then to analyse the reason that make it so
popular.

In this project we will be conducting a market study on the global
fast food giant McDonald’s.
MCDONALD’S
                     AN INTRODUCTION
McDonald's Corporation (NYSE: MCD) is the world's largest chain
of hamburger fast food restaurants, serving around 68 million
customers daily in 119 countries.
Headquartered in the United States, the company began in 1940 as a
barbecue restaurant operated by Richard and Maurice McDonald ; in
1948 they reorganized their business as a hamburger stand using
production line principles. Businessman Ray Kroc joined the
company as a franchise agent in 1955.
Ray Kroc subsequently purchased the chain from the McDonald
brothers and oversaw its worldwide growth.
A McDonald's restaurant is operated either by a franchisee, or an
affiliate, or the corporation itself. The corporation's revenues come
from the rent, royalties and fees paid by the franchisees, as well as
sales in company-operated restaurants.
McDonald's revenues grew 27 percent over the three years ending in
2007 to $22.8 billion, and 9 percent growth in operating income to
$3.9 billion.
McDonald's primarily sells hamburgers, cheese burgers,
chicken, French fries, breakfast items, soft drinks, milkshakes
and desserts. In response to changing consumer tastes, the company
has expanded its menu to include salads, wraps, smoothies and
fruits.
In July 2011, McDonald's announced that their largest restaurant in
the world will be built on the 2012 London Olympics site. The
restaurant will contain over 1,500 seat s and is half the length of an
American Football field. Over 470 staff will be employed serving
on average (during the 2012 Olympics) 100,000 portions of fries,
50,000 Big Macs and 30,000 Milkshakes. This restaurant will
overshadow the current largest McDo nald's in the world in Moscow,
Russia. In January 2012, the company announced revenue for 2011
reached an all-time high of $27 billion, and that 2400 restaurants
would be updated and 1300 new ones opened worldwide.
HISTORY OF MCDONALD’S
The McDonald's restaurant concept was introduced in San
Bernardino, California by Dick and Mac McDonald of Manchester,
New Hampshire. It was modified and expanded by their business
partner, Ray Kroc, of Oak Park, Illinois, who later bought out the
business interests of the McDonald brothers in the concept and went
on to found McDonald's Corporation.

Early history
In 1937, Patrick McDonald opened "The Airdrome", an octagonal
food stand, on Huntington Drive in Monrovia, California. In 1940,
his two sons, Maurice and Richard ("Mac" and " Dick"), moved the
entire building to 1398 North E Streets in San Bernardino,
California. The restaurant was renamed "McDonald's Famous
Barbeque" and served over forty barbequed items.
In 1953, the McDonald brothers began to franchise their successful
restaurant, starting in Phoenix, Arizona and Downey and California.
The McDonald brothers created Speedee to symbolize the quick and
efficient service system that they had devised. Downey's Speedee is
one of only a few remaining an d Downey’s restaurant is the oldest
operating McDonald's in the world.
Recognizing the historic and nostalgic value of the intact 1953
structure, the McDonald's Corporation acquired the store in 1990
and rehabilitated it to a modern but nearly original co ndition.
In 1954, Ray Kroc, suggested that they franchise their restaurants
throughout the country. He got the rights to set up McDonald's
restaurants throughout the country, except in a handful of territories
in California and Arizona already licensed by the McDonald
brothers.
Kroc's first McDonald's restaurant opened in Des Plaines, Illinois,
near Chicago, on April 15, 1955, the same day that Kroc
incorporated his company as McDonald's Systems, Inc. (which he
would later rename McDonald's Corporation).
By 1958, there were 34 restaurants. In 1959, however, Kroc opened
68 new restaurants, bringing the total to 102 locations.
Phenomenal growth in the 1960s and 1970s
In 1960, the McDonald's advertising campaign "Look for the Golden
Arches" gave sales a big boost In 1962, McDonald's introduced its
now world-famous Golden Arches logo. A year later, the company
sold its billionth hamburger and introdu ced Ronald McDonald, a
red-haired clown with particular appeal to children.
In the early 1960s, McDonald's really began to take off. In 1961
Kroc bought out the McDonald brothe rs for $2.7 million, aiming at
making McDonald's the number one fast -food chain in the country.
In 1965, McDonald's Corporation went public. In 1985, McDonald's
Corporation became one of the 30 companies that make up the Dow
Jones Industrial Average.
McDonald's success in the 1960s was in large part due to the
company's skilful marketing and flexible response to customer
demand. In 1968 the now legendar y Big Mac made its debut, and in
1969 McDonald's sold its five billionth hamburger. Two years later,
McDonald's restaurants had reached all 50 states.
In 1968, McDonald's opened its 1,000th re staurant; Kroc became
chairman and remained CEO until 1973.
By the late 1960s, many of the candy -striped Golden Arches stores
had been modified with enclosed walk -up order areas and limited
indoor seating. By June 1969, " mansard roof" building design
featuring indoor seating became the standard for McDonald's
restaurants.
The company pioneered breakfast fast food with the introduction of
the Egg McMuffin in 1972 and five years later McDonald's added a
full breakfast line to the menu.
In 1975, McDonald's opened its first drive-thru window in Sierra
Vista, Arizona. This service gave Americans a fast, convenient way
to procure a quick meal. Drive-thru sales eventually accounted for
more than half of McDonald's systemwide sales.
Surviving the 1980s "Burger Wars"
In the late 1970s, competition from other hamburger chains such
as Burger King and Wendy's began to intensify. A period of
aggressive advertising campaigns and price slashing in the early
1980s became known as the "burger wars." Burger King suggested
to customers: "have it your way"; Wendy's offered itself as the
"fresh alternative". But McDonald's sales and market share
continued to grow.
During the 1980s, McDonald's further diversified its menu to suit
changing consumer tastes. The company introduced
the McChicken in 1980. It proved to be a sales disappointment and
was replaced with series of different chicken sandwiches a year
later. Chicken McNuggets were invented in 1979. By the end of
1983, McDonald's was the second largest retailer of chicken in the
world. In 1985, ready-to-eat salads were introduced to lure more
health-conscious consumers. The 1980s were the fastest -paced
decade yet. Efficiency, combined with an expanded menu, continued
to draw customers. McDonald's, already entrenched in the suburbs,
began to focus on urban centres and introduced new architectural
styles.
Despite experts' claims that the fast -food industry was saturated,
McDonald's continued to expand. The first generation raised on
restaurant food had grown up. Eating out had become a habit rather
than a break in the routine, and McDonald's relentless marketing
continued to improve sales.
McDonald's growth in the United States was mirrored by its
stunning growth abroad. By 1991, 37 percent of system wide sales
came from restaurants outside the United States. McDonald's
opened its first foreign restaurant in British Columbia, Canada, in
1967. By the early 1990s the company had established itself in 58
foreign countries and operated more than 3,600 restaurants outside
the United States, through wholly owned subsidiaries, joint
ventures, and franchise agreements. Its strongest foreign markets
were Japan, Canada, Germany, Great Britain, Australia, and France.
Braille menus were introduced in 1979, and picture menus in 1988.
Experiments were conducted to find new technology and to research
new markets to keep McDonald's in front of its competition. New
locations such as hospitals and military bases were tapped as sites
for new restaurants.
1990s: Growing pains
The 10,000th unit was opened in April 1988.It took McDonald's 33
years to open its first 10,000 restaurants. Incredibly, the company
reached the 20,000-restaurant mark in only eight more years, in
mid-1996. By the end of 1997 the total had surpassed 23,000, and
by that time McDonald's was opening 2,000 new restaurants each
year, an average of one every five hours.
In 1993, a new region was added to the empire when the first
McDonald's in the Middle opened in Tel Aviv, Israel.
As the company entered new markets, it showed increasing
flexibility with respect to local food preferences and customs. In
Israel, for example, the first kosher McDonald's opened in a
Jerusalem suburb in 1995. In Arab countries, the restaurant chain
used "Halal" menus.
McDonald's entered India for the first time in 1996, where it
offered a Big Mac made with lamb called the Maharaja Mac.
Overall, the company derived increasing percentages of its revenue
and income from outside the Un ited States. In 1992 about two -
thirds of systemwide sales came from U.S. McDonald's, but by 1997
that figure was down to about 51 percent. Similarly, the operating
income numbers showed a reduction from about 60 percent derived
from the United States in 19 92 to 42.5 percent in 1997.
The company made several notable blunders in the United States in
the 1990s.
A seemingly weakened McDonald's was the object of a Burger King
offensive when the rival fast-food maker launched the Big
King sandwich, a Big Mac clone. Meanwhile, internal taste tests
revealed that customers preferred the fare at Wendy's and Burger
King.
In response to these difficulties, McDonald's drastically cut back on
its U.S. expansion. Plans to open hundreds of smaller restaurants
in Wal-Mart and gasoline stations were abandoned because test sites
did not meet targeted goals.


Failed turnaround: late 1990s
Following the difficulties of the early and mid -1990s, several
moves in 1998 seemed to indicate a reinvigorated McDonald's.
Announcements were made that McDonald's would improve the
taste of several sandwiches and introduce several new menu items.
McDonald's also said that it would overhaul its food preparation
system in every U.S. restaurant. The new just-in-time system,
dubbed "Made for You," was in developmen t for a number of years
and aimed to deliver to customers "fresher, hotter food"; enable
patrons to receive special-order sandwiches (a perk long offered by
rivals Burger King and Wendy's); and allow new menu items to be
more easily introduced thanks to th e system's enhanced flexibility.
Refurbishing and creating a healthier image: Early 2000s
McDonald's was sued in 2001 after it was revealed that for
flavoring purposes a small amount of beef extract was being added
to the vegetable oil used to cook the f rench fries.
McDonald's soon apologized for any "confusion" that had been
caused by its use of the beef flavouring, and in mid -2002 it reached
a settlement in the litigation, agreeing to donate $10 million
to Hindus, vegetarians, and other affected groups .
McDonald's also had to increasingly battle its public image as a
purveyor of fatty, unhealthy food. McDonald's responded by
introducing low-calorie menu items and switching to a more
healthful cooking oil for its French fries.
McDonald's continued to curtail store openings in 2004 and to
concentrate on building business at existing restaurants.
McDonald's also aimed to pay down debt by $400 million to $700
million and to return approximately $1 billion to shareholders
through dividends and share repurchases
With the new "Forever Young" design (adopted in 2006), the first
major redesign since 1969, McDonald's turned a new page for itself.
Most of new and remodelled restaur ants feature dining zones with
three sections or zones. Free wifi access points were also granted.
Also, harsh colours and hard plastics have been replaced with
custom earth tones and flexible padded fabric. The McDonald's
menu has been tweaked to offer a larger variety of what the
corporation refers to as more healthy food.


2010s
In July 2011, McDonald's announced that their largest restaurant in
the world will be built on the 2012 London Olympics site. The
restaurant will contain over 1,500 seats and is half the length of an
American Football field. Over 470 staff will be employed serving
on average (during the 2012 Olympics) 100,000 portions of fries,
50,000 Big Macs and 30,000 Milkshakes. This restaurant will
overshadow the current largest McDonald's in the world in Moscow,
Russia. In January 2012, the company announced revenue for 2011
reached an all-time high of $27 billion, and that 2400 restaurants
would be updated and 1300 new ones opened worldwide.
LIST OF PRODUCTS
Burgers
All beef patties are seasoned, consisting primarily of salt and black
pepper.

Big Mac: Along with the Quarter Pounder with cheese, this is one
of the two McDonald's signature menu items, introduced in 1967 as
a response to the flagship burger at Big Boy restaurants. Two 1.6-
ounce ground beef patties, special Big Mac sauce, shredded iceberg
lettuce, cheese, two gherkin slices, and re-hydrated onions on a
toasted sesame seed bun, with an additional middle bun separating
both beef patties.

Big N' Tasty: The Big N' Tasty consists of a seasoned quarter -
pound beef patty with ketchup, mayonnaise, slivered onions, two
dill pickle slices, leaf lettuce, and one tomato slice on a sesame
seed bun.

Quarter Pounder: Along with the Big Mac, this is one of the two
McDonald's signature menu items. 4 -ounce of ground beef patty
with ketchup, mustard, slivered onions, two gherkin slices, and two
slices of cheese.

Hamburger and cheeseburger: A 45 g ground beef patty, with
ketchup, mustard, a single dill pickle, re-hydrated onions, on a
toasted bun. Also sold as a double or triple, adding an extra pickle
slice for each beef patty added

Double Cheeseburger: It has two 45 g ground beef patties, with
ketchup, mustard, two slices of dill pickle, re-hydrated onions, and
two pieces of cheese on a toasted bun.

McDouble: It similar to a Double Cheeseburger, but with just one
slice of cheese. It was reintroduced as a permanent dollar -menu
item in December 2008.

Daily Double: Similar to the double cheeseburger, however the
toppings are different. The Daily Double is made with lettuce,
tomato, slivered onions, and mayonnaise. It also has only one slice
of cheese, rather than the two slices that are on the double
cheeseburger.
The Big N' Tasty: It was introduced in 1997 and has beef patty
with ketchup, cheese, mayonnaise with a grill flavouring, diced
onions, two pickles, leaf lettuce, kebab meat and a tomato slice, on
a toasted bun. It was devised to resemble Burger
King's Whopper sandwich.

McFeast: A hamburger with lettuce, tomato, and mayonnaise, the
McFeast contains a quarter pounder patty, lettuce, and modified
mayonnaise with lemon juice, ketchup, onion and tomato.

Chicken, Fish, Pork
McChicken: It is a mildly spicy chicken sandwich. Made from
ground white meat chicken, mayonnaise, and shredded lettuce, on a
toasted bun. It still remains one of the biggest sellers, just behind
the Big Mac.

Premium chicken sandwiches : The Classic is a rebranding of the
Crispy Chicken and Chicken McGrill sandwiches, with mayonnaise,
leaf lettuce, and a tomato slice . All are served on a whole-grain
roll, with either a grilled or crispy chicken breast.

Southern Style Chicken Sandwich : A southern-style fried chicken
breast filet, on a steamed bun, dre ssed with butter and two pickles.

Snack Wrap: McDonald's version of a wrap made with white
meat chicken breast, lettuce, shredded Cheddar
cheese and Monterey Jack cheese, and a sauce, wrapped in a soft
flour tortilla. There is also a Mac Snack Wrap which features the
fixings of the Big Mac, but without the bun and wrapped in a
tortilla shell, and uses one half of a piece of quarter meat.

Chicken Fajita: Chicken, cheese, red and green bell peppers, and
diced onions in a flour tortilla. Comes with Picante sauce packets
on request, which is available in mild and spicy.

Chicken McNuggets: Introduced in 1980 as a replacement for the
McChicken, these are small chicken chunks served with dipping
sauces of Barbecue, Sweet n' Sour, Honey, and Hot Mustard. In
2011, 4 new dipping sauces were introduced and added to the
lineup: Sweet Chili, Honey Mustard, Spicy Buffalo, and Creamy
Ranch.
Chicken Selects: McDonald's version of chicken strips. They
include choices of spicy buffalo, creamy ranch, Honey Mustard,
and Chipotle barbecue dipping sauces; sauce sele ctions in the UK
are Smokey barbecue, sour cream and sweet chilli sauce.

Filet-O-Fish: It is a whitefish fillet with tartar sauce and a half
slice of cheese, on a steamed bun.

McRib: It is a sandwich featuring boneless pork with barbecue
sauce, slivered onions, and pickles.

McArabia: There are two versions of the McArabia: Grilled
chicken and grilled kofta (beef with spices). Both are served with
lettuce, tomatoes, onions, and garlic mayonnaise in addition to two
small patties of grilled chicken or kofta, all wrapped in an Arabic
style pita bread. The McArabia has been very well received
throughout the Middle East.

Chicken McBites: They are Popcorn chicken breast with "home-
style seasoning”. Dipping sauces include ranch, Sweet n' Sour,
Tangy BBQ, Chipotle BBQ, and Honey Mustard.

Fish McBites: Similar to the Chicken McBites, these are small
pieces of flaky whitefish dipped in batter and fried until golden
brown, and served with tartar sauce for dipping.

Salads and side orders
McDonald's first introduced salads to its menu in 1985. The
Premium Salads all are a mixture of iceberg lettuce and a special
lettuce assortment, with cherry tomatoes and different toppings to
differentiate them; additionally all salads can be topped with warm
grilled or crispy chicken. All of its salads are part of McDonald's
move towards creating a healthier image.

McDonald's sells French fries as its primary side order. They also
sell potato wedges, a type o f French fry that is thick cut and wedge
shaped, fried onion pieces and onion rings.
CORPORATE OVERVIEW
Facts and figures
McDonald's restaurants are found in 119 countries and territories
around the world and serve 58 million customers each day.
McDonald’s operates over 31,000 restaurants worldwide, employing
more than 1.5 million people. The companies also operate other
restaurant brands, such as Piles Café.
Focusing on its core brand, McDonald's began divesting itself of
other chains it had acquired during the 1990s. The company owned
a majority stake in Chipotle Mexican Grill until October 2006,
when McDonald's fully divested from Chipotle through a stock
exchange. Until December 2003, it also owned Donatos Pizza. On
August 27, 2007, McDonald's sold Boston Market to Sun Capital
Partners. Notably, McDonald's has increased shareholder dividends
for 25 consecutive years, making it one of the S&P 500 Dividend
Aristocrats.


Types of restaurants
Most standalone McDonald's restaurants offer both counter service
and drive-through service, with indoor and sometimes outdoor
seating. Drive-Thru, Auto-Mac, Pay and Drive, or "McDrive" as it
is known in many countries, often has separate stations for placing,
paying for, and picking up orders, though the latter two steps are
frequently combined; it was first introduced in Arizona in 1975,
following the lead of other fast -food chains. The first such
restaurant in Britain opened at Fallowfield, Manchester in 1986.
In some countries, "McDrive" locations near highways offer no
counter service or seating. In contrast, locations in high -density city
neighbourhoods often omit drive-through service. There are also a
few locations, located mostly in downtown districts that offer Walk -
Thru service in place of Drive-Thru.
To accommodate the current trend for high quality coffee and the
popularity of coffee shops in general, McDonald's
introduced McCafé, a café-style accompaniment to McDonald's
restaurants in the style of Starbucks. McCafé is a concept created
by McDonald's Australia, starting with Melbourne in 1993. Today,
most McDonald's in Australia have McCafés located within the
existing McDonald's restaurant. In Tasmania, there are McCafés in
every store, with the rest of the states quickly following suit. After
upgrading to the new McCafé look and feel, some Australian stores
have noticed up to a 60% increase in sales. As of the end of 2003
there were over 600 McCafés worldwide.
Some locations are connected to gas stations/convenience
stores, while others called McExpress have limited seating and/or
menu or may be located in a shopping mall. Other McDonald's are
located in Wal-Mart stores. McStop is a location targeted at
truckers and travellers which may have services found at truck
stops.
Since 1997, the only Kosher McDonald's in the world that is not
in Israel is located in the "Abasto de Buenos Aires", Argentina.


Global operations
McDonald's has become emblematic of globalization, sometimes
referred to as the "McDonaldization" of society.
The Economist newspaper uses the "Big Mac Index": the
comparison of a Big Mac's cost in various world currencies can be
used to informally judge these currencies' purchasing power parity.
Norway has the most expensive Big Mac in the world as of J uly
2011, while the country with the least expensive Big Mac is India .
Some observers have suggested that the company should be given
credit for increasing the standard of service in markets that it
enters. A group of anthropologists in a study entitled Golden Arches
East looked at the impact McDonald's had on East Asia, and Hong
Kong in particular.
When it opened in Hong Kong in 1975, McDonald's was the first
restaurant to consistently offer clean restrooms, driving customers
to demand the same of other restaurants and institutions.
McDonald's has taken to partnering up with Sinopec, the second
largest oil company in the People's Republic of China, as it takes
advantage of the country's growing use of personal vehicles by
opening numerous drive-thru restaurants.
McDonald's has opened a McDonald's restaurant and McCa fé on the
underground premises of the French fine arts museum, the Louvre.
The company stated it will open vegetarian -only restaurants in India
by mid-2013.
Redesign
In 2006, McDonald's introduced its "Forever Young" brand by
redesigning all of its restaurants, the first major redesign since the
1970s. McDonald's has invested $1 billion to redesign nearly all of
the 14,000 restaurants by 2015.
The goal of the redesign is to be more like a coffee shop, similar to
Starbucks. The design includes wooden tables, faux -leather chairs,
and muted colours; the red is mut ed to terra cotta, the yellow was
turned golden for a more "sunny" look, and olive and sage green
were also added.
To warm up its look, the restaurants have less plastic and more
brick and wood, with modern hanging lights to produce a softer
glow.
Many restaurants now feature free Wi-Fi and flat screen TVs. Other
upgrades include double drive-thrus, flat roofs instead of the angled
red roofs, and replacing fibre glass with wood. Also, instead of the
familiar golden arches, the restaurants now feature "semi -swooshes"
(half of a golden arch), similar to the Nike swoosh.


Business model
McDonald's Corporation earns revenue as an investor in properties,
a franchiser of restaurants, and an operator of restaurants.
Approximately 15% of McDonald's restaurants are owned and
operated by McDonald's Corporation directly. The remainder are
operated by others through a variety of franchise agreements and
joint ventures.
The McDonald's Corporation's business model is slightly different
from that of most other fast-food chains. In addition to
ordinary franchise fees and marketing fees, which are calculated as
a percentage of sales, McDonald's may also collect rent, which may
also be calculated on the basis of sales.
As a condition of many franchise agreements, which vary by
contract, age, country, and location, the Corporation may own or
lease the properties on which McDonald's franchises are located. In
most, if not all cases, the franchisee does not own the location of its
restaurants.
The United Kingdom and Ireland business model is different than
the U.S, in that fewer than 30% of restaurants are franchised, with
the majority under the ownership of the company. McDonald's
trains its franchisees and others at Hamburger University in Oak
Brook, Illinois.
In other countries, McDonald's restaurants are operated by joint
ventures of McDonald's Corporation and other, local entities or
governments.
As a matter of policy, McDonald's does not make dire ct sales of
food or materials to franchisees, instead organizing the supply of
food and materials to restaurants through approved third party
logistics operators.
According to Fast Food Nation by Eric Schlosser, nearly one in
eight workers in the U.S. have at some time been employed by
McDonald's. It also states that McDonald's is the largest private
operator of playgrounds in the U.S., as well as the single largest
purchaser of beef, pork, potatoes, and apples. The selection of
meats McDonald's uses varies with the culture of the host country.
MARKETING MIX
The marketing mix of a company consists of the various elements as
follows which form the core of a company’s marketing system and
hence helps to achieve marketing objectives. The marketing mix of
McDonald’s is as follows:-

Product: - McDonald’s places considerable emphasis on developing a
menu which customers want. Market research establishes exactly what
this is. However, customers’ requirements change over time. In order
to meet these changes, McDonald’s has introduced new products and
phased out old ones, and will continue to do so. Care is taken not to
adversely affect the sales of one choice by introducing a new choice,
which will cannibalise sales from the existing one (trade off).
McDonald’s knows that items on its menu will var y in popularity.
Their ability to generate profits will vary at different points in their
cycle. In India McDonalds has a diversified product range focussing
more on the vegetarian products as most consumers in India are
primarily vegetarian. The happy mea l for the children is a great seller
among others.

Price: - The customer’s perception of value is an important
determinant of the price charged. Customers draw their own mental
picture of what a product is worth. A product is more than a physical
item; it also has psychological connotations for the customer. The
danger of using low price as a marketing tool is that the customer may
feel that quality is being compromised. It is important when deciding
on price to be fully aware of the brand and its integrit y.
In India McDonalds classifies its products into 2 categories namely
the branded affordability (BA) and branded core value products
(BCV). The BCV products mainly include the McVeggie and
McChicken burgers that cost Rs 50 -60 and the BA products include
McAloo tikki and Chicken McGrill burgers which cost Rs20 -30. This
has been done to satisfy consumers which different price perceptions.

Promotion :- The promotions aspect of the marketing mix covers all
types of marketing communications .One of the methods employed is
advertising, Advertising is conducted on TV, radio, in cinema, online,
using poster sites and in the press for example in newspapers and
magazines. Other promotional methods include sales promotions,
point of sale display, merchandising, direc t mail, loyalty schemes,
door drops, etc. The skill in marketing communications is to develop a
campaign which uses several of these methods in a way that provides
the most effective results. For example, TV advertising makes people
aware of a food item an d press advertising provides more detail. This
may be supported by in -store promotions to get people to try the
product and a collectable promotional device to encourage them to
keep on buying the item.
At McDonalds the prime focus is on targeting children . In happy
meals too which are targeted at children small toys are given along
with the meal. Apart from this, various schemes for winning prices by
way of lucky draws and also scratch cards are given when an order is
placed on the various mean combos.

Place: - Place, as an element of the marketing mix, is not just about
the physical location or distribution points for products. It
encompasses the management of a range of processes involved in
bringing products to the end consumer. McDonald’s outlets are v ery
evenly spread throughout the cities making them very accessible.
Drive in and drive through options make McDonald’s products further
convenient to the consumers.

Other than the main four elements mentioned above there are a
few other elements too in the marketing mix, which are as
follows:-

People:-The employees in McDonald’s have a standard uniform and
McDonald’s specially focuses on friendly and prompt service to its
customers from their employees.

Process:-The food manufacturing process at McDonald’s is
completely transparent i.e. the whole process is visible to the
customers. In fact, the fast food joint allows its customers to view and
judge the hygienic standards at McDonald’s by allowing them to enter
the area where the process takes pla ce. The customers are invited to
check the ingredients used in food.

Physical evidence: - McDonalds focuses on clean and hygienic
interiors of is outlets and at the same time the interiors are attractive
and the fast food joint maintains a proper decorum at its joints.
SWOT ANALYSIS
Strengths
  McDonald’s holds a very strong brand name worldwide.
  They have large partnerships with other companies that provide
  them with their desired products; this increases the goodwill of
  the company.
  McDonald’s is one of the most reputed firms who are socially
  responsible.
  Loyal employees & management & customer are their biggest
  strength.
  McDonald’s makes sure that cultural & regional barriers are kept
  in mind while providing food to different countries.
  Clean environment and play areas for children where they can
  enjoy their time.


Weakness
  The weakness that hits the list of employee turnover rate. Every
  year many of their employees are fired out of the restaurant.

  McDonalds mostly advertises products and food items that
  targets children.

  Health conscious people often complain that they do not provide
  us with the organic and healthy food. This becomes their
  weakness when they get in the complaints.

  They also face quality issue at times. This affects t he business
  as they are running the outlet worldwide, if one franchise gets
  affected others also get a bad name.
Opportunities
It can open up online services for their customers so that they
can easily order their desired meals sitting at home .

Discounts given on every food item may help them gain more
customers.

They can go for a joint venture with the retailers they work with .

They can introduce healthy hamburgers and healthy drinks for
the people who are health conscious.

In order to be environment friendly, they can use packing
material which can be recycled later or material that does not
create pollution.


Threats
Emerging competition of similar outlets is becoming a problem
for McDonalds.

Health issue also becomes a problem when it comes to food.

As it is a multinational food outlet, fluctuations in the currency
of other countries becomes a problem for such companies .

Recession in any country would definitely affect the whole outlet
worldwide.

People facing heart problems and obesity accuse McDonalds for
not providing them with the healthy food .

They have a threat of local food outlets in different countries .

McDonalds is operating in a fully fledged economy where
competition is increasing day by day therefore they should wor k
effectively to overcome their drawbacks because of the recession.
COMPANY’S FINANCIAL INFORMATION
        Company Name:                      McDonald's Corporation
        Ticker Symbol:                     MCD
        Web Address:                       www.mcdonalds.com
        CEO:                               Mr. Donald Thompson
        No. of Employees:                  420,000
        Common Issue Type:                 CS
        Business Description:              McDonald's Corporation franchises and operates McDonald's
                                           restaurants in the food service industry. The Company and its
                                           franchisees purchase food, packaging, equipment and other
                                           goods from numerous independent suppliers.


        Industry Information: LEISURE - Restaurants
Price                     Day Change                              Bid     Ask      Open           High    Low       Volume
87.18                                      -0.02                    -        -      87.43 87.43 86.76                    3658828
Market Cap (mil)          Shares Outstanding (mil)                Beta    EPS      DPS            P/E     Yield     52-Wks-Range
87,526.7                            1,004.0                       0.39 5.27          2.53          16.4     3.5       102.22 - 83.31
        KEY FIGURES (Latest Twelve Months -                              Balance Sheet (at a glance) in Millions
        LTM)
        Yesterday's Close                          87.06      $
        PE Ratio - LTM                                16.4
        Market Capitalisation                      87,526.7 mil
        Latest Shares Outstanding                   1,004.0 mil

        Earnings pS (EPS)                              5.27 $

        Dividend pS (DPS)                              2.53 ¢

        Dividend Yield                                  3.5 %

        Dividend Payout Ratio                            48 %
                                                                         DIVIDEND INFO
                                                                         Dividend Declared Date                     09/20/2012
        Revenue per Employee                        64,300 $
                                                                         Dividend Ex-Date                           11/28/2012
        Effective Tax Rate                             31.3 %            Dividend Record Date                       12/02/2012

        Float                                       1,015.3 mil          Dividend Pay Date                          12/16/2012
                                                                         Dividend Amount                                  770
        Float as % of Shares Outstanding               99.9 %
                                                                         Type of Payment                          Cash Payment
        Foreign Sales                               18,478 mil           Dividend Rate                                    3.08

        Domestic Sales                                8,528 mil          Current Dividend Yield                            3.5
                                                                         5-Y Average Dividend Yield                        3.1
        Selling, General & Adm/tive (SG&A) as %
        of Revenue
                                                      9.10    %          Payout Ratio                                     48.0
        Research & Devlopment (R&D) as % of                              5-Y Average Payout Ratio                         53.0
        Revenue
                                                      0.00    %
                                                                         Share price performance previous 3 years
        Gross Profit Margin                           44.7    %
        EBITDA Margin                                 35.6    %
        Pre-Tax Profit Margin                         29.1    %
        Assets Turnover                                 0.8   %
Return on Assets (ROA)                         16.1      %
Return on Equity (ROE)                         39.2      %
Return on Capital Invested (ROCI)              20.4      %
Current Ratio                                    1.0
Leverage Ratio (Assets/Equity)                   2.4
Interest Cover                                 16.6
Total Debt/Equity (Gearing Ratio)              0.96
LT Debt/Total Capital                          48.0      %
Working Capital pS                             0.06      $
Cash pS                                        2.17      $     Share price performance intraday
Book-Value pS                                 13.83      $
Tangible Book-Value pS                        11.10      $
Cash Flow pS                                   6.89      $
Free Cash Flow pS                              1.25      $

KEY FIGURES (LTM): Price info
Price/Book Ratio                               6.30
Price/Tangible Book Ratio                      7.85
Price/Cash Flow                                12.6
Price/Free Cash Flow                           69.9
P/E as % of Industry Group                     42.0      %
P/E as % of Sector Segment                     77.0      %

PRICE/VOLUME             High        Low         Close       % Price Chg    % Price Chg vs. Mkt.      Avg. Daily Vol          Total Vol
1 Week                       -         -             -           0.0                101                    54,041              66,217
4 Weeks                  87.43       83.31       84.74           2.7                101                    57,129              856,929
13 Weeks                 94.16       83.31       91.02          -4.4                98                     61,288             3,554,700
26 Weeks                 94.16       83.31       87.75          -0.8                93                     59,419             7,189,758
52 Weeks                 102.22      83.31       98.03          -11.2               79                     59,272             14,521,666
YTD                      102.22      83.31           -          -13.2               77                     59,774             13,807,695
Moving Average           5-Days     10-Days    10-Weeks       30-Weeks           200-Days            Beta (60-Mnth)       Beta (36-Mnth)
                         86.61       86.31       88.25          89.31              91.74                    0.39                  0.31



                          5-Year                              3-Year             YTD vs.       Curr Qtr vs.          Annual vs.
GROWTH RATES                          R² of 5-Year Growth      CHANGES
                          Growh                               Growth            Last YTD       Qtr 1-Yr ago         Last Annual
Revenue                     3.81              77.6             Revenue %
                                                               6.66                2.1             -0.2                12.2
Income                      20.17             81.1             Earnings %
                                                               9.78                -1.4            -3.5                11.3
Dividend                    15.36             94.7             10.16%
                                                               EPS                 1.0             -1.4                15.1
Capital Spending            6.97              NA               10.52$
                                                               EPS                 0.04            -0.02               0.69
R&D                         0.00              NA               0.00
Normalized Inc.             11.58             NA               9.79




SOLVENCY RATIOS
SHORT-TERM SOLVENCY RATIOS
(LIQUIDITY)
Net Working Capital Ratio                  2.71
Current Ratio                               1.3
Quick Ratio (Acid Test)                     1.0
Liquidity Ratio (Cash)                     0.67
Receivables Turnover                       21.5

Average Collection Period                   17

Working Capital/Equity                      6.2

Working Capital pS                         0.88

Cash-Flow pS                               6.77

Free Cash-Flow pS                          2.09


FINANCIAL STRUCTURE RATIOS
Altman's Z-Score Ratio                     4.85

Financial Leverage Ratio (Assets/Equity)    2.3

Debt Ratio                                 56.4

Total Debt/Equity (Gearing Ratio)          0.87

LT Debt/Equity                             0.84

LT Debt/Capital Invested                   56.9

LT Debt/Total Liabilities                  65.2

Interest Cover                             17.3

Interest/Capital Invested                  1.67
Attn: Replace this page with the 30 th page (as displayed
on the pdf reader and pg no.27 as displayed in the doc) of
the Consolidated Balance Sheet of McDonald’s, which you
can find on the link below.

http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Inve
stors/investors-2010-annual-report.pdf
QUESTIONNAIRE (Attn: Attach minimum 5 copies)
Name: ____________________                    age: ________

Gender: _________                        occupation: _______________

Please spare a few minutes of your valuable time to answer this
simple Questionnaire.

1. How often do you visit fast food restaurants?
   Everyday     Alternate days     Weekends      Once in a month           Once every three months

2. Which of the following fast food chain do you visit the most?
   Subway        McDonald’s        KFC        Pizza Hut       Burger King

3. Are you satisfied with the services provided by them
   Yes         Sometimes        Not at all satisfied

4. How often do you eat at McDonald’s?
   Everyday     Alternate days  Weekends              Once in a month      Once every three months

5. Which among the following is your favourite product at McDonald’s?
   Big Mac Burger  Mac Veggie      Big Mac Chicken Burger  Maharaj Mac                 Mac Fileto Fish

6. Is the product line of McDonald’s adequate?
   Yes        No         Haven’t Thought About That

7. What time of the day do you prefer to eat at McDonald’s?
   Morning        Noon      Evening       Night

8. What is the main problem you faced at McDonald’s?
   Long queues    Wrong orders     Hygienic problems Other problems                   No problems

9. What are the unique selling prepositions of McDonald’s?
   Product variety  Hygiene       Ambience      Quick service           Location          Other

10. Do you think McDonald’s will be triumphant over all its competitors?
    Yes        Maybe      Haven’t Thought About That     Never
                                                                                       Thank You!!
SURVEY RESPONSE ANALYSIS

    Frequency of visits made to fast food
                  centers
                                  Everyday

                                  Alternate days

                                  Weekends

                                  Once in a month



      Fast food chain visited the most

                                      Subway
                                      MacDonald's
                                      KFC
                                      Pizza Hut
                                      Burger King




     Favourite product at Macdonald’s

                                   Big Mac Burger


                                   Mac Veggie


                                   Big Mac
                                   Chicken Burger
                                   Maharaj Mac


                                   Mac Fileto Fish
Time of the day prefered to eat at
           Macdonald’s


                                         Morning
                                         Noon
                                         Evening
                                         Night




Main problem faced at McDonald’s


                               Long queues
                               Wrong orders
                               Hygienic problems
                               Other problems
                               No problems




The unique selling prepositions of
          MacDonald’s

                                 Product variety
                                 Hygiene
                                 Ambience
                                 Quick service
                                 Location
                                 Other
THE TOP FIVE REASONS WHY
            MCDONALD’S IS SO POPULAR
1. The System
 This is the first thing that makes McDonald's so successful, by
having an effective and efficient system in place, which exploits the
minimum wage labour available, in the form of young teenagers who
are just looking to make some cash or pick up fundamental job skills.


2. Convenience
The second reason why McDonald's is so popular is because it's
everywhere. There a McDonald's at every corner of the map, at every
major shopping centre, district, highway, freeway, every place which
attracts even, remotely more than 10 people, will have a McDonald's
restaurant not too far from them. McDonald's is having the best Real
Estate locations around the world which makes it so popular around
the globe.

3. Likability and Familiarity
The Golden Arches, the Big M. Ronald McDonald, happiness and fun;
all these are the associations with McDonald’s which makes it so
familiar by being so familiar to all age groups and to everybody.


4. The Menu
McDonald's has one of the most diverse menus, targeting all ages
from little kids to old pensioners, and everyone else in between.
There's Big Macs for the big kids and junior burgers for the little. The
menu's versatility is accentuated when they introduced the "healthy
tick" concept, which target those people who wants to watch
what they eat (even though it doesn't make sense to go to a fast food
restaurant to eat healthy).

5. Consistency
The last reason is, McDonald's is so successful because of its
consistency. The expectations that we have about everything
surrounding the store are fulfilled in almost every store nationwide,
worldwide. So everybody knows what they're getting into before they
come to McDonald's, and by being so consistent, it has a solid
reputation to uphold.
CONCLUSION
What started as a simple food stand on Huntington drive, California
in 1937, through the ages have become a billion Dollar corporation
and the world’s second largest fast -food chain. When analysed, one
would understand that McDonald’s had a stable growth in the past
years.

The credits of building it into one of world’s la rgest fast food
operation can be given to Ray Kroc who took over McDonald’s
from its establishers, modernised and expanded it to suit the
contemporary trend. Today McDonald’s has a net worth of $15.15
billion.

Through this project report and market survey we saw the how
McDonald’s was formed, its history and the present position. We
also its list of various products offered and the corporate profile.

Through the marketing mix, we saw how they make use of their
product, price, place, promotion mixes. SWOT a nalysis showed us
the strengths and weakness of McDonald’s as well as the
opportunities and threats they have got.

The consolidated financial statement showed us the financial
position of the corporation as of 2011. The questionnaire survey
provided us with a clear picture of the needs, want and expectations
of the consumers of the fast food market in general and McDonald’s
in particular. The respondents also rated the services provided by
the corporation. At last we also saw the top five reasons that make
McDonald’s so popular.

I gladly hope that this project has met its aim.

Let me conclude by quoting this quote by Ray Kroc

"Perfection is very difficult to achieve, and perfection was what I
wanted in McDonald's. Everything else was secondary for me."

                                                         Thank You!!
BIBLIOGRAPHY

www.google.com

www.wikipedia.org

www.macdonalds.com

www.slideshare.net

www.scribd.com

www.marketing91.com

www.infobarrel.com

www.aboutmacdonalds.com

answers.yahoo.com

talkfinanceonline.com




                 ~~~~~~~~~~~~
             Attn: Pictures on the next page!!
Pictures to be attached
Attn: Attach these pictures on the backside of the page
which is adjacent to the relevant page.
Project Report And Market Survey of McDonald’s- Cbse class 12 Entrepreneurship Project
Project Report And Market Survey of McDonald’s- Cbse class 12 Entrepreneurship Project
Logo of McDonald’s




McDonald's world headquarters, Oakbrook, United States




       Ray Kroc- The franchiser of McDonald's
The first McDonald’s restaurant opened by Patrick McDonald, in 1937




                       McDonald’s Speedee mascot




Downey’s restaurant; the oldest operating McDonald's in the world.
World-famous Golden Arches logo




     The legendary Big Mac
The Chicken McNuggets
The Maharaja Mac which is offered in India
An exterior view of the world's largest McDonald's restaurant built on 2012 London Olympics site
The Big Mac




The Big n Tasty
The premium chicken sandwich




  The McDonald's Chicken Fajita
McArabia




McDonald’s Salads              McDonald’s French fries
A map showing every continent with at least one McDonald's restaurant
A modern McDonald’s restaurant in London
Project Report And Market Survey of McDonald’s- Cbse class 12 Entrepreneurship Project
Project Report And Market Survey of McDonald’s- Cbse class 12 Entrepreneurship Project
Project Report And Market Survey of McDonald’s- Cbse class 12 Entrepreneurship Project

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Project Report And Market Survey of McDonald’s- Cbse class 12 Entrepreneurship Project

  • 1. ENTREPRENEURSHIP PROJECT PROJECT REPORT AND MARKET SURVEY OF MCDONALD’S Name of the school : SHARJAH INDIAN SCHOOL NAME OF THE STUDENT : DAN K. JOHN CLASS : XII-E CBSE ROLL NO. : ACADEMIC YEAR : 2012-2013 TEACHER IN CHARGE : MR. JAMES THOMAS
  • 2. INDEX SL. TITLE SOURCE OF THE PAGE SIGN OF NO. PROJECT NO. THE TEACHER 1 ACKNOWLEDGEMENT - 2 FAST FOOD www.wikipedia.org RESTAURANT AN INTRODUCTION 3 MCDONALD’S www.wikipedia.org AN INTRODUCTION 4 HISTORY OF www.wikipedia.org MCDONALD’S www.macdonalds.com 5 LIST OF PRODUCTS www.wikipedia.org 6 CORPORATE www.wikipedia.org OVERVIEW 7 MARKETING MIX www.marketing91.com 8 SWOT ANALYSIS www.slideshare.net www.scribd.com talkfinanceonline.com 9 CONSOLIDATED www.aboutmacdonalds.com BALANCE SHEET OF MCDONALD’S 10 QUESTIONNAIRE www.slideshare.net www.scribd.com
  • 3. 11 SURVEY RESULT ANALYSIS - 12 THE TOP FIVE www.infobarrel.com REASONS WHY MCDONALD’S IS SO POPULAR 13 CONCLUSION - 14 BIBLIOGRAPHY -
  • 4. ACKNOWLEDGEMENT I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would like to extend my sincere thanks to all of them. I thank my God for providing me with everything that I required in completing this project. I am highly indebted to the Teacher in Charge Mr. James Thomas for his guidance and constant supervision as well as for providing necessary information regarding the project & also for his support in completing the project. I would like to express my gratitude towards my parents for their kind co- operation and encouragement which helped me in the completion of this project. I would like to express my special gratitude and thanks to industry persons for giving me such attention and time. My thanks and appreciations also go to my classmates in developing the project and to the people who have willingly helped me out with their abilities.
  • 5. FAST FOOD RESTAURANT An INTRODUCTION A fast food restaurant, also known as a quick service restaurant (QSR) within the industry itself, is a specific type of restaurant characterized both by its fast food cuisine and by minimal table service. Food served in fast food restaurants typically caters to a " meat- sweet diet" and is offered from a limited me nu; is cooked in bulk in advance and kept hot; is finished and packaged to order; and is usually available ready to take away, though seating may be provided. Fast food restaurants are usually part of a restaurant chain or franchise operation, which provisions standardized ingredients and/or partially prepared foods and supplies to each restaurant through controlled supply channels. Arguably the first fast food restaurants originated in the United States with A&W in 1916 and White Castle in 1921. Today, American-founded fast food chains such as McDonald's and KFC are multinational corporations with outlets across the globe. Variations on the fast food restau rant concept include fast casual restaurants and catering trucks. Fast casual restaurants have higher sit-in ratios, and customers can sit and have their orders brought to them. Catering trucks often park just outside worksites and are popular with factory workers. Some trace the modern history of fast food in America to July 7, 1912, with the opening of a fast food restaurant called the Automat in New York. The Automat was a cafeteria with its prepared foods behind small glass windows and coin -operated slots. Joseph Horn and Frank Hardart had already opened the first Horn & Hardart Automat in Philadelphia in 1902, but their “Automat” at Broadway and 13th Street, in New York City, created a sensation. Numerous Automat restaurants were built around the country to deal with the demand. Automats remained extremely popular throughout the 1920s and 1930s. The company also popularized the notion of “take-out” food, with their slogan “Less work for Mother”.
  • 6. Modern commercial fast food is highly processed and prepar ed on a large scale from bulk ingredients using standardized cooking and production methods and equipment. It is usually rapidly served in cartons or bags or in a plastic wrapping, in a fashion which reduces operating costs by allowing rapid product identi fication and counting, promoting longer holding time, avoiding transfer of bacteria, and facilitating order fulfilment. In most fast food operations, menu items are generally made from processed ingredients prepared at a central supply facilities and then shipped to individual outlets where they are cooked (usually by grill, microwave, or deep-frying) or assembled in a short amount of time either in anticipation of upcoming orders (i.e., "to stock") or in response to actual orders (i.e., "to order"). Follow ing standard operating procedures, pre-cooked products are monitored for freshness and disposed of if holding times become excessive. This process ensures a consistent level of product quality, and is key to delivering the order quickly to the customer and avoiding labour and equipment costs in the individual stores. To make quick service possible and to ensure accuracy and security, many fast food restaurants have incorporated hospitality point of sale systems. This makes it possible for kitchen crew people to view orders placed at the front counter or drive through in real time. Wireless systems allow orders placed at drive through speakers to be taken by cashiers and cooks. Drive through and walk through configurations will allow orders to be taken at one register and paid at another. Modern point of sale systems ca n operate on computer networks using a variety of software programs. Sales records can be generated and remote access to computer reports can be given to corporate offices, managers, trouble -shooters, and other authorized personnel. The aim of this project is to conduct a market study on a thriving fast food restaurant, going deep into its formation, history and growth; then to analyse the reason that make it so popular. In this project we will be conducting a market study on the global fast food giant McDonald’s.
  • 7. MCDONALD’S AN INTRODUCTION McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald ; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. Ray Kroc subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated either by a franchisee, or an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion. McDonald's primarily sells hamburgers, cheese burgers, chicken, French fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, wraps, smoothies and fruits. In July 2011, McDonald's announced that their largest restaurant in the world will be built on the 2012 London Olympics site. The restaurant will contain over 1,500 seat s and is half the length of an American Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current largest McDo nald's in the world in Moscow, Russia. In January 2012, the company announced revenue for 2011 reached an all-time high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones opened worldwide.
  • 8. HISTORY OF MCDONALD’S The McDonald's restaurant concept was introduced in San Bernardino, California by Dick and Mac McDonald of Manchester, New Hampshire. It was modified and expanded by their business partner, Ray Kroc, of Oak Park, Illinois, who later bought out the business interests of the McDonald brothers in the concept and went on to found McDonald's Corporation. Early history In 1937, Patrick McDonald opened "The Airdrome", an octagonal food stand, on Huntington Drive in Monrovia, California. In 1940, his two sons, Maurice and Richard ("Mac" and " Dick"), moved the entire building to 1398 North E Streets in San Bernardino, California. The restaurant was renamed "McDonald's Famous Barbeque" and served over forty barbequed items. In 1953, the McDonald brothers began to franchise their successful restaurant, starting in Phoenix, Arizona and Downey and California. The McDonald brothers created Speedee to symbolize the quick and efficient service system that they had devised. Downey's Speedee is one of only a few remaining an d Downey’s restaurant is the oldest operating McDonald's in the world. Recognizing the historic and nostalgic value of the intact 1953 structure, the McDonald's Corporation acquired the store in 1990 and rehabilitated it to a modern but nearly original co ndition. In 1954, Ray Kroc, suggested that they franchise their restaurants throughout the country. He got the rights to set up McDonald's restaurants throughout the country, except in a handful of territories in California and Arizona already licensed by the McDonald brothers. Kroc's first McDonald's restaurant opened in Des Plaines, Illinois, near Chicago, on April 15, 1955, the same day that Kroc incorporated his company as McDonald's Systems, Inc. (which he would later rename McDonald's Corporation). By 1958, there were 34 restaurants. In 1959, however, Kroc opened 68 new restaurants, bringing the total to 102 locations.
  • 9. Phenomenal growth in the 1960s and 1970s In 1960, the McDonald's advertising campaign "Look for the Golden Arches" gave sales a big boost In 1962, McDonald's introduced its now world-famous Golden Arches logo. A year later, the company sold its billionth hamburger and introdu ced Ronald McDonald, a red-haired clown with particular appeal to children. In the early 1960s, McDonald's really began to take off. In 1961 Kroc bought out the McDonald brothe rs for $2.7 million, aiming at making McDonald's the number one fast -food chain in the country. In 1965, McDonald's Corporation went public. In 1985, McDonald's Corporation became one of the 30 companies that make up the Dow Jones Industrial Average. McDonald's success in the 1960s was in large part due to the company's skilful marketing and flexible response to customer demand. In 1968 the now legendar y Big Mac made its debut, and in 1969 McDonald's sold its five billionth hamburger. Two years later, McDonald's restaurants had reached all 50 states. In 1968, McDonald's opened its 1,000th re staurant; Kroc became chairman and remained CEO until 1973. By the late 1960s, many of the candy -striped Golden Arches stores had been modified with enclosed walk -up order areas and limited indoor seating. By June 1969, " mansard roof" building design featuring indoor seating became the standard for McDonald's restaurants. The company pioneered breakfast fast food with the introduction of the Egg McMuffin in 1972 and five years later McDonald's added a full breakfast line to the menu. In 1975, McDonald's opened its first drive-thru window in Sierra Vista, Arizona. This service gave Americans a fast, convenient way to procure a quick meal. Drive-thru sales eventually accounted for more than half of McDonald's systemwide sales. Surviving the 1980s "Burger Wars" In the late 1970s, competition from other hamburger chains such as Burger King and Wendy's began to intensify. A period of aggressive advertising campaigns and price slashing in the early 1980s became known as the "burger wars." Burger King suggested to customers: "have it your way"; Wendy's offered itself as the "fresh alternative". But McDonald's sales and market share continued to grow.
  • 10. During the 1980s, McDonald's further diversified its menu to suit changing consumer tastes. The company introduced the McChicken in 1980. It proved to be a sales disappointment and was replaced with series of different chicken sandwiches a year later. Chicken McNuggets were invented in 1979. By the end of 1983, McDonald's was the second largest retailer of chicken in the world. In 1985, ready-to-eat salads were introduced to lure more health-conscious consumers. The 1980s were the fastest -paced decade yet. Efficiency, combined with an expanded menu, continued to draw customers. McDonald's, already entrenched in the suburbs, began to focus on urban centres and introduced new architectural styles. Despite experts' claims that the fast -food industry was saturated, McDonald's continued to expand. The first generation raised on restaurant food had grown up. Eating out had become a habit rather than a break in the routine, and McDonald's relentless marketing continued to improve sales. McDonald's growth in the United States was mirrored by its stunning growth abroad. By 1991, 37 percent of system wide sales came from restaurants outside the United States. McDonald's opened its first foreign restaurant in British Columbia, Canada, in 1967. By the early 1990s the company had established itself in 58 foreign countries and operated more than 3,600 restaurants outside the United States, through wholly owned subsidiaries, joint ventures, and franchise agreements. Its strongest foreign markets were Japan, Canada, Germany, Great Britain, Australia, and France. Braille menus were introduced in 1979, and picture menus in 1988. Experiments were conducted to find new technology and to research new markets to keep McDonald's in front of its competition. New locations such as hospitals and military bases were tapped as sites for new restaurants. 1990s: Growing pains The 10,000th unit was opened in April 1988.It took McDonald's 33 years to open its first 10,000 restaurants. Incredibly, the company reached the 20,000-restaurant mark in only eight more years, in mid-1996. By the end of 1997 the total had surpassed 23,000, and by that time McDonald's was opening 2,000 new restaurants each year, an average of one every five hours. In 1993, a new region was added to the empire when the first McDonald's in the Middle opened in Tel Aviv, Israel.
  • 11. As the company entered new markets, it showed increasing flexibility with respect to local food preferences and customs. In Israel, for example, the first kosher McDonald's opened in a Jerusalem suburb in 1995. In Arab countries, the restaurant chain used "Halal" menus. McDonald's entered India for the first time in 1996, where it offered a Big Mac made with lamb called the Maharaja Mac. Overall, the company derived increasing percentages of its revenue and income from outside the Un ited States. In 1992 about two - thirds of systemwide sales came from U.S. McDonald's, but by 1997 that figure was down to about 51 percent. Similarly, the operating income numbers showed a reduction from about 60 percent derived from the United States in 19 92 to 42.5 percent in 1997. The company made several notable blunders in the United States in the 1990s. A seemingly weakened McDonald's was the object of a Burger King offensive when the rival fast-food maker launched the Big King sandwich, a Big Mac clone. Meanwhile, internal taste tests revealed that customers preferred the fare at Wendy's and Burger King. In response to these difficulties, McDonald's drastically cut back on its U.S. expansion. Plans to open hundreds of smaller restaurants in Wal-Mart and gasoline stations were abandoned because test sites did not meet targeted goals. Failed turnaround: late 1990s Following the difficulties of the early and mid -1990s, several moves in 1998 seemed to indicate a reinvigorated McDonald's. Announcements were made that McDonald's would improve the taste of several sandwiches and introduce several new menu items. McDonald's also said that it would overhaul its food preparation system in every U.S. restaurant. The new just-in-time system, dubbed "Made for You," was in developmen t for a number of years and aimed to deliver to customers "fresher, hotter food"; enable patrons to receive special-order sandwiches (a perk long offered by rivals Burger King and Wendy's); and allow new menu items to be more easily introduced thanks to th e system's enhanced flexibility.
  • 12. Refurbishing and creating a healthier image: Early 2000s McDonald's was sued in 2001 after it was revealed that for flavoring purposes a small amount of beef extract was being added to the vegetable oil used to cook the f rench fries. McDonald's soon apologized for any "confusion" that had been caused by its use of the beef flavouring, and in mid -2002 it reached a settlement in the litigation, agreeing to donate $10 million to Hindus, vegetarians, and other affected groups . McDonald's also had to increasingly battle its public image as a purveyor of fatty, unhealthy food. McDonald's responded by introducing low-calorie menu items and switching to a more healthful cooking oil for its French fries. McDonald's continued to curtail store openings in 2004 and to concentrate on building business at existing restaurants. McDonald's also aimed to pay down debt by $400 million to $700 million and to return approximately $1 billion to shareholders through dividends and share repurchases With the new "Forever Young" design (adopted in 2006), the first major redesign since 1969, McDonald's turned a new page for itself. Most of new and remodelled restaur ants feature dining zones with three sections or zones. Free wifi access points were also granted. Also, harsh colours and hard plastics have been replaced with custom earth tones and flexible padded fabric. The McDonald's menu has been tweaked to offer a larger variety of what the corporation refers to as more healthy food. 2010s In July 2011, McDonald's announced that their largest restaurant in the world will be built on the 2012 London Olympics site. The restaurant will contain over 1,500 seats and is half the length of an American Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current largest McDonald's in the world in Moscow, Russia. In January 2012, the company announced revenue for 2011 reached an all-time high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones opened worldwide.
  • 13. LIST OF PRODUCTS Burgers All beef patties are seasoned, consisting primarily of salt and black pepper. Big Mac: Along with the Quarter Pounder with cheese, this is one of the two McDonald's signature menu items, introduced in 1967 as a response to the flagship burger at Big Boy restaurants. Two 1.6- ounce ground beef patties, special Big Mac sauce, shredded iceberg lettuce, cheese, two gherkin slices, and re-hydrated onions on a toasted sesame seed bun, with an additional middle bun separating both beef patties. Big N' Tasty: The Big N' Tasty consists of a seasoned quarter - pound beef patty with ketchup, mayonnaise, slivered onions, two dill pickle slices, leaf lettuce, and one tomato slice on a sesame seed bun. Quarter Pounder: Along with the Big Mac, this is one of the two McDonald's signature menu items. 4 -ounce of ground beef patty with ketchup, mustard, slivered onions, two gherkin slices, and two slices of cheese. Hamburger and cheeseburger: A 45 g ground beef patty, with ketchup, mustard, a single dill pickle, re-hydrated onions, on a toasted bun. Also sold as a double or triple, adding an extra pickle slice for each beef patty added Double Cheeseburger: It has two 45 g ground beef patties, with ketchup, mustard, two slices of dill pickle, re-hydrated onions, and two pieces of cheese on a toasted bun. McDouble: It similar to a Double Cheeseburger, but with just one slice of cheese. It was reintroduced as a permanent dollar -menu item in December 2008. Daily Double: Similar to the double cheeseburger, however the toppings are different. The Daily Double is made with lettuce, tomato, slivered onions, and mayonnaise. It also has only one slice of cheese, rather than the two slices that are on the double cheeseburger.
  • 14. The Big N' Tasty: It was introduced in 1997 and has beef patty with ketchup, cheese, mayonnaise with a grill flavouring, diced onions, two pickles, leaf lettuce, kebab meat and a tomato slice, on a toasted bun. It was devised to resemble Burger King's Whopper sandwich. McFeast: A hamburger with lettuce, tomato, and mayonnaise, the McFeast contains a quarter pounder patty, lettuce, and modified mayonnaise with lemon juice, ketchup, onion and tomato. Chicken, Fish, Pork McChicken: It is a mildly spicy chicken sandwich. Made from ground white meat chicken, mayonnaise, and shredded lettuce, on a toasted bun. It still remains one of the biggest sellers, just behind the Big Mac. Premium chicken sandwiches : The Classic is a rebranding of the Crispy Chicken and Chicken McGrill sandwiches, with mayonnaise, leaf lettuce, and a tomato slice . All are served on a whole-grain roll, with either a grilled or crispy chicken breast. Southern Style Chicken Sandwich : A southern-style fried chicken breast filet, on a steamed bun, dre ssed with butter and two pickles. Snack Wrap: McDonald's version of a wrap made with white meat chicken breast, lettuce, shredded Cheddar cheese and Monterey Jack cheese, and a sauce, wrapped in a soft flour tortilla. There is also a Mac Snack Wrap which features the fixings of the Big Mac, but without the bun and wrapped in a tortilla shell, and uses one half of a piece of quarter meat. Chicken Fajita: Chicken, cheese, red and green bell peppers, and diced onions in a flour tortilla. Comes with Picante sauce packets on request, which is available in mild and spicy. Chicken McNuggets: Introduced in 1980 as a replacement for the McChicken, these are small chicken chunks served with dipping sauces of Barbecue, Sweet n' Sour, Honey, and Hot Mustard. In 2011, 4 new dipping sauces were introduced and added to the lineup: Sweet Chili, Honey Mustard, Spicy Buffalo, and Creamy Ranch.
  • 15. Chicken Selects: McDonald's version of chicken strips. They include choices of spicy buffalo, creamy ranch, Honey Mustard, and Chipotle barbecue dipping sauces; sauce sele ctions in the UK are Smokey barbecue, sour cream and sweet chilli sauce. Filet-O-Fish: It is a whitefish fillet with tartar sauce and a half slice of cheese, on a steamed bun. McRib: It is a sandwich featuring boneless pork with barbecue sauce, slivered onions, and pickles. McArabia: There are two versions of the McArabia: Grilled chicken and grilled kofta (beef with spices). Both are served with lettuce, tomatoes, onions, and garlic mayonnaise in addition to two small patties of grilled chicken or kofta, all wrapped in an Arabic style pita bread. The McArabia has been very well received throughout the Middle East. Chicken McBites: They are Popcorn chicken breast with "home- style seasoning”. Dipping sauces include ranch, Sweet n' Sour, Tangy BBQ, Chipotle BBQ, and Honey Mustard. Fish McBites: Similar to the Chicken McBites, these are small pieces of flaky whitefish dipped in batter and fried until golden brown, and served with tartar sauce for dipping. Salads and side orders McDonald's first introduced salads to its menu in 1985. The Premium Salads all are a mixture of iceberg lettuce and a special lettuce assortment, with cherry tomatoes and different toppings to differentiate them; additionally all salads can be topped with warm grilled or crispy chicken. All of its salads are part of McDonald's move towards creating a healthier image. McDonald's sells French fries as its primary side order. They also sell potato wedges, a type o f French fry that is thick cut and wedge shaped, fried onion pieces and onion rings.
  • 16. CORPORATE OVERVIEW Facts and figures McDonald's restaurants are found in 119 countries and territories around the world and serve 58 million customers each day. McDonald’s operates over 31,000 restaurants worldwide, employing more than 1.5 million people. The companies also operate other restaurant brands, such as Piles Café. Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until October 2006, when McDonald's fully divested from Chipotle through a stock exchange. Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners. Notably, McDonald's has increased shareholder dividends for 25 consecutive years, making it one of the S&P 500 Dividend Aristocrats. Types of restaurants Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or "McDrive" as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the latter two steps are frequently combined; it was first introduced in Arizona in 1975, following the lead of other fast -food chains. The first such restaurant in Britain opened at Fallowfield, Manchester in 1986. In some countries, "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high -density city neighbourhoods often omit drive-through service. There are also a few locations, located mostly in downtown districts that offer Walk - Thru service in place of Drive-Thru. To accommodate the current trend for high quality coffee and the popularity of coffee shops in general, McDonald's introduced McCafé, a café-style accompaniment to McDonald's restaurants in the style of Starbucks. McCafé is a concept created by McDonald's Australia, starting with Melbourne in 1993. Today, most McDonald's in Australia have McCafés located within the existing McDonald's restaurant. In Tasmania, there are McCafés in every store, with the rest of the states quickly following suit. After
  • 17. upgrading to the new McCafé look and feel, some Australian stores have noticed up to a 60% increase in sales. As of the end of 2003 there were over 600 McCafés worldwide. Some locations are connected to gas stations/convenience stores, while others called McExpress have limited seating and/or menu or may be located in a shopping mall. Other McDonald's are located in Wal-Mart stores. McStop is a location targeted at truckers and travellers which may have services found at truck stops. Since 1997, the only Kosher McDonald's in the world that is not in Israel is located in the "Abasto de Buenos Aires", Argentina. Global operations McDonald's has become emblematic of globalization, sometimes referred to as the "McDonaldization" of society. The Economist newspaper uses the "Big Mac Index": the comparison of a Big Mac's cost in various world currencies can be used to informally judge these currencies' purchasing power parity. Norway has the most expensive Big Mac in the world as of J uly 2011, while the country with the least expensive Big Mac is India . Some observers have suggested that the company should be given credit for increasing the standard of service in markets that it enters. A group of anthropologists in a study entitled Golden Arches East looked at the impact McDonald's had on East Asia, and Hong Kong in particular. When it opened in Hong Kong in 1975, McDonald's was the first restaurant to consistently offer clean restrooms, driving customers to demand the same of other restaurants and institutions. McDonald's has taken to partnering up with Sinopec, the second largest oil company in the People's Republic of China, as it takes advantage of the country's growing use of personal vehicles by opening numerous drive-thru restaurants. McDonald's has opened a McDonald's restaurant and McCa fé on the underground premises of the French fine arts museum, the Louvre. The company stated it will open vegetarian -only restaurants in India by mid-2013. Redesign
  • 18. In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of its restaurants, the first major redesign since the 1970s. McDonald's has invested $1 billion to redesign nearly all of the 14,000 restaurants by 2015. The goal of the redesign is to be more like a coffee shop, similar to Starbucks. The design includes wooden tables, faux -leather chairs, and muted colours; the red is mut ed to terra cotta, the yellow was turned golden for a more "sunny" look, and olive and sage green were also added. To warm up its look, the restaurants have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. Many restaurants now feature free Wi-Fi and flat screen TVs. Other upgrades include double drive-thrus, flat roofs instead of the angled red roofs, and replacing fibre glass with wood. Also, instead of the familiar golden arches, the restaurants now feature "semi -swooshes" (half of a golden arch), similar to the Nike swoosh. Business model McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are owned and operated by McDonald's Corporation directly. The remainder are operated by others through a variety of franchise agreements and joint ventures. The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract, age, country, and location, the Corporation may own or lease the properties on which McDonald's franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants. The United Kingdom and Ireland business model is different than the U.S, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's
  • 19. trains its franchisees and others at Hamburger University in Oak Brook, Illinois. In other countries, McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments. As a matter of policy, McDonald's does not make dire ct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators. According to Fast Food Nation by Eric Schlosser, nearly one in eight workers in the U.S. have at some time been employed by McDonald's. It also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the host country.
  • 20. MARKETING MIX The marketing mix of a company consists of the various elements as follows which form the core of a company’s marketing system and hence helps to achieve marketing objectives. The marketing mix of McDonald’s is as follows:- Product: - McDonald’s places considerable emphasis on developing a menu which customers want. Market research establishes exactly what this is. However, customers’ requirements change over time. In order to meet these changes, McDonald’s has introduced new products and phased out old ones, and will continue to do so. Care is taken not to adversely affect the sales of one choice by introducing a new choice, which will cannibalise sales from the existing one (trade off). McDonald’s knows that items on its menu will var y in popularity. Their ability to generate profits will vary at different points in their cycle. In India McDonalds has a diversified product range focussing more on the vegetarian products as most consumers in India are primarily vegetarian. The happy mea l for the children is a great seller among others. Price: - The customer’s perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item; it also has psychological connotations for the customer. The danger of using low price as a marketing tool is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand and its integrit y. In India McDonalds classifies its products into 2 categories namely the branded affordability (BA) and branded core value products (BCV). The BCV products mainly include the McVeggie and McChicken burgers that cost Rs 50 -60 and the BA products include McAloo tikki and Chicken McGrill burgers which cost Rs20 -30. This has been done to satisfy consumers which different price perceptions. Promotion :- The promotions aspect of the marketing mix covers all types of marketing communications .One of the methods employed is advertising, Advertising is conducted on TV, radio, in cinema, online, using poster sites and in the press for example in newspapers and magazines. Other promotional methods include sales promotions, point of sale display, merchandising, direc t mail, loyalty schemes, door drops, etc. The skill in marketing communications is to develop a
  • 21. campaign which uses several of these methods in a way that provides the most effective results. For example, TV advertising makes people aware of a food item an d press advertising provides more detail. This may be supported by in -store promotions to get people to try the product and a collectable promotional device to encourage them to keep on buying the item. At McDonalds the prime focus is on targeting children . In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos. Place: - Place, as an element of the marketing mix, is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer. McDonald’s outlets are v ery evenly spread throughout the cities making them very accessible. Drive in and drive through options make McDonald’s products further convenient to the consumers. Other than the main four elements mentioned above there are a few other elements too in the marketing mix, which are as follows:- People:-The employees in McDonald’s have a standard uniform and McDonald’s specially focuses on friendly and prompt service to its customers from their employees. Process:-The food manufacturing process at McDonald’s is completely transparent i.e. the whole process is visible to the customers. In fact, the fast food joint allows its customers to view and judge the hygienic standards at McDonald’s by allowing them to enter the area where the process takes pla ce. The customers are invited to check the ingredients used in food. Physical evidence: - McDonalds focuses on clean and hygienic interiors of is outlets and at the same time the interiors are attractive and the fast food joint maintains a proper decorum at its joints.
  • 22. SWOT ANALYSIS Strengths McDonald’s holds a very strong brand name worldwide. They have large partnerships with other companies that provide them with their desired products; this increases the goodwill of the company. McDonald’s is one of the most reputed firms who are socially responsible. Loyal employees & management & customer are their biggest strength. McDonald’s makes sure that cultural & regional barriers are kept in mind while providing food to different countries. Clean environment and play areas for children where they can enjoy their time. Weakness The weakness that hits the list of employee turnover rate. Every year many of their employees are fired out of the restaurant. McDonalds mostly advertises products and food items that targets children. Health conscious people often complain that they do not provide us with the organic and healthy food. This becomes their weakness when they get in the complaints. They also face quality issue at times. This affects t he business as they are running the outlet worldwide, if one franchise gets affected others also get a bad name.
  • 23. Opportunities It can open up online services for their customers so that they can easily order their desired meals sitting at home . Discounts given on every food item may help them gain more customers. They can go for a joint venture with the retailers they work with . They can introduce healthy hamburgers and healthy drinks for the people who are health conscious. In order to be environment friendly, they can use packing material which can be recycled later or material that does not create pollution. Threats Emerging competition of similar outlets is becoming a problem for McDonalds. Health issue also becomes a problem when it comes to food. As it is a multinational food outlet, fluctuations in the currency of other countries becomes a problem for such companies . Recession in any country would definitely affect the whole outlet worldwide. People facing heart problems and obesity accuse McDonalds for not providing them with the healthy food . They have a threat of local food outlets in different countries . McDonalds is operating in a fully fledged economy where competition is increasing day by day therefore they should wor k effectively to overcome their drawbacks because of the recession.
  • 24. COMPANY’S FINANCIAL INFORMATION Company Name: McDonald's Corporation Ticker Symbol: MCD Web Address: www.mcdonalds.com CEO: Mr. Donald Thompson No. of Employees: 420,000 Common Issue Type: CS Business Description: McDonald's Corporation franchises and operates McDonald's restaurants in the food service industry. The Company and its franchisees purchase food, packaging, equipment and other goods from numerous independent suppliers. Industry Information: LEISURE - Restaurants Price Day Change Bid Ask Open High Low Volume 87.18 -0.02 - - 87.43 87.43 86.76 3658828 Market Cap (mil) Shares Outstanding (mil) Beta EPS DPS P/E Yield 52-Wks-Range 87,526.7 1,004.0 0.39 5.27 2.53 16.4 3.5 102.22 - 83.31 KEY FIGURES (Latest Twelve Months - Balance Sheet (at a glance) in Millions LTM) Yesterday's Close 87.06 $ PE Ratio - LTM 16.4 Market Capitalisation 87,526.7 mil Latest Shares Outstanding 1,004.0 mil Earnings pS (EPS) 5.27 $ Dividend pS (DPS) 2.53 ¢ Dividend Yield 3.5 % Dividend Payout Ratio 48 % DIVIDEND INFO Dividend Declared Date 09/20/2012 Revenue per Employee 64,300 $ Dividend Ex-Date 11/28/2012 Effective Tax Rate 31.3 % Dividend Record Date 12/02/2012 Float 1,015.3 mil Dividend Pay Date 12/16/2012 Dividend Amount 770 Float as % of Shares Outstanding 99.9 % Type of Payment Cash Payment Foreign Sales 18,478 mil Dividend Rate 3.08 Domestic Sales 8,528 mil Current Dividend Yield 3.5 5-Y Average Dividend Yield 3.1 Selling, General & Adm/tive (SG&A) as % of Revenue 9.10 % Payout Ratio 48.0 Research & Devlopment (R&D) as % of 5-Y Average Payout Ratio 53.0 Revenue 0.00 % Share price performance previous 3 years Gross Profit Margin 44.7 % EBITDA Margin 35.6 % Pre-Tax Profit Margin 29.1 % Assets Turnover 0.8 %
  • 25. Return on Assets (ROA) 16.1 % Return on Equity (ROE) 39.2 % Return on Capital Invested (ROCI) 20.4 % Current Ratio 1.0 Leverage Ratio (Assets/Equity) 2.4 Interest Cover 16.6 Total Debt/Equity (Gearing Ratio) 0.96 LT Debt/Total Capital 48.0 % Working Capital pS 0.06 $ Cash pS 2.17 $ Share price performance intraday Book-Value pS 13.83 $ Tangible Book-Value pS 11.10 $ Cash Flow pS 6.89 $ Free Cash Flow pS 1.25 $ KEY FIGURES (LTM): Price info Price/Book Ratio 6.30 Price/Tangible Book Ratio 7.85 Price/Cash Flow 12.6 Price/Free Cash Flow 69.9 P/E as % of Industry Group 42.0 % P/E as % of Sector Segment 77.0 % PRICE/VOLUME High Low Close % Price Chg % Price Chg vs. Mkt. Avg. Daily Vol Total Vol 1 Week - - - 0.0 101 54,041 66,217 4 Weeks 87.43 83.31 84.74 2.7 101 57,129 856,929 13 Weeks 94.16 83.31 91.02 -4.4 98 61,288 3,554,700 26 Weeks 94.16 83.31 87.75 -0.8 93 59,419 7,189,758 52 Weeks 102.22 83.31 98.03 -11.2 79 59,272 14,521,666 YTD 102.22 83.31 - -13.2 77 59,774 13,807,695 Moving Average 5-Days 10-Days 10-Weeks 30-Weeks 200-Days Beta (60-Mnth) Beta (36-Mnth) 86.61 86.31 88.25 89.31 91.74 0.39 0.31 5-Year 3-Year YTD vs. Curr Qtr vs. Annual vs. GROWTH RATES R² of 5-Year Growth CHANGES Growh Growth Last YTD Qtr 1-Yr ago Last Annual Revenue 3.81 77.6 Revenue % 6.66 2.1 -0.2 12.2 Income 20.17 81.1 Earnings % 9.78 -1.4 -3.5 11.3 Dividend 15.36 94.7 10.16% EPS 1.0 -1.4 15.1 Capital Spending 6.97 NA 10.52$ EPS 0.04 -0.02 0.69 R&D 0.00 NA 0.00 Normalized Inc. 11.58 NA 9.79 SOLVENCY RATIOS SHORT-TERM SOLVENCY RATIOS
  • 26. (LIQUIDITY) Net Working Capital Ratio 2.71 Current Ratio 1.3 Quick Ratio (Acid Test) 1.0 Liquidity Ratio (Cash) 0.67 Receivables Turnover 21.5 Average Collection Period 17 Working Capital/Equity 6.2 Working Capital pS 0.88 Cash-Flow pS 6.77 Free Cash-Flow pS 2.09 FINANCIAL STRUCTURE RATIOS Altman's Z-Score Ratio 4.85 Financial Leverage Ratio (Assets/Equity) 2.3 Debt Ratio 56.4 Total Debt/Equity (Gearing Ratio) 0.87 LT Debt/Equity 0.84 LT Debt/Capital Invested 56.9 LT Debt/Total Liabilities 65.2 Interest Cover 17.3 Interest/Capital Invested 1.67
  • 27. Attn: Replace this page with the 30 th page (as displayed on the pdf reader and pg no.27 as displayed in the doc) of the Consolidated Balance Sheet of McDonald’s, which you can find on the link below. http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Inve stors/investors-2010-annual-report.pdf
  • 28. QUESTIONNAIRE (Attn: Attach minimum 5 copies) Name: ____________________ age: ________ Gender: _________ occupation: _______________ Please spare a few minutes of your valuable time to answer this simple Questionnaire. 1. How often do you visit fast food restaurants? Everyday Alternate days Weekends Once in a month Once every three months 2. Which of the following fast food chain do you visit the most? Subway McDonald’s KFC Pizza Hut Burger King 3. Are you satisfied with the services provided by them Yes Sometimes Not at all satisfied 4. How often do you eat at McDonald’s? Everyday Alternate days Weekends Once in a month Once every three months 5. Which among the following is your favourite product at McDonald’s? Big Mac Burger Mac Veggie Big Mac Chicken Burger Maharaj Mac Mac Fileto Fish 6. Is the product line of McDonald’s adequate? Yes No Haven’t Thought About That 7. What time of the day do you prefer to eat at McDonald’s? Morning Noon Evening Night 8. What is the main problem you faced at McDonald’s? Long queues Wrong orders Hygienic problems Other problems No problems 9. What are the unique selling prepositions of McDonald’s? Product variety Hygiene Ambience Quick service Location Other 10. Do you think McDonald’s will be triumphant over all its competitors? Yes Maybe Haven’t Thought About That Never Thank You!!
  • 29. SURVEY RESPONSE ANALYSIS Frequency of visits made to fast food centers Everyday Alternate days Weekends Once in a month Fast food chain visited the most Subway MacDonald's KFC Pizza Hut Burger King Favourite product at Macdonald’s Big Mac Burger Mac Veggie Big Mac Chicken Burger Maharaj Mac Mac Fileto Fish
  • 30. Time of the day prefered to eat at Macdonald’s Morning Noon Evening Night Main problem faced at McDonald’s Long queues Wrong orders Hygienic problems Other problems No problems The unique selling prepositions of MacDonald’s Product variety Hygiene Ambience Quick service Location Other
  • 31. THE TOP FIVE REASONS WHY MCDONALD’S IS SO POPULAR 1. The System This is the first thing that makes McDonald's so successful, by having an effective and efficient system in place, which exploits the minimum wage labour available, in the form of young teenagers who are just looking to make some cash or pick up fundamental job skills. 2. Convenience The second reason why McDonald's is so popular is because it's everywhere. There a McDonald's at every corner of the map, at every major shopping centre, district, highway, freeway, every place which attracts even, remotely more than 10 people, will have a McDonald's restaurant not too far from them. McDonald's is having the best Real Estate locations around the world which makes it so popular around the globe. 3. Likability and Familiarity The Golden Arches, the Big M. Ronald McDonald, happiness and fun; all these are the associations with McDonald’s which makes it so familiar by being so familiar to all age groups and to everybody. 4. The Menu McDonald's has one of the most diverse menus, targeting all ages from little kids to old pensioners, and everyone else in between. There's Big Macs for the big kids and junior burgers for the little. The menu's versatility is accentuated when they introduced the "healthy tick" concept, which target those people who wants to watch what they eat (even though it doesn't make sense to go to a fast food restaurant to eat healthy). 5. Consistency The last reason is, McDonald's is so successful because of its consistency. The expectations that we have about everything surrounding the store are fulfilled in almost every store nationwide, worldwide. So everybody knows what they're getting into before they come to McDonald's, and by being so consistent, it has a solid reputation to uphold.
  • 32. CONCLUSION What started as a simple food stand on Huntington drive, California in 1937, through the ages have become a billion Dollar corporation and the world’s second largest fast -food chain. When analysed, one would understand that McDonald’s had a stable growth in the past years. The credits of building it into one of world’s la rgest fast food operation can be given to Ray Kroc who took over McDonald’s from its establishers, modernised and expanded it to suit the contemporary trend. Today McDonald’s has a net worth of $15.15 billion. Through this project report and market survey we saw the how McDonald’s was formed, its history and the present position. We also its list of various products offered and the corporate profile. Through the marketing mix, we saw how they make use of their product, price, place, promotion mixes. SWOT a nalysis showed us the strengths and weakness of McDonald’s as well as the opportunities and threats they have got. The consolidated financial statement showed us the financial position of the corporation as of 2011. The questionnaire survey provided us with a clear picture of the needs, want and expectations of the consumers of the fast food market in general and McDonald’s in particular. The respondents also rated the services provided by the corporation. At last we also saw the top five reasons that make McDonald’s so popular. I gladly hope that this project has met its aim. Let me conclude by quoting this quote by Ray Kroc "Perfection is very difficult to achieve, and perfection was what I wanted in McDonald's. Everything else was secondary for me." Thank You!!
  • 34. Pictures to be attached Attn: Attach these pictures on the backside of the page which is adjacent to the relevant page.
  • 37. Logo of McDonald’s McDonald's world headquarters, Oakbrook, United States Ray Kroc- The franchiser of McDonald's
  • 38. The first McDonald’s restaurant opened by Patrick McDonald, in 1937 McDonald’s Speedee mascot Downey’s restaurant; the oldest operating McDonald's in the world.
  • 39. World-famous Golden Arches logo The legendary Big Mac
  • 41. The Maharaja Mac which is offered in India
  • 42. An exterior view of the world's largest McDonald's restaurant built on 2012 London Olympics site
  • 43. The Big Mac The Big n Tasty
  • 44. The premium chicken sandwich The McDonald's Chicken Fajita
  • 45. McArabia McDonald’s Salads McDonald’s French fries
  • 46. A map showing every continent with at least one McDonald's restaurant
  • 47. A modern McDonald’s restaurant in London