Comparitive analysis of major fast food joints in india

COMPARITIVE ANALYSIS OF MAJOR FAST FOOD JOINTS IN INDIA

INTRODUCTION

Objectives

• To identify and analyze the marketing strategies of the three fast food

chains:

- McDonalds

- Wimpys

- Nirulas

Under the fast food market.

• Analyzing the performance of the above chains since the past five years.

• Making a comparative analysis of the above three restaurants.

• Identifying the recruitment and selection procedures adopted by the stated

restaurants at :

- Managerial

- Supervisory

- Clerical and

- Operational level (Operations comprise an important part in any

restaurant).
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ICFAI BUSINESS SCHOOL HYDERABAD


• Conducting market research study to determine :

- Percentage wise consumer preferences

- Frequency of visit at each of the stated restaurants

- Identifying unique factors that attract people to the stated restaurants.

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METHODOLOGY

• Information regarding the organisation, 4P’s of marketing, and consumer

preferences has been obtained through :

a. Primary Sources

b. Secondary Sources.

Primary Sources

i. Marketing personal, PR personnel of the concerned organisation were

approached to obtain in formation about the concerned subject (Sample

questionnaire on the next page). McDonalds marketing and other

details had to be obtained indirectly through its public relations firm

since direct accessibility to the corporate office was not possible.

ii. Market research study was conducted in order to find out percentage

wise preferences of the stated fast food restaurants.

Secondary Sources

i. Internet

ii. Libraries such as CII and PHD House

iii. Articles from A & M and economic times

iv. Company brochures, literature and pamphlets.

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• Based on the information obtained from the above sources concepts were

developed on which analysis could be made.

• Conclusions and recommendations have been thereby given after a

thorough evaluation of the marketing strategies of the three restaurants.

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ORIGIN OF THE FAST FOOD MARKET IN INDIA

Traditionally over the ages, fast food for the average Indian customer meant

having breads i.e., paranthas, rotis etc. with sabzi or achaar. These were the

traditionally available snacks or in the form of samosas etc. All the items were

available at the roadside dhabas or the local sweet shops. There were no

established eating places or restaurants for the average Indian customer.

It was the Nirulas family way back in 1920’s that started the trend of opening

good eating places in the city. Nirulas initially when they entered the

restaurant business, were more into catering and hotel business. It was only in

the late 50’s and early 60’s that they decided to open up a restaurant serving

snacks and fast food. By 70’s they had a pastry shop, snack place and Hot

Shoppe. This started the trend of eating joints in the city and over the country.

Nirula’s was considered to be the pioneer in fast food business. Seeing its

success in the country other local fast food joints and restaurant started

coming up in the 80’s. With the coming up of these local joints Nirulas was not

left behind. It had a well-established fast food chain over the next decade.

However seeing the potential in the country in the 90’s due to the changing life

styles, the established chains world over made their entry into the Indian food

market. However the tastes and the style of the kind of food which these

MNC’s we offering the Indian customer has been made familiar to him by

Nirula’s only.

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Although the concept was introduced to the Indians way back, but in the true

sense market for fast food has been developed only after the entry the various

MNC’s starting with Wimpys to McDonald’s, Pizza Hut, TGIF, Dominos etc.,

with many more to come over the next few years.

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THE INDIAN FAST FOOD MARKET - AN OVERVIEW

Upto the year 1995 Indian food market was predominantly dominated by the

traditional dhabas, potential restaurants in the customer’s colony and some

restaurants in a five star hotel. Having fast food i.e., burgers, pizzas etc., was

considered to be an option for eating out. It was not at all synonymous with the

American concept of fast food as a quick takeaway bite or a substitute for

lunch.

Apart from fast food being available at the local colony restaurants and at

some five star restaurants, Nirulas was the only fast food chain existing in the

country with its restaurants expanding with every passing year since its

inception. It has been almost 50 years now since its set up and there is hardly

any one who doesn’t know that Nirulas exists. Nirulas was the first one to bring

fast food to India back in the 50’s since then it has evolved into an eating

place with a tremendous brand equity and brand recognition. It proved to be a

perfect eating place for an average middle class who wants to eat out at an

affordable price who cant afford the five-star restaurants and would not want

to go to the local dhabas.

Nirulas almost had a monopoly for decades due to the way it has been placed.

It is a place where a person from an average middle class group to upper

class group can go to eat out. Its popularity has increased over the decades.

With the trends changing and the incomes rising almost anybody who can

afford to eat out could go for a snack at Nirulas.

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However the year 1995-96 witnessed a drastic change. 1996 is considered to

be the year of India’s entry into the world food market. International giants

such as McDonalds, KFC, TGIF, Dominos, Pizza Hut all bombarded the Indian

food market.

Before these, UK-based joint called Wimpy’s had established its chain in the

country in 1990. By year 1996 it had about three to four joints established in

Delhi. However it did not pose much of a threat to Nirulas reason being lack of

variety and that Wimpys was looked at more of a hangout place rather than

eating out with the family.

Its been the American international giants i.e., McDonalds, Pizza Hut etc., who

have targeted their restaurants to the families. Apart from the foreign and

Indian fast food chains setting up shop, there are a range of specialty

restaurants offering varied fare such as Chinese, Mexican, French, Italian etc.

These places however offer range of items different from burgers, pizzas etc,

but they definitely are competition to both foreign and Indian fast food chains.

However, restaurant business is such which is surrounded by threat from

everywhere be it Indian joints or foreign joints.

It is only these international joints and specialty restaurants which are

gradually coming up and some Indian restaurants which have made up the

food market. Prior to this it was only the local restaurant that became visible

while passing by or through local banners etc., and the five star restaurants

were for the elite class out of reach by the average middle class customer.

There was hardly any awareness or promotion to beat competition.
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Each of the foreign food joints that have come into the country has their own

strategy lined up to differ from the rest. Each of these studied the Indian tastes

and style and thereby targeted the Indian customer. An average Indian

restaurant goer is no convenience eater, unlike the Americans.

If he is paying, he is paying for food that tastes good (Spicy, soft, savory etc.),

not for how pleasantly the stuff is served or how spotless the widows are. He

wants food for that can make him come back to the restaurant. An Indian food

joint owner would definitely understand this but an American company, which

comes and places it directly without knowing the customer is definitely in for

trouble. Customer loyalty in a restaurant business is essentially low. A

customer when he comes to a restaurant usually looks at the quality of food,

variety, ambience, speed of delivery and the location. The variety would

influence the frequency of visits since taste is a dominating factor to the Indian

customers.

Almost all the fast food chains both Indian i.e., Nirulas and foreign i.e.,

McDonalds etc., are targeting the families. This serves to be an advantage

because the turnaround time is short and family has higher propensity to

spend because different members order larger variety of dishes.

Each of these restaurants delivers quality, value and services in its own way

through its line of strategies. The emphasis is on the value that the restaurant

is delivering to the customers.

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WIMPY’S

A). AN OVERVIEW

World Wide Operations

Wimpy’s overseas limited has its origin in United Kingdom since 1954.

Wimpy Overseas limited has an outlet almost all over the world. Current

wimpy operation spreads from Jamaica in the West to the Philippines in the

Far East. It has it strongest representation in the Middle East. Its most

Northerly restaurant is in Bodo, Norway within the Arctic Circle. The furthest

South restaurants are in South Africa where there are currently about 200

wimpy restaurants operating.

Story behind the name ‘Wimpy’

The name “Wimpy” was first heard of in the” POPEYE THE SAILOR MAN

CARTOON”.

Popeye and his girlfriend, Olive, had a friend called Wimpy. Wimpy was a

rounded, hamburger-eating gentleman, whose slow drawn out voice was

based on a famous wit of that period. He was the inspiration for the Wimpy

Empire.

Even today Mr. Wimpy is a similar shape, he is dressed as a beefeater as this

is the name of the Queens guards who according to tradition, protect the

Crown Jewels.
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This way the fact that Wimpy is a very and also the heart of the business, the

HAMBURGER are linked in one person as the trade mark for the company.

Indian Operations

Wimpy is the oldest of the international chains to enter the Indian scene.

The company in India i.e., Wimpy’s international Ltd., is a hundred percent

subsidiary of Wimpys overseas limited. Wimpys in India is the master

Franchise for South East Asia.

It extends its operations to Katmandu and Sri Lanka. It started its operations in

India in 1989 with the opening of one outlet in Delhi’s Connought Place area.

Today Wimpys has about 15 outlets in the country with more expansion plans

around the corner for more outlets in the next two to three years.

B. MARKETING FUNCTIONS

Wimpys opened its first restaurant in Delhi in 1989. Its been almost nine years

since it was established, Wimpys is primarily recognised as the burger Chain.

Initially while Wimpys entered the Indian market it hardly had any competition,

except from the local restaurants or from local fast food joint Nirulas.

In order to beat against competition the company has to decide upon its target

audience. Since its inception the Target Consumer with Wimpys have been

youngsters between the age group of 18-30 and the kids. Even today Wimpys

aims to target the same audience.

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Wimpys as a fast food restaurant has been positioned as a very pleasant

resting-place where a wide variety of items are available through fast service.

It is basically selling ambience and atmosphere.

Wimpys marketing strategy lies in Fast Food. Based on this the details of its

marketing mix i.e., product, price promotion and Distribution are explained

below:

Product Based Strategies

Wimpys is offering in the market and to its customer’s fast food in the form of

burgers, pizzas, salads, beverages, milkshakes, ice creams and assorted

treats.

Any product has three levels i.e.,

Core product: here a consumer buys a burger or a pizza to satisfy its taste

buds.

Actual Product: The burger that he buys that is neatly packed with Wimpys

mentioned on the cover is the actual product.

Augmented product: Ambience, past service atmosphere, cleanliness all

augment the product.

Wimpys has about 5 to 6 different product lines namely:

• Burgers

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• Pizzas

• Salads

• Milkshakes/Beverages

• Ice Creams

• Assorted Treats.

Following are the range of items at the Wimpys restaurant:

Burgers Pizzas Ice Creams Additional

(in Variety) (in variety) (in variety)

14 8 17 3

Available in two Includes Nuggets and

sizes fries

Its unique selling proposition lies in its product line. Aim is to offer increasing

choice and variety of items to its consumers.

However, when Wimpys had started its operations it had about 3 to 4 product

Lines. Since the past five years its product line has remained same till date.

Ofcourse changes are constantly being made to offer new variety in each of its

product lines.

For example: Consider Burgers, when its started it had about six variety of

burgers to offer. Over a period of time it has included new varieties almost
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every year. This year it has included chicken liliput burger and veggie Lilliput

burger that is especially for the kids.

Under its assorted treat line, which includes French fries, fish N chips,

Nuggets etc. has also been modified from time to time. Since the past two to

three years it has started including new varieties to it almost every year. The

most recent additions have been veggie nuggets and chicken drumsticks.

Wimpys also provides with economical meals, which include a coke, burger,

french fries or any combination of these three. It keeps on coming with new

meals every six months. The most recent meals that it had in its menu were

the Navratra meals, which had a combination of pizza and coke; vegburger,

Frenchfries and coke; and salad, Frenchfries and coke.

Before the Navratra meals it had come up with Liliput Meals (especially for the

kids) i.e., Veggie Lilliput burger meal, Chicken Lilliput burger meal etc.

(Wimpys has always kept the kids into consideration for deciding its product

lines).

Although the restaurant did have pizzas in its menu earlier i.e., about a year

back but since the past 8 months the restaurant has come up with a new

variety and quality of pizzas. The product line of pizzas that it had in its menu

earlier was not showing good results i.e., there were not much of sale of

pizzas in the restaurant. But since the modified version has been introduced,

sales have definitely gone up.

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Wimpy even has this special Breakfast Meal only at its restaurant in

Connaught Place. The meal is quite different from its rest of the meals. It has

Eggs in a Bun, Doughnuts, Orange juice, Tea/Coffee. It is targeted to the

tourists, executives and the Shoppers in C.P.

The customer now has more variety available to him and he has a wide range

of items available to choose from. All this has been done by Wimpys to

change its image, keeping the competition in mind.

Pricing Strategies

All the items at Wimpys have been competitively priced.

The price of pizzas is far lower than other outlets, such as Dominos, Pizza Hut

etc. Its cheese pizza (regular) is priced at Rs. 45 compared to Pizza hut’s

regular cheese pizza for Rs. 65. Even the Burgers are reasonably priced. Min.

availability is at Rs. 14 for Veggie Lilliput burger and maximum at Rs. 48 for

Grilled Chicken burger.

Even for Pizzas min price is about Rs. 45 for a regular cheese pizza and max

at Rs. 75 for Half non-veg Half veg. This price is quite reasonable considering

the prices of regular pizzas at Dominos where they go as high as Rs. 150-200

for a regular pizza.

The prices are so designed to suit everyone’s pocket, such that an average

middle class person can afford a meal at Wimpy’s.

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Promotion Strategies

Since its inception is 1989 Wimpys has promoted its restaurant mainly via

instore posters and danglers or through outstore posters. However its

promotional strategies have under gone a change in these nine years

considering the competition coming from everywhere.

Its promotional strategy has been to emphasize and publicize the concept of

variety, reach out to people and convince them to eat at Wimpy’s. In brief, the

aim is to reach the right target and do it effectively.

The media most commonly used by Wimpy’s can be classified as:

Instore Out store

Use of posters and Danglers. Use of Flyer’s, which are gradually

Informing about latest meal combos coming down. Emphasis now is on

and latest additions in the menu. newspapers and press ads. Recently

there is this Wimpy’s Graffiti Show

that is being aired on Times FM. Use

of T.V under consideration.

Coca-Cola also assists in promoting and marketing of Wimpy’s restaurants.

The posters and dangers used for advertising are designed via free lancers.

Wimpy’s provides sales promotion schemes through the economical meals

that its offers. Recently it has started giving coupons in great savers magazine
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of September issue, whereby on order of Rs. 200-299 you get veggie nuggets/

Chicken nuggets free. Also, on order of Rs. 300 or above you can have any

one of the salads free.

During the past two years, the idea has been to improve the image of the

restaurants. This is being done through improving the menu boards and the

nameplates. Also the mascot Mr. Wimpy is being promoted more and more in

their posters.

Since the past four to five years. Wimpy’s has always been coming up with

special menus, contests, gift schemes etc., in the festive season such as

Navratras, Diwali and Christmas. It comes up with special menus and meals

during Nawratras, such that people can still come and have meals during that

time.

Aim during the past two years has been to change the image and make

Wimpy’s more and more visible to the people.

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Distribution Strategies

Wimpy’s started with just one outlet in Delhi in 1989.

In 1993 it had about 3 outlets in Delhi. By 1998 it has about 10 outlets in total

in the city with one outlet in each of the cities i.e., Jalhandar, Ludhiana and

Bangalore. The opening of its outlet at New Delhi Railway Station in 1997 had

a effect on other outlets around that area.

In order to expand its distribution network it has come up with a scheme

whereby an individual can franchise with Wimpy’s. Wimpy’s gives him the right

to use the brand name, but he has to have resources i.e., land and capital to

become a franchisee with Wimpys. The restaurant manager and the operation

staff would go from the company itself.

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CUSTOMER DEMAND

Knowing what factors attract a customer to eating joint is important for every

restaurant. The factors influencing customer demand for Wimpys menu items

are as follows:

• The image of Wimpys as a burger chain and its popularity for its juicy

burgers.

• Wimpys is considered to be the most preferred eating-place especially by

the teenagers and the youngsters. It is them who are mostly the regular

customers almost at every Wimpys restaurant.

• Almost every wimpy restaurant is spacious enough to attract large crowd of

customers. Normally one would not have to wait for long to get a seating

place at its restaurant (except during peak hours).

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NIRULA’S

A). AN OVERVIEW

History and Background

Nirulas today is a well-known name in the hospitality industry.

Nirula family was the first to offer western style fast food in India. It came to

Delhi in 1928. They realized the paucity of good eating places in and around

New Delhi, began ‘Hotel India’ in 1934 with 12 rooms and a restaurant with a

bar license. They also specialized in catering to parties and soon Nirulas

catering became famous.

Meanwhile, Nirula’s had set up the ‘India Coffee Shop’ in Janpath on request

of the Coffee board. A few years later, the Coffee Board of India seeing the

success of the international decided to run the business itself.

It 1939, whine the Second World war had started, Nirulas rented more space

in Connaught Circus (what is currently the ground floor of Nirulas, L-block) and

opened a Restaurant with music and dancing serving a six course dinner for

only Rs. 1. The restaurant proved to be popular with both Indian and foreign

guests. It also started serving Indian food and introduced ballroom dancing

and cabaret. However, business fluctuated widely since it was dependent on

the quality and reputation of those evening’s performers. Hence, in 1950 the

restaurant with the cabaret was given up in favour of the Brasserie.

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The Brasserie was a popular self-service restaurant serving beer and liquor

with a limited menu of Indian and Western food. The Brasserie gave way to

the ‘Cafeteria’; the first of its kind in India with a variety of Dishes and the

guests could help themselves to whatever they fancied.

Before 1947, Nirulas had also opened the first fruit preservation unit in Delhi.

The jams and squash and other preserves were marketed under the name of

Nirula’s and had an all India distribution. With the partition of India in 1947, the

supply of raw material was disrupted and this unit was stopped.

In 1950, Nirulas started the ‘Chinese Room’ which was the first restaurant of

its kind in India. Nirulas created history by being the first Indians of non-

Chinese origin to have a Chinese food restaurant in India.

In 1954, Nirulas were the first ones to introduce espresso coffee in India.

Gaggia, the inceptors of espresso coffee machines gave Nirula’s sole

distribution rights for their machines and Nirula’s sold these to the luxury

hotels and first class restaurants. Nirula’s store was opened in the 1950’s with

a section for cold meat and delicatessen products and a separate section for

bakery and confectionery produce.

Nirulas Hotel was started in 1958 and was the first modern 3-star hotel in

India. In 1960 two specialty restaurants were opened. La Bohame was a

modern restaurant where tea, coffee, snacks and meals were very popular. It

was the most popular restaurant of its time in India. Gufa was an Indian

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restaurant with Indian style seating and an all silver thali service in a romantic

atmosphere.

The Pastry shop was independently introduced in 1972 and did externally well.

The opening of the Snack bar in 1972 and Hot Shoppe in 1977 again ventured

into the quick service food business, which was instant success. The first Ice

Cream Parlor in India was started in 1978. Potpourri restaurant with the first

salad bar in India and the Pegasus Bar were started in 1979. All of these exist

till today.

The Expansion Plan

It was only by early 80’s that Nirulas decided to expand itself. It’s first

restaurant outside Connaught Place opened at Vasant Vihar in 1980 and soon

followed by Chanakya (1981) and Defense Colony (1986).

In 1985 the Central Kitchen, comprising of the first section bulk kitchen, Ice

Cream section and the bakery section was opened at Okhla, thus enabling

Nirulas to expand faster.

Also in 1985, Nirulas opened their first restaurant outside India in Katmandu,

Nepal. Production facilities were also set up. This was followed by another in

Katmandu in 1986 and one in Pokhra, June 1993.

Mean while Nirula’s also took over the management of restaurants at Tej’s

(Nov. 1985) Karol Bagh (March 1986), New Friends Colony (April 1988),

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Bungalow Road (Oct. 1990), East of Kailash (Aug 1994) Gurgaon (Jan 1998)

and Faridabad (Feb 1998).

Nirulas’ also set up a unit in Noida, a suburb of Delhi. This unit started with a

restaurant in Jan. 1987 and was soon extended to also include a Hotel (March

1991) the first of its kind in India offering the most modern and attractive

facilities at very reasonable prices.

It also started catering services for the Railways in July 1993 by providing food

on the August Kranti Express from Delhi to Bombay.

In 1994, a Food Delivery Service was started at L-block, Chanakya and

Defence Colony and was soon extended to all the units. Nirula’s was the first

to introduce in the country services on such a large scale.

In Jan. 1996, a restaurant complex with a large family style restaurant, Pastry

Shop and a Potpourri restaurant was commissioned in Preet Vihar. An

"“express” Restaurant where the thrust is on take away and delivery service

was opened for the first time at Vasant Kunj in March 1996. Another outlet at

Bawa Potterries Complex at Vasant Kunj opened in Aug 1996. Second

express restaurant was opened at Rajindra Place in 1997. Two restaurants

were opened in Haryana in quick succession – in Gurgaon in 1998 and

Faridabad 1998.

A new restaurant at Vikaspuri is being completed and will open soon.

Negotiations are in progress for opening more Hotels and restaurants in and

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around Delhi and in major metro cities in Northern India. The company even

plans on opening its outlets in Singapore and in South East Asia.

Besides opening new outlets to cater to the ever-expanding market, Nirulas

have always believed in expansion and improvement of its existing facilities.

It has always welcomed other restaurants stating as they assist in developing

the overall business. Even though a number of new restaurants have started

Nirulas’ is still the most popular chain of restaurants with among the highest

sales per square foot. They continue to experiment, introduce new items and

continue to give the citizens of Delhi and tourists what they desire-excellent

quality food at a reasonable economical price in pleasant surroundings and

such a variety that every one in the family feels catered to – ‘Fun Foods for the

Whole family’. Nirulas stands for Quality, Service Cleanliness and value for

money.

B. MARKETING FUNCTIONS

In early 80’s when Nirulas started expanding its operations, it positioned as a

family style restaurant for the kids and the entire family.

To target the family, the chain has simultaneously focused on the Child who

will get the rest in. People between the age group of 8-80 have been the target

audience. It is ideally for the kids and the elders.

Nirulas marketing strategy rests in the adaptation of the fast food concept to

the Indian situation.
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Nirulas in order to provide products at best quality has a single central kitchen

that caters to all its outlets in Delhi.

Keeping marketing strategy in mind details of the marketing mix are explained

below:

Product Based Strategies

The menu at every Nirulas restaurant is designed keeping in view the tastes

that appeal to the average urban resident. The product line, which every

Nirulas restaurant has, whether inside or outside Delhi can be categorized

into. :

• Burgers

• Pizzas

• Foot longs

• Ice Creams

• Beverages / Shakes

• Hot Numbers.

At some of its restaurants keeping in mind the local tastes it extends its

product line to:

• South Indian

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• Tandoori N Curries.

Following are the range of items available at any Nirulas restaurant:

Burgers Pizzas Ice Creams Additional

(in variety) (in variety) (in variety) (in variety)

15 12 21 5

Served as meal Available in three Includes tandoori

combos too with sizes items, footlongs,

fries and coke hot nos. etc.

Nirulas has always designed the products keeping local tastes in mind. It

keeps on adding new varieties to its product line every now and then. The

emphasis here is more on indianised food and considering Indian tastes and

consumer into account the products are designed and modified.

Nirulas expanded its menu including Tandoori items, South Indian food etc.,

during early 90’s and this definitely helped the restaurant in increasing its

clientage.

Nirulas keeps on coming up with desi-style burgers, the most recent addition

in the burger category have been the channa Buger, Bhaji Burger and

omelette burger.

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Prior to these Nirulas had added the Panner Tikka Burger and Chicken Tikka

Burger to its menu. The rest of the variety has remained more or less the

same over the past many years.

Due to the inclusion of the above few items in the list, Nirulas has re-invented

itself. Vegetarian customers are being offered with separate exclusive items

and non-vegetarian ones are offered similar exclusive items.

Nirulas has constantly changed the menu as and when consumer preferences

have changed. It is the only serious restaurant chain offering a complete meal

with wide variety.

Pricing Strategies

Inspire of Nirulas having a monopoly situation for decades with its brand of

restauranting, it has always been cautious about the way in which it has

increased prices.

Its strategy is to rely on high volumes and low margins.

Nirulas has never relied on competition to price its products. The items on the

menu are such, that they can suit every pocket. All kind of people from all

strata visits the restaurant.

It has a burger, which is max for Rs. 71 and min at Rs. 16. Its Pizzas range

from Rs. 63 to Rs. 96 for a regular size. These prices are for lower than the

pizza chains that have entered the country.

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Promotional Strategies

The ad line for Nirulas goes something like:

“Fun foods for the entire family”.

This serves the purpose of positioning the restaurant as a family, eating-place.

Promotional material used by the restaurant mostly includes distribution of

flyers, menu cards, and through newspapers.

It has its own in house design department and creative department, which

designs posters and banners for advertising. It is more of in – house

promotions.

Newspaper releases that come out every now and then of Nirulas are handled

by its public relations firm.

Children have always been the prime target group with Nirulas since they play

a key role in deciding where the family should eat. There is constant

promotional activity carried on for the kids by the restaurant.

There is a birthday club membership for children below 13 years of age, who

receive a birthday card and a free scoop of ice cream to celebrate the

occasion.

During April, to coincide with the annual exams, there is Nirulas Scholar’s

award. School children scoring more than 90 per cent troop in with their report

SaurabhGupta 28


card to claim a Triple Sunday free. Nirulas scholars are sent best of luck cards

in March.

In 1991 when this scheme was introduced there were only 600 entrees. The

members grew to 3000 in 1993 to 15,000 in 1994. By 1998 the figure has

increased to 90,000. Over 90,000 kids come do Nirulas for a free sundae.

Nirulas also organizes for birthday parties for the kids at some of its

restaurants.

Any festival that comes, Nirulas is associated with it. During Christmas time

Santa Clans appears in all its outlets to hand out sweets to children.

During Diwali it comes up with special gift packs etc.


Today Nirulas has about 25 outlets in Delhi and 3 in Nepal out of the 18

outlets in Delhi 2 of the outlets are express restaurants where the thrust is on

take away and delivery service.

Nirulas carefully uses its locations and also the meal timings to aim at different

target groups. Each of its outlets has its own personality. For example:

Connaught Place has a major share of tourists or foreigners where as

Chanakya Puri and Defense Colony get a lot of young students.

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It has carefully chosen the locations of its outlets at Vasant Kunj Leisure Bowl

and Destination Point Faridabad. Such places attract lots of crowd on holidays

and even on weekdays.

This is a very effective distribution strategy placing yourself where opportunity

exists to attract people into the restaurants.

Setting up of restaurants at such places is a way to ward off competition. Aim

is to move into residential location and making its outlets more accessible for

its clients.

Nirulas started its home delivery services in an organized manner in 1994.

Looking at competition coming from the MNC’s who established themselves

as home delivery chains, Nirulas did not want to left behind. Another reason

for starting home delivery services was the rise of the customer base.

1984 – Only 22000 customers came in a day

1989 – 35,000 Customers per day

1994 – 44,000 Customers per day

1996 – 46,000 Customers per day.

By 2004, 17 Nirulas outlets had home delivery services. The company

witnessed a ten-fold increase in home delivery revenues since it started.

Today, the number of outlets has gone up to 25, which are having delivery

services.

SaurabhGupta 30


CUSTOMER DEMAND

The factors influencing customer demand for Nirula’s menu items are as

follows:

• Adapting the western style fast food to Indinised tastes and standards.

• Long term brand-image built by the restaurant over the past 50 years.

• Nirula’s as a restaurant has it’s own image and distinction vis-a-vis other

restaurants in the market. At Nirulas the customer can choose from Indian

tandoori items to western style burgers and pizzas.

• Nirulas restaurant has been placed at the most looked upon places. One

can find a Nirulas joint at the most popular markets, cinema complexes and

bowling alleys.

• The restaurant has been placed as a family style restaurant in the market.

Considering this the inside of the restaurant is such that there is enough

place for families to come and enjoy their meal.

SaurabhGupta 31


McDONALD’S

A). AN OVERVIEW

History and Background

In 1955, Ray Kroc, a 52-year old salesman of milkshake mixing machines,

became interested in a string of seven restaurants owned by Richard and

Maurice McDonald. These two founded the quick service restaurant industry

when they converted their barbecue drive in with carhops into the world’s first

McDonand’s limited menu, self-service drive-in in 1958, in California. Kroc

liked their fast-food restaurant concept and bought the Chain for $2.7 million.

He opened his first McDonalds in Illinois in April 1955 and founded the

company that evolved into McDonalds corporation. He decided to expand the

chain by selling Franchises, and the number of restaurants grew rapidly.

Worldwide Operations

There are more than 23,000 McDonalds restaurants in III Countries (as of Jan.

1998). McDonalds 1997-year end system wide sales were $ 33,368.3 billion.

McDonalds is the largest and the best known global food service retailer. Its

global market potential is enormous seeing the member of restaurants it has.

On any day McDonald’s serves less than one percent of the worlds

population. Its outstanding brand recognition. (It is one of the most recognised

brand all over the world), experienced management, high quality food, site

SaurabhGupta 32


development, high quality food, site development expertise, advanced

operational systems and unique global infrastructure position it to capitalize on

global opportunities.

McDonalds Vision is to dominate the global food service industry. Global

dominance means setting the performance standard for customer satisfaction

and increasing market share and profitability through successfully

implementing convenience value and exception strategies.

In order to expand its operation McDonalds goes by a simple thumbrule to

estimate haw many outlets it wants: One restaurant for every 25,000 people

with new markets sprouting in so many parts of the would, the chain is

expanding at a breathtaking pace of one restaurant every three hours. This

can be known from the following:

Period No. of outlets Countries Sales

Jan. 1997 19,400 95 $ 30 billion

Jan 2005 33,000 119 $ 44 billion

McDonalds franchises restaurants in many international markets, and

decisions relating to the selection of candidates are made local by the

management in the country where the restaurant is located.

SaurabhGupta 33


McDONALD’s India

A locally owned Company

McDonalds India is a locally owned company managed by Indians. In Mumbai

Amit Jatias company, Hard castle restaurants Pvt. Ltd., owns and manages

McDonalds restaurants. In Delhi, McDonalds restaurants are owned and

managed by Vikram Bakshis Connaught Plaza restaurants Pvt. Ltd. Both

these individuals are responsible for the running of McDonalds India.

Local Sourcing is Key for Truly Indian Products

Around the world, McDonald’s traditionally operates with local partners or local

management. In India too, McDonand’s purchases from local suppliers.

McDonald’s constructs its restaurants using local architects, contractors,

labour and - where possible - local materials. McDonald’s hires local

personnel for all positions within the restaurants and contributes a portion of

its success to communities in the form of municipal taxes and reinvestment. Its

98% of the inputs are obtained domestically.

SaurabhGupta 34


McDonald’s sources food products from local companies. mutton patties are

supplied by Al-Kabeer, Hyderabad, Andhra Pradesh; fresh lettuce comes from

Pune, Ooty, Maharashtra and Dehradun; cheese from Dynamix Dairies,

Baramati, Maharashtra; sesame seed buns and sauces from Cremica

Industries Phillaur, Punjab, and pickles from VST Natural Foods, Hyderabad,

Andhra Pradesh.

Setting Up of an Extensive Food Chain

For three years before the opening of the first McDonald’s restaurant in India,

McDonald’s and its international supplier partners worked together with local

Indian companies to develop products that meet McDonald’s vigorous quality

standards. These standards also strictly adhere to Indian Government

regulation on food, health and hygiene. Part of this development involves the

transfer of state-of-the-art food processing technology which has enabled

Indian business to grow by improving their ability to compete in today’s

international markets.

For instance, Cremica Industries worked with another McDonald’s supplier

from Europe to develop technology and expertise which allowed Cremica to

expand it business from baking to also providing breading and batters to

McDonand’s Indian and other companies. Another benefit is expertise in the

areas of agriculture that allowed McDonald’s and its suppliers to work with

farmers in Ooty, Pune and Dehradun and other regions to cultivate high

quality lettuce. This includes sharing advanced agricultural technology and

SaurabhGupta 35


expertise like utilization of drip irrigation systems which reduce overall water

consumption and agricultural management practices which result in greater

yields.

In some cases, these Indian suppliers had the technology - but no market for

the products they produced. For example, Dynamix Dairies -- through its

relationship with McDonald’s was introduced to a large customer of milk

casein and other milk derivatives. The two companies entered into a business

relationship resulting in an initial export order of approximately US $ 12 million

per year - with the potential to increase. McDonald’s local supply networks

through Radhakrishna Foodland, to get products from the various suppliers to

restaurants in Delhi and Mumbai.

Respect for the Indian Customer and Culture

McDonald’s worldwide is well known for the high degree of respect to the local

culture. McDonald’s has developed a menu especially for India with vegetarian

selections to suit Indian tastes and culture. Keeping in line with this

McDonald’s does not offer any beef or pork items in India. McDonald’s has

also re-engineered its operations to address the special requirements of a

vegetarian menu. Vegetable products are prepared separately, using

dedicated equipment and utensils. This separation of vegetarian and non-

vegetarian food products is maintained throughout the various stages of

procurement, cooking and serving.

SaurabhGupta 36


An Employer of Opportunity

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

and long-term careers to the Indian people. the average McDonald’s

restaurant employs more than 100 people in 25 different positions - from

cashier to restaurant manager. McDonald’s world-class training inputs to its

employee could be seen in the present close to 10000 employees currently in

Mumbai and Delhi.

Community Partnership

McDonald’s believes in giving back to the communities it serves. Wherever

McDonald’s goes it becomes a part of the community it operates in and

contributes towards the development of the locality. For example, McDonald’s

has introduced the concept of ‘Litter Patrol’ - McDondld’s employees go

around the immediate vicinity of the restaurant every day, packing up garbage

left behind not only by customers from McDonald’s restaurants but also by

other visitors to the area. The result is a cleaner neighborhood.

To commemorate 50 years of Indian independence, on 15 August 1997,

McDonald’s Mumbai organized a ‘No Garbage Drive’, in association with the

‘Brihan Mumbai Municipal Corporation’ and five schools in Bandra.

Inaugurated by the Municipal Commissioner, this was in support of BMCs

‘Zero Garbage, initiative. Other community activities undertaken by

McDonald’s in India include the adoption of local public parks for restoration

and beautification, thereby providing a play area for children. In fact in Delhi,
SaurabhGupta 37


McDonald’s has even addressed the security issues relevant to a particular

residential colony.

Charities, especially those benefiting children, are often the recipients of

McDonald’s support - either through the use of the restaurants for meetings or

for fund-raising activities. McDonald’s International charitable foundation,

Ronald McDonald House Charities supports charities around the world. In fact,

in 1993, RMHC donated to the Indian Prime Minister’s Relief Fund following

the devastating earthquake in Maharashtra.

Quality, Service, Cleanliness and Value

The McDonald’s philosophy of QSC & V is the guiding force behind its service

to the customers.

McDonald’s India serves only the highest quality products. All McDonald’s

suppliers adhere to Indian government regulations on food, health and

hygiene while continuously maintaining McDonald’s own recognized

standards. All McDonald’s products are prepared using the most current state-

of-the-art cooking equipment to ensure quality and safety.

At McDonald’s the customer always comes first. McDonald’s India provides

fast, friendly service - the hallmark of McDonald’s that sets its restaurants

apart from others.

McDonald’s restaurants provide a clean, comfortable environment especially

suited for families. This is achieved through McDonald’s stringent cleaning
SaurabhGupta 38


standards, carefully adhered to.

McDonald’s menu is priced at a value that the largest segment of Indian

consumers can afford. McDonald’s does not sacrifice quality for price - rather

McDonald’s leverages economies of scale to minimize costs while maximizing

value to customers.

McDonalds has a 20-year profitability plan for India and it intends having at

least 50 restaurants here by the year 2000. The company has already

invested Rs. 50 crore in its Indian operations, and each of the two joint venture

partners has invested about Rs. 17.56 crore.

B). MARKETING FUNCTIONS

Mc Donalds started its operations in India in October 1996 and by July 1998 it

has served about 10 million customers in the country.

Mc Donalds marketing philosophy is captured in its motto of “Q.S.C.V.”, which

is the guiding force behind its service to the customers.

Mc Donalds India serves only the highest QUALITY products. All Mc Donalds

suppliers adhere to Indian government regulations on food, health and

hygiene while maintaining Mc Donalds own recognised standards. All its

products are prepared using the most current, state of the art cooking

equipment to ensure quality and safety.

SaurabhGupta 39


At Mc Donalds, the customers always come first. Mc Donalds India provides

fast friendly SERVICE – the hallmark of Mc Donalds that sets its restaurants

apart from others.

Its restaurants provide a CLEAN, comfortable environment especially suited

for families. This is achieved through Mc Donalds stringent cleaning

standards, carefully adhered to.

Mc Donalds menu is priced at a VALUE that the largest segment of Indian

customers can afford.

It’s strategy in India is to target the plain and simple mass market. The target

consumers for Mc Donalds are the family and the kids. Mc Donalds has been

positioned as a “Family Restaurant”.

Product Related Strategies

World over Mc Donalds is known for its juicy beef burgers. But in order to

settle in India the entire concept of beef burgers had to be changed. India is

the only country where Mc Donalds is offering veggie burgers and non-veg

burgers without beef (uses mutton instead).

This is a classic case of Product Adaptation, where Mc Donalds adapted its

product according to the culture and norms of the country in order to position

itself in the market.

There has been other product adaptations too. Mc Donalds sells a spicier

Maharaja Mac in India as its flagship product in place of the globally famed Big
SaurabhGupta 40


Mac. It also has a large capacity for vegetarian burgers, the production and

serving of which is separated in such a way that the customer can actually see

it.

Mc Donalds product line is almost similar to other burger chains in the country.

• Burgers

• Desserts

• Beverages/shakes

• Assorted items.

Burgers Pizzas Ice Creams Additional Meal

(in variety) (in variety) (in variety) (in variety) Combos

12 - 2 2 (french fries and 7

veg nuggets)

Product standards, packaging, quality, processing are all the same like at any

other Mc Donalds outlet in the world. The quality standards are so stringent

that nowhere, not even is its rawest state, is any of the food touched by hand.

The typical burger undergoes 54 checks before it is served. The menu at Mc

Donalds has remained more or less the same over the past 2 years except a

couple of additions in the burgers variety and inclusion of couple of items in

SaurabhGupta 41


the dessert variety.

Mc Donalds even has the calorie count carefully worked out for its burgers. A

veg burger offers 418 calorie, 10 gm of protein, 22gm of fat and 48 gm of

carbohydrate.

All Mc Donald’s menu items fit into a balanced diet and it offers certain items

that fit well within a low fat diet (option of burger with or without cheese).

Pricing Strategies

Worldwide Mc Donalds is known for its ‘Purchasing power’ pricing. The ability

to pay-of a large section of customers has been the sole criteria. This was

assessed through market research. It wanted to price its products in such a

way that it can even be accessible to a child. For this it examined Indian

spending on snacks and other foods before setting on the prices.

Price variations from 1996 to 1998 for a couple of items are as follows:

Item Entry level (1996) (2005)

Mc Burger Rs. 12 Rs. 20

Maharaja Mac Rs. 42 Rs. 59

The company continued with the 1996 prices for about a year in order to meet

its one million-target audience.

SaurabhGupta 42


One look at the restaurant and it doesn’t seem that the prices of its products

would be this low. Reason being that Mc Donalds gets the materials (55 per

cent of outlets running expenses) at very cheap rates. Therefore this is one of

the reason that Mc Donalds products are priced reasonably.

It buys its supplier from 35 suppliers who sell at incredibly low prices. Products

at Mc Donalds are neither elitist in its pricing nor at the dhaba level, they are

average in its pricing.

Mc Donalds was offering a softie at a price of Rs 6/- about a year back during

the festive season. Today this softie costs only a rupee more at Rs.7/-. No

restaurant of this caliber offers a product at this rate.

Mc Donalds recently has come up with “Economeals”, in which one can afford

to have a burger and coke for as little as Rs. 29/- and at max for Rs. 49/-

(Instore pamphlet enclosed) Mc Donalds keeps on coming up with such meals

almost every month such that almost anyone can afford to have a Mc Donalds

product.

SaurabhGupta 43


Promotional Strategies

Mc Donalds ad line goes like:

“I am loving it”

Mc Donalds had started its promotional activity with local area banners and

posters and now it has moved on to movie hall commercial. Its commercial is a

60-second close up which focuses on a burger being prepared in slow motion

tantalizing the audience as though it’s a strip tease.

It has even started advertising through local channels such as siti cable.

Mudra is the ad agency, which puts up publicity banners in Delhi and Mumbai

and takes up the local TV commercials. Newspapers such as Delhi times are

also being used for local advertising. McDonald’s plans to advertise in national

newspapers such as Hindustan Times and Times of India in another couple of

months.

In addition to this Mc Donalds also has a public relation agency handling its

account that takes care of publicity and press releases.

McDonalds keeps on coming up with sales promotion schemes every now and

then.

During World Cup Soccer it came up with this soccer game for Rs.11/- with

every meal combo ordered. Since kids are the prime targets by the restaurant,

SaurabhGupta 44


it has come up with happy meals especially for the kids along which a game is

free.

Also, for the kids Mc Donalds is the most happening place for birthday parties

kids love the place due to all the attention and knick-knacks they are

showered with. The restaurant even has playpens displayed especially for the

kids.

McDonalds also comes up with special schemes during the festive season

Last month i.e. September, during Navratras it came up with special “Shudh

Shakahari Meal” where a meal for two was for Rs. 99/- and a meal for four

was for Rs. 199/- (Instore pamphlet enclosed). Another way through which Mc

Donalds is promoting its image is via community services. There are Mc

Sermons on maintaining parks, conducting litter patrols and putting up public

trashcans.

At majority of McDonald’s restaurants, the management emphasizes on

developing parks for the kids as a playground for them. E.g. at McDonald’s

G.K. restaurant there is a playground developed for the kids in front of the

restaurant. The management has put boards at these parks to put across

certain messages for the community as a whole, such as:

“If you see someone without a smile, give them one of yours”

“Children are the light of our future” etc.

SaurabhGupta 45


In addition to all these promotional measures, McDonalds has boards put all

over the roads to show directions to their restaurant. These boards are put

almost two to three kms before the location of the restaurant. This makes it

easier for the customer who is not familiar with McDonald’s restaurant

location.


Till date Mc Donalds has 187 outlets in India out of which 56 are in Delhi and

five in Mumbai. In 1997 there were about 3 outlets in Delhi and fifty three more

outlets have been added to the list by 1998.

By the year 2000 Mc Donalds plans to have about 50 outlets in the country. At

Mc Donalds, while opening a restaurant the emphasis is, to choose a site

whereby 150-200 seating capacity can be available. This is to attract as many

people as possible into its premises.

SaurabhGupta 46


CUSTOMER DEMAND

The factors influencing customer demand for McDonald’s menu items are as

follows:

• McDonald’s worldwide is known for its quality burgers. This worldwide

name for burgers has influenced the demand for it in the Indian market.

This can be known from the fact that within two years it has served about

10 million customers at its restaurants.

• The factor that influences customer demand for the organizations product to

a great extent is the offering of highest quality product, providing services

which is fast friendly and accurate, creating a restaurant atmosphere which

is always clean, comfortable and ideally suited to India families and

children.

• McDonald’s products are offered at a value that can be affordable by the

maximum number of Indian consumers.

• The Chain of restaurants provide a variety of comfortable seating

arrangement to accommodate different size groups of people from

individuals to large families.

SaurabhGupta 47


McDONALD’S Customer Base

• In 1997, Mc Donalds 3 outlets received about 15,000 customers daily.

• A Mc Donalds restaurant with about 150-200 seating capacity serves about

40,000 customers per month.

• By July 1998, Mc Donalds has served 10 million customers in the country.

SaurabhGupta 48


MARKET RESEARCH

(a) Research Objective

The objective of conducting a market research study is to:

(i) Identify the unique factors that attract people to each of the three stated

restaurants.

(ii) Determine the percentage wise preference for these for these

restaurants.

(iii) Finding out the frequency of visit at each of the stated restaurants.

(b) Methodology

(i) A set of attributes was generated on basis of which objective I could be

determined. This would eventually determine what attributes/benefits

the consumer desires.

- Price - Accessibility

- Quality of food - Variety

- Speed of Delivery - Space

- Cleanliness/hygiene - Decor

(ii) Based on above attributes concepts were developed on which analysis

could be made.

SaurabhGupta 49


(iii) Finally a personally administered questionnaire survey was conducted

(Based on which findings have been presented).

(c) Reasons for selecting the various questions

(i) Question 1 & 2

To determine the frequency of visit to all three fast food restaurants and

determine the income generated approximately on basis of the expenditure

incurred.

(ii) Question 3

Various factors being considered by respondents to select a restaurant.

(iii) Question 4

Evaluation of most preferred fast food restaurant on various criteria.

(d) Data Preparations

A total of 20 questionnaires used to conduct the survey. In accordance with

the response drawn from the questionnaire tables and graph have been

prepared

SaurabhGupta 50


Determination of Percentage wise Preference

(Calculations shown in Appendix 1)

Percentage wise preference for the three stated fast food restaurants as

indicated by market research study is :

Restaurants Consumer Preferences (in %)

Nirulas 26

Mc Donalds 65

Wimpys 09

Wimpys
9% Nirulas
26%

Mc Donalds
65%

SaurabhGupta 51


BARGRAPH INDICATING FREQUENCY OF VISIT

(Computations in Appendix II)

The above pie diagram shows that 26 per cent of consumers would prefer

going to Nirulas restaurant,65 per cent prefer for Mcdonalds and only 9 per

cent prefer a Winpy’s joint.

The unique attributes which attract consumer to Nirulas that makes it stand out

from the rest is variety, accessibility and value for money.

McDonald’s and Wimpys (both foreign entrants) have a very little difference in

their preferences by the consumer.

Preference for Nirulas over and above the other two states that over the past

many decades Nirulas has maintained its brand recognition till date and it is

very much likely to continue in the future, since Nirulas being an Indian

company knows the customer tastes and preferences better than the foreign

entrants.

SaurabhGupta 52


BARGRAPH INDICATING FREQUENCY OF VISIT

(Computations in Appendix II)

14
Nirulas McDonald's Wimpy

12

10
10
10

8
8
7

6
5 5

4
4
3
2
2
1 1 1 1 1
0
0
Do not visit Occasionally Monthly Weekly More than
once a w eek

SaurabhGupta 53


Identifying Unique Attributes

The unique attributes of the three fast food joints are:

Nirulas: Variety, Accessibility, value for money.

Wimpys: Spacious, Quality of food

Mc Donalds: Spacious, Service, hygiene, value for money.

Criteria most commonly considered by respondents while selecting a

fast food joint.

Criteria Ranking (from 1 to 5)

Quality of food - 1

Cleanliness /hygiene - 2

Variety - 3

Speed of Delivery - 4

Price - 5

(Computations in Appendix III)

SaurabhGupta 54


COMPARITIVE ANALYSIS

A comparative analysis for the three food chains has been made on the

following five parameters:

 Performance

 Variety

 Price

 Accessibility

 Service

Performance

Nirulas started its operations in the country as early as in 1930’s but its first

fast food restaurant came up around in 1950’s. This means that the chain is

about five decades old. Wimpys is about 8-9 years old and Mc Donalds just

two years old.

Each of these chains has its own reputation and name in the market. Nirulas

being in the country for so long still has it’s distinguished fan following and is

surviving in the market despite the coming in of the international chains such

as Mc Donalds and Wimpys. Nirulas is considered to be more of a dine–in

eating-place than a fast food joint like the other two. Most of the time the

customers coming in at Nirulas are not in a hurry to leave, they want to relax

SaurabhGupta 55


and enjoy their meals. In contrast Mc Donalds and Wimpys are considered to

be a place to grab a bite or quick take away fast food joint. McDonald’s in US

is a lunch time place from which customers keep away in the evening. Nirulas

on the other hand is packed after dusk with carloads of families to have

dinner. Despite Mc Donalds being placed as a comfortable family-eating

restaurant, a person would come to the restaurant to have a quick meal for

lunch or dinner alone or with his family.

When Wimpys came into the country in 1990, with two outlets in Delhi, Nirulas

had about 11 outlets all performing well, serving a wide variety of items from

thaalis to hotdogs to pizzas. But Wimpys was not performing well except in a

couple of locations such as C.P and G.K in Delhi. The worst came for Wimpys

when Mc Donalds had itself in locations where there was already a Wimpys

outlet. Market became sluggish for Wimpys after the entry of Mc Donalds.

Preference for the Mc Donalds burger increased vis-à-vis the Wimpy burger

for quite some time (about a year). People started liking its service, quality of

food, ambience etc.

However, in the past six to eight months Wimpys has tried to review its

position by offering a variety in the menu i.e. inclusion of salads, pizzas etc, to

beat competition.

The trend for kids birthday parties at these restaurants which was initiated by

Wimpys has witnessed quite a set back from the entry of Mc Donalds. The

audience suddenly started preferring Mc Donalds for birthday parties than

SaurabhGupta 56


Wimpys within a year of its entry. (On an average Mc Donalds hosts about five

to six birthday parties at each week at majority of its restaurants).

When Mc Donalds came up in locations where Nirulas was already

established, it affected the restaurant drastically in the initial few months. But

as and when the customers had tried the Mc Donalds product, they returned

back, happy that Nirulas offers a wider choice and tastier food.

Hence, Nirulas is still performing well in the market despite the coming in of

Mc Donalds and Wimpys. Wimpys however would need to re-define its

strategy to survive since it is in for a lot of competition and as far as Mc

Donalds is concerned, its worldwide brand recognition is enough to make it

sustain in the market.

Variety

The range of items that each of these joints has can be seen in the following

table.

SaurabhGupta 57


Name Burger Pizzas Ice Additional( includes

(in (in creams assorted items)

variety) Variety) (in variety)

Nirulas 15 12 21 15

Wimpys 14 8 17 8

Mc 12 - 2 2

Donalds

No. of Meal Combos

Nirulas 15

Mc Donalds 7

Wimpys 4

The range of items given in the above table and no. of meal combos are

standard items which the restaurant has. In addition to this Nirulas comes up

pizza of the month and ice cream of the month. Wimpys comes up with new

meal combos every two months and Mc Donalds comes up with a meal combo

also almost every month.

For all the product lines Nirulas takes the cake vis-à-vis other two joints. The

customer has a range of items to choose from at Nirulas. He is just not

restricted to a few items in the menu list. One has every thing from Indian to

Western food at most of its joints, Wimpy’s too has a variety of items in the list,

SaurabhGupta 58


but nowhere near to what Nirulas is offering. Though McDonald’s has the least

variety of items in its menu, it is surviving in the market because of its world

wide brand recognition. The fact that McDonald’s burger is famous all over the

world, is what that is making it sell like hot cakes in India.

However if one wish to just grab a bite one could go to McDonald’s but if one

is looking for variety then Nirulas is the place to go to. From the market

research study conducted to know consumer preferences, Nirulas is the most

preferred eating place and variety is one of the unique attributes for Nirulas,

which attracts customers to its restaurant. In the burgers category Nirulas has

the maximum variety, Wimpys stands second and Mc Donalds has the least

variety. For Pizzas Nirulas has more variety than Wimpys and for ice creams

too Nirulas has maximum variety.

Price

Each of the products at Wimpys, Nirulas and Mc Donalds are priced so as to

suit everyone’s pocket.

When Mc Donalds opened its first restaurant in the country it adopted a price

strategy whereby all its products were priced lower than the domestic

counterparts. It had priced its chicken burger at Rs. 39, a rupee below Nirulas

equivalent in 1996. Today, the burger is priced at Rs. 20 and Nirulas burger is

for Rs. 40.The 2005 prices of each of the three restaurants for their chicken

and veg burger are:

SaurabhGupta 59


Chicken Burger (Rs.) Veg Burger (Rs)

Nirulas 45 40

Mc Donalds 49 20

Wimpys 43 33

The prices of its products are very much competitive with a rupee or two below

or above.

Another interesting feature of these restaurants is the meal combos that they

serve. All the three food joints offer these meal combos with a combination of

burger + pepsi + fries. Basic idea behind this is to offer meals at a very

economical rate. The meal combo rates of each of the three joints can be

depicted from the following table:

SaurabhGupta 60


Veg Meal Combo Non-veg Meal Combo

(Veg Burger + Coke+ (Chicken Burger + Coke +

Fries) Fries)

Nirulas Rs. 57 Rs. 64

McDonald’s Rs. 51 Rs. 55

Wimpy’s Rs. 65 Rs. 75

Again for these meal combinations too the prices are competitive for all the

three restaurants. Nirulas offers these meals at the most economical rates

compared to McDonalds & Wimpy’s.

However, from the market research study conducted price is considered to be

the fifth most important variable while selecting a fast food joint. The emphasis

is more on quality of food, cleanliness, variety and speed of delivery.

Therefore price becomes an in significant characteristic to the extent that the

product is affordable by the consumer.

Accessibility

Every restaurant has to be placed at the right location such that it attracts the

maximum number of customer into its premises. All the three restaurants in

the city are located at the most frequently visited places by the customer.
SaurabhGupta 61


Nirulas started with its expansion plan by opening a joint in C.P. (the most

frequently visited place in the city). Soon more and more joints followed and all

of them are located at either the most popular markets in the city or cinema

complexes or bowling alleys. This way anybody going for shopping, watching

a movie or just playing some games doesn’t have to go to another part of the

city to have meals. Wimpy;s too opened its to first restaurant in the city at

C.P., to be accessible to the tourists, shoppers and executives in that area.

McDonald’s opened its first restaurant in Vasant Vihar Complex to be

accessible to the movie watcher’s coming there.

How ever, Nirulas has an added advantage in terms of accessibility vis-à-vis

the other two joints due to its home delivery services. Although the services

are restricted to the locality where the restaurant exists, still it has an

advantage because the customer if he does not feel like going to the

restaurant and have a meal he can still consider it if the home delivery

services are made available. Amongst the three restaurants Nirulas has the

maximum no. of outlets in and around Delhi. This is mainly due to amount of

time for which it has been into the business.

However, all the three restaurant are located at the most frequently visited

places by the people such as shopping areas, cinema halls, bowling alleys

etc.

SaurabhGupta 62


Service

McDonald’s takes the share on this attribute for providing the customer with
fast and friendly services.

At Mc Donalds you get your order usually within 60 to 90 seconds from the
time it is placed. Providing the customer with fast and friendly services is
under the philosophy of McDonalds. This is one big advantage Mc Donalds
has over Wimpys and Nirulas. Even at Wimpys you get your order between
two the three min. but this is followed at only few of the restaurants. It is not a
standard rule everywhere, but at Mc Donalds it is at every restaurant.

On this attribute, Nirulas has a disadvantage. Once an order is placed it
normally takes about 10 to 15 min. to get the order. This is probably because
of the fact that the kind of food served and the production facilities used by
Nirulas differs from the production facilities used by McDonald’s and Wimpys.
Mcdonald’s and Wimpys have an assembly line approach to fast food where a
certain number of orders are already prepared/cooked, the idea is that as
soon as the payment is made at one counter, the food can be picked from the
next almost instantly. On the other hand at Nirulas the order is dealt with after
it has been placed. But whatever may be the case, provision of fast and
friendly services to the customer is very important for any fast food restaurant.
In the market research study services is the unique factor for McDonald’s that
attracts the customer to its restaurant. The customer prefers being serviced by
a friendly countrer assistant than someone who is arrogant and least
interested in entertaining the customer properly.

SaurabhGupta 63


The above analysis can be summarized in the following chart:

Variety Service Ambience Price Accessibility Taste of Food

NIRULAS Has 15 types of Takes about Not too Moderately Located at the Spicy
Burgers, 12 10-15 min. for Spacious Expensive most visited
types of Pizzas order to arrive places
& 21 types of
Ice-Creams to
choose from

WIMPY’S 14 types of Take about 5 to Spacious Expensive Located only at Not too spicy
burgers, 8 6 min certain certain major
types of Pizzas joints & 60-90 markets
& 17 types of sec. in another
Ice-creams to
choose from

MCDONALD’S 12 types of Average Very Spacious Affordable Located only at Not at all spicy
burgers, no McDonald’s certain major
Pizzas, 2 types restaurant markets
of Ice-creams serves in about
to choose 60-90 sec.

SaurabhGupta 64


SWOT ANALYSIS

SWOT Analysis is an overall evaluation of the previous analysis and the

marketing strategy of the organization in terms of its strengths and

weaknesses of the unit, the opportunities available to it and the threats

posed by the external environment.

The strengths, weaknesses, opportunities and threats faced by each the

three restaurants are presented individually.

McDONALDS

Strengths

• Mc Donalds serves its customers with high quality products. There are

extensive quality tests at the supplier and all products are examined

again in the restaurant to ensure that they are of highest quality

possible.

• Mc Donalds provides fast, friendly service. Any customer visiting Mc

Donalds is usually served within 60 seconds.

• Mc Donalds menu is priced in such a way that the largest segment of

Indian consumers can afford. It has a wide variety of products at

different prices to be affordable to as many as possible.

• Mc Donalds is an active participant in community services.

SaurabhGupta 65


Weaknesses

• Mc Donalds has limited range of items in its menu. However, to get a

item included in the menu approval has to be made from the high tech

kitchens at Mc Donalds headquarters in suburban Chicago.

• In India burgers are a long way from becoming the common man’s food,

having fast food is considered to be another option for dining out, unlike

other countries.

Opportunities

• Mc Donalds can develop two regional training colleges in India, one

each in Delhi and Mumbai. This can save the expense of the

organization is sending its management team and crewmembers to

outside countries like Indonesia and America.

• Mc Donalds expects to expand its chain in the coming years. It plans to

open about 50 restaurants by the year 2000. This can have the

opportunity to serve and employ more people.

Threats

• Mc Donalds faces tough competition from other food chains in the

country both international i.e. Kentucky Fried Chicken, Wimpys and

Pizza hut and domestic i.e. Nirulas.

SaurabhGupta 66


• The decision taken by Mc Donalds India to serve ‘Shudh Shakhari”

meals at its restaurants can risk the global American image of Mc

Donalds.

NIRULAS

Strengths

• The consumer has a wide variety of items to choose from at Nirulas

(Both Indian and Western). These items are constantly modified keeping

the consumer preferences in mind.

• Nirulas brand loyalty has not changed (at least till now) despite the

coming in of the MNC’s.

• Home delivery services started by the restaurant have improved its

customer base. This would prove to be an added advantage in the long

run.

SaurabhGupta 67


Weaknesses

• The restaurant does not have stringent cleanliness/hygiene standards.

• The restaurant does not provide with fast and friendly service. At times it

takes about 30 min for a meal to be served.

Opportunity

• The home delivery services started by the restaurant can be expanded

further by introducing it even at those joints where is has not started.

This would help the restaurant to expand its customer base and serve

more clients.

• The opening of Nirulas restaurants at places like “destination point” and

“leisure bowl” has tremendous opportunity for serving its clientele.

Threats

• Nirulas mainly faces competition from international fast food chains that

have established themselves in the country about two to three years

back such as Mc Donalds, Pizza Hut, Dominos, KFC etc.

• The international food chains that are opening their outlets in the country

might give attractive offers to its employees. Hence there could be a

problem in keeping its employed workforce.

SaurabhGupta 68


WIMPYS

Strengths

• Wimpys serves its customers with a wide variety of items. The consumer

has a list of items to choose from the menu.

• The crewmembers at the restaurant are friendly and meals are served in

about 5 to 7 minutes from the time of its order. At certain restaurants

meals are even served immediately after the order is placed.

• The restaurant is a clean and spacious enough to have a comfortable

meal.

Weaknesses

• Does not adhere to strict service standards at all its restaurants in a

similar way. If a meal is provided at one restaurant in 60-90 seconds, it

should be provided at the second restaurant in the same time limit.

Opportunity

• With the coming up of a modified menu and changing the image of the

restaurant during the past months, opportunity does exist for Wimpys to

make itself visible to the customers. It plans to go on these lines for

some more time such that its customer base can be improved.

• Opening of its restaurant at New Delhi Railway Station has improved its

clientele at the nearby restaurants around that area.

SaurabhGupta 69


Threat

Competition exists for Wimpys both from foreign and Indian food Chains

i.e. Mc Donalds, Pizza hut, Nirulas etc. It is going to face problems in

competing with international burger chains come into the market and others

coming into the market.

SaurabhGupta 70


LIMITATIONS

There are following drawbacks in the findings:

• Sales figures (current and past) could not be made available for any of

the three restaurants.

• Distribution strategies of Mc Donalds not upto the mark.

• Customer base figures not available for Wimpys.

• Organisation structure for McDonald’s could not be made available.

SaurabhGupta 71


CONCLUSIONS AND RECOMMENDATIONS

CONCLUSIONS

Indian food market has witnessed several entrants into the country over the

past few years. Each of the established food chains and the ones entering

the market pose a threat to each other. In the food market each restaurant

faces competition from 1000 other restaurants, it could be a 5-star

restaurant or a roadside dhaba. In order to prove itself, the restaurant has

to have a well-defined marketing strategy and famous brand recognition to

survive in the market.

The three fast food chains whose marketing strategies have been

compared and analyzed also need to look on their marketing strategies to

do more than just survive in the market (Certain recommendations have

been put forth in the coming pages).

The attractiveness of the three restaurant chains in the fast food market

can be judged from the following factors:

• Existing Competition

The Indian food market today has many established global chains that

have opened their restaurants at major cities in the country. It is only those

restaurants who have built their image over many years in the country i.e.,

Nirulas and world famous brands such as McDonald’s are the ones to

sustain themselves in the market. Any other restaurant below this caliber

SaurabhGupta 72


would not have the power to fight these joints. Nirulas has the power to

fight competition because it is not identical to the MNC chains and has not

duplicated their policies. Also as long as it continues to deliver value to its

customers it is unlikely to feel the heat of competition. McDonald’s however

is new to the market but in a short period of time it has built a place for

itself in the market by reaching the maximum number of audience in almost

all income groups. Wimpy’s however will have problems competing with the

multinational burger chains come into the market.

• Substitutes Available

There are end numbers of substitutes available to the customer for fast

food in the market. The customer can choose from traditional Indian cuisine

to specialty cuisine such as Chinese, Italian, Thai etc. For the three fast

food joints there must be more than a thousand restaurants to choose from

as substitutes. Even Wimpy’s burger could be a substitute for Nirulas Pizza

or vice versa. It all depends on the choice of the customer of what he wants

to have.

SaurabhGupta 73


• Likely New Competition

Looking at the changing lifestyles and the disposable income of the middle

class increasing, the food market has enormous potential. Wimpy’s

definitely will have problems in the future if new multinational burger chains

enter into the market. With this its market share will fall and it could even

become a non-player in the near future. McDonald’s with its “purchasing

power pricing” policy however has dominated the middle class segment in

the market. Until and unless some chain with the same policy attacks the

market, McDonald’s does not have any threat from new burger chains

entering the market. For Nirulas however it is the variety and the location

factor, which can save the chain from new competition.

SaurabhGupta 74


RECOMMENDATIONS

For the purpose of growth of each of the thee fast food restaurants i.e.,

Wimpy’s, Nirula’s and McDonald’s certain recommendation have been

given below:

McDONALD’S

• Variety: Mc Donalds should start considering new additions to its menu

looking at the expansion plan the company has lined up for India, it

cannot do much until and unless it makes new additions to the menu.

• Being an international chain, there is scope for drive in restaurants in

certain joints of Mc Donalds. The new outlets, which the company plans

to come up with, this would be an excellent way of introducing

something new in the country.

WIMPYS

• Accessibility: Wimpys could come up with a restaurant at the

International Airport/Domestic airport considering the success of its NDR

station joint.

• Home delivery services could also improve its clientele.

SaurabhGupta 75


• Compared to the items of McDonalds, the masses do not derive value

for money for certain items and hence its price should be reduced

atleast marginally. If done in places where both are located, more

income could generated by Wimpy’s

NIRULAS

• Accessibility: Nirulas should look at more and more places like

“Destination Point” and “Leisure bowl” to expand its chain of outlets.

• Standard of hygiene: People of India are becoming more hygiene

conscious. Therefore the management needs to become more hygiene

conscious. The restaurant should start providing with disposable spoons,

plates etc., Mineral water should also be provided free of cost.

• Décor: Any new restaurant that Nirulas plans to come up with should be

spacious, vibrant and give a pleasant look.

• Services: Staff needs to be more efficient and friendly.

• Other than the variety provided by Nirulas a low calorie diet could also

be added to its menu. This would attract health conscious people into

the restaurant thus improving its customer base.

SaurabhGupta 76


• The company’s plan of opening up of outlets in West and South East

Asia should be materialized as soon as possible as this would affect the

image of the restaurant nationally.

Common Recommendations for all three : Overnight services could be

started by a few joints of Nirulas , Wimpy’s and McDonald’s. Since

overnight services are there at McDonald’s restaurants in certain parts of

the world, it could start these services in India too. However these

restaurants can quote extra charges for their service after 12’O clock

midnight.

SaurabhGupta 77


BIBLIOGRAPHY

Sources Referred

1. Internet : McDonalds Website

Nirulas, Website.

2. Company Literature : McDonalds India Information Booklet

Nirulas Company Information Booklet,

3. News Papers : Economic Times

Dated - 15th September 1995

July 21st 1996

4. Magazines : A & M - Issue 15th February 1997

A & M - Issue 31st May 1998

A & M - 15th January 1995

First City - January 1997

5. McDonald’s Restaurant Brochures

6. Nirulas Restaurant Brochures

7. Wimpy’s Restaurant Brochures

SaurabhGupta 78

Comparitive analysis of major fast food joints in india

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