McDonald’s recently completed 20 years in India. Kedar Teny, Director – Marketing & Digital, Hardcastle Restaurants, McDonald’s India (West & South) talks about the major takeaways from the journey so far and what lies ahead
By Samarpita Banerjee
Q] McDonald’s recently completed 20 years in India. How has your journey been?
Our journey in India has been a fascinating one. To break the journey, we have split it into three parts. The first phase was about building the brand. The second was about growing it and then it was about acceleration. So, when we got into it 20 years back, after the initial euphoria of long queues to get inside, it clearly required the next level to move forward. That’s when we realized that anything behind glass walls with air-conditioning was perceived as expensive. That was the barrier we needed to break. Till date when we talk to people about our most recalled ad, they fondly talk about ‘stage fright’. That commercial really resonated well with consumers and opened the gates to a whole lot of people. Once that was done, we started getting into the growth phase where we needed to localize our flavors. And finally, if you have to explore any category in a country like India, it has to be based on value. And that’s when McAloo Tikki came in and we pretty much founded the category of burgers in the country. Now, we are in a fairly exciting phase because we are pushing ourselves into adding more conveniences to the brand. We are adding coffee, drive-throughs and more highway stores, just to make ourselves more ubiquitous and to ensure that people can access us from anywhere.
Q] What was the insight behind the campaign ‘A lot has changed. Nothing has changed’?
Twenty years is an important landmark in any brand’s life. We were sitting and ideating on what we wanted to talk about. And the insight actually came about from our customers. Every time, we make it a point to go and catch-up with our customers while they are in our restaurants, and generally have a conversation. We realized people came to us for different reasons. The same person could walk in to have a cold coffee or for a meal with his children. So it’s just the same person who is accessing you for different reasons and the unifying factor was the comfort and trust people had in the brand. I was a teenager when McDonald’s came to India. But when it came to taking my children for their first real meal outside home, the choice of place was a no-brainer because you just want to pass on the baton to the next generation. I think very few brands give you that opportunity and with that we hit on an insight. From there, Leo Burnett took it ahead with a lovely, compelling story which brought the whole idea alive.
Q] It’s been 20 years, and the brand has evolved with the consumer’s taste. How has the brand reinvented itself over the years to stay relevant in the market?
When we introduced the brand, it was pretty much an American brand talking about its core international products. We had to add a new dimension which didn’t really exist predominantly around the world - vegetarian. But as we went along, we had to bring in many more people into the fold of categories. We pioneered the category of western fast food and made it accessible with two things - taste and price. As we progressed, we realized the consumer expected us to increase the level of spice. That’s when we launched McSpicy. Also, earlier this year, we re-launched the Maharaja Mac, and that was purely coming from the fact that people were expecting more filling meals. From where the brand was when we launched to where we are today, there has been a marked difference. We have added new conveniences like McCafe and delivery. We started deliveries in 2005-2006 and it is currently growing in double digits. Coffee is another exciting space and we are powering our way through it by offering great handmade coffee at affordable prices. So, giving importance to value is deeply embedded in our DNA, and we will continue to give quality stuff at affordable prices.
Q] How difficult is it to sell your products to consumers who are waking up to health consciousness?
For a city like Mumbai, the number for the informal eating-out category is about 9-10 times in a month, which in itself sounds very low as compared to places like South East Asia, where the number ranges in the high 20s to 30s. We will get there, I am sure. But as of now, there is a section of people who are getting health conscious. However, when you go out, you want to indulge. And it’s just that the amount of negativity that comes around the category is far greater than what’s actually being served out there. We want to change people’s perception towards the segment. We are a quick service restaurant, so we serve good food quickly. That’s about it. We do conduct a lot of farm trips. Our kitchens are easily accessible to people where they can come in and see how things are made. Globally around McDonald’s, there are lots of trends that are emerging and we are learning from the best practices. You will see some action soon.
Q] How difficult is it to sell your products to people who are waking up to health consciousness?
For a city like Mumbai, the number for the informal eating out category is about 9-10 times in a month which itself sounds very low as compared to places like South East Asia, where the number ranges in the high 20s to 30s. We will get there, I am sure. But as of now, there is a section of people who are getting health conscious. However, when you go out, you want some indulgence. And it’s just the amount of negativity that comes around the category which is far greater than what’s been actually served out there. We want to change people’s perspective towards the segment. We are a quick service restaurant, so we serve good food quickly. That’s about it. We do conduct a lot of farm trips, our kitchens are easily accessible to people where they can see how things are made. Globally around McDonald’s now there are new trends that are emerging and we are learning from the best practices, you will see some action soon.
Q] What are your plans for the future in terms of investments to stay ahead of the curve?
We have an outlay in the range of about Rs 700-750 crores where we aspire to go from the current 245 restaurants to about 500 odd restaurants by 2022. But what’s important for us is that we are also offering conveniences, value and menu to the people we serve. We are the only player right now that is operating in a space like breakfast which is a winning dimension that we want to see grow more than where we are currently. Coffee as a culture is picking up and therefore, the proliferation of McCafes. In Mumbai, we have around 45 McCafes and overall we are at 90. Delivery as a platform is really up and we are expanding in the space. And with drive-throughs and other conveniences, people will be able to access us more often.
Q]Have you made changes in the contents of the food to make them healthier?
It’s a continuous journey and won’t happen overnight. Back in 2011, we launched our grilled breakfast menu which has lots of proteins in the form of eggs, muffins, carbs and all sorts of vitamins to make it healthy and nutritious. Secondly, in the last one year, we have done a lot of menu innovations. All our sauces are low fat mayonnaise, we have cut down oil content from 67% to 25%. There has been a calorie reduction of about 8%-10% in all burgers. We have cut down on sodium from our fries, nuggets and buns. Every year, we are building on this.
Q] What is brand McDonald’s USP over competitors?
It’s a destination for every occasion and talks to consumers ranging from college-goers to students and families. It’s a brand that traverses across target audiences and demographics. It covers every aspect. We have actually democratized access to food and beverages. And because we are affordable, we stand for democratizing happiness.
Q] Did the recent demonetization affect you?
It was a move forced down the system and we had to accept it. Of course, it has set us back, but not by a margin like some other businesses. In fact, during that one week, we saw our cashless transactions go up from 25% to 75%.
Q] When you launched, the idea was to give people an affordable eating option. Do you think that has limited your appeal to a certain age group?
Till a few years back, we might have been a unidimensional brand. But over the years, we have added many more dimensions. From the accessible everyday value of a McAloo Tikki to more offerings, we have innovated on our core products, McChicken and McVeggie. We have peppered them with limited time offers like the Mexican, Chinese or Italian version of the McChicken and McVeggie. We have added spicy and reinvented Maharaja Mac. So we have a price pyramid that straddles all needs and has widened our appeal.
Q] What are the fundamental principles of your marketing strategy?
We have a clear segmentation approach - whether it is college students, first jobbers, younger parents or older parents. And each segment has some unique and common needs. Our strategy is to approach them with product mixes which are uniquely offering and catering to them, both in terms of taste and prices. And then there are the common needs like what kind of an environment they want. We use those platforms to communicate the relevance for them depending on the seasonality of the year.
Q] With McDonald’s completing 20 years, where do you want to see the brand 20 years from now?
People have seen how we have changed in the last 20 years. The only thing that keeps us going is that we have our ears to the ground and are listening to the people we serve. We are also listening to the people who don’t come to us and thinking about how to get them to us. And on the basis of that, you will see us evolving across technology, taste and experience.
Marketing Tip
Find the human purpose. Have a long term view on everything and keep the faith. If you have your customers at your heart, you will find answers
Credits
Media Agency: Madison Media
Advertising Agency: Leo Burnett
Digital Planning Agency: DDB Mudra Group
Digital Creative Agency: Tonic Media
PR Agency: Avian Media
CMO File
Kedar Teny comes with over seventeen years of experience in brand management & strategic planning across Advertising, FMCG and Telecom sectors with some of the leading and established brands under his portfolio. He joined Hardcastle Restaurants as Director – Marketing & Digital in August 2014 and has been tasked with spearheading and shaping marketing for brand McDonald’s across consumer engagement platforms in the West and South region.
About the brand
Westlife Development focuses on putting up and operating Quick Service Restaurants (QSR) in India through its subsidiary Hardcastle Restaurants which is a McDonald’s franchisee with rights to own and operate McDonald’s restaurants in India’s West and South markets since 1996. HRPL serves approximately 185 million customers annually, at its 245 McDonald’s restaurants across 33 cities in the states
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