Indian Case Study

McDonald’s Pricing Strategy in India

McDonald’s in India

McDonald’s began operations in India in 1996. The fast-food chain started making profits after it broke even in 2008. Reports suggest that McDonald’s two subsidiaries in India, Connought Plaza Restaurants based in New Delhi and Hard Castle Restaurants in based in Mumbai posted accumulated losses of Rs 189.19 crore and Rs 119 crore in fiscal 2008. A total of Rs 211.41 crore of accumulated losses for fiscal 2008 for the company. India and China continue to be high-growth markets for McDonald’s. The top management felt that McDonald’s had achieved tremendous brand success in India and there was nothing extraordinary about accumulating losses and that McDonald’s India was not a unique case as the company was making losses similarly in many other markets.

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What McDonald’s is doing to increase the footfalls and increase the store utilisation?

McDonald’s menu is recognized world over for its affordability. A McDonald’s store gets an average of 3,000 walk-ins every day in each of its 165 restaurants in India. Typically, a customer visits a McDonald’s store twice. The key is to make that customer visit the McDonald’s store a third time so that the existing store space and rent can be leveraged further. Earlier attempts by McDonald’s to do so included adding breakfast to its menu, longer hours of service, setting up of kiosks etc. Eventhough breakfast was on its menu globally, it was on launched on a trial basis in India.

However, McDonald’s had a ‘snack joint’ tag in India. To overcome this McDonald’s added a lunch and dinner menu.

McDonald’s Pricing Strategy in India

In September 2009, McDonald’s announced reduction in prices by almost 25% for its lunch and dinner menus. Prices for its extra-value meals like McVeggie and McChicken were reduced to Rs. 85 and 95 respectively from Rs. 110 and 120 respectively. Typically a meal consists of burger, French fries and soft drinks. This strategy was surprising as it came at a time when food prices were increasing by the day. Cutting prices in such times did not make sense. But the management in India was convinced that tweaking the prices of it combo meal offering would help customers prefer McDonald’s as a lunch and dining destination as well.

Corporate Social Responsibility (CSR) and McDonald’s

The chief electoral office of Delhi, India decided to launch a series of advertisements in April 2009 at McDonald’s retail outlets to encourage young voters for the Lok Sabha elections – the largest ever democratic process in the world. McDonald’s which has around 155 restaurants in India (including 35 in Delhi) is keen on the idea and considers it as its social responsibility to make people aware and encourage to participate the democratic process.

McDonald’s in India

McDonald’s was launched in 1996 in India and has established itself as the family’s favorite quick-service restaurant. According to estimates, McDonald’s stores have an average of 2,750 walk-ins in each of the 155 stores. India counts itself amongst the top 10 per cent of the busiest markets for McDonald’s anywhere in the world. In India, McDonald’s had decided not to launch its beef-based core product – the hamburger – so that it didn’t hurt religious sentiments of the Hindus.

The Strategy – Building awareness among citizens

The strategy is simple. Delhi has approximately 40 lakh electors between the age group of 18-29. McDonald’s is popular among the younsters and catchy slogans and messages will encourage them. McDonald’s India wants to support the task of building awareness amongst citizens and remind them of exercising their right to vote.

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Nokia’s new Brand campaign and Manufacturing in India

Nokia in India – New Brand campaign

In October 2008, Nokia, the world’s largest mobile phone maker launched a brand new campaign with the tagline ‘It’s not just a phone, it’s who we are’.

Nokia selected Priyanka Chopra, former Miss World and current Bollywood actor, as the Brand Ambassador. The company believes the young actor’s brand association will create a deeper connection with its young and style-savvy consumers and the new ad capmpaign featuring her will represent style, modernity and individuality. The TV campaign would be integrated with other consumer touch points like print, outdoor, radio, online and digital media.

Nokia’s other brand ambassadors include Bollywood’s leading actor – Shahrukh Khan. The company has already planned to bundle exclusive content featuring the actor for handsets sold in India. His movie ‘Om Shanti Om’ movie was recently bundled in Nokia N96.

New Indian factory

In October 2008, Nokia Siemens Networks, the second-largest network gear provider in India after Ericsson, announced that over three years it will invest $70 million in a new Indian factory in Chennai (south of India). The unit will make and distribute mobile communication equipment. Nokia Siemens already has a manufacturing facility in Kolkata in eastern India, where it makes fixed network equipment.

Also, in October 2008, Nokia’s handset manufacturing unit in Tamil Nadu (with over 8,000 workers) reached production volume of 200 million handsets within just three years of starting operations. Around 50 per cent of the production is sold domestically and the rest is exported. Nokia has two manufacturing units in China.

Nokia has a 62.5% market share in India while Samsung, the second major player with Aamir Khan (lead Bollywood actor) as the brand ambassador, has a 8% share.

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Article on Nokia’s Strategy in the Emerging Markets

Nokia Business Strategy India

Nokia Business Strategy India

What is Nokia’s Business Strategy and Expansion Strategy in India is an interesting discussion.

Nokia India,Indian Mobile Phones Industry, CDMA, GSM, Marketing Strategy, Marketing Mix

Nokia Headquarters: Finland
Industry: Telecommunications

Nokia Businesses and Products
home satellite systems
wireless switching equipment
wireless systemsmobile gaming devices
set-top boxes
wireless data and voice devices

Nokia Facts

  • Nokia was founded in 1865 as a wood-pulp mill
  • Nokia was founded by Fredrik Idestam.
  • The name Nokia originated from the river which flowed through the town of the same name (Nokia).

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