How to win over a challenging market as India: Inside McDonald’s success story

• As Westlife Development Ltd's McDonald celebrates its 25th anniversary in India this year, we speak to Arvind RP, Director - Marketing and Communications, McDonald’s India (West and South) about the brand's marketing milestones.
• We discuss several phases of transformation that the brand has gone through over the years to become India’s one of the most trusted brands.

McDonald’s, for 25 years, has remained synonymous with burgers in India. The golden arches entered the country in 1996 and was an undisputed leader in burgers until 2014, that’s when its rival Burger King set up its first store in Delhi. However, by then, McDonald’s had captured the lion’s share of the market. Surviving through many neck-to-neck burger rivalries, economic crises and pandemic, McDonald’s stands strong today.

When the American fast-food giant first thought of entering the Indian market, it had to face a huge challenge. Across the world, Big Mac beefburger was McDonald’s signature product and India was known as a vegetarian market back then. So, the starting point for McDonald's India was to position itself as Indian, represent family values and culture and position itself as comfortable and easy while retaining its global values. McDonald’s gracefully Indianised its global menu and Indians couldn’t get enough of its burgers, which is a quintessential American fast food.

Sharing how the company laid its foundation into the country, Arvind RP, Director - Marketing and Communications, McDonald’s India (West and South) said, “McDonald's is a very interesting case study. It has gone through several phases in its 25 years in India. Phase one was all about building the foundation through localisation or as we call it, the democratization of the burger. We introduced the McAloo Tikki and many such locally relevant burgers for the Indian market. We also introduced many new practices to win over consumer trust such as using separate veg kitchen and non veg kitchen.”

After introducing its famous McAloo Tikki and the Chicken Maharaja Mac, McDonald’s next step was to win consumer trust and it went all out with its marketing activities to woo them. Another way to win over Indians was by offering low prices and beat street food, so it introduced its Happy Price menu starting from Rs 20 back then. McDonald’s made it a point to highlight its ‘value for money’ range in its marketing campaign and that’s when its iconic tagline ‘I’m lovin’ it’ was born too.

“It was time to create a strong brand-connect with consumers for a brand that was unknown in India before that. So, we launched several campaigns, the one campaign that comes to mind is ‘McDonald's mein hai kuch baat’. Those were the early days of laying the foundation for the brand in India. The second phase was more about making it affordable for the masses. McDonald's is a democratic and a mass brand and we also felt that at some point in time, it was important to lay a broader appeal. And that's when we can came up with many campaigns around happy price combos. One such campaign was Aapke zamane mein, baap ke zamane ka daam (prices from your father's era, in your era). It was a really stellar campaign with a broad-based appeal.”

After localising the menu and introducing affordable offers, McDonald’s started focusing on establishing itself as a FoodTech platform. As per Arvind, it was one of the first companies in India to offer home delivery services. “Our early campaigns focused on making the brand more affordable and then it was accelerating to kind of a food tech image. We scaled up on McDelivery. We also launched McCafe around that time, which added a whole new dimension and a whole new vision,” said Arvind.

Cut to the pandemic which brought with it a time when all marketing playbooks felt redundant. Even India’s oldest brands were struggling to survive during the initial phases of the lockdown. As the government eased lockdown, the QSR industry left no stone unturned in doubling down on their ‘doorstep and contactless delivery’ proposition.

McDonald’s also revamped its marketing strategy; from focusing on creating happy memories, affordability and home-delivery before the pandemic, it started assuring its consumers about its safety practices and focused on empathy after the pandemic.

Arvind said, “In the post-pandemic phase, the brand has gone to the next level, we have really amped up on our omni-channel convenience. Delivery is a very important lever for the business today. Over the last two years, we went to the consumer with our golden guarantee campaign. And that went a long way in reassuring consumers in the context of the pandemic, telling them food is safe to eat and also talking about stringent quality standards and safety standards the brand has always had, which elevated during the pandemic. Also, in the post pandemic era, it's important for brands to be empathetic, not to be tone deaf to what's going out there, and tweak their marketing messaging, marketing mix, to kind of be more relevant to today's context.”

Today, home delivery contributes around 40-45% to McDonald’s business and its drive-through services were first to recover post-lockdown. So, the brand started positioning itself as a convenient omni-channel service.

Sharing how convenience has taken the center stage today in its communication, Arvind said, “We were the first QSR brand to launch McDelivery in India, and we have been consistently at it to kind of grow it. Pre-pandemic, about 20-25% of the business was delivery and now 40-45% of the business comes from delivery. In fact, our overall convenience channels, which is our delivery, our drive through, our on the go is upwards of 50-60%. So in essence, McDonald's has kind of transformed itself over the years into an omni channel, convenient brand and that's quite important for consumers of today.”

To celebrate these milestones and commemorate its 25 years of existence in our country, McDonald’s has launched a new campaign called ‘25ActsofHappy,’ a gourmet range of burgers and healthy beverages.

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Explaining the thought behind its 25th anniversary campaign, Arvind said, “All kinds of consumers have had wonderful memories of the brand built over the last many years. And our 25 years is all about those happy memories. What we are saying is, we will do 25 acts of happiness over the next one year. And the first such Act has happened, which is all about building memories at McDonald's and bringing them alive. The next such act will happen later in November. So through these 25 acts over the next one year, we want to celebrate the brand and the fandom that McDonald's has among the consumer.”

Capturing newly-entered territories

If Arvind is to be believed, Mcdonald’s is just getting started! In its next phase of growth, the QSR giant aims to expand its presence further into the country and capture the coffee and fried chicken market.

According to Edelweiss Securities report, India’s quick-service restaurant (QSR) market is expected to clock a compound annual growth rate of 23% between 2021 to fiscal year 2025. As per Technopak, India’s food services market was estimated at ₹4,236 billion in FY20.

“We plan to open about 25-30 stores every year and are broadly open to emerging retail opportunities. Apart from metros like Mumbai and Bengaluru, even the smaller towns are doing very well. As an example, our drive throughs in some of the smaller towns were the first to recover post pandemic and they went up to over 50% of their original pre-pandemic sales. Our new products like McSpicy fried chicken are higher in demand in smaller towns, especially in the South,” said Arvind.

Talking about the next phase of growth, Arvind added, “Future McDonald's would be something that plays across multiple dimensions. The first dimension would be categories, where we build leadership in burger, chicken and coffee. The second dimension would be across different dayparts. We are uniquely positioned as a brand to play across breakfast, lunch, snack, dinner and post dinner. And we have got burgers and beverages that are relevant across these day parts and that's such an important differentiator for the brand.”

With its glocal approach and affordable options, McDonald's has quietly made inroads into desi households in these last 25 years and has built a brand connect that is here to stay.