Competition may come and go, but the fast food major, as Kedar Teny, Director- Marketing & Digital, McDonald’s India (West& South) says, will always focus on keeping abreast of changing customer needs and eating out patterns rather than look over its shoulder. Set up in October 1996, McDonald’s runs nearly 400 restaurants across the country with 209 being in West and South India, the regions that Teny oversees. Excerpts from a freewheeling interview:
You started off in the 1990s. Do you see any specific milestones in the way the marketing or advertising pitch has changed over the years?
When we started this business, way back in 1996, it was about trying to build relevance. People were broadly aware of what the plan was, but the format was completely new to India. If you look at our early campaigns, they’re about how you can shed your inhibitions and come to McDonald’s. There was no order-taking at the table. You had to go to the counter, look at the menu above you, place your order, collect the tray and find a seat for yourself. This was very different from how informal eating out was, in 1996. At that time, people may have been intimidated [by McDonald’s], wondering if it would be expensive or the food, certainly alien to them, would work. Those barriers were broken by the initial pieces of communication we sent out, which talked about the experience rather than the food.
The next phase was about celebrating the menu. When people started wondering whether we might have vegetarian food, we spoke about the McVeggie and separate kitchens [for vegetarian and non-vegetarian food]. That brought in a new set of consumers and built trust. Then we reached a point where we said we need to grow, with more stores. That’s when the real localisation of the menu happened. First came the McAloo Tikki, which today is a significant part of our business. And then the Happy Price Menu. That really brought us a whole new set of customers and changed the business completely.
If you look, this is the most democratic place you’ll find in the restaurant business. You’ll find young adults, kids, first jobbers, older and younger parents, everybody. We’ve also augmented our services by introducing drive-throughs (more than 40% of our restaurants have this), high-street mall and standalone outlets. As the coffee culture began to catch on, we introduced McCafes. We take great pride in the coffee that we serve; it’s probably the best at that price point. There’s also a big focus on digital. We introduced McDelivery about four or five years ago and this, along with McCafe are extensions of the brand. We’ve done a significant amount in the digital space, whether it’s the website, mobile ordering through apps or the site, and all this helps us stay ahead of the competition while also staying relevant to consumer needs today
How much does Indianisation of the menu contribute to your overall sales?
McAloo Tikki is our flagship, when it comes to contribution to business.
McDonald’s advertising has always stood out, over the years. It looks like a fair amount of research has gone into your current one, the ‘Kuchh Pal Offline’ created by Leo Burnett campaign. What got you into it?
For a long time, we had an almost monopolistic market presence. Over the last five or seven years, while competition has increased significantly with new entrants in the market, the eating out patterns have remained the same. Category growth has not happened as much as we’d have liked. Since we were first off the block, everybody ends up emulating us. If we have a Happy Price Menu, someone will have a similar menu at a similar price point. The market is becoming more crowded. That’s why we’d got Leo Burnett’s Chicago office to do a robust, quantitative study on the Indian market, the frequency of eating out and the habits and attitudes around that.
So is it goodbye to the ‘I’m Loving It’ campaign?
I don’t think ‘Loving it’ is something we’re moving away from. We’re just trying to capture the mood and sentiment of what’s going on right now, to create more differentiation for our consumers. People see us as a fun, social, change-of-pace kind of place. While we still want be fun and social, we also wanted to move away from being a change-of-pace place, to a constant.
So how do we ensure we become the preferred destination for our consumers? Â We met customers at the store, and one of the things that emerged is that today, customers are a lot more distracted than they used to be, continuously looking at their phones and losing out on conversations. Also, people today want to share things, and the internet has made this possible. We decided to bring these three or four things together and see if there’s a proposition that can help us achieve the objective we want. That’s how the ‘Kuchh Pal Offline’ campaign was born. We’re an offline destination, a bricks-and-mortar restaurant. We want people to come in and spend time with us, keep their phones down and have wonderful conversations, supported by our food and the overall experience.
Now the competition is not just from QSRs right? There are Starbucks and other coffee destinations…
The category overall is of course growing. As more options kick in, people are spending more time outside of their homes now. Consumption will obviously go up. What remains to be seen is how much of the share we will be able to get.
Over the years when we’ve seen the McDonalds advertising look at families, kids, young adults. Who is your primary TG now?
We started off as a family destination since, at that point in time, eating out was a family thing especially on weekends. But what happens on week days? That was a chance to explore the market through menu innovations and pricing. About 60% of our walk-ins are teens and young adults. Families still give us our volume and value of business, but we’re not catering to a particular audience or driving a particular menu at a particular price point.
The QSR space is getting crowded. We’ve had Wendy’s launch recently. Earlier, at the malls, you just had McDonalds; now there are many others. Will this mean more spends on advertising?
Not really. As the business grows, advertising will grow. But we don’t want to be spending particularly because of competition. We’ll spend in line with our business objectives.
Now that there are a lot more players, are you looking at any change in terms of television, on-ground and all of that?
Television will continue to play a stellar role, but as you start growing into Tier II and Tier III geographies, where you may not have the same presence as Mumbai, Bangalore or Pune ,it makes more sense driving on-ground excitement to generate footfalls. Typically we leverage our assets like Ronald McDonald. You conduct kids’ shows, have weekend events and things like the First Tasters Club, for the select group of people who apply to sample our menus.
McDonald’s is known as a value-for-money brand. It fits all budgets. Will this continue to be a part of your marketing strategy?
Yes, it will because McDonald’s stands for value and it’s not just value for a particular audience. Its relative price index with respect to the market will always be at a slight discount to the company that’s defining that thing for you. But we’ll always be a value brand.
What are your digital spends now? Has the percentage increased? And how does digital compare vis-Ã -vis others?
Yes it has. From practically nothing to a very insignificant amount, it’s moved to a 10% of total spends. And we’re seeing this number increase every month.
What about print and BTL?
Print has more or less maintained its ratio at 20%, while TV continues to dominate with about 75%.
No celebrity endorsements for you?
We haven’t given it a serious thought. If the proposition deserves it, maybe we’ll look at it.
This interview first appeared in dna of brands on May 18, 2015
