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Is your birthday around? Are you planning to treat your college friends at McDonald’s? Well, you don’t have to worry about coughing up a lot as the food chain has decided to limit its price increase to half the prevailing inflation rates in the country. By pushing up prices between 3 and 4 per cent in the past six months, the fast food chain has adopted a pricing strategy which is in sync with its positioning of offering ‘value and affordability’ for the masses.
Building efficiencies in the supply chain and sourcing directly from farmers have been ways of reducing costs for the quick service restaurant (QSR). “Prices for most of the utility services such as cooking gas and electricity have increased by nearly 30 per cent, but we have coped with inflation and limited our price increases between 3 and 4 per cent,” Mr Amit Jatia, Vice Chairman, McDonald’s India (west and south), said.
Besides, McDonald’s has also introduced the concept of a ‘value’ lunch at Rs 55 ( price drop from Rs 75) during the peak lunch hours (12 to 3).
Reaching out to a wider consumer base, the food chain is now including ‘Eggetarians’ with the launch of a new burger, Mc Egg burger. “We are trying to bridge the gap between vegetarians and non vegetarians. Through the launch of Mc Egg burger, we believe we are reaching out to 75 per cent of the population,” claims Mr Jatia. Pegged at Rs 25, Mc Egg is also being targeted at health conscious consumers through the ‘protein’ content in the product.
Its online sales model (through its Web site) is also being propagated to drive more sales. “We will use our delivery boys to spread the message about online sales. The next few months will see some heightened activity around the portal,” added Mr Jatia. McDonald’s advertising agency Leo Burnett is already on the job of unleashing new ads to drive the message.
Having penetrated tier 2 and tier 3 cities, the chain is growing between 35 and 40 per cent today. However, getting good real estate continues to be a challenge. While it has big plans of doubling the number of outlets (140 in western and southern India) in the next three years, high rentals are likely to affect costs.
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