Acknowledgement Firstly,I would like to thank to thank God for giving me the mental and physicalstrength and health to complete this project.
I would like to thank my familyfor their constant support and guidance which helped me to stay motivated, confidentand calm during times of distress.Iwould like to express my sincere gratitude to my faculty mentor Dr. ShubhangiSalokhe, Professor- Agribusiness department, for her constant guidance andinputs. I would further like to thank my faculty members and my friends whotook out time to share their valuable feedback. Lastly, I would like to thank each and everyone whohave played a role in helping me complete this project. IntroductionFooddiversity in India is an implicit characteristic of India’s diversified cultureconsisting of different regions and states within. Conventionally, Indians liketo have home-cooked meals.
This concept supported religiously as well asindividually. However, with times there is a slight shift in food consumptionpatterns among urban Indian families due to increasing awareness and influenceof western culture.Itstarted with just eating outside casually and went on to welcoming a widevariety of delicacies from all over the world. Liberalizationof the Indian economy in the early 1990s and the following entry of new playershas played a significant change in lifestyles and the food preferences ofIndians.
Afterthe multinational fast food players adapted the basic Indian food requirementsviz. vegetarian meals and selected non-vegetarian options excluding beef andpork totally from their menu, fast food gained acceptance of Indian palate.Multinationalfast food outlets initially faced protests and non-acceptance fromIndianconsumers.
Thishappened due to primary perception that these fast food players serve do notserve vegetarian meals and server only chicken. In addition, fast food is perceivedexpensive besides being out-of-way meals in Indian culture. Today,fast food industry is growing in India as they are adapting to Indian foodrequirements. It is gaining acceptance predominantly from Indian youth andyounger generations as it is becoming part of their routine life. Fastfood is a very fast growing industry in world as well as in India especially inurbanareas (small and large cities). Fast food industry in India Accordingto worldwatch.
org, India’s fast-food industry is growing by 40 percent a yearand supposed to generate over a billion dollars in sales in 2005 as per their estimates.Before the entry of multinational fast food outlets, Nirula’s was a popular domesticfast food provider for eating-out. Nirula’s started with ice-cream parlours andlater moved on the range of fast food including burgers, pizzas, sandwichesetc.Establishedin 1934, Nirula’s today is a diversified group having a chain of ElegantBusinessHotels, Waiter Service Restaurants, Family Style Restaurants, Ice CreamParlours,Pastry Shops and Food Processing Plants in India.
The chain with over 60outletsoperating in five states successfully caters to the Indian palate of over50,000 guest everyday for over 70 years.Wimpywas another fast food provider besides Nirula’s in Indian market. Wimpywasthe only multinational fast food outlet in India before 1990s with one outletin New Delhi. In the initial years of its operations, Wimpy used to be visitedby foreigners in India.
Indians were occasional visitors. Today Wimpy has 8outlets in the capital city New Delhi and it is expanding its menu with Indiandishes with a view to attract Indian consumer.Afterthe liberalization policy that came in force in 1991, fast food industry grownin India as multinational fast food providers have set up their business eitherjointly with Indian partners or independently.
McDonald’s signed two jointventures – one with Amit Jatia and another one with Vikram Bakshi in April1995. The first outlet was opened in New Delhi. It has 50 outlets in NorthIndia and 76 in total all over India. It aims for 100 outlets by the end of2006. In 1995, Kentucky Fried Chicken (KFC) also entered the Indian market andopened its first outlet in Delhi. In 1996, Domino’s set up base in India byentering into a long-term franchisee agreement with the Bhartia Brothers whohad businesses in chemicals and fertilizers. By 2000, Domino’s had presence inall the major cities andtownsin India.
Domino’s had grown from one outlet in 1995 to 101 outlets in April 2001.Pizza Hut entered India in June 1996 with its first outlet in Bangalore.Initially, the company operated company-owned outlets and then moved on thefranchisee owned restaurants. McDonald’s, Domino’s, Pizza Hut and Nirula’s are themost popular and frequently visited fast food outlets. KFC has limited outletsand has faced number of problems since entry in India.
Besides these, there arePizza Express and Pizza Corner of which are not so popular. With changing lifestyle and aggressive marketing by fast food outlets, fast food is also becomingpopular in small towns; therefore, success of existing fast food outlets andentry of more is inevitable (Gupta, 2003). Fast food and consumption patterns Accordingto the findings of the recent online survey from AC Nielson, India being at theseventh place, is among the top ten markets for weekly fast food consumption amongthe countries of Asia-Pacific region. Over 70 per cent of urban Indians consumefood from take-away restaurants once a month or more frequently. Surveyindicates that Pizza Hut is the most preferred fast food outlet in India.Identifying the drivers for preference of one-brand over another, the surveyresults indicate that Indians (66 per cent) are amongst the consumers whoconsider hygiene and cleanliness their most important criterion for selection.
A total of 24 per cent of Indians use the quality of service as a decisionmaking criterion to purchase a fast food brand’s offering and 22 per cent relyon their perception of whether a take-away brand offers them healthy food options.InIndian context, there is high concern towards health in twenty-first century.Thereare health related articles in daily newspapers, and health shows ontelevision.Thereare special health related magazines that are now very popular.
Health related articlesdo mention to consume more fruits, vegetables, water and to consume less or nilof junk food including fast food being high on fat and calories. Recent newsarticle by Barker (2006) indicates that Indians are facing the problem ofobesity and among kinds of food – fast food is one of the reasons for the same.However, there is gap of a particular research in Indian context to have a linkbetween the health problems and fast food consumption. In future, geneticallymodified food may take the place of fast food of today. Marketingstrategy is a big part of fast food success. Fast food chains have branchesalmost everywhere because, this is part of their marketing strategy.
HighVisibility along with global recognition is the most significant and prevalenttheme of fast food chains. According to a New York Times article, there areabout three new Mc Donald’s Opening every day. The main goal is to increasetheir outreach by not having any person more than four minutes away from abranch. Just as Mc Donald’s follows this marketing strategy, even other fastfood chains does so. The competitor must be able to keep up to be able tocomplete with the biggest name in the industry, and hence, when new Mc Donald’sopens nearby, a competitor is also opening in the same area. Objectives To understand the growth of fast food industryin India. To take a look and study the fast food marketstore and market share in India Tounderstand the developing marketing strategies in fast food industry in India Methodology Thepaper has been written by using secondary data collected from articles, books, journals,newspapers, reports, working papers and websites. Alsoinformation has been referred from annual reports of various fast foods organizations.
FindingsGrowthof the fast food Industry in IndiaIndiathat is extremely conservative about its food is expressively fond of homecooked and fresh food. This trend is slowly shattering due to the globalizationof India and increase of new markets. With number of people eating out increasing,the industry has major opportunities to offer to the players to capture alarger consumer base. In 1996 the international food players like McDonalds,Dominos, Pizza Hut and KFC entered Indian market and at the moment they areinvesting huge amount of money to seize a share of this extremely profitablemarket present in India. CRISIL reported that conventionally, the Indianconsumers have preferred eating road side foods such as Dhabas and stalls whichtill date occupies a major share of the unorganized sector; where fast food hasbeen eaten traditionally.
However, domestic players like Jumboking, Kaati zone,Fasso’s are growing quickly with the changes in the economy and help of modernemployment, in 2001. Jumboking is one of the fastest and biggest growing foodchain in local fast food in India. The industry is currently having more than75 stores across 12 regions in the country. The analysis predict that in 2020their stores might increase to 200. Indian fast food market is growing at therate of 40% per annually (CRISIL).
India’s QSR business is expected to doublein three years from Rs34billion in the 2012-13 to about Rs70billion in 2015-16.The analysists predict that in 2017 their QSR business will increased intoRs172billion in tier-1, tier-11 cities in India. Present scenario in IndiaMarketstores in India Thetable-1 shows that in 2006 Dominos had 128 stores in India to market theirproduce. In 2010 it increased to 362 stores and in 2014 it increased furtherto772 stores. In contrast with previous year number of store of dominos hasincreased in ten years.
Similarly McDonald’s market store has increased to 500in 2015. Same is the case for KFC India’s market store which has increased significantly372 in 2015. Therefore from the table it is quite evident that Dominos is theleading fast food market store in India. MarketShare of fast food in India Theabove table -2 shows that in 2001 Dominos had market share of 4.5% in India.
In2005 it was 5.2%, 2009 it was 9.3% of market share. In 2013 contrast of marketshare of dominos has increased in twelve years. Even Mc Donald’s market shareis quite constant from 2001 to 2013. Similarly KFC India’s market share hasincreased quite a lot to 12.
2%. Therefore from the table it is clear thatDominos remains the leading fast food chain in India.Theabove table-3 shows the Indian fast food market size has seen the constantgrowth from 2010 – 2014 that is 29.78% to 35.18%. It decreased to 26.02% in2015. The year 2014 has shown the highest market growth rate in India.
Furthermorefast food and food industry is highly competitive and conquered by largecompanies. Marketing strategies that have emerged in fastfood industryIndianshave embraced fast food as it fits well with the busy pace of everyday life,and also as it looks and tastes good. In order to keep its foothold in thefront line of modern culture, the $2bn a year fast food industry also uses avariety of marketing strategies. Marketing is constantly evolving, but thereare various emerging strategies the industry uses to sell fast food. Visibility& Volume TheIndia is that the consumers don’t have to hunt for fast food as it’severywhere. Fast food restaurants are made so as they often appear in clusters,but individual chains also tend open multiple restaurants within shortdistances.
Althoughit might come across as over-saturation, but itis the basic element of fast food marketing. A continuous stretch of highlyvisible logos and brand names has become part of the setting where people work,live, and play in their day to day lives. The nonstop access to fast food strengthensbrand recognition and highlights the convenience and ease that are trademarksof the industry. MarketingStrategies to attract Kids & Teenagers Itis estimated that the fast food industry spends about $10 billion annually onmarketing products directly to their target segment which mostly comprises ofkid and teenagers.
Advertisements for kids’ meals feature film starts, cartoon charactersgiving out toys and characters that are in the current fad in order to attractkids.Inorder to engage children, websites offers kids’ clubs with stories, games and contestswhich in turn exposes them to brand names and logos. Thefast food industry targets young teens by using product placement in variousmovies, shows, video games and music videos.Anothermajor wayof marketing is to send out text messages with coupons for free products,and Webbased rewards programs that offer free merchandise and meals. Accordingto Eric Schlosser, author of “Fast Food Nation,” the goal is to initiate anddevelop a customer relationship with kids and teens that will last throughadulthood.Affordability& ValueFastfood marketing responds to the needs and moods of customers, and highlightingvalue and affordability has always been a vital part of the industry’s overallstrategy, product qualities have become even more significant in a close-fittingeconomy. Freesamples, value menus that feature items for $1 and special monthly deals areall marketing tools aimed at consumers.
Two-for-one coupons, combination mealswith free drinks or side orders and senior discounts also bring in customers towhom cost is a concern. Affordableprices have become a strong marketing tool. SocialResponsibility MarketingOneaspect where the fast food industry has been constantly criticized is thatmenus offer processed foods that are high in fat, and packaging that generatetons of waste. Theindustry has responded with advertisements featuring whole foods purchased fromdomestic farmers, and fresh, lowcalorie menu options geared towardhealth-conscious consumers.
Somecompanies in order to highlight reductions in packaging and the use of recycledmaterials have also developed green advertising. The fast food companies havepotrayed themselves as socially responsible businesses that share the public’s worryabout health and the environment through marketing. Socialresponsibility marketing is aimed at consumers who try to make purchases thatreflect their values ConclusionFastfood industry is one of the biggest emerging markets in India.
Fast foodindustry has managed to become so successful due to emerging marketingstrategies in India.Itis often observed that when something is unique and stands apart from otherthings, and this in order will lead it to be noticed and checked. The emergingmarketing strategies of fast food will undoubtedly increase the GDP by giving reputationto an Indian industry. Indianeconomy will gain if Indian fast food and food sectors follow the emergingmarketing strategies which has been mentioned above. Emerging marketingstrategies of fast food industry provide best products of quality and bestfeatures as per the preference and demand of the target market. But on thecontrary, fast food contains several ingredients can harm the health of theconsumers. Hence, taking into account a long term business strategy, fast foodcompanies must do research and development to make their recipes more healthyand filled with nutritional values.
This would ensure not only the growth offast food businesses but also safeguard its consumers from health hazards andlifestyle diseases.