Where the North and East regions are a pain point for McDonald’s India, the West and South regions under Westlife Development plan to dive headfirst into the future with gusto. Seema Arora Nambiar, SVP — strategy, innovation and capability, McDonald’s India (West and South) speaks with BrandWagon’s Shinmin Bali about the brand’s personality today, catering to a changing food culture and the company’s continuing excitement around brand extensions. Edited excerpts:
What does today’s McDonald’s India look like?
Today’s McDonald’s is about feel-good moments, trust and nostalgia. There is an element of comfort. We have changed how we are looking at the consumers of today. In the launch year (1996), it was all about a global brand coming into the country. Today’s youngsters have the innate pride of being an Indian. We are seeing Indian food becoming fashionable. On the menu front, we have moved from just being a burger company to having different food forms which may be more relevant for our country. With Flavours of the World, we have gone from a burger to a fold-over; we are also doing whole wheat wraps or testing rice in multiple different formats. We are trying to be adaptive to how people consume food.
How has the target audience evolved?
Children will always remain our mainstay. You have to be able to cope with the demographic in the country. Our region is aging much faster than the North and East. SEC definitions are changing very quickly. Somebody who was in SEC C when we opened up has probably moved up to SEC A now. It is about cutting across the age and different SEC segments. We had to adapt to that, which is why you are seeing this ‘Indianness’ come in. Apart from kids, our TG includes the young college population, the first jobbers and new parents falling in the 15-39 year bracket. Many QSR players now provide the environment to conduct meetings…
McCafé’s introduction into the brand was done to bring in that customer set. We have 121 odd McCafés across our region (as of June, 2017). We are penetrating much more aggressively in the South. We have a wider range of beverages and a dedicated area for McCafés. We are investing on redoing our restaurants. We are seeing people there in the mornings (8:30am-12:30pm) and evenings (5pm-7pm), especially in outlets that are close to office districts; where people simply hang out, have meetings or even catch up on work.
McDonald’s has been struggling to remain a ‘cool’ and ‘young’ brand. Your thoughts?
A lot of people have probably grown up with a Happy Meal toy. It is a cool brand because it brings back memories. It is a hangout place for the younger age group. For the older age group, it is about convenience and genuine comfort. Do I want to be the coolest hangout place? Maybe not. Do I want to be the place where parents are comfortable sending their children? Yes, because they know the food will be safe, won’t be a waste of pocket money and will be a secure area where kids won’t be exposed to alcohol or cigarettes.
What is the brand doing to keep consumers excited?
First, is the menu. We redid our breakfast menu last year to become more relevant to the younger age group. We also worked on our core menu. We are toying with salads and soups for consumers that want slightly lighter, perceptively healthier food options. Experience is the second area. We provide technology to our customers to be able to change how they order. Having launched our app, having a revamped website, providing self-order kiosks in restaurants… we have also simplified counters based on where the order is placed and where it is collected. The third part is on the people front. We have conducted an exercise where we have trained almost 800 of our managers on aspects of communication such as tonality, body language and eye contact. From a BTL point of view, we interact heavily with colleges. We also conduct kitchen or restaurant tours for schools.
Has the Connaught Plaza Restaurant (CPRL) issue put pressure on West and South?
We have stayed our course. I can’t comment on the North as that is between the corporation and CPRL but our plan remains to double the base of restaurants in West and South by 2022. We have not felt any additional pressure from anybody. There has been no change in our strategy. We do realise there is a great market opportunity in the West and South where many tier II towns are emerging and tier III is starting to get there. The opportunity for Drive Thru is phenomenal.
Has the controversy given the brand’s competitors room to capture more consumers?
There is a lot of space for everyone to grow. I don’t think it is about a McDonald’s not opening in a place that is benefitting others.
Given the kind of formats in the market, could you take us through how each of them has developed?
Essentially, we remain a bricks-and-mortar format. The phone consumption is moving up dramatically so we added McDelivery in 2004. Each delivery set-up contributes Rs 50-80 lakh annually to the store. We are seeing road travel evolve in India. With Drive Thru, our penetration is at 22%-23%; we would like to take it to 30%. One of the challenges with this format is the consumer’s ability to interact with it. One of the places when we started this off saw people ordering via Drive Thru but chose to be seated at the restaurant. The same outlet now sees 75 cars on average per day. Our breakfast menu was launched in 2008 but it didn’t really pick up. We realised we had to address the fact that even the non-vegetarian eating population still prefers vegetarian food for breakfast. With McCafé coffee house in McDonald’s, we had to build structures for both of them to coexist in such a way that they don’t kill each other.
What is the contribution of communication to the growth?
A lot of the effort is in the digital space which is where most of our consumers are. Digital gets a significant share of our communication spends. TV would be the primary medium. Digital spend is growing owing to OOH, whereas TV would be flattish.
(Seema Arora Nambiar, SVP — strategy, innovation and capability, McDonald’s India (West & South))