Communication and Composition
Table of Contents
MARKET SIZE & MAJOR PLAYERS4
MAJOR PLAYERS IN FAST FOOD4
REASON FOR EMERGENCE5
Paucity of Time:5
CHALLENGES FOR THE INDUSTRY6
Social and cultural implications of Indians switching to western breakfast food:6
Emphasis on the usage of bio-degradable products:6
Retrenchment of employees:6
PROBLEMS OF INDUSTRY7
Environmental friendly products cost high:7
Balance between societal expectation and companies economic objectives:7
Health related issues (Obesity):7
TRENDS IN INDIAN MARKET7
Marketing to children's:7
Low level customer commitment:8
Attracting different segments of the market:8
THE SUCCESS OF FAST FOODS IN INDIA8
“There is no sincerer love than the love of food.”- G. B. Shaw The food that a country’s citizens eat is what is a major part of their culture; it’s a representative of their society. So let’s see how a country that has a very strong cultural belief that was know for its cultural heritage is accepting the new way of living, which living fast. And why is this change happening at such a fast pace breaking nearly all records of growth by an industry in any country. So lets have a look at the Indian Fast food Industry.
FAST FOOD INDUSTRY IN INDIA
Eating at home remains very much inbuilt in Indian culture and changes in eating habits are very slow moving with barriers to eating out entrenched in certain sectors of Indian society. The growth in nuclear families, particularly in urban India, exposure to global media and Western cuisine and an increasing number of women joining the workforce have had an impact on eating out trends. Which has lead us in a new era of eating “Fast Food”. The name it self says the meaning the food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with low quality preparation and served to the customer in a packaged form for take-out/take-away. MARKET SIZE & MAJOR PLAYERS
* Dominated by McDonalds having as many as 123 outlets. * Domino’s pizza is present in around 274 locations. * Pizza hut is also catching up and it has planned to establish 147 outlets at the end of 2009. * Subways have established around 145 outlets. * Nirula’s is established at Delhi and Northern India. However, it claims to cater 50,000 guests every day. It has future expansion plans for more than 50 outlets every year, for next 3 years. MAJOR PLAYERS IN FAST FOOD
* MCDONALDS 132 outlets
* KFC 72 outlets
* PIZZA HUT 147 outlets
* DOMINOS PIZZA 274 outlets
* CAFÉ COFFEE DAY 833 outlets
* BARISTA. 200 outlets
The main reason behind the success of the multinational chains is their expertise in product development, sourcing practices, quality standards, service levels and standardized operating procedures in their restaurants, a strength that they have developed over years of experience around the world. The homegrown chains have in the past few years of competition with the MNCs, learnt a few things and has made us proud for example today you might not find Mc Donald’s burger every where but one can have a sip of Café Coffee Day coffee REASON FOR EMERGENCE
Gender roles are now changing. Females have started working outside. So, they have no time for their home and cooking food. Fast food is an easy way out because these can be prepared easily. Customer Sophistication and Confidence: consumers are becoming more sophisticated now. They do not want to prepare food and spend their time and energy in house holds works. They are building their confidence more on ‘ready to eat and easy to serve’ kind of foods Paucity of Time:
People have no time for cooking. Because of emergence of working women and also number of other entertainment items. Most of the time either people work or want to enjoy with their family. Double Income Group: emergence of double income group leads to increase in disposable income. Now people have more disposable income so they can spend easily in fast food and other activities. Working Women:
Workingwomen have no time for cooking, and if they have then also they don’t want to cook. Because they want to come out of the traditionally defined gender roles. They do not want to confine themselves to household work and upbringing of children’s. Large population:
India being a second largest country in terms of population possesses large potential market for all the products/services. This results into entry of large number of fast food players in the country. Relaxation in rules and regulations: with the economic liberalization of 1991, most of the tariff and non-tariff barriers from the Indian boundaries are either removed or minimized. This helped significantly the MNC’s to enter in the country.
Menu diversification: increase in consumption of pizzas, burgers and other type of fast foods.
CHALLENGES FOR THE INDUSTRY
Social and cultural implications of Indians switching to western breakfast food:
Generally, Hindus avoid all foods that are believed to inhibit physical and spiritual development. Eating meat is not explicitly prohibited, but many Hindus are vegetarian because they adhere to the concept of ahimsa. Those seeking spiritual unity may avoid garlic and onions. The concept of purity influences Hindu food practices. Products from cows (e.g., milk, yogurt, ghee-clarified butter) are considered pure. Pure foods can improve the purity of impure foods when they are prepared together. Some foods, such as beef or alcohol, are innately polluted and can never be made pure. But now, Indians are switching to fast food that contain all those things that are considered impure or against there beliefs. Some traditional and fundamentalist are against this transformation of food habit and number of times they provoke their counterparts to revolt against such foods. And that is what happened when McDonald’s decided to enter the complexity of Indian business landscape, counting only on its “fast food global formula”, without any apparent previous cultural training. Emphasis on the usage of bio-degradable products:
Glasses, silverware, plates and cloth napkins are never provided with fast food. Instead, paper plates and napkins, polyurethane containers, plastic cups and tableware, drinking cartons or PET (polyethylene terephthalate) bottles are used, and these are all disposable. Many of these items are tossed in the garbage instead of being recycled, or even worse, merely thrown on the ground. This burdens nature unnecessarily and squanders raw materials. In order to reduce soil and water pollution, government now emphasis more on the usage of bio-degradable products. Retrenchment of employees:
Most of new industries will be capital intensive and may drive local competitors, which have more workers, out of business. Profit repatriation: Repatriation of profits is another area of concern for Indian economy. As when multinational enters the any countries, people and government hope that it will increase the employment rate and result in economic growth. However, with the multinational operation, host country experiences these benefits for a short time period. In long run neither employment increases (because of capital intensive nature of MNC’s) nor it increases the GDP or GNP because whatever MNC’s earn they repatriate that profit back to their home country. PROBLEMS OF INDUSTRY
Environmental friendly products cost high:
Government is legislating laws in order to keep check on the fast food industry and it is emphasizing more on the usage of bio-degradable and environment friendly products. But associated with this issue is the problem that fast food player faces - the cost associated with the environment friendly product. They cost much higher than the normal products that companies uses for packaging or wrapping their products. Balance between societal expectation and companies economic objectives:
To balance a society’s expectation regarding environment with the economic burden of protecting the environment. Thus, one can see that one side pushes for higher standards and other side tries to beat the standard back, thereby making it a arm wrestling and mind boggling exercise. Health related issues (Obesity):
1. Studies have shown that a typical fast food has very high density and food with high density causes people to eat more then they usually need. 2. Low calories food: Emphasis is now more on low calorie food. In this line McDonald has a plan to introduce all white meat chicken Mc nugget with less fat and fewer calories. TRENDS IN INDIAN MARKET
Marketing to children's:
Fast food outlets in India target children’s as their major customers. They introduce varieties of things that will attract the children’s attention and by targeting children’s they automatically target their parents because Children’s are always accompanied by their parents. Low level customer commitment:
Because of the large number of food retail outlets and also because of the tendency of customer to switch from one product to other, this industry faces low level customer commitment.
Value added technology services:
There is continuous improvement in the technology as far as fast food market in India is considered. The reason behind that is food is a perishable item and in order to ensure that it remain fresh for a longer period of time. Earlier, Indian people prefer eating at home but now with the change in trend there is also need for improvement and up gradation of technology in food sector. Attracting different segments of the market:
Fast food outlets are introducing varieties of products in order to cater the demands of each and every segment market. They are introducing all categories of product so that people of all age, sex, class, income group etc can come and become a customer of their food line. THE SUCCESS OF FAST FOODS IN INDIA
1. Many women or both parents now work.
2. There are increased numbers of single-parent households. 3. Long distances to school and work are common. 4. Usually, lunch times are short.
5. There's often not enough time or opportunity to shop carefully for groceries, or to cook and eat with one's family. Especially on weekdays, fast food outside the home is the only solution. 6. People in India have now a good amount of disposable income hence can afford but doesn’t have sufficient time. Hence, leading to a higher growth of the outlets in the country. 7. These companies have developed products suiting Indian taste and requirements eg. Mc Allo Tikki or Vegetarian Dominos in Haridwar.
Therefore in my opinion if you want to earn good amount of money and as fast as possible go for a collaboration with these global players or open you own fast food outlet but never forget that you are a fast food outlet. If you are going for collaboration or a franchise with these players be very careful with your contract and terms and conditions. Bibliography