JV Partner & Managing Director | 24 Apr 2006
“The need for introducing the new logo is that it is our way of celebrating 10 years of leadership of the company. Our success is due to the true Indianisation of McDonald’s. It clearly signifies the shift that has been made for the Indian consumers. The new logo has the well-known double arch stylised as a marigold garland with the Indian flag at the top. It shows the spirit of Indianisation and celebrating 10 years of leadership.”
Vikram Bakshi has extensive experience spanning 25 years in diverse businesses, including real estate, hospitality and retail. He is an entrepreneur who has continually reinvented himself and redefined his goals. As Managing Director, Connaught Plaza Restaurants Pvt Ltd, and JV Partner of McDonald’s India, a joint venture with McDonald’s Corporation, USA, he has successfully established McDonald’s as the industry leader in the food services sector in North India.
Bakshi has been involved in the real estate, construction and hospitality business for over 15 years, where he still has a significant base. This division has recently developed the first standalone service apartment hotel ‘Savoy Suites’, at Noida, as well as the East Delhi Mall near Anand Vihar in East Delhi.
In conversation with exchange4media’s Pallavi Goorha, Bakshi speaks about Brand McDonald’s, which recently completed 10 years in India and the road ahead.
Q. How have these years been for McDonald’s? What are the challenges that you faced?
The journey wasn’t easy at all. It has been challenging and an exciting journey. It was tough understanding the Indian consumer and his needs. We had introduced a number of products, which came and went as they didn’t suit the tastes of Indian consumers. Seventy per cent of our products were introduced in India to cater to the tastes of Indian people, mostly middle class consumers.
Q. How has the brand been performing?
The response to the brand has been overwhelming. The brand has been doing very well. The chain has grown from two restaurants to a robust 86 restaurant-chain all over India today, with a steady growth of 40 per cent CAGR. Indian consumers have a kind of loyalty, a strong connection with the brand, which they have accepted very well.
Q. What was the mindset of people when McDonald’s entered India?
The people accepted it well. Though it took time for them to accept the taste of our offerings, as there were many products that were not up to their liking. But slowly people started liking the brand and the brand’s affordability.
Q. What was the need to introduce the new logo? What does it signify? Will you continue with the new logo?
The need for introducing the new logo is that it is our way of celebrating 10 years of leadership of the company. Our success is due to the true Indianisation of McDonald’s. It clearly signifies the shift that has been made for the Indian consumers. The new logo has the well-known double arch stylised as a marigold garland with the Indian flag at the top. It shows the spirit of Indianisation and celebrating 10 years of leadership. This logo will be around for a year.
Q. What are your expansion plans in India?
McDonald’s will embark on the second phase of growth in the Indian market in the next three years. We are planning to foray into Eastern India this year as also the non-metro cities. We are also planning to open 25 restaurants in cities like Benaras, Amritsar, Patiala, Jhabli, Greater Noida, Delhi-Jaipur Highway, Kolkata, etc, over the next two years. We have plans to open franchise in the next two years. We are opening food joints in campus areas like that of Infosys. The company is also expanding into food courts, kiosks and delivery. We are also increasing our workforce to 800 this year. We will be opening four plants in the next three years depending on the availability of raw materials. Moreover, we have plans to open McDonald’s at airports once the privatisation happens.
Q. How much investment are you planning in India?
McDonald’s will be investing about Rs 400 crore in India. We grew by 40 per cent last year, doubling our turnover every three years.
Q. Has the bird flu scare affected McDonald’s?
Yes, nearly 30 per cent of our sales got affected in the beginning, but slowly we bounced back. People were sceptical in the beginning to have chicken products, but slowly they have started eating it again.
Q. With people becoming more health conscious, has McDonald’s brought about any changes in its menu?
I don’t think people are health conscious in India. They just want to have a balanced diet. But we do take care to keep the fat content in our products low, for instance, there is only 3 per cent fat in McServe Chocolate, whereas the Government of India regulations is 12 per cent fat.
Q. Who handles your advertising? Are you planning any new campaigns?
Leo Burnett is currently handling our advertising. We will be launching a few TVCs this year on the ‘Khaya toh phansa’ campaign. Recently we had a campaign ‘McDonald’s Ka Fresh & Crispy McVeggie Burger’, which focussed on building a branded preference for our core product, the McVeggie Burger. The TVC ‘Khaya toh phansa’ reinforces McDonald’s core values of ‘indulgence and enjoyment’. With the new ad, we are further reinforcing the core proposition of McDonald’s ‘I am Loving It’, and accentuating McDonald’s proposition of quality products. The ‘Khaya toh phansa’ campaign is being promoted with a 360-degree marketing strategy. The outdoors will include a mix of hoardings, gantry signage, mobile display vans and signages in and around DMRC stations.
Q. Some time back there was this controversy regarding beef tallow being used to flavour McDonald’s French fries. How did you overcome it?
It was a fluke. We didn’t face much of a problem. Our consumers are very well educated about the vegetarian and the non-vegetarian products. It didn’t affect the Indian market much.
Q. What was the reason behind introducing the Rs 20 price range?
A larger number of our Indian consumers have limited money. That’s why our pricing strategy was to make the brand affordable to our middle class customers.