Emerging Marketing Strategies of Fast Food Industry in India

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1 Emerging Marketing Strategies of Fast Food Industry in India G.Kannammal Research Scholar, Department of Economics, St. Joseph s college, Tiruchirappalli. Dr. M.Suvakkin Assistant professor Department of Economics, St.Joseph s college, Tiruchirappalli Abstract The fast food industry is highly competitive and dominated by large companies. Highly competitive businesses must be savvy in developing marketing strategies that drive consumer traffic. This entails staying in constant touch with customers. One of the best ways for biggest fast food companies to stay in touch with their companies is through marketing research. Fast Food Company must know what key customers want and will buy before developing marketing and advertising strategies. Fast food companies often use market segmentation as a marketing tool. Fast food companies can drive traffic through collectibles, particularly those that kids enjoy. Select a movie or popular animated film Market segmentation is the process of identifying key buying groups that patronize your restaurant. This information is largely obtained through market research surveys, asking people demographic information such as age, income and household size. Frequency card programs are a popular type of loyalty program for fast food restaurants. Create a display and sign-up forms to promote your frequency card program. The emerging marketing strategies of fast food will raise the GDP by giving importance to an Indian industry. Indian economy will gain if Indian fast food and food sectors follow the emerging marketing strategies mentioned above. Key words: marketing, strategies, fast food, market segmentation, Introduction Fast Food is the term given to 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 from for take out / take away. A big part of fast food success is marketing strategy. Ever wondered why fast food chains have branches practically everywhere? Because, this is part of their marketing strategy. High Visibility and global recognition is the ultimate theme of fast food chains. According to a New York Times article, there are about three new Mc Donald s Opening every day. The main goal is not to have any person more than four minutes away from a branch. Easily, there can be more than one branch in a town. Just as Mc Donald s embarks on this marketing Strategy, so does other fast food chains. To be able to complete with the biggest name in the industry, the competitor must be able to keep up, therefore, just as a new Mc Donald s opens nearby, a competitor is also opening in the same area. Fast food began after the Second World War. It has come a long way and has achieved unmatchable success and popularity. The success of the fast food chains rest on its marketing strategy and selling Point. With their large signs, billboards and advertisements illuminating the city, the fast food chains are definitely here to stay (Lawerence Scholor) According to Hussain (1991) Conducted a research on recent marketing strategies in food industry, Hussain research that promotions were what made Mc Donald s and Jollibee successful. Hussain discovered that the most frequently used promotions by these two enterprises were window dressing, free delivery, radio, TV and flyer advertising played a major role in expanding product market shares. According to Miranda Brookins (2015) fast food restaurant franchisees and owners use many advertising techniques to reach customers of all ages. Brand awareness, budgets and target market play a major role in the techniques a brand decides to use. By combining online, radio, television and print strategies, they reach customers through several types of media. According to Melanie Hammond (2015) most people will visit a fast- food restaurant at least once in their lives. However, other than opening our pocketbooks to pay, do we ever stop to thing about the price of the items on the menu? What determines how much we pay for a burger and fries? Fast food restaurants utilize many different pricing tactics, but the most common strategies ISSN: Page 52

2 include value pricing, penetration pricing, customary pricing and bundle pricing. Objectives of the study 1. To study the growth of fast food industry in India. 2. To analyse the fast food market store and market share in India 3. To analyse the emerging marketing strategies in fast food industry in India Methodology of the study The present paper has been prepared by using secondary data collected from journals, newspapers, reports, working papers and websites. Also information has been referred from source of annual report. Growth of the fast food Industry in India India that is particular about its food is significantly fond of home cooked and fresh food. This trend is showing the globalization of India and increase of new markets not witnessed in India before. With increasing number of people eating out, the industry offers major opportunities to the players to capture a larger consumer base. In 1996 the international food players like Pizza Hut, McDonalds, Dominos and KFC entered Indian market and are investing huge amount of money to grab a share of this highly profitable market in India. CRISIL reported that traditionally, the Indian consumers have been eating road side foods Dhabas and stalls which still occupy a major share of the unorganized sector; where fast food has been eaten traditionally. However, with the changes in the economy and help of modern employment, in 2001 domestic players like Jumboking, Kaati zone, Fasso s are growing quickly. Jumboking is one of the biggest, fastest growing food chain in indigenous fast food in India. This industry currently more than 75 stores across 12 regions within the country. The analysis foresee that in 2020 their stores will increase into 200. Indian fast food market is growing at the rate of 40% per annually. (CRISIL). India s QSR business will double in just three years from Rs34bn in the to around Rs70bn in The analysist fore see that in 2017 their QSR business will increased into Rs172bn in tier-1, tier-11 cities in India Fast food market store in india The present situation in India Table -1 Market store in India Year Dominos India McDonald s India KFC India Source: Euromonitor ISSN: Page 53

3 The table-1 depicts that in 2006 Dominos had 128 stores to market their products in India. In 2010 it increased to 362 stores and in 2014 it further increased to772 stores in India. In comparison with previous year number of store of dominos has increased in ten years. Similarly McDonald s market store has increased to 500 in 2015.Likewise KFC India s market store has increased considerably 372 in Therefore from the table it is clear that Dominos remains the leading fast food market store in India. Table -2. Market share in India Fast food market share in India year Dominos India McDonald s India KFC India Source: Euromonitor The above table -2 shows that in 2001 Dominos had market share of 4.5%in India. In 2005 it was 5.2%, 2009 it was 9.3% of market share. In 2013 comparison of market share of dominos has increased in twelve years. Similarly Mc Donald s market share is constant from 2001 to Like wise KFC India s market share has increased considerbly 12.2%. Therefore from the table it is clear that Dominos remains the leading fast food chain in India. ISSN: Page 54

4 Fast food market in India Year Market size in billion Growth rate Source: RNCOS; market reports The above table-3 shows that in Indian fast food market size has witnessed the steady growth from i.e., percent to percent. It decreased to percent in The year 2014 has the highest market growth rate in India. Further fast food and food industry is highly competitive and dominated by large companies. Emerging marketing strategies in fast food industry Indian embrace fast food because it fits well with the busy pace of everyday life, and because it looks and tastes good. But the $2billion a year fast food industry also uses a battery of marketing strategies to keep its foothold in the front line of modern culture. Marketing is continually evolving, but there are some emerging strategies the industry uses to sell fast food. Volume and Visibility Consumers don't have to hunt for fast food, it s everywhere. Fast food restaurants often appear in clusters, but individual chains also open multiple restaurants within short distances. Although it might seem like over-saturation, it s a basic element of fast food marketing. A continual trail of highly visible brand names and logos has become part of the landscape where people live, work and play. The uninterrupted access to fast food reinforces brand recognition and underscores the ease and convenience that are hallmarks of the industry. Marketing Strategies for Kids and Teens The Center for Science in the Public Interest estimates the fast food industry spends about $10 billion annually on marketing products directly to kids. Ads for kids' meals feature cartoon characters and film stars who tout free toys inspired by popular movies and television shows. Websites offers kids' clubs with stories, games and contests that engage children while exposing them to brand names and logos. The fast food industry targets young teens with product placement in music videos, movies and video games. Mobile marketing campaigns send out text messages with coupons for free products, and Webbased rewards programs offer free merchandise and meals. According to Eric Schlosser, author of Fast Food Nation, the goal is to initiate and develop a customer relationship with kids and teens that will last through adulthood. Value and Affordability Fast food marketing reacts to the moods and needs of customers, and while emphasizing value and affordability have always been part of the industry's overall strategy, those product qualities have become even more important in a tight economy. Free samples, value menus that feature items for $1 and special monthly deals are all marketing tools aimed at cashstrapped consumers. Two-for-one coupons, combination meals with free drinks or side orders and senior discounts also bring in customers concerned with costs. Some companies acknowledge maintaining quality at rock-bottom prices is a challenge. Still, affordable prices are a potent marketing tool. Social Responsibility Marketing The fast food industry has been criticized for menus that offer processed foods high in fat, and packaging that generate tons of waste. The industry has responded with ads featuring whole foods ISSN: Page 55

5 purchased from American farmers, and fresh, lowcalorie menu options geared toward health-conscious consumers. Some companies have also developed green advertising campaigns to highlight reductions in packaging and the use of recycled materials. Through marketing, the fast food companies have presented themselves as socially responsible businesses that share the public's concern about health and the environment. Social responsibility marketing is aimed at consumers who try to make purchases that reflect their values. Fast food companies use social responsibility marketing to convince consumers they can buy their convenient and affordable products without compromising their values. Conclusion Fast food industry is one of the biggest emerging markets in India. Fast food industry owes its strong success of managing certain emerging marketing strategies in India. When something is unique and stands apart from other things that will be noticed and checked. The emerging marketing strategies of fast food will raise the GDP by giving importance to an Indian industry. Indian economy will gain if Indian fast food and food sectors follow the emerging marketing strategies mentioned above. Emerging marketing strategies of fast food industry provide best products of quality and best features as per the preference and demand of the target market. Fast food contains several ingredients that are very harmful to health of the consumers. Therefore, as a long term business strategy, fast food companies have to utilize their research and development to make their recipes more healthy and filled with nutritional values. This would ensure not only the growth of fast food businesses but also safeguard its consumers from health hazards and lifestyle diseases. References 1) Nair Rajan.N.Dr, Nair Sanjth.R.Dr. (2012) Marketing, Sultan Chand & Sons, New Delhi 2) Chatterjee.B.K (2006) Marketing Management a finance emphasis, Jaico Publishing House,Mumbai. 3) Pandey Onkar (March-2012) Fast food market in India, The Sunday Indian. Madan Pankaj, Mittal Amit, Verma Hemraj (2011) Marketing Management, Delhi. 4) Talwar Parker Jennifer. (2002) Fast food, fast track immigrants, Big business and the American Dreams. West view press. 5) 6) 7) www. Crisil.com/pdf/research/CRISIL %20Research_Article QSR_17sep2013.pdf 8) business.chron.com/fast food-marketingstrategies ) business.chron.com/key-elementssuccess-fast food- industry business.chron.com/marketing-strategies-food-brands ) business.chron.com/market-sell-new food product-grocery-store 11) business.chron.com/fast-foodtechniques-advertising ISSN: Page 56