Temat: Paper 2: American Business Culture: McDonald's in India.

The purpose of this project is to show how McDonald’s is operating in India, country being so much different, in terms of culture, from the United States of America, and how it had to adjust to fit in the likes of the people. We will see how the company had to adjust not only in terms of culture but also in terms social life of the citizens of India.
The McDonald’s corporation may be treated as an exemplar showing how other American fast food restaurant chains are functioning in such an exotic country, and what they had to do to earn people’s trust. Whether McDonald’s succeeded or not, we will see by the end of the work.
The first arrival of this American company can be considered to be a pretty late one. It is worth mentioning that until 1990s American fast food companies had had no interest in investing in this country. At the very beginning of the 1990s, though, there could be observed the coming of certain American food companies like: TCI Friday’s, Baskin Robins, Pizza Hut, Domino Pizza or Kentucky Fried Chicken (KFC). Before, however, McDonald’s entered the Indian market, some research on the taste of the consumers had to be done and the entry itself took a few years.
The first McDonald’s in India appeared in October, 1996 in a rich residential area in New Dehli. In November 2001, there were already 58 McDonald’s restaurants in this country, and according to plans in the next three years there is supposed be built 90 new ones.
India’s market seems to be enticing as well as offputting for food corporations. The culture can be characterized be diverse population sticking to its strict food traditions. It is worth pointing out that Indians are used to home-prepared food that is considered to be healthier and, first of all, cheaper. On the other hand, though, India is an extremely large market containing as many as 300 million consumers (it is almost as big as China’s). This feature of the market is pretty an incentive for various corporations. In her radio interview,
dr. Vandana Shiva points out to the fact that this is one of the major reasons for McDonald’s presence in India.
According to Vikram Bakshi and Amit Jatia, who are responsible for running McDonald’s in India, there are two most important challenges for McDonald’s to tackle: the first is not to hurt religious feelings of the citizens and the second is not to get oneself involved in political confrontations with some political activists. In this paper, however, I am more interested in having a look at the first thing. What is important here is that 80% of the population of India is Hindus (according to this religion, cows, being the main ingredient of Mc menu, are sacred and not to be consumed) and, what is more, 150 million of the population are Muslims, and they cannot eat pork. In order to suit the situation, McDonald’s had to introduce some special meals that cannot be found anywhere in the world in restaurants of this kind. The introduction of new products in various countries is not something rare at all, as Bakshi points out but he as well adds: ”but what is unique in the context of India is the company’s willingness to replace its core product, beef-based Big Mac.” Some examples are as follow: “Maharaja Mac” that serves as a substitution for Big Mac that can be found everywhere except for India. Another example is “McAloo Tikki Burger”, which is made of pea pattie and breaded potato. As a result of all those adjustments, 75% of the menu is suited, or, in other words, “Indianized.” Maharaja Mac is meant for those 83% of Indians who do not eat beef or pork whereas another cultural fit, McDonald’s has thought of, is “Veggie Burger” for 20% of complete vegetarians. All the food is very carefully segregated into that consisting of vegetarian and nonvegetarian ingredients because, otherwise, some religious feelings might be offended. Kishore Dash indicates in the paper issued by The Garvin School of International Management that such situations can go to the extreme because even French fries in India cannot be flovored with beef tallow or the ice cream and mayonnaise have no egg in them. It is worthy of attention that such information concerning the content of the meals is always displayed in Mc leaflets.
No product launched by the company enters the market accidentally. As it is pointed out by Sagiv Mediratta, quality assurance and product development manager for McDonald’s India, she: “test-marketed this veggie burger in 1994 in McDonald’s outlets located in three Asian population-dominated towns of London-Southall, Ilford, and Hounslow-before launching this product in India in 1996.” This indicates that a careful and thorough examination of the market is necessary before any steps are taken, and this strategy was extensively used by McDonald’s company in India.
There are also some advantages of the presence of McDonald’s in that area. First of all, it is a great job provider. On average in a single restaurant 100 people are needed to work on various positions, and, what is more, there is also more employment in India’s agriculture. This is surely a great plus speaking in support for the company.
There are, however, some attacks and criticism from the side of the green activists accusing the corporation of creating bad eating habits (fat, unhealthy food) as well as serving only the chosen (the wealthy) in the society. In the radio interview on McDonald’s exploitation and the global economy Vandana Shiva, the director of The Research Foundation for Science, Technology and Natural Resource Policy, criticizes the corporation for providing people with “junk” food, as she calls it. Being the main organizer of protests against junk food chain restaurants, she accuses big corporations of having detrimental impact on life of the people around the world, not only in India stating that:” I think that corporations, like McDonald’s, who are on one hand destroying entire food cultures of the world and on the other hand not giving healthy food to people, there is going to be an inevitable outcry against their operations and they know it.” As people’s consciousness of the importance of healthy eating habits rises, such fast food companies may encounter increasing problems. Being aware of this fact, McDonald’s launched certain initiatives to turn the oncoming stalemate into a situation that would be more advantageous for it. Shiva also directs our attention to the fact that such junk food may be the cause of various diseases. She provides examples of other countries by saying that “Japan has had a 70% increase in food-related illnesses because of the kind of fast food chains like McDonald’s are bringing.” To support her statement, she mentions Mad Cow Disease or Bird Flu that can endanger human lives.
In response, McDonald’s started to support various green movements and sponsor different “community-related activities to promote environmental consciousness.” One of the initiatives was the Olympic Day Run, organized in June, 2005. The other may be the company’s attempts to keep public parks in Greater Kailash and Basant Lok cooperating with New Delhi’s Municipality. The fact that even high, governmental organizations involve themselves in such actions is the obvious indicator that the corporation’s initiatives are really treated seriously.
McDonald’s found also a way of how its environmental concerns could be combined with the religion and, what is more, was able to turn it into an advantage. The company is the leader in the campaign whose aim is to detoxify the Yamuna River. “Grease Traps” were installed in all the restaurants where oil is seperated from water before it is pumped into the river as sewage. It must be noted here that the river itself is considered to be sacred by the majority of India’s population.
There is a large number of various campaigns, led by McDonald’s, to preserve the natural environment like replacing the polythene bags with recyclable paper bags (the Mc corporation was the first one in India to introduce this idea).
Vandana Shiva, in her interview, also points out to another very important feature of big corpotations in general-the exploitation of the labor force which occurs there. She especially focuses on the fact that, first of all, children are being exploited in the McDonald’s company and it has a very negative effect on the kids’ education. She states that the corporation uses the fact of the India’s population being poor and hires children to work for minimum wages. This can really be an acutely damaging argument against the restaurant’s trials to gain public support and trust and its response had to be quick, and it was.
Being aware of the fact that children in India are the center of family, McDonald’s is also the major organizer of special events devoted for kids. Right now, children make the main clientele of the company in India, that is why they are treated as serious clients and many attractions are created there for them. One of those is the McDonald’s Spotlight which is an acting competition. The number of schools participating in the occasion is still on the increase and in 2003 it reached 120 schools.
Whereas the Children’s Day is celebrated on November 14 worldwidely, in India McDonald’s celebrates World Children’s Week, November 14-20, throughout all the restaurants all over the country. The aim of the activity is simple-to raise funds for educational programs for kids. Some of the other attractions for kids, prepared by the restaurant, include Happy Meals with Leggo toys, and special Fun Zones- where birthday parties can be organized and children are able to play, not disturbing the adults. There are also special Cold Kiosks where kids can eat different desserts like ice creams and other sweets.
In India McDonald’s are called family restaurants, not, as it is in other parts of the world, simply McDonald’s. Going to the restaurant may be treated as a family holiday or a family celebration.
Another successful program initiated by McDonald’s in India is Pulse Polio. In this case the company cooperates with different health organizations and “the aim is to make this country polio free.” Outside the restaurants special inoculation booths are placed where polio vaccine is distributed for free to kids up to the age of 5. This is a large-scale operation being carried out all over the country with a clear goal-to eliminate polio from public life by the year 2005. McDonald’s is not the only active participant in the project as it is supported by Mumbai Municipal Corporation. Here, we have another example where local authorities are involved in the activities initiated by the company.
It must be noted that such initiatives are popular among the people and it adds to the overall popularity of the corporation.
McDonald’s has as well taken steps to attract the youth as it is common knowledge that American culture and lifestyle is popular among them. Among the young of India, America is associated with success and good life. Through that, going to the restaurant is seen as trendy. The company’s specialists also observed the fact that during various festivals Indian people like eating out. Using this information, McDonald’s launches new products- “fourth flavor” -Veg Surprise (a vegetable burger with Indian spices). This is another cultural fit during festival season, lasting from September till November, when even nonvegetarian Hindus do not eat meat and turn vegetarian.
The company even thought of something for those who hardly ever eat out-delivery service. Being conscious of the fact that some people may have transport problems, this is a great opportunity for them to have access to it and for the company to reach braoder “audience.” There is, however, another example of delivery in India’s McDonald’s restaurants, as it is pointed out by Rob H. He writes about his tourist experience in a Mc restaurant in an Indian town-Connaught Place. He describes his feeling of shock when, after paying for the meal, he was asked to sit down by one of the tables and await his order, that was supposed to be hand-delivered to his table.
To conclude, I must admit that this topic is an interesting one, there was, however, too little space in the paper to have a closer and more detailed insight into the context of the operations of McDonald’s in India. It is extremely hard to decide whether the corporation succeeded or flopped. To some extent it may have succeeded as the gimmicks it used attracted people’s attention and their role was carried out. The restaurant cannot complain as far as the number of customers is concerned. It is probably due to the fact that most of those adjustments it had to apply were successful.
I notice, however, some dangers to the company as all those campaigns and movements against it are getting stronger and reaching greater audience. They do their task which is to raise people’s awareness and if, on the other hand, they prove to be successful, all of those big corporations will inevitabely lose in India as well as in other countries. Even right now we can see on the news that a number of McDonald’s outlets is being closed down in some parts of the world whereas in some other parts the demand for such companies is still huge. Why is that so? I think it depends on how much a given country is ready or willing to adopt this Westernized, or to be more specific Americanized, way of life. This is, I suppose, the cause of the success of the fast food restaurants-that American lifestyle is in vogue and that people want to imitate it for a period of time, before they become jaded with it as, with time, happens in most countries. The question arises here, however, about how long this process is still to last in India.















Bibliography

Raj’s Homepage. Cultural Globalization. http://www.rajluhar.com/raj/finalproject.htm.
H., Robert. 30 Days in India: In Search of Art, Culture, and Authenticity.
http://www.tblogs.bootsnall.com/rh/archives/006831.shtml.
Dash, Kishore. “Thunderbird.” McDonald’s in India. The Garvin School of International
Management. http://www.thunderbird.edu/pdf/about_us/case_series/a0....
Mcspotlight. “Transcript of the RealAudio Interview.” Interview: Vandana Shiva on
McDonald’s, Exploitation, and the Global Economy.
http://www.mcspotlight.org/people/interviews/vandana_t....







author: Bartosz Michał Kraszewski

American Studies Center, University of Warsaw